IAS 32 — Application of the ‘fixed for fixed’ condition

Date recorded:


The IFRIC received requests for guidance on the application of paragraph 22 of IAS 32 which states that ‘except as stated in paragraph 22A, a contract that will be settled by the entity (receiving or) delivering a fixed number of its own equity instruments in exchange for a fixed amount of cash or another financial asset is an equity instrument’ (often referred to as the ‘fixed-for-fixed’ condition).

The IFRIC identified that diversity may exist in practice in the application of the fixed-for-fixed condition to other situations in addition to the specific situations identified in the requests.


Decision not to add

January 2010



The IFRIC noted that the Board is currently undertaking a project to improve and simplify the financial reporting requirements for financial instruments with characteristics of equity. A key objective of this project is to develop a better distinction between equity and non-equity instruments. This includes consideration of the current fixed-for-fixed condition in IAS 32.

Consequently, the IFRIC concluded that the Board’s current project on Financial Instruments with Characteristics of Equity is expected to address issues relating to the fixed-for-fixed condition on a timely basis. Therefore, the IFRIC decided not to add this issue to its agenda.


IFRIC reference: IAS 32-8

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