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Deloitte comment letter on tentative agenda decision on IAS 32 — Accounting for a financial instrument mandatorily convertible into a variable number of shares subject to a cap and a floor

Published on: 07 Apr 2014

We have commented on the IFRS Interpretations Committee tentative decision not to take onto the Committee’s agenda the accounting for a financial instrument that is mandatorily convertible at a stated maturity date into a variable number of its own equity instruments to equal a fixed cash amount (subject to a cap and a floor).

We agree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda for the reasons set out in the tentative agenda decision. However, we are concerned that the third paragraph of the tentative agenda decision could be interpreted as suggesting that a separate embedded derivative be recognised for each of the cap and the floor.

Download the full comment letter below.


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