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Deloitte comment letter on tentative agenda decision on IAS 32 — Classification of a financial instrument that is mandatorily convertible into a variable number of shares upon a contingent ‘non-viability’ event

Published on: Oct 01, 2013

We have commented on the IFRS Interpretations Committee tentative decision not to take onto the Committee’s agenda a request for clarification of the classification as equity or as a liability of a financial instrument that has no stated maturity date, pays interest at the discretion of the issuer and is mandatorily convertible into a variable number of equity shares upon breach of the issuer’s Tier 1 Capital ratio (‘the contingent nonviability event’).

We believe that additional clarity is needed surrounding the classification of the instrument and the measurement of any liability component to be recognised and that there is more than one valid view for each.

Download the full comment letter below.


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