The Board discussed creating an exception to the liability classification for shares that evidence a residual interest in the assets of an entity and that are puttable to the entity at fair value. It was noted that IAS 32 currently requires classifying these instruments as liabilities. If the fair value exceeds the recorded net asset value, this results in a recorded net liability position.

The Board expressed mixed views. Some were concerned about reporting a net liability position, and they favoured an immediate solution. Others believe that the issue is more fundamental because it relates to the definitions of equity and liabilities; they want to wait for that project to be finalised. The Board asked the staff to explore the issue further and consider whether a short-term solution that can be restricted to solving the immediate problem is apparent.