IAS 32 — Classification of puttable and perpetual instruments

Date recorded:

The staff presented the IFRIC with a submission on the revised version of IAS 32 Financial Instruments: Presentation. The submission asked whether an entity can have more than one class of equity instruments under the revised Standard where one class is a puttable instrument. The scenario described in the submission assumed a perpetual instrument meeting the definition of an equity instrument in IAS 32 and a puttable instrument that would be a deemed equity instrument under the amended provisions.

The staff brought forward two possible views:

  • Perpetual instruments classified as equity do not prohibit an entity from classifying puttable instruments as equity provided the criteria in IAS 32.16A/B are met
  • Perpetual instruments classified as equity prohibit puttable instruments from being classified as equity at the same time since the criterion in IAS 32.16A(c) is not met.

There was consensus around the IFRIC that the first view was in line with the Standard. It was agreed that the agenda decision as drafted should clearly that the existence of more than one class of equity is possible under IAS 32.

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