Newsletter on classification of rights issues
20 Oct 2009
Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter – Classification of Rights Issues explaining the IASB's amendment to IAS 32 adopted on 8 October 2009. The amendment addresses the accounting for rights issues (rights, options, or warrants) that are denominated in a currency other than the functional currency of the issuer.
The amendment requires that rights, options, or warrants to acquire a fixed number of an entity's own equity instruments for a fixed amount of any currency are equity instruments – regardless of the currency in which the exercise price is denominated – if the entity offers the rights, options, or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. The amendment is effective for annual periods beginning on or after 1 February 2010, with earlier application permitted. The amendment is to be applied retrospectively.
Click to view IAS Plus Update Newsletter – Classification of Rights Issues (PDF 55k).