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IASB finalises 'rights issues' amendment to IAS 32

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09 Oct 2009

The International Accounting Standards Board has finalised an amendment to IAS 32 'Financial Instruments: Presentation'.

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. Previously such rights issues were accounted for as derivative liabilities.

However, 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 for IASB Press Release (PDF 98k).


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