We comment on IFRIC D25

  • Deloitte Comment Letter Image

06 Oct 2009

Deloitte Touche Tohmatsu has submitted comments on IFRIC Draft Interpretation D25 Extinguishing Financial Liabilities with Equity Instruments, which was published 6 August 2009. IFRIC D25 addresses the appropriate accounting under IFRSs when a creditor agrees to accept an entity's shares or other equity instruments to settle the financial liability fully or partially.

IFRIC D25 proposes – and in our letter of comment we agree – that:
  • an entity's equity instruments are part of any 'consideration paid' to extinguish a financial liability.
  • the equity instruments should be measured at either their fair value or the fair value of the financial liability extinguished, whichever is more reliably determinable.
  • any difference between the carrying amount of the financial liability extinguished and the initial measurement amount of those equity instruments should be included in the entity's profit or loss for the period.
Click to download our letter on the ED Extinguishing Financial Liabilities with Equity Instruments (PDF 22k). All past letters comment are Here.


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