Comment deadline reminder – rights issues ED

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01 Sep 2009

We remind you that comments are due on 7 September 2009 on the Exposure Draft: Classification of Rights Issues.

The ED was issued by the IASB on 6 August 2009. The ED proposes to amend IAS 32 Financial Instruments: Presentation to clarify the accounting treatment when rights issues are denominated in a currency other than the functional currency of the issuer. Current practice appears to require such issues to be accounted for as derivative liabilities. The proposals state that if such rights are issued pro rata to an entity's existing shareholders for a fixed amount of currency, they should be classified as equity regardless of the currency in which the exercise price is denominated. The IASB plans to issue the final amendment before the end of 2009 with early application permitted. If adopted the amendment will apply retrospectively.


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