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We comment on the IASB's discussion paper on financial instruments with characteristics of equity

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17 Dec 2018

We have responded to the IASB's discussion paper 'Financial Instruments with Characteristics of Equity' that was published in June 2018.

We do not support the preferred classification approach in the discussion paper and believe financial performance should be attributed to those holders of equity instruments that currently own a residual interest in the entity, not to those that hold instruments which may result in them being owners in the future. In addition, we disagree that amounts due at liquidation are financial liabilities prior to liquidation and do not support the carry over of requirements in IAS 32 that future acquisitions of equity should be recognised as a gross financial liability with a debit in equity.

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