IAS 32 – Classification of rights issues


In 2005, the IFRIC recommended to the IASB that it amend IAS 32 Financial Instruments: Presentation to permit a conversion or stand-alone option to be classified as equity if the exercise price was fixed in any currency. In September 2005 the Board decided not to proceed with the proposed amendment.  Click here for more information about that project.

In 2009, IFRIC received a related request as to whether a right entitling the holder to receive a fixed number of the issuing entity’s own equity instruments for a fixed amount of a currency other than the issuing entity’s functional currency (foreign currency) should be accounted for as a derivative liability.

These rights are commonly described as ‘rights issues’ and include rights, options and warrants.  The entity issues one or more rights to acquire a fixed number of additional shares pro rata to all existing shareholders of a class of non-derivative equity instruments. The exercise price is normally below the current market price of the shares.

IFRIC recommended to the IASB that it consider an amendment to IAS 32 to permit rights issues denominated in a foreign currency to be classified as equity.


Current status of the project

This project has been completed. Classification of Rights Issues (Amendment to IAS 32) was issued on 8 October 2009.


Project milestones

6 August 2009 Exposure Draft ED/2009/9 Classification of Rights Issues published Comment deadline 7 September 2009
8 October 2009 Classification of Rights Issues (Amendment to IAS 32) issued Effective for annual periods beginning on or after 1 February 2010

Correction list for hyphenation

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