Jul 2006
In this newsletter, we look at the following topics:
Debt versus equity
The classification of financial instruments as debt or equity instruments can be complex. The classifications resulting from HKAS 32 Financial instruments: Disclosure and Presentation can also be counter-intuitive and differ from those under tax laws or other regulatory frameworks. This article looks at the HKAS 32 principles that are relevant to step-up instruments and linked instruments. However, it only considers instruments that are settled in cash and does not cover instruments that may or will be settled in the issuer's own equity.
IFRIC update - Convertible instruments denominated in a foreign currency
IFRIC agreed that an obligation denominated in a foreign currency represents a variable amount of cash. Therefore contracts that will be settled by an entity delivering a fixed number of its own equity instruments in exchange for a fixed amount of foreign currency should be classified as liabilities.
Note: HKFRS has converged with IFRS effective from 1 January 2005. Contents contained in this newsletter are also relevant to IFRS preparers. Get Your Copy Here
Read more by downloading our HKFRS News - Jul 2006 (pdf file, 318KB).
Other Issues of HKFRS News
Accounting and Listing Rules Updates. | 