IAS 32 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Classification of an issued instrument: financial liability, equity instrument or compound instrument: Total financial liabilities
Instruments issued: definition of a financial instrument, contractual obligation and right to avoid delivery
Section 1 of 7
Objective
Section brief
- What to document
- The engagement, its scope and the working mode chosen.
- Why
- A workpaper answers one precise question: framing it avoids off-topic work.
- How
- Read the objective and the assignment, then choose the mode (guided, semi-guided, professional).
- Expected result
- You know which question the workpaper must settle, and for which reporting date.
- Your role
- Preparer of the IAS 32 workpaper
- Level
- Foundation
- Estimated time
- ≈ 60 min
- Progress
- 0 / 3 steps done (review excluded)
Context
Nordval SA (fictitious entity) issued four instruments in 20X6 to finance its development: ordinary shares, two kinds of preference shares and a bond. You prepare the classification note for these instruments at the closing date of 31 December 20X6.
Assignment
Classification of the preference shares and the ordinary shares of Nordval
Purpose of the workpaper
Record the contractual terms of the instrument, the settlement clauses, the contingent events, the currency of the exercise price and, where relevant, the redemption rights of the holder. The classification rests on these terms, not on the intention of the parties or the name of the instrument; amounts and terms are case data and the classification remains a supported judgment.
Questions of the file covered by this workpaper
- Classify each instrument issued as a financial liability or an equity instrument.
- Why does the right to avoid the delivery of cash separate the C shares from the B shares?
Documents in the file
Open the documents to pick out the relevant information.