{"entries":[{"key":"LX.IAS32.000001","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_INSTRUMENT_DEFINITION"],"dimension":"RECOGNITION","format":"TRUE_FALSE","context":"FINANCE","tested_point":"FI_BOND_TWO_SIDES","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000001","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"understand"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"A bond issued by Zaldor SA and subscribed by a fund is a financial liability for Zaldor and a financial asset for the fund.","es":""},"explanation":{"fr":"","en":"The same contract creates the obligation to pay for the issuer (financial liability) and the right to be paid for the subscriber (financial asset) (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Looking at the contract from one side only.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000002","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_ASSET_DEFINITION"],"dimension":"RECOGNITION","format":"SINGLE_CHOICE","context":"INVESTMENT","tested_point":"FA_EQUITY_INVESTMENT_HOLDER","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000001","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Corvett SA holds 8% of the share capital of Elmar, a listed company. From Corvett's point of view, how is this holding described?","es":""},"explanation":{"fr":"","en":"On the holder's side, investment securities are a financial asset; on the issuer's side, they are an equity instrument (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Mixing up the holder's and the issuer's points of view.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A financial liability of Corvett, since Corvett paid to obtain these shares","es":""},"correct":false,"feedback":{"fr":"","en":"Paying for shares creates a right for the holder, not an obligation to deliver cash (IAS 32, para. 11).","es":""}},{"id":"B","text":{"fr":"","en":"A financial asset, the shares being equity for Elmar","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"An equity instrument of Corvett, since they are shares","es":""},"correct":false,"feedback":{"fr":"","en":"These shares are equity for their issuer, Elmar, not for Corvett which holds them (IAS 32, para. 11).","es":""}},{"id":"D","text":{"fr":"","en":"No financial instrument, because Corvett signed no contract with Elmar","es":""},"correct":false,"feedback":{"fr":"","en":"Elmar's shares are equity securities issued by Elmar, so a financial instrument for the holder as well as the issuer (IAS 32, para. 11).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000003","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_ASSET_DEFINITION","IAS32.SCOPE.FINANCIAL_LIABILITY_DEFINITION","IAS32.SCOPE.CONTRACTUAL_REQUIREMENT"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"MANUFACTURING","tested_point":"FI_SORT_SIX_ITEMS","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000001","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"example"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"From Orsel SA's point of view, classify each item.","es":""},"explanation":{"fr":"","en":"A contractual right to receive cash is a financial asset, a contractual obligation to deliver it a financial liability; a statutory tax and a building are neither (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Calling a tax or levy due to the State a financial liability.","es":""},"format":"CLASSIFICATION","categories":[{"id":"fa","text":{"fr":"","en":"Financial asset","es":""}},{"id":"fl","text":{"fr":"","en":"Financial liability","es":""}},{"id":"nn","text":{"fr":"","en":"Neither a financial asset nor a financial liability","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"A term deposit opened with a bank","es":""},"category":"fa"},{"id":"i2","text":{"fr":"","en":"A bond loan issued by Orsel","es":""},"category":"fl"},{"id":"i3","text":{"fr":"","en":"Corporate income tax to pay to the tax authority","es":""},"category":"nn"},{"id":"i4","text":{"fr":"","en":"An industrial building","es":""},"category":"nn"},{"id":"i5","text":{"fr":"","en":"A supplier invoice to pay within 30 days","es":""},"category":"fl"},{"id":"i6","text":{"fr":"","en":"A receivable from a customer who bought on credit","es":""},"category":"fa"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000004","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.CONTRACTUAL_REQUIREMENT"],"dimension":"RECOGNITION","format":"MULTIPLE_CHOICE","context":"SERVICES","tested_point":"CONTRACTUAL_OBLIGATIONS_PICK","difficulty":"INTERMEDIATE","estimated_time_s":90,"lesson_id":"LS.IAS32.000001","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-contract"},"references":["IAS 32 §13","IAS 32 §AG12"],"exercise":{"prompt":{"fr":"","en":"Among Dorvil SA's obligations, which are contractual? (several answers)","es":""},"explanation":{"fr":"","en":"The balance agreed with the subcontractor and the bank loan come from an agreement between parties, written or not; the fine and the tax come from law or a judge (IAS 32).","es":""},"common_error":{"fr":"","en":"Requiring a written document to recognise a contract, or taking a statutory obligation for a contractual one.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A balance owed to a subcontractor, agreed verbally then confirmed by email","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"A fine set by a court decision","es":""},"correct":false,"feedback":{"fr":"","en":"A fine arises from a court decision, not from an agreement between parties: it is not contractual (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"The repayment of a loan taken out with a bank","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"A payroll tax whose rate is set by law","es":""},"correct":false,"feedback":{"fr":"","en":"A tax set by law is not contractual, so it is not a financial liability (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000005","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_INSTRUMENT_DEFINITION","IAS32.SCOPE.CONTRACTUAL_REQUIREMENT","IAS32.SCOPE.FINANCIAL_LIABILITY_DEFINITION"],"dimension":"ANALYSIS","format":"ERROR_SPOT","context":"SERVICES","tested_point":"DEFINITIONS_ERROR_SPOT","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000001","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"pitfalls"},"references":["IAS 32 §11","IAS 32 §13","IAS 32 §AG12"],"exercise":{"prompt":{"fr":"","en":"Spot the erroneous statements about financial instruments.","es":""},"explanation":{"fr":"","en":"Form does not decide classification and a written document is not required; on the other hand a statutory obligation such as a tax is not a financial liability (IAS 32).","es":""},"common_error":{"fr":"","en":"Taking legal form (share, debt) as the sole criterion.","es":""},"format":"ERROR_SPOT","statements":[{"id":"s1","text":{"fr":"","en":"A financial instrument is a contract.","es":""},"erroneous":false},{"id":"s2","text":{"fr":"","en":"A share issued is always an equity instrument for the issuer.","es":""},"erroneous":true,"correction":{"fr":"","en":"A share can be a financial liability if the contract requires the issuer to deliver cash that it cannot avoid.","es":""}},{"id":"s3","text":{"fr":"","en":"A tax due to the State is not a financial liability, because it is not contractual.","es":""},"erroneous":false},{"id":"s4","text":{"fr":"","en":"A contract must be written and signed to create a financial asset.","es":""},"erroneous":true,"correction":{"fr":"","en":"A contract does not have to be written; a verbal agreement, or one resulting from dealings, can be enough.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000006","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_ASSET_DEFINITION","IAS32.SCOPE.FINANCIAL_LIABILITY_DEFINITION"],"dimension":"RULE_KNOWLEDGE","format":"FILL_BLANK","context":"FINANCE","tested_point":"FA_FL_VIEWPOINT_BLANKS","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000001","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Complete the sentence.","es":""},"explanation":{"fr":"","en":"The financial asset is assessed from the holder's point of view (cash, receivables, investments) and the financial liability from the issuer's point of view (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Swapping the holder and the issuer.","es":""},"format":"FILL_BLANK","text":{"fr":"","en":"The financial asset is assessed on the side of {{b1}}, the financial liability on the side of {{b2}}.","es":""},"blanks":[{"id":"b1","mode":"CHOICE","choices":[{"id":"holder","text":{"fr":"","en":"the holder","es":""}},{"id":"issuer","text":{"fr":"","en":"the issuer","es":""}},{"id":"regulator","text":{"fr":"","en":"the regulator","es":""}}],"answer":"holder"},{"id":"b2","mode":"CHOICE","choices":[{"id":"holder","text":{"fr":"","en":"the holder","es":""}},{"id":"issuer","text":{"fr":"","en":"the issuer","es":""}},{"id":"regulator","text":{"fr":"","en":"the regulator","es":""}}],"answer":"issuer"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000007","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_LIABILITY_DEFINITION"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"INDUSTRY","tested_point":"FL_EXCHANGE_UNFAVOURABLE","difficulty":"INTERMEDIATE","estimated_time_s":90,"lesson_id":"LS.IAS32.000001","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Which of these contractual obligations of Hexa SA falls within the definition of a financial liability?","es":""},"explanation":{"fr":"","en":"A financial liability includes the contractual obligation to deliver cash or another financial asset, or to exchange financial assets or liabilities on potentially unfavourable terms (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Treating every contractual obligation, even to deliver a good or a service, as a financial liability.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Undertaking to deliver to a customer, in six months, goods made by Hexa, at a price already fixed in euros","es":""},"correct":false,"feedback":{"fr":"","en":"Delivering goods is neither cash nor another financial asset: it is not a financial liability (IAS 32, para. 11).","es":""}},{"id":"B","text":{"fr":"","en":"Undertaking to provide a maintenance service to a customer for two years, with an annual invoice sent in advance","es":""},"correct":false,"feedback":{"fr":"","en":"An obligation to provide a service delivers neither cash nor a financial asset (IAS 32, para. 11).","es":""}},{"id":"C","text":{"fr":"","en":"Having to pay a property tax each year whose amount is set by law","es":""},"correct":false,"feedback":{"fr":"","en":"A tax set by law is not contractual: it is not a financial liability (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"Undertaking to exchange financial assets with another party on potentially unfavourable terms","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000008","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EXCLUSIONS"],"dimension":"RECOGNITION","format":"SINGLE_CHOICE","context":"ACQUISITIONS","tested_point":"EXCL_EMPLOYEE_BENEFITS","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000002","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"understand"},"references":["IAS 32 §4"],"exercise":{"prompt":{"fr":"","en":"Which of these transactions is excluded from the scope of IAS 32?","es":""},"explanation":{"fr":"","en":"Employers' rights and obligations under employee benefit plans fall under IAS 19 and are excluded from IAS 32; a loan, a deposit and a receivable stay within the scope (IAS 32, para. 4).","es":""},"common_error":{"fr":"","en":"Applying IAS 32 to every instrument, without checking the exclusions.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A variable-rate loan taken out with a bank to finance a warehouse","es":""},"correct":false,"feedback":{"fr":"","en":"A bank loan is a typical financial liability, within the scope of IAS 32 (IAS 32, para. 11).","es":""}},{"id":"B","text":{"fr":"","en":"A current account in credit opened with a credit institution","es":""},"correct":false,"feedback":{"fr":"","en":"Bank deposits are financial assets, within the scope of IAS 32 (IAS 32, para. 11).","es":""}},{"id":"C","text":{"fr":"","en":"An employer's defined benefit pension plan","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"A customer receivable payable within sixty days","es":""},"correct":false,"feedback":{"fr":"","en":"A customer receivable is a financial asset, within the scope of IAS 32 (IAS 32, para. 11).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000009","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EXCLUSIONS","IAS32.INTERACTIONS.IFRS2"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"HR","tested_point":"EXCL_OPTION_PLAN_TREASURY","difficulty":"INTERMEDIATE","estimated_time_s":60,"lesson_id":"LS.IAS32.000002","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"rule-exclusions"},"references":["IAS 32 §4","IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"Treasury shares bought back to honour an employee option plan are entirely excluded from IAS 32, since the plan falls under IFRS 2.","es":""},"explanation":{"fr":"","en":"The exclusion targets the share-based payment contract; the treasury shares held remain subject to the IAS 32 rules (deducted from equity, no gain or loss) (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Excluding the treasury shares of an option plan as well.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000010","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EXCLUSIONS","IAS32.INTERACTIONS.IFRS2"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"SERVICES","tested_point":"EXCL_SORT_FIVE_TRANSACTIONS","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000002","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"example"},"references":["IAS 32 §4","IAS 32"],"exercise":{"prompt":{"fr":"","en":"Classify each Rovane SA transaction according to whether it stays within the scope of IAS 32 or falls outside it.","es":""},"explanation":{"fr":"","en":"Share-based payments fall outside IAS 32 in favour of IFRS 2; a loan, a receivable and a deposit come within it (IAS 32).","es":""},"common_error":{"fr":"","en":"Relying on the means of payment rather than the link with the entity's share.","es":""},"format":"CLASSIFICATION","categories":[{"id":"in","text":{"fr":"","en":"Stays within the scope of IAS 32","es":""}},{"id":"out","text":{"fr":"","en":"Falls outside the scope of IAS 32","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"Share options offered to managers on top of their salary","es":""},"category":"out"},{"id":"i2","text":{"fr":"","en":"A five-year bond issued on the market","es":""},"category":"in"},{"id":"i3","text":{"fr":"","en":"The payment of a provider by delivering 400 Rovane shares","es":""},"category":"out"},{"id":"i4","text":{"fr":"","en":"A receivable from a customer, payable in 45 days","es":""},"category":"in"},{"id":"i5","text":{"fr":"","en":"A term deposit placed with a credit institution","es":""},"category":"in"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000011","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.NON_FINANCIAL_ITEMS"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"AGRIFOOD","tested_point":"NONFIN_OWN_USE_WHEAT","difficulty":"INTERMEDIATE","estimated_time_s":90,"lesson_id":"LS.IAS32.000002","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"rule-nonfin"},"references":["IAS 32 §8"],"exercise":{"prompt":{"fr":"","en":"Navrel SA enters into a purchase of 7,400 tonnes of wheat. The contract can be settled net in cash, but Navrel has documented that it will take delivery to supply its mills. What is the conclusion?","es":""},"explanation":{"fr":"","en":"Settleable net, the contract would come within IAS 32, unless it is held for the entity's expected purchase, sale or usage requirements, which Navrel has documented (IAS 32).","es":""},"common_error":{"fr":"","en":"Ignoring the exception for expected purchase, sale or usage requirements.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The contract comes within IAS 32, because it can be settled net in cash, even if the entity plans to take delivery of the wheat","es":""},"correct":false,"feedback":{"fr":"","en":"The possibility of net settlement is not enough: the exception for expected usage requirements applies (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"The contract stays outside the scope of IAS 32, because it is held for Navrel's expected usage requirements","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"The contract comes within IAS 32, because wheat is a financial instrument within the definition, traded on commodity markets","es":""},"correct":false,"feedback":{"fr":"","en":"Wheat is a non-financial item; only the contract can come within the scope, under conditions (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"The contract is outside the scope, because a non-financial item cannot be settled net","es":""},"correct":false,"feedback":{"fr":"","en":"A contract on a non-financial item can be settled net; that is precisely what can bring it within the scope (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000012","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.NON_FINANCIAL_ITEMS","IAS32.SCOPE.EXCLUSIONS"],"dimension":"PROFESSIONAL_JUDGMENT","format":"MINI_CASE","context":"ENERGY","tested_point":"NONFIN_ENERGY_MINI_CASE","difficulty":"ADVANCED","estimated_time_s":240,"lesson_id":"LS.IAS32.000002","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"judgment"},"references":["IAS 32 §8","IAS 32 §4"],"exercise":{"prompt":{"fr":"","en":"Sorvane SA: two gas contracts.","es":""},"explanation":{"fr":"","en":"Same title, opposite conclusions: the expected use of the contract and the possibility of net settlement decide the scope (IAS 32).","es":""},"common_error":{"fr":"","en":"Concluding on the contract's title.","es":""},"format":"MINI_CASE","scenario":{"fr":"","en":"Sorvane SA signs two gas purchase contracts of 14,500 units each (case facts).\n\n**Contract X**: the gas supplies the furnaces of Sorvane's plant; physical delivery is planned and monitored by the technical teams. The contract can legally be settled net in cash.\n\n**Contract Y**: no Sorvane site uses this gas. Sorvane enters into the contract to profit from price changes and settles it by a net cash payment of the price difference.","es":""},"parts":[{"prompt":{"fr":"","en":"What is the treatment of contract X with regard to the scope of IAS 32?","es":""},"explanation":{"fr":"","en":"Contract X serves the plant's expected usage requirements: it stays outside the scope despite the possibility of net settlement (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Within the scope, because the possibility of net settlement is enough on its own","es":""},"correct":false,"feedback":{"fr":"","en":"The possibility of net settlement does not override the expected needs exception (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"Within the scope, because gas is a financial instrument for its buyer","es":""},"correct":false,"feedback":{"fr":"","en":"Gas is a non-financial item; the definition of a financial instrument does not apply to it (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"Outside the scope, because held for the plant's expected usage requirements","es":""},"correct":true}],"id":"p1","dimension":"APPLICATION"},{"prompt":{"fr":"","en":"Why does contract Y come within the scope of IAS 32?","es":""},"explanation":{"fr":"","en":"Settleable net and with no link to usage needs, contract Y does not meet the exception: it comes within IAS 32 (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"It is settled net in cash and is not held for expected usage requirements","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"It covers the same volume of gas as contract X","es":""},"correct":false,"feedback":{"fr":"","en":"Volume is not a criterion; only net settlement and expected needs count (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"It was entered into after contract X, and the signing date decides the scope","es":""},"correct":false,"feedback":{"fr":"","en":"The signing date does not determine the scope (IAS 32).","es":""}}],"id":"p2","dimension":"ANALYSIS"},{"prompt":{"fr":"","en":"The title \"gas purchase\" of both contracts is enough to conclude that both are outside the scope of IAS 32.","es":""},"explanation":{"fr":"","en":"Classification depends on the possibility of net settlement and the expected use, documented contract by contract, not on the title (IAS 32).","es":""},"common_error":{"fr":"","en":"Classifying by the contract's title: what counts is the possibility of net settlement and expected use, contract by contract.","es":""},"format":"TRUE_FALSE","answer":false,"id":"p3","dimension":"PROFESSIONAL_JUDGMENT"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000013","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION","IAS32.SCOPE.EQUITY_INSTRUMENT_DEFINITION"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"INVESTMENT","tested_point":"PREF_SERIES_LIAB_OR_EQUITY","difficulty":"INTERMEDIATE","estimated_time_s":150,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Brantor SA issues five series of preference shares. Classify each series (no special exception applies to the instruments in the exercise).","es":""},"explanation":{"fr":"","en":"A mandatory redemption, a redemption the holder can demand and a mandatory fixed dividend are unavoidable obligations to deliver cash; a discretionary dividend and a mere redemption option create none (IAS 32).","es":""},"common_error":{"fr":"","en":"Mistaking an issuer option for an obligation, or overlooking a mandatory dividend.","es":""},"format":"CLASSIFICATION","categories":[{"id":"li","text":{"fr":"","en":"Financial liability","es":""}},{"id":"eq","text":{"fr":"","en":"Equity instrument","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"Series A: mandatory redemption in cash in six years","es":""},"category":"li"},{"id":"i2","text":{"fr":"","en":"Series B: no redemption date; dividend decided each year by the meeting, with no guaranteed amount","es":""},"category":"eq"},{"id":"i3","text":{"fr":"","en":"Series C: the holder can demand redemption in cash at any time","es":""},"category":"li"},{"id":"i4","text":{"fr":"","en":"Series D: mandatory fixed dividend of 5% every year, no redemption date","es":""},"category":"li"},{"id":"i5","text":{"fr":"","en":"Series E: redemption possible only at the issuer's initiative, with no penalty if it does not redeem","es":""},"category":"eq"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000014","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"MANUFACTURING","tested_point":"AVOID_VERBAL_PROMISE","difficulty":"INTERMEDIATE","estimated_time_s":90,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-avoidance"},"references":["IAS 32 §25"],"exercise":{"prompt":{"fr":"","en":"Durel SA's securities are redeemable in cash at the holder's request. The finance director states that in ten years the company has never accepted a redemption and will not do so. What is the conclusion on classification?","es":""},"explanation":{"fr":"","en":"The holder can demand cash and the contract gives no right to refuse: past practice and management's promise do not count, so the instrument is a financial liability (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Mistaking a past practice of non-repayment for a contractual right of refusal.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"They are equity, because ten years of consistent practice create a right to refuse, which the issuer could invoke against a holder","es":""},"correct":false,"feedback":{"fr":"","en":"A habit does not create a contractual right: only what the contract provides counts (IAS 32, para. 25).","es":""}},{"id":"B","text":{"fr":"","en":"They are equity, as long as management maintains its position in writing","es":""},"correct":false,"feedback":{"fr":"","en":"A unilateral management commitment is not a clause of the issue contract (IAS 32, para. 25).","es":""}},{"id":"C","text":{"fr":"","en":"Classification is impossible until a holder has requested redemption","es":""},"correct":false,"feedback":{"fr":"","en":"Classification is made at issue, from the terms of the contract (IAS 32, para. 25).","es":""}},{"id":"D","text":{"fr":"","en":"Financial liabilities: the practice is not a contractual right to refuse","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000015","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"INVESTMENT","tested_point":"FIXED_DIVIDEND_OBLIGATION_TF","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"A clause that requires the issuer to pay a fixed dividend every year creates a contractual obligation to deliver cash.","es":""},"explanation":{"fr":"","en":"A mandatory fixed dividend is a delivery of cash that the issuer cannot avoid: it is a contractual obligation (IAS 32).","es":""},"common_error":{"fr":"","en":"Seeing an obligation only in the repayment of capital.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000016","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION"],"dimension":"RECOGNITION","format":"MULTIPLE_CHOICE","context":"INVESTMENT","tested_point":"LIABILITY_CLAUSES_PICK","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Among these preference share clauses (no special exception), which are enough on their own to classify the instrument as a financial liability? (several answers)","es":""},"explanation":{"fr":"","en":"Mandatory redemption, repayment the holder can demand and a mandatory fixed dividend are unavoidable deliveries of cash; an issuer option or a discretionary dividend are not (IAS 32).","es":""},"common_error":{"fr":"","en":"Retaining only the redemption clause and forgetting the mandatory dividend.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Redemption is mandatory on a date set by the contract","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The dividend is paid only if the meeting so decides","es":""},"correct":false,"feedback":{"fr":"","en":"A discretionary dividend creates no unavoidable obligation (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"The holder can demand repayment whenever it wishes","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"The issuer may buy the securities back, without being bound to","es":""},"correct":false,"feedback":{"fr":"","en":"An issuer's buy-back option is not an obligation (IAS 32).","es":""}},{"id":"E","text":{"fr":"","en":"A fixed 6% dividend must be paid every year, profits or not","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000017","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION","IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"RECOGNITION","format":"MATCHING","context":"INVESTMENT","tested_point":"CLAUSE_EFFECT_MATCHING","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"example"},"references":["IAS 32 §16","IAS 32 §25"],"exercise":{"prompt":{"fr":"","en":"Match each clause to its consequence for classification.","es":""},"explanation":{"fr":"","en":"Each clause is read through its possible cash delivery and the issuer's ability to avoid it without condition (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Matching clauses by their name rather than by the cash delivery.","es":""},"format":"MATCHING","left":[{"id":"l1","text":{"fr":"","en":"Mandatory redemption on a set date","es":""}},{"id":"l2","text":{"fr":"","en":"Dividend decided freely by the meeting","es":""}},{"id":"l3","text":{"fr":"","en":"Repayment the holder can demand","es":""}},{"id":"l4","text":{"fr":"","en":"Right to refuse repayment in every case","es":""}}],"right":[{"id":"r1","text":{"fr":"","en":"Cash delivery on a certain date, hence a liability","es":""}},{"id":"r2","text":{"fr":"","en":"Distribution with no obligation to pay, consistent with equity","es":""}},{"id":"r3","text":{"fr":"","en":"The issuer cannot oppose it, hence a liability in principle","es":""}},{"id":"r4","text":{"fr":"","en":"Repayment the issuer can always avoid, hence no obligation on this point","es":""}}],"pairs":[{"left":"l1","right":"r1"},{"left":"l2","right":"r2"},{"left":"l3","right":"r3"},{"left":"l4","right":"r4"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000018","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"INVESTMENT","tested_point":"PERPETUAL_MANDATORY_DIVIDEND","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"judgment"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Vilmor SA issues preference shares with no repayment date, but with a mandatory fixed dividend every year. The holders have no right of repayment. Which analysis is correct?","es":""},"explanation":{"fr":"","en":"The mandatory fixed dividend is an unavoidable contractual obligation to deliver cash: the instrument is a financial liability, even without a repayment date (IAS 32).","es":""},"common_error":{"fr":"","en":"Seeing an obligation only in the repayment of capital.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Financial liability, because the annual dividend is a delivery of cash that Vilmor cannot avoid","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"Equity, because the absence of a repayment date removes any obligation, since the holder cannot demand the capital back","es":""},"correct":false,"feedback":{"fr":"","en":"The obligation to pay the dividend remains even without repayment of capital (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"Equity, because a dividend is not a contractual obligation","es":""},"correct":false,"feedback":{"fr":"","en":"A dividend provided as mandatory by the contract is a contractual obligation (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"Compound instrument, because it has both a dividend and a capital element, the dividend being the equity part and the capital the debt part","es":""},"correct":false,"feedback":{"fr":"","en":"Splitting requires a conversion option; here no equity feature is described (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000019","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION"],"dimension":"RULE_KNOWLEDGE","format":"FILL_BLANK","context":"INVESTMENT","tested_point":"LIABILITY_RULE_BLANKS","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"understand"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Complete the classification rule.","es":""},"explanation":{"fr":"","en":"An unavoidable contractual obligation to deliver cash or another financial asset makes the instrument issued a financial liability (IAS 32).","es":""},"common_error":{"fr":"","en":"Thinking that an optional obligation is enough to create a liability.","es":""},"format":"FILL_BLANK","text":{"fr":"","en":"An instrument issued is a {{b1}} when the issuer has an {{b2}} contractual obligation to deliver cash or another financial asset.","es":""},"blanks":[{"id":"b1","mode":"CHOICE","choices":[{"id":"liab","text":{"fr":"","en":"financial liability","es":""}},{"id":"eq","text":{"fr":"","en":"equity instrument","es":""}},{"id":"asset","text":{"fr":"","en":"financial asset","es":""}}],"answer":"liab"},{"id":"b2","mode":"CHOICE","choices":[{"id":"unavoid","text":{"fr":"","en":"unavoidable","es":""}},{"id":"optional","text":{"fr":"","en":"optional","es":""}},{"id":"oral","text":{"fr":"","en":"purely verbal","es":""}}],"answer":"unavoid"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000020","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION","IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"PROFESSIONAL_JUDGMENT","format":"MINI_CASE","context":"INDUSTRY","tested_point":"NEW_SERIES_MINI_CASE","difficulty":"ADVANCED","estimated_time_s":240,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"judgment"},"references":["IAS 32 §16","IAS 32 §25"],"exercise":{"prompt":{"fr":"","en":"Garnel SA: a new series of securities.","es":""},"explanation":{"fr":"","en":"Classification depends on whether the right of refusal is unconditional: a ratio condition makes it conditional and the instrument a liability (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Taking a conditional right of refusal for an unconditional one.","es":""},"format":"MINI_CASE","scenario":{"fr":"","en":"Garnel SA issues a series of securities whose contract provides (case facts):\n\n- the holder may ask for repayment in cash after five years;\n- Garnel may refuse this repayment, but only as long as its equity ratio stays below a threshold set in the contract;\n- the dividend is decided each year by the meeting, with no guaranteed amount.\n\nNo special exception applies to these securities.","es":""},"parts":[{"prompt":{"fr":"","en":"Is Garnel's right to refuse repayment unconditional?","es":""},"explanation":{"fr":"","en":"Refusal is possible only under a ratio condition: Garnel has no unconditional right to avoid delivery (IAS 32, para. 25).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Yes, because the contract does contain a clause of refusal of repayment","es":""},"correct":false,"feedback":{"fr":"","en":"The existence of a refusal clause is not enough; the right must be unconditional (IAS 32, para. 25).","es":""}},{"id":"B","text":{"fr":"","en":"Yes, because the dividend is discretionary and neutralises the holder's right, which removes the issuer's obligation to repay","es":""},"correct":false,"feedback":{"fr":"","en":"The discretionary nature of the dividend has no bearing on the right to refuse repayment (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"No, because it depends on a condition tied to the equity ratio","es":""},"correct":true}],"id":"p1","dimension":"ANALYSIS"},{"prompt":{"fr":"","en":"How does Garnel classify these securities?","es":""},"explanation":{"fr":"","en":"Without an unconditional right to avoid delivery, these securities are a financial liability from issue (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As equity, because the dividend is discretionary","es":""},"correct":false,"feedback":{"fr":"","en":"A discretionary dividend does not neutralise the possible repayment obligation (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"As a financial liability, because it may have to deliver cash without being able to avoid it","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"As equity until the fifth year, then as a liability, because the equity-ratio test applies from that date","es":""},"correct":false,"feedback":{"fr":"","en":"Classification is made at issue from the terms of the contract, not according to an exercise calendar (IAS 32).","es":""}}],"id":"p2","dimension":"APPLICATION"},{"prompt":{"fr":"","en":"If the contract allowed Garnel to refuse repayment in every case, without condition, the obligation to deliver would disappear on this point.","es":""},"explanation":{"fr":"","en":"An unconditional right of refusal removes the unavoidable obligation to deliver cash (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Thinking a right to refuse does not remove the obligation: if it is unconditional, there is no longer an unavoidable obligation to deliver cash.","es":""},"format":"TRUE_FALSE","answer":true,"id":"p3","dimension":"PROFESSIONAL_JUDGMENT"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000021","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EQUITY_INSTRUMENT_DEFINITION"],"dimension":"RECOGNITION","format":"SINGLE_CHOICE","context":"RETAIL","tested_point":"EQUITY_ORDINARY_SHARES_PICK","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000003","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"example"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Which of these instruments issued by Lorine SA is an equity instrument?","es":""},"explanation":{"fr":"","en":"Only the ordinary shares, with no redemption or mandatory dividend, impose no unavoidable delivery of cash: they are equity (IAS 32).","es":""},"common_error":{"fr":"","en":"Defining equity only as ordinary shares, without examining the issuer's contractual obligation.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A loan received from a bank, repayable in five equal annual instalments","es":""},"correct":false,"feedback":{"fr":"","en":"A loan creates an unavoidable obligation to repay: it is a financial liability (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"Securities that the holder can hand back at any time for cash","es":""},"correct":false,"feedback":{"fr":"","en":"The holder can demand cash: in principle, it is a financial liability (IAS 32, para. 16A).","es":""}},{"id":"C","text":{"fr":"","en":"Securities with a mandatory fixed dividend, paid each year whatever the result","es":""},"correct":false,"feedback":{"fr":"","en":"The mandatory dividend is an unavoidable delivery of cash: a financial liability (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"Ordinary shares with no redemption date, with a dividend decided by the meeting","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000022","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"INDUSTRY","tested_point":"FIXED_FIXED_SORT_FOUR","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000004","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"example"},"references":["IAS 32 §22","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Classify each contract settled in own shares (functional currency: the euro; no adjustment, no net settlement).","es":""},"explanation":{"fr":"","en":"Only contracts whose number of shares and amount given in exchange are fixed are equity instruments; a variable number or an indexed price rules them out (IAS 32).","es":""},"common_error":{"fr":"","en":"Classifying as equity an option whose number of shares or amount of cash is variable.","es":""},"format":"CLASSIFICATION","categories":[{"id":"eq","text":{"fr":"","en":"Equity instrument","es":""}},{"id":"fl","text":{"fr":"","en":"Financial liability or asset","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"Option to buy 68,000 shares at €9 each, settled by delivery of the shares","es":""},"category":"eq"},{"id":"i2","text":{"fr":"","en":"Delivery of as many shares as needed to reach €750,000 at the price on the maturity day","es":""},"category":"fl"},{"id":"i3","text":{"fr":"","en":"Option on 35,500 shares whose €14 exercise price rises every year by the inflation rate","es":""},"category":"fl"},{"id":"i4","text":{"fr":"","en":"94,000 warrants, one share per warrant against €22, number and price unchanged until maturity","es":""},"category":"eq"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000023","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"INDUSTRY","tested_point":"FIXED_FIXED_SETTLE_SHARES_TF","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000004","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"rule-test"},"references":["IAS 32 §22"],"exercise":{"prompt":{"fr":"","en":"For a contract to be an equity instrument, settlement by delivery of the issuer's own shares is necessary but not sufficient.","es":""},"explanation":{"fr":"","en":"The number of shares and the amount given in exchange must also be fixed: settlement in own shares alone does not settle the question (IAS 32).","es":""},"common_error":{"fr":"","en":"Concluding \"equity\" because settlement is in shares.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000024","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"ANALYSIS","format":"MULTIPLE_CHOICE","context":"INDUSTRY","tested_point":"FIXED_FIXED_PREVENTING_FEATURES","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000004","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"rule-test"},"references":["IAS 32 §22"],"exercise":{"prompt":{"fr":"","en":"Among these features of a contract settled in own shares (functional currency: the euro), which prevent equity classification? (several answers)","es":""},"explanation":{"fr":"","en":"A variable number of shares and an indexed price make one of the two terms vary: the fixed-for-fixed condition is not met (IAS 32).","es":""},"common_error":{"fr":"","en":"Checking only the number of shares and forgetting the price indexation.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The number of shares delivered depends on the share price at maturity","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The number of shares and the price in euros are fixed at signing and no longer move","es":""},"correct":false,"feedback":{"fr":"","en":"A number and a price that are both fixed are precisely the fixed-for-fixed condition (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"The exercise price is readjusted every year according to a price index","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"Settlement is by physical delivery of the shares against the price","es":""},"correct":false,"feedback":{"fr":"","en":"Physical delivery against a fixed price is the method consistent with equity (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000025","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FOREIGN_CURRENCY_RIGHTS"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"LISTED_COMPANY","tested_point":"FX_RIGHTS_PRO_RATA_EXCEPTION","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000004","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"rule-fx"},"references":["IAS 32 §22","IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Tavor SA (functional currency: the euro) offers all its shareholders, in proportion to their shares, the right to subscribe for new shares at a fixed price of 5 dollars each. How does it classify these rights?","es":""},"explanation":{"fr":"","en":"The dollar price normally breaks fixed-for-fixed; the exception for rights offered pro rata to all existing owners of the same class allows equity classification here (IAS 32).","es":""},"common_error":{"fr":"","en":"Applying the non-functional currency conclusion to pro rata rights without examining the exception.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a financial liability, because the dollar price makes the euro amount vary","es":""},"correct":false,"feedback":{"fr":"","en":"That conclusion would hold outside the exception; here the pro rata offer to all shareholders falls under the exception (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"As equity, thanks to the exception for rights offered pro rata to all existing owners","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"As a financial asset, because the rights give Tavor the option to receive dollars, in a currency other than the functional one","es":""},"correct":false,"feedback":{"fr":"","en":"For the issuer of the rights, classification is liability or equity; it does not become an asset (IAS 32, para. 11).","es":""}},{"id":"D","text":{"fr":"","en":"As equity, because a price in dollars has no effect on classification","es":""},"correct":false,"feedback":{"fr":"","en":"A foreign currency price normally breaks fixed-for-fixed; it is the exception that saves the classification (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000026","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FIXED_FOR_FIXED","IAS32.CLASSIFICATION.FOREIGN_CURRENCY_RIGHTS"],"dimension":"ANALYSIS","format":"ERROR_SPOT","context":"INDUSTRY","tested_point":"FIXED_FIXED_ERROR_SPOT","difficulty":"ADVANCED","estimated_time_s":150,"lesson_id":"LS.IAS32.000004","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"pitfalls"},"references":["IAS 32 §22"],"exercise":{"prompt":{"fr":"","en":"Spot the erroneous statements about the fixed-for-fixed test.","es":""},"explanation":{"fr":"","en":"An indexed price makes the amount vary and so breaks fixed-for-fixed, and the exception covers only the offer pro rata to all existing owners (IAS 32).","es":""},"common_error":{"fr":"","en":"Extending the pro rata rights exception to a reserved issue.","es":""},"format":"ERROR_SPOT","statements":[{"id":"s1","text":{"fr":"","en":"The test covers both the number of shares delivered and the amount received in exchange.","es":""},"erroneous":false},{"id":"s2","text":{"fr":"","en":"An option on a fixed number of shares whose price is indexed remains fixed-for-fixed, since the number of shares does not move.","es":""},"erroneous":true,"correction":{"fr":"","en":"The indexed price makes the amount vary: the fixed-for-fixed condition is not met.","es":""}},{"id":"s3","text":{"fr":"","en":"An exercise price fixed in a currency other than the functional currency does not normally satisfy the condition.","es":""},"erroneous":false},{"id":"s4","text":{"fr":"","en":"The exception for rights offered pro rata also applies to warrants sold to a single bank.","es":""},"erroneous":true,"correction":{"fr":"","en":"The exception covers only rights offered pro rata to all existing owners of the same class.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000027","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FOREIGN_CURRENCY_RIGHTS","IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"PROFESSIONAL_JUDGMENT","format":"MINI_CASE","context":"LISTED_COMPANY","tested_point":"FX_RIGHTS_MINI_CASE","difficulty":"EXPERT","estimated_time_s":300,"lesson_id":"LS.IAS32.000004","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"judgment"},"references":["IAS 32 §22","IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Kelvira SA: dollar rights, two operations.","es":""},"explanation":{"fr":"","en":"The currency of the price normally breaks fixed-for-fixed; only the offer pro rata to all existing owners of the same class benefits from the exception (IAS 32).","es":""},"common_error":{"fr":"","en":"Extending the pro rata rights exception to a reserved issue.","es":""},"format":"MINI_CASE","scenario":{"fr":"","en":"Kelvira SA has the euro as its functional currency. It carries out two operations (case facts):\n\n**Operation 1**: it offers all its ordinary shareholders, in proportion to their shares, the right to subscribe for one new share at 12 dollars.\n\n**Operation 2**: it sells to a bank 46,000 warrants each giving the right to buy one share at 12 dollars.\n\nNo adjustment or net settlement is provided for in either contract.","es":""},"parts":[{"prompt":{"fr":"","en":"How are the rights of operation 1 classified?","es":""},"explanation":{"fr":"","en":"The offer is made pro rata to all existing owners of the same class: the exception allows equity classification despite the dollar price (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Financial liability, because the dollar price makes the euro amount vary, and no exception can change that outcome","es":""},"correct":false,"feedback":{"fr":"","en":"That is the conclusion in principle, which the exception sets aside for an offer pro rata to all shareholders (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"Financial asset, because the rights give the right to receive shares","es":""},"correct":false,"feedback":{"fr":"","en":"For the issuer, an instrument is a liability or equity, never an asset (IAS 32, para. 11).","es":""}},{"id":"C","text":{"fr":"","en":"Equity, through the exception for rights offered pro rata to all existing owners","es":""},"correct":true}],"id":"p1","dimension":"APPLICATION"},{"prompt":{"fr":"","en":"How are the warrants of operation 2 classified?","es":""},"explanation":{"fr":"","en":"The warrants are sold to a single bank: the exception does not apply and the foreign currency price breaks the fixed-for-fixed condition (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Financial liability or asset, because the dollar price makes the euro amount vary and no exception applies","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"Equity, because both operations concern the same shares","es":""},"correct":false,"feedback":{"fr":"","en":"Classification depends on the terms of each contract, not on the underlying shares (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"Equity, because the number of warrants and shares is fixed, which is enough to satisfy the fixed-for-fixed condition whatever the currency of the price","es":""},"correct":false,"feedback":{"fr":"","en":"A fixed number is not enough: the amount received in euros varies with the exchange rate (IAS 32).","es":""}}],"id":"p2","dimension":"APPLICATION"},{"prompt":{"fr":"","en":"The mere fact that the price is in dollars is enough to conclude that both operations give a financial liability or asset.","es":""},"explanation":{"fr":"","en":"The exception for rights offered pro rata to all existing owners sets this conclusion aside for operation 1 (IAS 32).","es":""},"common_error":{"fr":"","en":"Concluding liability from the price currency alone: rights offered pro rata to all existing owners fall under an exception.","es":""},"format":"TRUE_FALSE","answer":false,"id":"p3","dimension":"ANALYSIS"},{"prompt":{"fr":"","en":"Kelvira finally reserves the offer of operation 1 for shareholders holding more than 5% of the capital only. What is the effect on classification?","es":""},"explanation":{"fr":"","en":"An offer limited to shareholders above 5% is not made to all existing owners: the exception no longer applies and the dollar price breaks fixed-for-fixed (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The exception no longer applies: the rights become a financial liability or asset","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"No effect, since the rights are still offered to shareholders","es":""},"correct":false,"feedback":{"fr":"","en":"The exception requires an offer to all existing owners of the same class, not to some of them (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"The rights become equity as of right, because they are more targeted","es":""},"correct":false,"feedback":{"fr":"","en":"Narrower targeting moves away from the exception; it does not create equity classification (IAS 32).","es":""}}],"id":"p4","dimension":"PROFESSIONAL_JUDGMENT"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000028","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTINGENT_SETTLEMENT"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"FINANCE","tested_point":"CONTINGENT_CLAUSES_SORT","difficulty":"INTERMEDIATE","estimated_time_s":150,"lesson_id":"LS.IAS32.000005","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-contingent"},"references":["IAS 32 §25","IAS 32 §AG28"],"exercise":{"prompt":{"fr":"","en":"For each cash repayment clause, say whether it makes the instrument a financial liability or has no such effect.","es":""},"explanation":{"fr":"","en":"An event beyond the control of both parties (index, regulator, exchange rate) in principle makes a liability; an event that depends on the issuer or a non-genuine clause has no such effect (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Ignoring a contingent settlement clause because the event is unlikely.","es":""},"format":"CLASSIFICATION","categories":[{"id":"li","text":{"fr":"","en":"Financial liability in principle","es":""}},{"id":"nn","text":{"fr":"","en":"Has no such effect","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"Repayment if the national stock index loses more than 40% over a year","es":""},"category":"li"},{"id":"i2","text":{"fr":"","en":"Repayment if the issuer's board decides to sell a subsidiary","es":""},"category":"nn"},{"id":"i3","text":{"fr":"","en":"Repayment if an independent regulator withdraws the issuer's licence","es":""},"category":"li"},{"id":"i4","text":{"fr":"","en":"Repayment if a collision with an asteroid destroys the issuer's head office","es":""},"category":"nn"},{"id":"i5","text":{"fr":"","en":"Repayment if the euro-dollar exchange rate exceeds a level set in the contract","es":""},"category":"li"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000029","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTINGENT_SETTLEMENT"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"AGRIFOOD","tested_point":"CONTINGENT_PLAUSIBLE_EVENT","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000005","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-contingent"},"references":["IAS 32 §25","IAS 32 §AG28"],"exercise":{"prompt":{"fr":"","en":"An instrument of Marlen SA will be repaid in cash if the national wheat harvest falls below a set level, which has happened twice in twenty years. Marlen has no control over this level. What is the conclusion?","es":""},"explanation":{"fr":"","en":"The event is beyond both parties, has already occurred and is therefore not extremely rare or highly abnormal: the clause is genuine, hence a financial liability in principle (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Calling a merely rare clause non-genuine.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The clause is non-genuine, because the event is less frequent than once in ten years","es":""},"correct":false,"feedback":{"fr":"","en":"An event that has already happened is not \"highly abnormal\"; no numerical frequency is a criterion (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"The instrument is equity as long as the harvest has not fallen below the level","es":""},"correct":false,"feedback":{"fr":"","en":"Classification is made at issue, without waiting for the event to occur (IAS 32, para. 25).","es":""}},{"id":"C","text":{"fr":"","en":"The clause is genuine and makes the instrument a financial liability in principle","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"The clause has no effect, because the event depends on a natural factor","es":""},"correct":false,"feedback":{"fr":"","en":"A factor outside both parties is precisely what creates contingent settlement (IAS 32, para. 25).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000030","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTINGENT_SETTLEMENT"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"FINANCE","tested_point":"NON_GENUINE_NOT_JUST_UNLIKELY","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000005","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-contingent"},"references":["IAS 32 §AG28"],"exercise":{"prompt":{"fr":"","en":"A contingent settlement clause is non-genuine only if the event is extremely rare, highly abnormal and very unlikely.","es":""},"explanation":{"fr":"","en":"The three qualifiers apply together: an event merely judged unlikely does not make the clause non-genuine (IAS 32).","es":""},"common_error":{"fr":"","en":"Mixing up \"unlikely\" and \"non-genuine\".","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000031","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.SETTLEMENT_OPTIONS","IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"INDUSTRY","tested_point":"SETTLEMENT_OPTION_NET_SHARES","difficulty":"ADVANCED","estimated_time_s":150,"lesson_id":"LS.IAS32.000005","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-options"},"references":["IAS 32 §26","IAS 32 §22"],"exercise":{"prompt":{"fr":"","en":"A derivative on Ketel SA's own shares lets Ketel choose between delivery of 26,000 shares against a fixed price in euros and net share settlement, whose number depends on the share price. How is it classified?","es":""},"explanation":{"fr":"","en":"For a derivative with settlement options, all methods must lead to equity; net share settlement, with a variable number, departs from it: financial asset or liability (IAS 32, para. 26).","es":""},"common_error":{"fr":"","en":"Classifying as equity a derivative on own shares because one settlement method is delivery of a fixed number of shares.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Financial asset or liability, because the net share method does not meet fixed-for-fixed","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"Equity instrument, because both methods are settled in shares","es":""},"correct":false,"feedback":{"fr":"","en":"Settling in shares is not enough; the number of shares must be fixed in all methods (IAS 32, para. 26).","es":""}},{"id":"C","text":{"fr":"","en":"Equity instrument, because it is Ketel that chooses the method","es":""},"correct":false,"feedback":{"fr":"","en":"Whether the issuer or the holder chooses, all methods must lead to equity (IAS 32, para. 26).","es":""}},{"id":"D","text":{"fr":"","en":"Financial liability, because one of the methods provides for cash settlement","es":""},"correct":false,"feedback":{"fr":"","en":"No method provides for cash here; it is the variable number of shares that is the problem (IAS 32, para. 26).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000032","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.SETTLEMENT_OPTIONS"],"dimension":"APPLICATION","format":"MULTIPLE_CHOICE","context":"INDUSTRY","tested_point":"SETTLEMENT_ALL_METHODS_EQUITY_PICK","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000005","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-options"},"references":["IAS 32 §26"],"exercise":{"prompt":{"fr":"","en":"Among these derivatives on own shares (functional currency: the euro, no adjustment), which can be classified as equity? (several answers)","es":""},"explanation":{"fr":"","en":"A derivative with a single fixed-for-fixed method can be an equity instrument; as soon as a cash method exists, at either party's choice, not all lead to equity any more (IAS 32, para. 26).","es":""},"common_error":{"fr":"","en":"Believing that the identity of the party choosing changes the rule.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Only method provided: physical delivery of 26,000 shares against a fixed price in euros","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"At the holder's choice, physical delivery of 26,000 shares against a fixed price or net cash settlement","es":""},"correct":false,"feedback":{"fr":"","en":"Net cash settlement does not result in equity (IAS 32, para. 26).","es":""}},{"id":"C","text":{"fr":"","en":"At the issuer's choice, physical delivery of 26,000 shares against a fixed price or net cash settlement","es":""},"correct":false,"feedback":{"fr":"","en":"The issuer's choice does not change the rule: a cash method rules out equity (IAS 32, para. 26).","es":""}},{"id":"D","text":{"fr":"","en":"Only method provided: physical delivery of 53,000 shares against €7 each","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000033","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTINGENT_SETTLEMENT","IAS32.CLASSIFICATION.SETTLEMENT_OPTIONS"],"dimension":"RECOGNITION","format":"MATCHING","context":"FINANCE","tested_point":"CONTINGENT_OPTIONS_MATCHING","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000005","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"example"},"references":["IAS 32 §25","IAS 32 §26","IAS 32 §AG28"],"exercise":{"prompt":{"fr":"","en":"Match each situation to its conclusion.","es":""},"explanation":{"fr":"","en":"The first three rows come under the \"who controls the event, is the clause genuine?\" grid; the last, under the settlement options rule (IAS 32, para. 25 and 26).","es":""},"common_error":{"fr":"","en":"Mixing the contingent settlement grid and the settlement options grid.","es":""},"format":"MATCHING","left":[{"id":"l1","text":{"fr":"","en":"Delivery of cash dependent on an event beyond the control of both parties, with no right to avoid it","es":""}},{"id":"l2","text":{"fr":"","en":"Delivery of cash dependent on a decision that the issuer alone can take or not","es":""}},{"id":"l3","text":{"fr":"","en":"Clause that is extremely rare, highly abnormal and very unlikely","es":""}},{"id":"l4","text":{"fr":"","en":"Derivative whose holder chooses between delivery of shares and net cash settlement","es":""}}],"right":[{"id":"r1","text":{"fr":"","en":"Financial liability in principle","es":""}},{"id":"r2","text":{"fr":"","en":"The issuer can avoid it, so no obligation on this point","es":""}},{"id":"r3","text":{"fr":"","en":"Non-genuine clause, no effect on classification","es":""}},{"id":"r4","text":{"fr":"","en":"Financial asset or liability, because not all methods lead to equity","es":""}}],"pairs":[{"left":"l1","right":"r1"},{"left":"l2","right":"r2"},{"left":"l3","right":"r3"},{"left":"l4","right":"r4"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000034","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTINGENT_SETTLEMENT","IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"ANALYSIS","format":"MINI_CASE","context":"ENERGY","tested_point":"CONTINGENT_INDEX_MINI_CASE","difficulty":"ADVANCED","estimated_time_s":240,"lesson_id":"LS.IAS32.000005","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"judgment"},"references":["IAS 32 §25","IAS 32 §AG28"],"exercise":{"prompt":{"fr":"","en":"Lorvane SA: an index-linked instrument.","es":""},"explanation":{"fr":"","en":"The event is beyond both parties, the clause is genuine and the issuer has no unconditional right to avoid: financial liability (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Ignoring the clause because the event is unlikely.","es":""},"format":"MINI_CASE","scenario":{"fr":"","en":"Lorvane SA issues an instrument whose contract provides (case facts):\n\n- at the end of the fourth year, Lorvane repays the nominal in cash if the oil price index is above a level set in the contract;\n- otherwise, the instrument is never repaid and its dividend is decided freely by the meeting;\n- the index is published by an independent body; Lorvane has no influence on it.\n\nManagement estimates the probability that the index exceeds the set level at 3%.","es":""},"parts":[{"prompt":{"fr":"","en":"Who controls the event that triggers repayment?","es":""},"explanation":{"fr":"","en":"The index is set by an independent third party: the event is beyond both Lorvane and the holder (IAS 32, para. 25).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Lorvane alone, since it decides the dividend, and so controls the trigger of repayment","es":""},"correct":false,"feedback":{"fr":"","en":"The dividend has no bearing on the trigger of repayment, which depends on the index (IAS 32, para. 25).","es":""}},{"id":"B","text":{"fr":"","en":"Neither Lorvane nor the holder: the index is published by an independent body","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"The holder alone, since it is the beneficiary of the repayment, and so decides when to ask for it","es":""},"correct":false,"feedback":{"fr":"","en":"The holder has no influence on the index: it does not control the event (IAS 32, para. 25).","es":""}}],"id":"p1","dimension":"RECOGNITION"},{"prompt":{"fr":"","en":"How does Lorvane classify the instrument at issue?","es":""},"explanation":{"fr":"","en":"A cash settlement dependent on an event beyond the control of both parties, with no unconditional right to avoid, in principle gives a financial liability (IAS 32, para. 25).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a financial liability, because it has no unconditional right to avoid delivering cash","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"As equity, because the dividend is discretionary and repayment is unlikely, given the level of the index today","es":""},"correct":false,"feedback":{"fr":"","en":"Probability does not decide; the conditional clause creates a possible obligation that Lorvane cannot avoid (IAS 32, para. 25).","es":""}},{"id":"C","text":{"fr":"","en":"As equity as long as the index has not exceeded the set level, then as a liability once it is exceeded","es":""},"correct":false,"feedback":{"fr":"","en":"Classification is made at issue and does not flip with the event (IAS 32, para. 25).","es":""}}],"id":"p2","dimension":"APPLICATION"},{"prompt":{"fr":"","en":"Management's estimate (3%) is enough to show that the clause is non-genuine.","es":""},"explanation":{"fr":"","en":"A clause is non-genuine if it is extremely rare, highly abnormal and very unlikely; a 3% probability on a market index does not establish that (IAS 32).","es":""},"common_error":{"fr":"","en":"Judging a clause not genuine on a low probability: it requires an event that is extremely rare, highly abnormal and very unlikely.","es":""},"format":"TRUE_FALSE","answer":false,"id":"p3","dimension":"PROFESSIONAL_JUDGMENT"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000035","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.MEMBERS_SHARES_IFRIC2"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"COOPERATIVE","tested_point":"COOP_FOUR_SORT","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000006","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000006","section_id":"example"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"Classify the members' shares of each cooperative.","es":""},"explanation":{"fr":"","en":"An unconditional right of refusal or prohibition gives equity; a redemption that can be demanded or a conditional prohibition leaves a liability in principle (IFRIC 2, para. 7 and 8).","es":""},"common_error":{"fr":"","en":"Treating as unconditional a redemption prohibition that applies only if a liquidity constraint is reached.","es":""},"format":"CLASSIFICATION","categories":[{"id":"eq","text":{"fr":"","en":"Equity","es":""}},{"id":"li","text":{"fr":"","en":"Liability in principle","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"Alvera: the articles give the board the right to refuse any redemption, without condition","es":""},"category":"eq"},{"id":"i2","text":{"fr":"","en":"Brisal: the departing member is repaid as of right at the end of the year","es":""},"category":"li"},{"id":"i3","text":{"fr":"","en":"Corvane: the law of the country prohibits any redemption of the shares, without exception","es":""},"category":"eq"},{"id":"i4","text":{"fr":"","en":"Dunval: the articles prohibit redemption only if equity falls below a threshold","es":""},"category":"li"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000036","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.MEMBERS_SHARES_IFRIC2","IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"COOPERATIVE","tested_point":"COOP_MEMBER_CAN_DEMAND","difficulty":"BEGINNER","estimated_time_s":75,"lesson_id":"LS.IAS32.000006","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000006","section_id":"understand"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"The articles of the cooperative Faluma allow any departing member to demand redemption of their shares, without the board being able to oppose it. How are these shares classified?","es":""},"explanation":{"fr":"","en":"Without a right to refuse redemption, the cooperative must deliver cash: the shares are in principle liabilities (IFRIC 2, para. 7).","es":""},"common_error":{"fr":"","en":"Classifying by the status of the holders rather than by the right of refusal.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As equity, because the members are the owners of the cooperative","es":""},"correct":false,"feedback":{"fr":"","en":"Being an owner does not decide; the right to refuse redemption decides (IFRIC 2, para. 7).","es":""}},{"id":"B","text":{"fr":"","en":"As equity, because a member leaving is a rare event","es":""},"correct":false,"feedback":{"fr":"","en":"The rarity of an event does not remove an obligation the cooperative cannot avoid (IFRIC 2, para. 7).","es":""}},{"id":"C","text":{"fr":"","en":"As a financial asset of the cooperative, because it keeps the sums paid in, which it invests in its own activity","es":""},"correct":false,"feedback":{"fr":"","en":"For the issuer of the shares, classification is liability or equity, never an asset (IAS 32, para. 11).","es":""}},{"id":"D","text":{"fr":"","en":"As a liability in principle, because the cooperative cannot avoid delivering cash","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000037","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.MEMBERS_SHARES_IFRIC2"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"COOPERATIVE","tested_point":"COOP_UNCONDITIONAL_PROHIBITION_TF","difficulty":"INTERMEDIATE","estimated_time_s":60,"lesson_id":"LS.IAS32.000006","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000006","section_id":"rule-prohibition"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"An unconditional prohibition on redeeming shares, set by law or by the articles, has the same effect as an unconditional right of refusal of the board.","es":""},"explanation":{"fr":"","en":"In both cases, the cooperative has no unavoidable obligation to redeem: the shares are equity (IFRIC 2, para. 7 and 8).","es":""},"common_error":{"fr":"","en":"Believing that only a board right of refusal counts.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000038","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.MEMBERS_SHARES_IFRIC2"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"COOPERATIVE","tested_point":"COOP_CAPITAL_THRESHOLD_PROHIBITION","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000006","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000006","section_id":"pitfalls"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"The articles of the cooperative Terralis prohibit redemption of the shares only when its capital falls below the legal minimum; above it, departing members can demand it. Which conclusion is correct?","es":""},"explanation":{"fr":"","en":"The prohibition applies only if capital is below the minimum: it is conditional, so does not have the effect of an unconditional right of refusal; the shares are in principle liabilities (IFRIC 2, para. 8).","es":""},"common_error":{"fr":"","en":"Treating as unconditional a redemption prohibition that applies only under conditions.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Equity, because the articles do contain a prohibition on redeeming","es":""},"correct":false,"feedback":{"fr":"","en":"A prohibition that applies only under condition does not have the effect of an unconditional right (IFRIC 2, para. 8).","es":""}},{"id":"B","text":{"fr":"","en":"The prohibition is conditional: it does not have the effect of an unconditional right of refusal, hence a liability in principle","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"Equity, because the legal minimum is a rule of law and not of the articles","es":""},"correct":false,"feedback":{"fr":"","en":"Whether the condition comes from the law or the articles does not make it unconditional (IFRIC 2, para. 8).","es":""}},{"id":"D","text":{"fr":"","en":"Classification depends on the first member who actually asks for a redemption, the instrument being equity until that first request is received","es":""},"correct":false,"feedback":{"fr":"","en":"Classification is made from existing rights and obligations, not from future requests (IFRIC 2, para. 8).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000039","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"RECOGNITION","format":"SINGLE_CHOICE","context":"ASSET_MANAGEMENT","tested_point":"PUTTABLE_PRINCIPLE","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"understand"},"references":["IAS 32 §16A"],"exercise":{"prompt":{"fr":"","en":"A fund issues units that its holders can hand back to it at any time for cash. Absent an applicable exception, what is the starting point for classification?","es":""},"explanation":{"fr":"","en":"The holder can demand cash and the fund cannot refuse: the starting point is a financial liability; a framed exception is examined only afterwards (IAS 32, para. 16A).","es":""},"common_error":{"fr":"","en":"Starting from owner status instead of the analysis of the obligation.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A financial liability, as the fund cannot refuse repayment","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"Equity, because the holders are the owners of the fund","es":""},"correct":false,"feedback":{"fr":"","en":"Owner status does not decide; the unavoidable obligation to repay does (IAS 32, para. 16A).","es":""}},{"id":"C","text":{"fr":"","en":"A compound instrument, because the units have a redemption value and a market value","es":""},"correct":false,"feedback":{"fr":"","en":"Splitting requires a conversion option into shares; that is not the case here (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"A financial asset, because the fund holds the holders' money","es":""},"correct":false,"feedback":{"fr":"","en":"For the issuer, an instrument is a liability or equity, never an asset (IAS 32, para. 11).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000040","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.PUTTABLE_CONDITIONS"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"ASSET_MANAGEMENT","tested_point":"PUTTABLE_SUBORDINATION_FAILS","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-puttable"},"references":["IAS 32 §16A","IAS 32 §16B"],"exercise":{"prompt":{"fr":"","en":"Norvik SA's P units are puttable by the holder. On liquidation, class P ranks ahead of the ordinary shares class. What can be said about the puttable instruments exception?","es":""},"explanation":{"fr":"","en":"A cumulative condition is missing: class P ranks ahead of the ordinary shares, it is not the most subordinate; the liability principle applies (IAS 32, para. 16A).","es":""},"common_error":{"fr":"","en":"Applying the exception without checking all the cumulative conditions.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"It is available, because the units are puttable and the redemption option is enough to subordinate them","es":""},"correct":false,"feedback":{"fr":"","en":"A redemption option does not by itself reduce subordination, which depends on the rank on liquidation (Committee decision of 2009).","es":""}},{"id":"B","text":{"fr":"","en":"It is available, because the liquidation of a company is a remote event","es":""},"correct":false,"feedback":{"fr":"","en":"The subordination condition is assessed precisely from the rank on liquidation (IAS 32, para. 16A).","es":""}},{"id":"C","text":{"fr":"","en":"It is not available, for lack of subordination to the most subordinate class; class P remains a liability","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"It is available for half of the units, because subordination is assessed security by security","es":""},"correct":false,"feedback":{"fr":"","en":"Subordination is assessed by class of instruments, not security by security (IAS 32, para. 16A).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000041","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.PUTTABLE_CONDITIONS"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"ASSET_MANAGEMENT","tested_point":"PUTTABLE_OTHER_OBLIGATION_FAILS","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-puttable"},"references":["IAS 32 §16A"],"exercise":{"prompt":{"fr":"","en":"Selvan SA's Q units are puttable by the holder and form the most subordinate class, but Selvan must also pay a mandatory fixed dividend to the holders every year. What is the conclusion?","es":""},"explanation":{"fr":"","en":"The condition of no other contractual obligation unfavourable to the issuer is missing because of the mandatory dividend: the liability principle remains (IAS 32, para. 16A).","es":""},"common_error":{"fr":"","en":"Forgetting a contractual obligation other than redemption.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The exception is available, because subordination is enough on its own","es":""},"correct":false,"feedback":{"fr":"","en":"The conditions of the exception are cumulative; subordination alone is not enough (IAS 32, para. 16A).","es":""}},{"id":"B","text":{"fr":"","en":"The exception is available, because the dividend is a flow and not a repayment, so the mandatory dividend does not count as an obligation","es":""},"correct":false,"feedback":{"fr":"","en":"A mandatory dividend is an unavoidable delivery of cash, so another obligation (IAS 32, para. 16A).","es":""}},{"id":"C","text":{"fr":"","en":"The exception is not available: the mandatory dividend is another obligation unfavourable to the issuer","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"The exception is available for the capital and closed for the dividend","es":""},"correct":false,"feedback":{"fr":"","en":"The exception is assessed for the instrument as a whole and its cumulative conditions (IAS 32, para. 16A).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000042","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.PUTTABLE_VS_LIQUIDATION","IAS32.SPECIAL.LIQUIDATION_OBLIGATIONS"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"ASSET_MANAGEMENT","tested_point":"COMPARE_EXTRA_CONDITION_TF","difficulty":"INTERMEDIATE","estimated_time_s":60,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-compare"},"references":["IAS 32 §16A","IAS 32 §16C"],"exercise":{"prompt":{"fr":"","en":"The liquidation exception includes, like the puttable instruments exception, a condition of no other obligation unfavourable to the issuer.","es":""},"explanation":{"fr":"","en":"Unlike 16A, paragraph 16C does not contain this condition, which the IASB explains by the time at which the issuer might have to settle (IAS 32, para. 16A and 16C).","es":""},"common_error":{"fr":"","en":"Applying to the liquidation exception the condition of no other unfavourable obligation.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000043","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.PUTTABLE_VS_LIQUIDATION"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"ASSET_MANAGEMENT","tested_point":"COMPARE_TIMING_RATIONALE","difficulty":"ADVANCED","estimated_time_s":100,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-compare"},"references":["IAS 32 §16C"],"exercise":{"prompt":{"fr":"","en":"How does the IASB explain the lack, in the liquidation exception, of an equivalent to the condition of no other unfavourable obligation?","es":""},"explanation":{"fr":"","en":"For a puttable instrument, settlement may occur during the life of the entity; for the liquidation obligation, it occurs only at the end, which explains the absence of the condition (IAS 32, para. 16C).","es":""},"common_error":{"fr":"","en":"Applying to the liquidation exception a condition belonging to the puttable instruments exception.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"By the amount, which would be lower than that of a puttable instrument, the smaller amount being treated as equity","es":""},"correct":false,"feedback":{"fr":"","en":"The amount is not the argument given; it is the possible time of settlement (IAS 32, para. 16C).","es":""}},{"id":"B","text":{"fr":"","en":"By the legal form of the issuer, which is a company in liquidation","es":""},"correct":false,"feedback":{"fr":"","en":"The issuer is not in liquidation: the obligation would arise only on a future liquidation (IAS 32, para. 16C).","es":""}},{"id":"C","text":{"fr":"","en":"By a drafting mistake that the standard has kept since the start","es":""},"correct":false,"feedback":{"fr":"","en":"The IASB gives a substantive justification, not a drafting mistake (IAS 32, para. 16C).","es":""}},{"id":"D","text":{"fr":"","en":"By the time at which the issuer might have to settle: the obligation arises only on liquidation","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000044","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.IFRIC_PUTTABLES_2009"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"ASSET_MANAGEMENT","tested_point":"IFRIC2009_OPTION_AND_SUBORDINATION","difficulty":"ADVANCED","estimated_time_s":100,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-ifric2009"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"A fund adds a holder's put option to its units, which remain the most subordinate class on liquidation. What is the effect of this option on subordination?","es":""},"explanation":{"fr":"","en":"The Committee recalls that the subordination required by the exception is judged by the rank on liquidation; the existence of a redemption option does not reduce it on its own (Committee decision of 2009).","es":""},"common_error":{"fr":"","en":"Considering that a redemption option makes the instrument less subordinated.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"None: only the rank on liquidation counts, unchanged by the option","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"It makes the units less subordinated, because the holder can exit before the others","es":""},"correct":false,"feedback":{"fr":"","en":"The Committee specifies that the redemption option does not by itself reduce subordination (Committee decision of 2009).","es":""}},{"id":"C","text":{"fr":"","en":"It makes the units more subordinated, because repayment is postponed","es":""},"correct":false,"feedback":{"fr":"","en":"The option neither adds nor removes subordination; only the rank on liquidation counts (Committee decision of 2009).","es":""}},{"id":"D","text":{"fr":"","en":"It removes subordination, since the holder now takes priority over the issuer","es":""},"correct":false,"feedback":{"fr":"","en":"The redemption option creates no priority rank on liquidation (Committee decision of 2009).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000045","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.IFRIC_PUTTABLES_2009","IAS32.SPECIAL.PUTTABLE_CONDITIONS"],"dimension":"ANALYSIS","format":"ORDERING","context":"ASSET_MANAGEMENT","tested_point":"IFRIC2009_TWO_STEP_ORDERING","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-ifric2009"},"references":["IAS 32","IAS 32 §16A"],"exercise":{"prompt":{"fr":"","en":"Put in order the approach recalled by the Committee in 2009 for an instrument puttable by the holder.","es":""},"explanation":{"fr":"","en":"The general liability or equity analysis comes first; the conditions of the exception are examined only afterwards, for an instrument that would otherwise be a liability (Committee decision of 2009).","es":""},"common_error":{"fr":"","en":"Skipping the general analysis and starting straight from the conditions of the exception.","es":""},"format":"ORDERING","steps":[{"id":"o1","text":{"fr":"","en":"Analyse the clauses and look for the unavoidable obligation to deliver cash","es":""}},{"id":"o2","text":{"fr":"","en":"Note that, without an exception, the instrument would be a financial liability","es":""}},{"id":"o3","text":{"fr":"","en":"Examine the cumulative conditions of the exception, including the rank on liquidation","es":""}},{"id":"o4","text":{"fr":"","en":"Conclude equity only if all the conditions are met","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000046","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.FICE_PROPOSALS"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"LISTED_COMPANY","tested_point":"FICE_APPLY_TODAY","difficulty":"INTERMEDIATE","estimated_time_s":75,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-fice"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"At the closing date, the FICE exposure draft proposes to clarify the treatment of certain contingent settlement clauses. No final amendment to IAS 32 is published. What does the entity do to classify its instruments?","es":""},"explanation":{"fr":"","en":"As long as the amendments are not published in final form, the standard in force remains the reference; the exposure draft sheds light without applying (FICE project).","es":""},"common_error":{"fr":"","en":"Applying a proposal of the exposure draft as a rule in force.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"It applies the proposals of the exposure draft, because they are more recent","es":""},"correct":false,"feedback":{"fr":"","en":"A proposal is not a rule in force; only the published standard applies (FICE project).","es":""}},{"id":"B","text":{"fr":"","en":"It applies the standard in force; the exposure draft is only background","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"It suspends the classification of its instruments until final publication","es":""},"correct":false,"feedback":{"fr":"","en":"The standard in force requires classifying now; no suspension is provided for (FICE project).","es":""}},{"id":"D","text":{"fr":"","en":"It adopts the more favourable solution between the standard and the proposal","es":""},"correct":false,"feedback":{"fr":"","en":"There is no choice between a rule and a proposal; the published standard prevails (FICE project).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000047","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.FICE_PROPOSALS"],"dimension":"ANALYSIS","format":"MULTIPLE_CHOICE","context":"LISTED_COMPANY","tested_point":"FICE_STATEMENTS_PICK","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000007","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-fice"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"Among these statements about the FICE project, which are correct? (several answers)","es":""},"explanation":{"fr":"","en":"The November 2023 exposure draft and the ongoing deliberations are facts; they create no applicable rule before final amendments are published (FICE project).","es":""},"common_error":{"fr":"","en":"Applying a proposal of the exposure draft as a rule in force.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"An exposure draft of November 2023 proposes amending IAS 32","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The proposals have been in force since the exposure draft was published","es":""},"correct":false,"feedback":{"fr":"","en":"An exposure draft creates no rule in force (FICE project).","es":""}},{"id":"C","text":{"fr":"","en":"The deliberations concern in particular contingent settlement clauses and the fixed-for-fixed condition","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"An entity may early adopt a proposal as long as no final amendment is published","es":""},"correct":false,"feedback":{"fr":"","en":"Only a final text can be early adopted; a proposal does not apply (FICE project).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000048","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL","IAS32.COMPOUND.RECOGNITION_AND_SPLIT","IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"CALCULATION","format":"CALCULATION","context":"TECHNOLOGY","tested_point":"SPLIT_TWO_YEAR_EXACT","difficulty":"INTERMEDIATE","estimated_time_s":240,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"numeric-split"},"references":["IAS 32 §28","IAS 32 §31","IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"Alcor SA issues at par 3,025 convertible bonds of €1,000 nominal, that is €3,025,000. A 5% coupon on the nominal (€151,250) is paid on 31 December of each of the two years, the nominal is repaid at the end of the second year, with conversion into a fixed number of shares. Market rate for a similar debt without a conversion option: 10% (case datum). The amounts are whole numbers, no rounding is needed. Discount one flow at a time, then calculate the two components.","es":""},"explanation":{"fr":"","en":"€151,250 ÷ 1.10 = €137,500; €151,250 ÷ 1.10² = €125,000; €3,025,000 ÷ 1.10² = €2,500,000; liability = €137,500 + €125,000 + €2,500,000 = €2,762,500; equity = €3,025,000 − €2,762,500 = €262,500 (IAS 32).","es":""},"common_error":{"fr":"","en":"Discounting at the coupon rate (5%) instead of the rate of a similar liability without a conversion option.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Issue proceeds (at par)","es":""},"value":"3025000","unit":"EUR"},{"label":{"fr":"","en":"Annual coupon","es":""},"value":"151250","unit":"EUR"},{"label":{"fr":"","en":"Rate of a similar liability without option","es":""},"value":"10","unit":"PERCENT"}],"steps":[{"id":"s1","label":{"fr":"","en":"Present value of the year 1 coupon","es":""},"answer":137500,"tolerance":0,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Present value of the year 2 coupon","es":""},"answer":125000,"tolerance":0,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Present value of the nominal repaid","es":""},"answer":2500000,"tolerance":0,"unit":"EUR"},{"id":"s4","label":{"fr":"","en":"Liability component","es":""},"answer":2762500,"tolerance":0,"unit":"EUR"},{"id":"s5","label":{"fr":"","en":"Equity component","es":""},"answer":262500,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"s1","meaning":{"fr":"","en":"Present value of the year 1 coupon","es":""},"expression":"a / (1 + b)","variables":[{"symbol":"a","meaning":{"fr":"","en":"Annual coupon","es":""},"value":151250,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Rate of a similar liability without option","es":""},"value":10,"unit":"PERCENT"}],"result":137500,"unit":"EUR"},{"step":"s2","meaning":{"fr":"","en":"Present value of the year 2 coupon","es":""},"expression":"a / (1 + b)^2","variables":[{"symbol":"a","meaning":{"fr":"","en":"Annual coupon","es":""},"value":151250,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Rate of a similar liability without option","es":""},"value":10,"unit":"PERCENT"}],"result":125000,"unit":"EUR"},{"step":"s3","meaning":{"fr":"","en":"Present value of the nominal repaid","es":""},"expression":"a / (1 + b)^2","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds (at par)","es":""},"value":3025000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Rate of a similar liability without option","es":""},"value":10,"unit":"PERCENT"}],"result":2500000,"unit":"EUR"},{"step":"s4","meaning":{"fr":"","en":"Liability component","es":""},"expression":"a + b + c","variables":[{"symbol":"a","meaning":{"fr":"","en":"Present value of the year 1 coupon","es":""},"value":137500,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Present value of the year 2 coupon","es":""},"value":125000,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Present value of the nominal repaid","es":""},"value":2500000,"unit":"EUR"}],"result":2762500,"unit":"EUR"},{"step":"s5","meaning":{"fr":"","en":"Equity component","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds (at par)","es":""},"value":3025000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Liability component","es":""},"value":2762500,"unit":"EUR"}],"result":262500,"unit":"EUR"}],"references":["REF.IAS32.28","REF.IAS32.31","REF.IAS32.32"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000049","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL","IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"CALCULATION","format":"CALCULATION","context":"ENERGY","tested_point":"SPLIT_ZERO_COUPON","difficulty":"ADVANCED","estimated_time_s":200,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"numeric-split"},"references":["IAS 32 §31","IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"Hesper SA issues for €2,400,000 a zero-coupon convertible instrument, repayable in three years for €2,928,200 or convertible into a fixed number of shares. A similar debt without a conversion option would yield 10% a year (case datum). The amounts are whole numbers. Calculate the present value of the repayment, the equity component and check that there is no gain on issue.","es":""},"explanation":{"fr":"","en":"€2,928,200 ÷ 1.10³ = €2,200,000; equity = €2,400,000 − €2,200,000 = €200,000; check: €2,400,000 − (€2,200,000 + €200,000) = 0, so no gain or loss on issue (IAS 32).","es":""},"common_error":{"fr":"","en":"Subtracting the proceeds from the repayment instead of the present value of that repayment.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Issue proceeds","es":""},"value":"2400000","unit":"EUR"},{"label":{"fr":"","en":"Repayment in three years","es":""},"value":"2928200","unit":"EUR"},{"label":{"fr":"","en":"Rate of a similar liability without option","es":""},"value":"10","unit":"PERCENT"}],"steps":[{"id":"s1","label":{"fr":"","en":"Liability component (present value of the repayment)","es":""},"answer":2200000,"tolerance":0,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Equity component","es":""},"answer":200000,"tolerance":0,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Proceeds − (liability + equity)","es":""},"answer":0,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"s1","meaning":{"fr":"","en":"Liability component (present value of the repayment)","es":""},"expression":"a / (1 + b)^3","variables":[{"symbol":"a","meaning":{"fr":"","en":"Repayment in three years","es":""},"value":2928200,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Rate of a similar liability without option","es":""},"value":10,"unit":"PERCENT"}],"result":2200000,"unit":"EUR"},{"step":"s2","meaning":{"fr":"","en":"Equity component","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds","es":""},"value":2400000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Liability component (present value of the repayment)","es":""},"value":2200000,"unit":"EUR"}],"result":200000,"unit":"EUR"},{"step":"s3","meaning":{"fr":"","en":"Proceeds − (liability + equity)","es":""},"expression":"a - (b + c)","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds","es":""},"value":2400000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Liability component (present value of the repayment)","es":""},"value":2200000,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Equity component","es":""},"value":200000,"unit":"EUR"}],"result":0,"unit":"EUR"}],"references":["REF.IAS32.31","REF.IAS32.32"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000050","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL","IAS32.COMPOUND.RECOGNITION_AND_SPLIT"],"dimension":"CALCULATION","format":"CALCULATION","context":"LOGISTICS","tested_point":"SPLIT_THREE_YEAR_ROUNDED","difficulty":"ADVANCED","estimated_time_s":300,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"numeric-split"},"references":["IAS 32 §28","IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"Dolmar SA issues at par €1,800,000 of bonds convertible into a fixed number of shares. A 2% coupon on the nominal (€54,000) is paid at the end of each of the three years, nominal repaid at the end of the third. Market rate for a similar debt without a conversion option: 6% (case datum). Case convention: each present value is rounded to the euro, then the rounded amounts are added. Calculate each flow, the liability component and the equity component.","es":""},"explanation":{"fr":"","en":"€54,000 ÷ 1.06 ≈ €50,943; ÷ 1.06² ≈ €48,060; ÷ 1.06³ ≈ €45,339; €1,800,000 ÷ 1.06³ ≈ €1,511,315; liability = €50,943 + €48,060 + €45,339 + €1,511,315 = €1,655,657; equity = €1,800,000 − €1,655,657 = €144,343 (IAS 32).","es":""},"common_error":{"fr":"","en":"Using a single discount factor for all the flows instead of one exponent per flow.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Issue proceeds (at par)","es":""},"value":"1800000","unit":"EUR"},{"label":{"fr":"","en":"Annual coupon","es":""},"value":"54000","unit":"EUR"},{"label":{"fr":"","en":"Rate of a similar liability without option","es":""},"value":"6","unit":"PERCENT"},{"label":{"fr":"","en":"Term","es":""},"value":"3","unit":"YEARS"}],"steps":[{"id":"s1","label":{"fr":"","en":"Present value of the year 1 coupon","es":""},"answer":50943,"tolerance":1,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Present value of the year 2 coupon","es":""},"answer":48060,"tolerance":1,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Present value of the year 3 coupon","es":""},"answer":45339,"tolerance":1,"unit":"EUR"},{"id":"s4","label":{"fr":"","en":"Present value of the nominal","es":""},"answer":1511315,"tolerance":1,"unit":"EUR"},{"id":"s5","label":{"fr":"","en":"Liability component","es":""},"answer":1655657,"tolerance":2,"unit":"EUR"},{"id":"s6","label":{"fr":"","en":"Equity component","es":""},"answer":144343,"tolerance":2,"unit":"EUR"}],"formula":{"lines":[{"step":"s5","meaning":{"fr":"","en":"Liability component","es":""},"expression":"a + b + c + d","variables":[{"symbol":"a","meaning":{"fr":"","en":"Present value of the year 1 coupon","es":""},"value":50943,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Present value of the year 2 coupon","es":""},"value":48060,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Present value of the year 3 coupon","es":""},"value":45339,"unit":"EUR"},{"symbol":"d","meaning":{"fr":"","en":"Present value of the nominal","es":""},"value":1511315,"unit":"EUR"}],"result":1655657,"unit":"EUR"},{"step":"s6","meaning":{"fr":"","en":"Equity component","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds (at par)","es":""},"value":1800000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Liability component","es":""},"value":1655657,"unit":"EUR"}],"result":144343,"unit":"EUR"}],"references":["REF.IAS32.28","REF.IAS32.31"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000051","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.RECOGNITION_AND_SPLIT","IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"MANUFACTURING","tested_point":"ISSUE_ENTRY_PIVON","difficulty":"INTERMEDIATE","estimated_time_s":150,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"entry-issue"},"references":["IAS 32 §28","IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"Pivon SA issues at par 3,528 convertible bonds of €1,000 and collects €3,528,000. The liability component is measured at €3,462,400. Post the issue entry (accounts: case convention).","es":""},"explanation":{"fr":"","en":"Equity: €3,528,000 − €3,462,400 = €65,600; debit Cash €3,528,000, credit Liability component €3,462,400 and Equity component €65,600; no profit or loss (IAS 32).","es":""},"common_error":{"fr":"","en":"Crediting the whole issue to share capital, or swapping the components.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"liab","text":{"fr":"","en":"Liability component of the convertible bond","es":""}},{"id":"eqc","text":{"fr":"","en":"Equity component of the convertible bond","es":""}},{"id":"cap","text":{"fr":"","en":"Share capital and share premium","es":""}}],"lines":[{"id":"l1","account":"cash","side":"DEBIT","amount":3528000,"given":["account"]},{"id":"l2","account":"liab","side":"CREDIT","amount":3462400,"given":["account"]},{"id":"l3","account":"eqc","side":"CREDIT","amount":65600,"given":["account"]}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000052","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.RECOGNITION_AND_SPLIT","IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"PHARMA","tested_point":"ISSUE_ENTRY_ZERO_COUPON_DECOY","difficulty":"ADVANCED","estimated_time_s":180,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"entry-issue"},"references":["IAS 32 §28","IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"Rombal SA issues for €1,980,000 a zero-coupon convertible instrument, repayable in two years for €1,874,250. At the 5% rate of a similar liability without an option, the present value of the repayment is €1,700,000. Post the issue entry, with no gain or loss.","es":""},"explanation":{"fr":"","en":"Equity: €1,980,000 − €1,700,000 = €280,000; debit Cash €1,980,000, credit Liability component €1,700,000 and Equity component €280,000; the difference from the repayment of €1,874,250 gives no gain or expense on issue (IAS 32).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss on issue because the liability component differs from the nominal.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"liab","text":{"fr":"","en":"Liability component of the convertible instrument","es":""}},{"id":"eqc","text":{"fr":"","en":"Equity component of the convertible instrument","es":""}},{"id":"pl","text":{"fr":"","en":"Gain on issue (profit or loss)","es":""}},{"id":"int","text":{"fr":"","en":"Interest expense","es":""}}],"lines":[{"id":"l1","account":"cash","side":"DEBIT","amount":1980000},{"id":"l2","account":"liab","side":"CREDIT","amount":1700000},{"id":"l3","account":"eqc","side":"CREDIT","amount":280000}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000053","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"TECHNOLOGY","tested_point":"SPLIT_RATE_SENSITIVITY","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"judgment"},"references":["IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"Marnix SA recalculates the split of its convertible bond with a market rate of 12% instead of 10%, flows and proceeds unchanged. What is the effect?","es":""},"explanation":{"fr":"","en":"A higher discount rate reduces the present value of the contractual flows, hence the liability component; the residual in equity rises by the same amount (IAS 32).","es":""},"common_error":{"fr":"","en":"Thinking that a higher rate increases the debt.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The liability component rises, because a riskier debt costs the issuer more","es":""},"correct":false,"feedback":{"fr":"","en":"A higher rate reduces the present value of the flows: the liability falls (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"Nothing changes, because the issue proceeds stay the same","es":""},"correct":false,"feedback":{"fr":"","en":"The proceeds are unchanged but their split varies with the discount rate (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"The liability component falls and the equity component rises by the same amount","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"A gain appears on issue, equal to the gap between the two rates","es":""},"correct":false,"feedback":{"fr":"","en":"The split creates no gain or loss, whatever the rate (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000054","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"TECHNOLOGY","tested_point":"SPLIT_ORDER_REVERSED_TF","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"rule-split"},"references":["IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"In splitting a convertible bond, the liability is measured first, at the rate of a similar liability without an option, and equity is obtained by difference.","es":""},"explanation":{"fr":"","en":"The liability is measured first and equity is the residual; valuing the option first and deducing the liability would reverse the order (IAS 32).","es":""},"common_error":{"fr":"","en":"Measuring equity first and then deducing the liability.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000055","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL","IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"APPLICATION","format":"ORDERING","context":"MANUFACTURING","tested_point":"SPLIT_STEPS_ORDERING","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"rule-split"},"references":["IAS 32 §31","IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"Put the steps of splitting a convertible bond in order.","es":""},"explanation":{"fr":"","en":"Each step depends on the previous one: the flows and the rate allow discounting, the liability allows deducing the residual, and the check covers the whole (IAS 32).","es":""},"common_error":{"fr":"","en":"Calculating equity before having measured the liability.","es":""},"format":"ORDERING","steps":[{"id":"o1","text":{"fr":"","en":"List the contractual flows, that is the coupons and the nominal to be repaid","es":""}},{"id":"o2","text":{"fr":"","en":"Adopt the market rate of a similar liability without a conversion option","es":""}},{"id":"o3","text":{"fr":"","en":"Discount each flow, then add up to obtain the liability component","es":""}},{"id":"o4","text":{"fr":"","en":"Deduct the liability component from the proceeds to obtain the equity component","es":""}},{"id":"o5","text":{"fr":"","en":"Check that liability plus equity equals the proceeds, with no profit or loss","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000056","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.RECOGNITION_AND_SPLIT","IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL","IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"ANALYSIS","format":"ERROR_SPOT","context":"TECHNOLOGY","tested_point":"SPLIT_ERROR_SPOT","difficulty":"ADVANCED","estimated_time_s":150,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"pitfalls"},"references":["IAS 32 §28","IAS 32 §31","IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"Spot the erroneous statements about the split of a compound instrument.","es":""},"explanation":{"fr":"","en":"The discount rate is that of a similar liability without an option, and the gap with the nominal goes to equity with no profit or loss (IAS 32).","es":""},"common_error":{"fr":"","en":"Discounting at the coupon rate or recognising an issue gain.","es":""},"format":"ERROR_SPOT","statements":[{"id":"s1","text":{"fr":"","en":"The liability is measured first, at the market rate of a similar liability without a conversion option.","es":""},"erroneous":false},{"id":"s2","text":{"fr":"","en":"The flows of the liability component are discounted at the coupon rate of the convertible bond.","es":""},"erroneous":true,"correction":{"fr":"","en":"The market rate of a similar liability without a conversion option is used, generally higher than the coupon rate.","es":""}},{"id":"s3","text":{"fr":"","en":"The equity component is the residual amount after deducting the liability.","es":""},"erroneous":false},{"id":"s4","text":{"fr":"","en":"The gap between the nominal and the liability component is an issue gain.","es":""},"erroneous":true,"correction":{"fr":"","en":"This gap is carried in equity; the split creates no gain or loss on issue.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000057","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL","IAS32.COMPOUND.RECOGNITION_AND_SPLIT","IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"PROFESSIONAL_JUDGMENT","format":"MINI_CASE","context":"TELECOM","tested_point":"SPLIT_ZELMAR_MINI_CASE","difficulty":"ADVANCED","estimated_time_s":360,"lesson_id":"LS.IAS32.000008","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"judgment"},"references":["IAS 32 §28","IAS 32 §31","IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"Zelmar SA: the split rate and its calculation.","es":""},"explanation":{"fr":"","en":"The rate of a debt without an option, 10%, gives a liability below the nominal; the residual goes to equity, with no profit or loss (IAS 32).","es":""},"common_error":{"fr":"","en":"Discounting at the coupon rate or recognising a gain on issue.","es":""},"format":"MINI_CASE","scenario":{"fr":"","en":"Zelmar SA issues at par 2,541 convertible bonds of €1,000 nominal, that is €2,541,000 (case facts).\n\n- Term: two years; nominal repaid at the end of the second year; conversion possible into a fixed number of shares.\n- Coupon: 4% of the nominal, that is €101,640, paid on 31 December each year.\n- Its bankers indicate that Zelmar would borrow at 10% a year a comparable debt without a conversion option: the 4% coupon reflects the value of the option.\n- Case convention: whole amounts, no rounding.","es":""},"parts":[{"prompt":{"fr":"","en":"Which rate does Zelmar adopt to discount the flows of the liability component?","es":""},"explanation":{"fr":"","en":"The liability is measured at the fair value of a similar liability without a conversion option: the 10% rate given by the case is used (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"4%, the coupon rate, since that is what Zelmar pays","es":""},"correct":false,"feedback":{"fr":"","en":"The coupon is reduced by the conversion option; it does not measure the cost of a debt without an option (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"10%, the rate of a comparable debt without a conversion option","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"7%, the arithmetic average between the coupon and the comparable rate","es":""},"correct":false,"feedback":{"fr":"","en":"No average is provided for; the rate is that of a similar liability without a conversion option (IAS 32).","es":""}}],"id":"p1","dimension":"PROFESSIONAL_JUDGMENT"},{"prompt":{"fr":"","en":"Calculate, flow by flow, the liability component then the equity component.","es":""},"explanation":{"fr":"","en":"€101,640 ÷ 1.10 = €92,400; €101,640 ÷ 1.10² = €84,000; €2,541,000 ÷ 1.10² = €2,100,000; liability = €2,276,400; equity = €2,541,000 − €2,276,400 = €264,600 (IAS 32).","es":""},"common_error":{"fr":"","en":"Discounting at the coupon rate, or allocating the residual to the liability: discount at the market rate used and allocate the residual to equity.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Annual coupon","es":""},"value":"101640","unit":"EUR"},{"label":{"fr":"","en":"Nominal","es":""},"value":"2541000","unit":"EUR"},{"label":{"fr":"","en":"Rate adopted","es":""},"value":"10","unit":"PERCENT"}],"steps":[{"id":"c1","label":{"fr":"","en":"Present value of the year 1 coupon","es":""},"answer":92400,"tolerance":0,"unit":"EUR"},{"id":"c2","label":{"fr":"","en":"Present value of the year 2 coupon","es":""},"answer":84000,"tolerance":0,"unit":"EUR"},{"id":"c3","label":{"fr":"","en":"Present value of the nominal","es":""},"answer":2100000,"tolerance":0,"unit":"EUR"},{"id":"c4","label":{"fr":"","en":"Liability component","es":""},"answer":2276400,"tolerance":0,"unit":"EUR"},{"id":"c5","label":{"fr":"","en":"Equity component","es":""},"answer":264600,"tolerance":0,"unit":"EUR"}],"id":"p2","dimension":"CALCULATION","formula":{"lines":[{"step":"c1","meaning":{"fr":"","en":"Present value of the year 1 coupon","es":""},"expression":"a / (1 + b)","variables":[{"symbol":"a","meaning":{"fr":"","en":"Annual coupon","es":""},"value":101640,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Rate adopted","es":""},"value":10,"unit":"PERCENT"}],"result":92400,"unit":"EUR"},{"step":"c2","meaning":{"fr":"","en":"Present value of the year 2 coupon","es":""},"expression":"a / (1 + b)^2","variables":[{"symbol":"a","meaning":{"fr":"","en":"Annual coupon","es":""},"value":101640,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Rate adopted","es":""},"value":10,"unit":"PERCENT"}],"result":84000,"unit":"EUR"},{"step":"c3","meaning":{"fr":"","en":"Present value of the nominal","es":""},"expression":"a / (1 + b)^2","variables":[{"symbol":"a","meaning":{"fr":"","en":"Nominal","es":""},"value":2541000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Rate adopted","es":""},"value":10,"unit":"PERCENT"}],"result":2100000,"unit":"EUR"},{"step":"c5","meaning":{"fr":"","en":"Equity component","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Nominal","es":""},"value":2541000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Liability component","es":""},"value":2276400,"unit":"EUR"}],"result":264600,"unit":"EUR"}],"references":["REF.IAS32.28","REF.IAS32.31","REF.IAS32.32"]}},{"prompt":{"fr":"","en":"The difference between the nominal and the liability component is recognised in profit or loss on issue.","es":""},"explanation":{"fr":"","en":"This difference is carried in equity; the split creates no gain or loss on issue (IAS 32).","es":""},"common_error":{"fr":"","en":"Taking the difference to profit or loss: it is recognised in equity, with no gain or loss on issue.","es":""},"format":"TRUE_FALSE","answer":false,"id":"p3","dimension":"RULE_KNOWLEDGE"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000058","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"CALCULATION","format":"CALCULATION","context":"MANUFACTURING","tested_point":"ACCRETION_PIVON_TWO_YEARS","difficulty":"INTERMEDIATE","estimated_time_s":240,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"numeric-accretion"},"references":["IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"Pivon SA has split its convertible bond: the initial liability component is €3,462,400. The rate at inception is 5%, the annual coupon paid is €141,120, and the nominal to be repaid at the end of the second year is €3,528,000. Whole amounts. Calculate, for each of the two years, the interest charge and the closing carrying amount of the liability component.","es":""},"explanation":{"fr":"","en":"Year 1: 5% × €3,462,400 = €173,120; €3,462,400 + €173,120 − €141,120 = €3,494,400. Year 2: 5% × €3,494,400 = €174,720; €3,494,400 + €174,720 − €141,120 = €3,528,000, exactly the nominal to be repaid (IAS 32).","es":""},"common_error":{"fr":"","en":"Calculating the interest charge on the nominal instead of the carrying amount of the liability component.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Initial liability component","es":""},"value":"3462400","unit":"EUR"},{"label":{"fr":"","en":"Rate at inception","es":""},"value":"5","unit":"PERCENT"},{"label":{"fr":"","en":"Annual coupon paid","es":""},"value":"141120","unit":"EUR"}],"steps":[{"id":"s1","label":{"fr":"","en":"Interest charge of year 1","es":""},"answer":173120,"tolerance":0,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Closing carrying amount of year 1","es":""},"answer":3494400,"tolerance":0,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Interest charge of year 2","es":""},"answer":174720,"tolerance":0,"unit":"EUR"},{"id":"s4","label":{"fr":"","en":"Closing carrying amount of year 2","es":""},"answer":3528000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"s1","meaning":{"fr":"","en":"Interest charge of year 1","es":""},"expression":"a * b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Rate at inception","es":""},"value":5,"unit":"PERCENT"},{"symbol":"b","meaning":{"fr":"","en":"Initial liability component","es":""},"value":3462400,"unit":"EUR"}],"result":173120,"unit":"EUR"},{"step":"s2","meaning":{"fr":"","en":"Closing carrying amount of year 1","es":""},"expression":"a + b - c","variables":[{"symbol":"a","meaning":{"fr":"","en":"Initial liability component","es":""},"value":3462400,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Interest charge of year 1","es":""},"value":173120,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Annual coupon paid","es":""},"value":141120,"unit":"EUR"}],"result":3494400,"unit":"EUR"},{"step":"s3","meaning":{"fr":"","en":"Interest charge of year 2","es":""},"expression":"a * b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Rate at inception","es":""},"value":5,"unit":"PERCENT"},{"symbol":"b","meaning":{"fr":"","en":"Closing carrying amount of year 1","es":""},"value":3494400,"unit":"EUR"}],"result":174720,"unit":"EUR"},{"step":"s4","meaning":{"fr":"","en":"Closing carrying amount of year 2","es":""},"expression":"a + b - c","variables":[{"symbol":"a","meaning":{"fr":"","en":"Closing carrying amount of year 1","es":""},"value":3494400,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Interest charge of year 2","es":""},"value":174720,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Annual coupon paid","es":""},"value":141120,"unit":"EUR"}],"result":3528000,"unit":"EUR"}],"references":["REF.IAS32.31"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000059","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT","IAS32.COMPOUND.CONVERSION_AT_MATURITY"],"dimension":"CALCULATION","format":"CALCULATION","context":"MANUFACTURING","tested_point":"TOTALS_AND_EQUITY_AFTER_CONVERSION","difficulty":"ADVANCED","estimated_time_s":240,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"numeric-accretion"},"references":["IAS 32 §31","IAS 32 §AG32"],"exercise":{"prompt":{"fr":"","en":"For Pivon SA, the interest charge is €173,120 in the first year and €174,720 in the second; the annual coupon is €141,120. The original equity component is €65,600 and the liability component is worth €3,528,000 just before conversion at maturity. Calculate the total interest charges, the total coupons, the gap between the two, then the total equity linked to the instrument after conversion.","es":""},"explanation":{"fr":"","en":"€173,120 + €174,720 = €347,840; 2 × €141,120 = €282,240; gap €347,840 − €282,240 = €65,600, equal to the original equity component; after conversion, €3,528,000 + €65,600 = €3,593,600 (IAS 32).","es":""},"common_error":{"fr":"","en":"Forgetting to add the original equity component to the converted liability.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Interest charge, year 1","es":""},"value":"173120","unit":"EUR"},{"label":{"fr":"","en":"Interest charge, year 2","es":""},"value":"174720","unit":"EUR"},{"label":{"fr":"","en":"Annual coupon","es":""},"value":"141120","unit":"EUR"},{"label":{"fr":"","en":"Original equity component","es":""},"value":"65600","unit":"EUR"}],"steps":[{"id":"s1","label":{"fr":"","en":"Total interest charges","es":""},"answer":347840,"tolerance":0,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Total coupons paid","es":""},"answer":282240,"tolerance":0,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Gap between charges and coupons","es":""},"answer":65600,"tolerance":0,"unit":"EUR"},{"id":"s4","label":{"fr":"","en":"Total equity after conversion","es":""},"answer":3593600,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"s1","meaning":{"fr":"","en":"Total interest charges","es":""},"expression":"a + b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Interest charge, year 1","es":""},"value":173120,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Interest charge, year 2","es":""},"value":174720,"unit":"EUR"}],"result":347840,"unit":"EUR"},{"step":"s2","meaning":{"fr":"","en":"Total coupons paid","es":""},"expression":"2 * a","variables":[{"symbol":"a","meaning":{"fr":"","en":"Annual coupon","es":""},"value":141120,"unit":"EUR"}],"result":282240,"unit":"EUR"},{"step":"s3","meaning":{"fr":"","en":"Gap between charges and coupons","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Total interest charges","es":""},"value":347840,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Total coupons paid","es":""},"value":282240,"unit":"EUR"}],"result":65600,"unit":"EUR"}],"references":["REF.IAS32.31","REF.IAS32.AG32"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000060","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"MANUFACTURING","tested_point":"YEAR_ENTRY_CHARGE_AND_COUPON","difficulty":"ADVANCED","estimated_time_s":180,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"entry-accretion"},"references":["IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"For the first year, Pivon SA records in a single entry the interest charge of €173,120 and the payment of the coupon of €141,120; the difference increases the liability component. Post the entry (accounts: case convention).","es":""},"explanation":{"fr":"","en":"Debit Interest expense €173,120; credit Cash €141,120; credit Liability component €173,120 − €141,120 = €32,000 (IAS 32).","es":""},"common_error":{"fr":"","en":"Expensing only the coupon paid.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"exp","text":{"fr":"","en":"Interest expense","es":""}},{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"liab","text":{"fr":"","en":"Liability component of the convertible bond","es":""}},{"id":"eqc","text":{"fr":"","en":"Equity component of the convertible bond","es":""}}],"lines":[{"id":"l1","account":"exp","side":"DEBIT","amount":173120,"given":["account"]},{"id":"l2","account":"cash","side":"CREDIT","amount":141120,"given":["account"]},{"id":"l3","account":"liab","side":"CREDIT","amount":32000,"given":["account"]}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000061","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.CONVERSION_AT_MATURITY"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"MANUFACTURING","tested_point":"CONVERSION_ENTRY_PIVON","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"rule-conversion"},"references":["IAS 32 §AG32"],"exercise":{"prompt":{"fr":"","en":"At maturity, the holders of Pivon SA's bonds convert. The liability component is worth €3,528,000 after the last coupon. Post the conversion entry (accounts: case convention).","es":""},"explanation":{"fr":"","en":"Debit Liability component €3,528,000, credit Share capital and share premium €3,528,000; no profit or loss, and the original equity component of €65,600 stays in place (IAS 32).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss on conversion at maturity.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"liab","text":{"fr":"","en":"Liability component of the convertible bond","es":""}},{"id":"cap","text":{"fr":"","en":"Share capital and share premium","es":""}},{"id":"eqc","text":{"fr":"","en":"Equity component of the convertible bond","es":""}},{"id":"gain","text":{"fr":"","en":"Gain on extinguishment of debt (profit or loss)","es":""}}],"lines":[{"id":"l1","account":"liab","side":"DEBIT","amount":3528000,"given":["account"]},{"id":"l2","account":"cap","side":"CREDIT","amount":3528000,"given":["account"]}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000062","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"RECOGNITION","format":"SINGLE_CHOICE","context":"TELECOM","tested_point":"WHICH_COMPONENT_MOVES","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"understand"},"references":["IAS 32 §30"],"exercise":{"prompt":{"fr":"","en":"Between the issue and maturity of a split convertible bond, which of these statements about the two components is correct?","es":""},"explanation":{"fr":"","en":"Only the liability component changes, by the interest charge less the coupon paid; the equity component is not revised (IAS 32).","es":""},"common_error":{"fr":"","en":"Remeasuring the equity component at each closing.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Both components are remeasured at each closing","es":""},"correct":false,"feedback":{"fr":"","en":"The equity component is not remeasured; the split is not revised (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"The equity component grows every year with interest","es":""},"correct":false,"feedback":{"fr":"","en":"Equity bears no interest; it is the liability component that grows by the charge (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"The liability component stays fixed, the coupon being expensed, while the equity component absorbs the accretion","es":""},"correct":false,"feedback":{"fr":"","en":"The liability component changes with the interest charge and the coupon paid (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"The liability component changes every year, the equity component stays at its initial amount","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000063","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"TELECOM","tested_point":"CHARGE_ABOVE_COUPON_WHY","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"numeric-accretion"},"references":["IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"Why is the annual interest charge on the liability component higher than the coupon paid, when this component is initially below the nominal?","es":""},"explanation":{"fr":"","en":"The charge is based on the carrying amount of the liability at the market rate at inception, higher than the coupon rate; the excess over the coupon increases the liability up to the nominal (IAS 32).","es":""},"common_error":{"fr":"","en":"Calculating the interest charge on the nominal at the coupon rate.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"It is calculated on the carrying amount of the liability at the rate used at inception, higher than the coupon rate","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"It includes the cost of the conversion option, paid each year by the issuer, which is added to the coupon on each 31 December","es":""},"correct":false,"feedback":{"fr":"","en":"The conversion option is in equity and generates no annual charge (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"It includes a provision for the risk that the holder will not convert","es":""},"correct":false,"feedback":{"fr":"","en":"No provision enters into the calculation of the interest charge (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"It results from an error, because the charge should equal the coupon","es":""},"correct":false,"feedback":{"fr":"","en":"The charge-coupon equality holds only if the liability equals the nominal (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000064","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.CONVERSION_AT_MATURITY"],"dimension":"APPLICATION","format":"SINGLE_CHOICE","context":"LOGISTICS","tested_point":"CONVERSION_TOTAL_EQUITY_AND_RESULT","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"rule-conversion"},"references":["IAS 32 §AG32"],"exercise":{"prompt":{"fr":"","en":"At maturity, the holders of a convertible bond convert. The liability component is worth €420,000 after the last coupon and the original equity component is €75,000. What is the effect of conversion?","es":""},"explanation":{"fr":"","en":"€420,000 of liability moves to equity with no profit or loss and the original component of €75,000 remains: €420,000 + €75,000 = €495,000 (IAS 32).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss on conversion at maturity.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A gain of €75,000; the equity linked to the instrument totals €420,000","es":""},"correct":false,"feedback":{"fr":"","en":"The liability is removed at its carrying amount: no gain is recognised on conversion (IAS 32).","es":""}},{"id":"B","text":{"fr":"","en":"A loss of €75,000; the equity linked to the instrument totals €420,000","es":""},"correct":false,"feedback":{"fr":"","en":"The original component stays in equity and no loss appears (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"No profit or loss; the equity linked to the instrument totals €420,000, the original component being reversed","es":""},"correct":false,"feedback":{"fr":"","en":"The original component is not reversed: it adds to the converted liability (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"No profit or loss; the equity linked to the instrument totals €495,000","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000065","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.IFRS9"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"BANKING","tested_point":"IAS32_CLASSIFIES_IFRS9_MEASURES","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"rule-ifrs9"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"For a convertible bond, IAS 32 decides classification and the split, whereas IFRS 9 measures the financial liability.","es":""},"explanation":{"fr":"","en":"IAS 32 answers the question of liability or equity and the split; the measurement of the financial liability falls under IFRS 9 (IAS 32; IFRS 9).","es":""},"common_error":{"fr":"","en":"Mixing the classification questions of IAS 32 with the measurement questions of IFRS 9.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000066","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.IAS33","IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"CALCULATION","format":"SINGLE_CHOICE","context":"MANUFACTURING","tested_point":"DILUTION_ADDBACK_AFTER_TAX","difficulty":"ADVANCED","estimated_time_s":150,"lesson_id":"LS.IAS32.000009","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"rule-ias33"},"references":["IAS 32"],"exercise":{"prompt":{"fr":"","en":"For the first year's diluted earnings, Pivon SA adds the after-tax interest on the liability component to the numerator. The interest charge recognised is €173,120, the coupon paid is €141,120 and the tax rate (case convention) is 25%. What amount does it add?","es":""},"explanation":{"fr":"","en":"Interest charge €173,120 × (1 − 25%) = €129,840, added to the numerator; the conversion shares go to the denominator (IAS 33).","es":""},"common_error":{"fr":"","en":"Adding back the coupon paid instead of the interest charge after tax.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"€105,840, that is the coupon paid reduced by tax at 25%","es":""},"correct":false,"feedback":{"fr":"","en":"The interest added back is that of the charge recognised, not just the coupon paid (IAS 33, para. 33).","es":""}},{"id":"B","text":{"fr":"","en":"€129,840, that is the interest charge reduced by tax at 25%","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"€173,120, that is the interest charge before any tax effect","es":""},"correct":false,"feedback":{"fr":"","en":"The add-back is made after tax effect, because conversion would also remove the tax saving (IAS 33).","es":""}},{"id":"D","text":{"fr":"","en":"€65,600, that is the original equity component","es":""},"correct":false,"feedback":{"fr":"","en":"The original equity component bears no interest to add back (IAS 33).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000067","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"RECOGNITION","format":"SINGLE_CHOICE","context":"RETAIL","tested_point":"TREASURY_GAIN_WHERE","difficulty":"BEGINNER","estimated_time_s":60,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"numeric-treasury"},"references":["IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"A company resells 1,500 treasury shares for a price above their buy-back cost. Where does it recognise the difference between the resale price and the cost?","es":""},"explanation":{"fr":"","en":"The consideration received on reselling treasury shares is recognised directly in equity, with no gain or loss in profit or loss (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss in profit or loss on resale of treasury shares.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"In finance income of the year's profit or loss, as a gain on disposal of securities","es":""},"correct":false,"feedback":{"fr":"","en":"No gain or loss is recognised in profit or loss on the sale of treasury shares (IAS 32, para. 33).","es":""}},{"id":"B","text":{"fr":"","en":"In other comprehensive income, because it is an unrealised gain","es":""},"correct":false,"feedback":{"fr":"","en":"The difference is carried in equity; it goes neither through profit or loss nor through other comprehensive income (IAS 32, para. 33).","es":""}},{"id":"C","text":{"fr":"","en":"Directly in equity, without passing through profit or loss","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"In liabilities, as a debt to the former shareholders","es":""},"correct":false,"feedback":{"fr":"","en":"The resale extinguishes any debt relationship; it creates none (IAS 32, para. 33).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000068","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"RETAIL","tested_point":"TREASURY_BUYBACK_REDUCES_EQUITY_TF","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"understand"},"references":["IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"A company's buy-back of its own shares reduces its equity by the amount paid.","es":""},"explanation":{"fr":"","en":"Treasury shares are presented as a deduction from equity, for the consideration paid (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Presenting treasury shares as an asset.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT","reserve":true},{"key":"LX.IAS32.000069","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"CALCULATION","format":"CALCULATION","context":"RETAIL","tested_point":"TREASURY_RESALE_BELOW_COST_CALC","difficulty":"INTERMEDIATE","estimated_time_s":150,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"numeric-treasury"},"references":["IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"A company buys back 5,500 of its shares at €27 each, that is €148,500, then resells 4,600 at €22. Calculate the resale proceeds, the cost of the shares resold and the decrease in equity linked to the difference (no loss is recognised in profit or loss).","es":""},"explanation":{"fr":"","en":"Proceeds: 4,600 × €22 = €101,200; cost: 4,600 × €27 = €124,200; difference: €124,200 − €101,200 = €23,000, debited to equity and not recognised as a loss (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Recognising as a loss in profit or loss a resale difference below cost.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Shares bought back","es":""},"value":"5500","unit":"UNITS"},{"label":{"fr":"","en":"Buy-back price per share","es":""},"value":"27","unit":"EUR"},{"label":{"fr":"","en":"Shares resold","es":""},"value":"4600","unit":"UNITS"},{"label":{"fr":"","en":"Resale price per share","es":""},"value":"22","unit":"EUR"}],"steps":[{"id":"s1","label":{"fr":"","en":"Resale proceeds","es":""},"answer":101200,"tolerance":0,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Cost of the shares resold","es":""},"answer":124200,"tolerance":0,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Decrease in equity (difference)","es":""},"answer":23000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"s1","meaning":{"fr":"","en":"Resale proceeds","es":""},"expression":"a * b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Shares resold","es":""},"value":4600,"unit":"UNITS"},{"symbol":"b","meaning":{"fr":"","en":"Resale price per share","es":""},"value":22,"unit":"EUR"}],"result":101200,"unit":"EUR"},{"step":"s2","meaning":{"fr":"","en":"Cost of the shares resold","es":""},"expression":"a * b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Shares resold","es":""},"value":4600,"unit":"UNITS"},{"symbol":"b","meaning":{"fr":"","en":"Buy-back price per share","es":""},"value":27,"unit":"EUR"}],"result":124200,"unit":"EUR"},{"step":"s3","meaning":{"fr":"","en":"Decrease in equity (difference)","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Cost of the shares resold","es":""},"value":124200,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Resale proceeds","es":""},"value":101200,"unit":"EUR"}],"result":23000,"unit":"EUR"}],"references":["REF.IAS32.33"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000070","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TRANSACTION_COSTS"],"dimension":"CALCULATION","format":"CALCULATION","context":"INDUSTRY","tested_point":"ISSUE_COSTS_NET_CALC","difficulty":"INTERMEDIATE","estimated_time_s":180,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"rule-costs"},"references":["IAS 32 §37"],"exercise":{"prompt":{"fr":"","en":"A company issues 290,000 shares at €6 each. It bears a placement commission of €56,000, legal fees specific to the issue of €11,000, prospectus printing costs of €7,000 (all three marginal) and €19,000 of general management costs it would have borne anyway. Calculate the total costs deducted from equity, the net amount recorded in equity and the expense of the period.","es":""},"explanation":{"fr":"","en":"Gross proceeds 290,000 × €6 = €1,740,000; marginal costs €56,000 + €11,000 + €7,000 = €74,000; net in equity €1,740,000 − €74,000 = €1,666,000; the general costs of €19,000 remain an expense (IAS 32).","es":""},"common_error":{"fr":"","en":"Deducting from equity general costs that would have existed without the issue.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Gross proceeds","es":""},"value":"1740000","unit":"EUR"},{"label":{"fr":"","en":"Placement commission","es":""},"value":"56000","unit":"EUR"},{"label":{"fr":"","en":"Legal fees","es":""},"value":"11000","unit":"EUR"},{"label":{"fr":"","en":"Prospectus printing","es":""},"value":"7000","unit":"EUR"},{"label":{"fr":"","en":"General management costs","es":""},"value":"19000","unit":"EUR"}],"steps":[{"id":"s1","label":{"fr":"","en":"Costs deducted from equity","es":""},"answer":74000,"tolerance":0,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Net amount recorded in equity","es":""},"answer":1666000,"tolerance":0,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Expense of the period","es":""},"answer":19000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"s1","meaning":{"fr":"","en":"Costs deducted from equity","es":""},"expression":"a + b + c","variables":[{"symbol":"a","meaning":{"fr":"","en":"Placement commission","es":""},"value":56000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Legal fees","es":""},"value":11000,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Prospectus printing","es":""},"value":7000,"unit":"EUR"}],"result":74000,"unit":"EUR"},{"step":"s2","meaning":{"fr":"","en":"Net amount recorded in equity","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Gross proceeds","es":""},"value":1740000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Costs deducted from equity","es":""},"value":74000,"unit":"EUR"}],"result":1666000,"unit":"EUR"}],"references":["REF.IAS32.37"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000071","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"RETAIL","tested_point":"BUYBACK_ENTRY","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"entry-treasury"},"references":["IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"A company buys back 5,500 of its shares for €148,500, paid in cash. Post the buy-back entry (accounts: case convention).","es":""},"explanation":{"fr":"","en":"Debit Treasury shares €148,500 (deduction from equity), credit Cash €148,500; neither a financial asset nor an expense (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Debiting an investment account in assets.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"ts","text":{"fr":"","en":"Treasury shares (deduction from equity)","es":""}},{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"inv","text":{"fr":"","en":"Financial investments (asset)","es":""}},{"id":"exp","text":{"fr":"","en":"Expense of the period","es":""}}],"lines":[{"id":"l1","account":"ts","side":"DEBIT","amount":148500,"given":["account","side"]},{"id":"l2","account":"cash","side":"CREDIT","amount":148500,"given":["account","side"]}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000072","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"RETAIL","tested_point":"RESALE_BELOW_COST_ENTRY","difficulty":"ADVANCED","estimated_time_s":150,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"entry-treasury"},"references":["IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"The company resells 4,600 treasury shares for €101,200; these shares had cost €124,200. Post the resale entry (accounts: case convention): no loss is recognised in profit or loss.","es":""},"explanation":{"fr":"","en":"Debit Cash €101,200 and Premium on treasury shares €23,000; credit Treasury shares €124,200 (their cost); the difference €124,200 − €101,200 = €23,000 is debited to equity, with no loss in profit or loss (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Debiting a loss in profit or loss for the resale difference.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"prem","text":{"fr":"","en":"Premium on treasury shares (equity)","es":""}},{"id":"ts","text":{"fr":"","en":"Treasury shares (deduction from equity)","es":""}},{"id":"loss","text":{"fr":"","en":"Loss on disposal (profit or loss)","es":""}}],"lines":[{"id":"l1","account":"cash","side":"DEBIT","amount":101200},{"id":"l2","account":"prem","side":"DEBIT","amount":23000},{"id":"l3","account":"ts","side":"CREDIT","amount":124200}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000073","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TRANSACTION_COSTS"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"INDUSTRY","tested_point":"ISSUE_NET_OF_COSTS_ENTRY","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"entry-treasury"},"references":["IAS 32 §37"],"exercise":{"prompt":{"fr":"","en":"A company issues shares for gross proceeds of €1,150,000 and pays €24,000 of marginal costs directly attributable to the issue, all in cash. Post the entry as a net amount (accounts: case convention).","es":""},"explanation":{"fr":"","en":"Net amount: €1,150,000 − €24,000 = €1,126,000; debit Cash €1,126,000, credit Share capital and share premium €1,126,000; the marginal costs are deducted from equity, not expensed (IAS 32).","es":""},"common_error":{"fr":"","en":"Expensing share issue costs.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"cap","text":{"fr":"","en":"Share capital and share premium","es":""}},{"id":"exp","text":{"fr":"","en":"Issue expenses (profit or loss)","es":""}}],"lines":[{"id":"l1","account":"cash","side":"DEBIT","amount":1126000,"given":["account","side"]},{"id":"l2","account":"cap","side":"CREDIT","amount":1126000,"given":["account","side"]}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000074","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TRANSACTION_COSTS"],"dimension":"APPLICATION","format":"MULTIPLE_CHOICE","context":"INDUSTRY","tested_point":"DEDUCTIBLE_COSTS_PICK","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000010","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"rule-costs"},"references":["IAS 32 §37"],"exercise":{"prompt":{"fr":"","en":"On a share issue, which of these costs are marginal costs deducted from equity? (several answers)","es":""},"explanation":{"fr":"","en":"Only the costs directly attributable to the issue that would have been avoided without it are deducted from equity; the annual audit and salaries remain expenses (IAS 32).","es":""},"common_error":{"fr":"","en":"Deducting every cost paid at the time of the issue, marginal or not.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The commission paid to the bank that places the shares","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The auditor's annual fees for auditing the accounts","es":""},"correct":false,"feedback":{"fr":"","en":"This audit would take place without the issue: it is not a marginal cost (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"The printing and distribution costs of the issue prospectus","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"The salary of the finance director, who spent a week on the operation","es":""},"correct":false,"feedback":{"fr":"","en":"The salary would exist without the operation: it is not marginal (IAS 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000075","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.INTEREST_DIVIDENDS"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"RETAIL","tested_point":"ORDINARY_DIVIDEND_ENTRY","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000011","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"entry-dividends"},"references":["IAS 32 §35"],"exercise":{"prompt":{"fr":"","en":"A company pays in cash a dividend of €0.40 per share on 1,350,000 ordinary shares, that is €540,000. Post the entry (accounts: case convention).","es":""},"explanation":{"fr":"","en":"1,350,000 × €0.40 = €540,000; the distribution on an equity instrument is debited directly to equity, with no expense (IAS 32, para. 35).","es":""},"common_error":{"fr":"","en":"Expensing the distribution on an equity instrument.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"re","text":{"fr":"","en":"Retained earnings (equity)","es":""}},{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"fin","text":{"fr":"","en":"Finance costs","es":""}}],"lines":[{"id":"l1","account":"re","side":"DEBIT","amount":540000,"given":["account","side"]},{"id":"l2","account":"cash","side":"CREDIT","amount":540000,"given":["account","side"]}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000076","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.INTEREST_DIVIDENDS"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"INDUSTRY","tested_point":"TWO_DIVIDENDS_ONE_ENTRY","difficulty":"ADVANCED","estimated_time_s":180,"lesson_id":"LS.IAS32.000011","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"entry-dividends"},"references":["IAS 32 §35"],"exercise":{"prompt":{"fr":"","en":"A company pays in cash, in one go: the mandatory fixed dividend of 8% on €1,900,000 of preference shares classified as a financial liability, and a dividend of €340,000 on its ordinary shares. Post the single entry (accounts: case convention).","es":""},"explanation":{"fr":"","en":"8% × €1,900,000 = €152,000 in finance costs (liability); €340,000 in retained earnings (equity); cash: €152,000 + €340,000 = €492,000 (IAS 32, para. 35).","es":""},"common_error":{"fr":"","en":"Applying the same treatment to both dividends.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"fin","text":{"fr":"","en":"Finance costs","es":""}},{"id":"re","text":{"fr":"","en":"Retained earnings (equity)","es":""}},{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"pref","text":{"fr":"","en":"Preference shares (financial liability)","es":""}}],"lines":[{"id":"l1","account":"fin","side":"DEBIT","amount":152000},{"id":"l2","account":"re","side":"DEBIT","amount":340000},{"id":"l3","account":"cash","side":"CREDIT","amount":492000}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000077","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.INTEREST_DIVIDENDS"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"FINANCE","tested_point":"FLOWS_PL_OR_EQUITY","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000011","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"rule-follow"},"references":["IAS 32 §35"],"exercise":{"prompt":{"fr":"","en":"Classify each flow according to where it is recognised.","es":""},"explanation":{"fr":"","en":"Flows of an instrument or component classified as a liability go to profit or loss; distributions on an equity instrument or component go directly to equity (IAS 32, para. 35).","es":""},"common_error":{"fr":"","en":"Relying on the word \"dividend\" instead of the instrument's classification.","es":""},"format":"CLASSIFICATION","categories":[{"id":"pl","text":{"fr":"","en":"Profit or loss","es":""}},{"id":"eq","text":{"fr":"","en":"Equity","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"Interest on a bank loan","es":""},"category":"pl"},{"id":"i2","text":{"fr":"","en":"Discretionary dividend on ordinary shares","es":""},"category":"eq"},{"id":"i3","text":{"fr":"","en":"Mandatory fixed dividend on preference shares classified as a liability","es":""},"category":"pl"},{"id":"i4","text":{"fr":"","en":"Interest charge on the liability component of a convertible bond","es":""},"category":"pl"},{"id":"i5","text":{"fr":"","en":"Distribution decided on the equity component of a compound instrument","es":""},"category":"eq"},{"id":"i6","text":{"fr":"","en":"Dividend freely decided on preference shares with no redemption","es":""},"category":"eq"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000078","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.DISTRIBUTION_TAX"],"dimension":"RULE_KNOWLEDGE","format":"SINGLE_CHOICE","context":"LISTED_COMPANY","tested_point":"DISTRIBUTION_TAX_WHICH_STANDARD","difficulty":"INTERMEDIATE","estimated_time_s":75,"lesson_id":"LS.IAS32.000011","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"rule-tax"},"references":["IAS 32 §35A"],"exercise":{"prompt":{"fr":"","en":"A company pays a dividend to its ordinary shareholders. Which standard determines where to recognise the income tax effect linked to this distribution?","es":""},"explanation":{"fr":"","en":"The income tax effects of distributions to holders of equity are accounted for under IAS 12 (IAS 32).","es":""},"common_error":{"fr":"","en":"Forgetting that the tax effect of a distribution follows IAS 12 and not IAS 32.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"IAS 12, to which IAS 32 refers for the tax effects of distributions","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"IAS 32 itself, which sets a single treatment for any tax effect, whatever the type of distribution","es":""},"correct":false,"feedback":{"fr":"","en":"IAS 32 classifies the distribution but refers to IAS 12 for its tax effect (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"IFRS 9, because the dividend is a financial flow, received in cash by the shareholders","es":""},"correct":false,"feedback":{"fr":"","en":"IFRS 9 measures financial instruments and does not deal with tax on distributions (IAS 32).","es":""}},{"id":"D","text":{"fr":"","en":"IAS 33, because the dividend affects earnings per share","es":""},"correct":false,"feedback":{"fr":"","en":"IAS 33 deals with earnings per share, not tax on distributions (IAS 32).","es":""}}]},"scope":"CORE_STUDENT","reserve":true},{"key":"LX.IAS32.000079","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.DISTRIBUTION_TAX"],"dimension":"ANALYSIS","format":"TRUE_FALSE","context":"LISTED_COMPANY","tested_point":"DISTRIBUTION_TAX_NOT_ALWAYS_EQUITY_TF","difficulty":"ADVANCED","estimated_time_s":75,"lesson_id":"LS.IAS32.000011","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"rule-tax"},"references":["IAS 32 §35A"],"exercise":{"prompt":{"fr":"","en":"IAS 32 refers to IAS 12 to determine where the income tax effect of a distribution to shareholders is recognised.","es":""},"explanation":{"fr":"","en":"IAS 12 determines the line from the entity's facts; IAS 32 does not itself impose a single line (IAS 32).","es":""},"common_error":{"fr":"","en":"Attributing to IAS 32 a line rule for the tax effect.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000080","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.INTEREST_DIVIDENDS"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"FINANCE","tested_point":"LIABILITY_DIVIDEND_NOT_EQUITY_TF","difficulty":"BEGINNER","estimated_time_s":45,"lesson_id":"LS.IAS32.000011","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"rule-follow"},"references":["IAS 32 §35"],"exercise":{"prompt":{"fr":"","en":"A dividend paid on a preference share classified as a financial liability is a distribution recognised directly in equity.","es":""},"explanation":{"fr":"","en":"For an instrument classified as a liability, the dividend is a financing cost recognised in profit or loss (IAS 32, para. 35).","es":""},"common_error":{"fr":"","en":"Recognising in equity the dividend on a share classified as a financial liability.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000081","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.CRITERIA"],"dimension":"CALCULATION","format":"CALCULATION","context":"DISTRIBUTION","tested_point":"OFFSET_TWO_COUNTERPARTIES_CALC","difficulty":"INTERMEDIATE","estimated_time_s":180,"lesson_id":"LS.IAS32.000012","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-criteria"},"references":["IAS 32 §42"],"exercise":{"prompt":{"fr":"","en":"A company has two relationships. With A: receivable of €1,010,000, payable of €260,000; both offsetting criteria are met. With B: receivable of €420,000, payable of €380,000; the intention to settle net is missing. Calculate the net amount presented for A, then the total receivables and the total payables presented on the balance sheet.","es":""},"explanation":{"fr":"","en":"A: €1,010,000 − €260,000 = €750,000 net; B stays gross. Receivables: €750,000 + €420,000 = €1,170,000; payables: only those of B, that is €380,000 (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Also offsetting B's balances although one criterion is missing.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Receivable from A","es":""},"value":"1010000","unit":"EUR"},{"label":{"fr":"","en":"Payable to A","es":""},"value":"260000","unit":"EUR"},{"label":{"fr":"","en":"Receivable from B","es":""},"value":"420000","unit":"EUR"},{"label":{"fr":"","en":"Payable to B","es":""},"value":"380000","unit":"EUR"}],"steps":[{"id":"s1","label":{"fr":"","en":"Net receivable presented for A","es":""},"answer":750000,"tolerance":0,"unit":"EUR"},{"id":"s2","label":{"fr":"","en":"Total receivables presented","es":""},"answer":1170000,"tolerance":0,"unit":"EUR"},{"id":"s3","label":{"fr":"","en":"Total payables presented","es":""},"answer":380000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"s1","meaning":{"fr":"","en":"Net receivable presented for A","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Receivable from A","es":""},"value":1010000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Payable to A","es":""},"value":260000,"unit":"EUR"}],"result":750000,"unit":"EUR"},{"step":"s2","meaning":{"fr":"","en":"Total receivables presented","es":""},"expression":"a + b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Net receivable presented for A","es":""},"value":750000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Receivable from B","es":""},"value":420000,"unit":"EUR"}],"result":1170000,"unit":"EUR"}],"references":["REF.IAS32.42"]}},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000082","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.CRITERIA"],"dimension":"JOURNAL_ENTRY","format":"JOURNAL_ENTRY","context":"DISTRIBUTION","tested_point":"NET_SETTLEMENT_ENTRY","difficulty":"INTERMEDIATE","estimated_time_s":120,"lesson_id":"LS.IAS32.000012","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-criteria"},"references":["IAS 32 §42"],"exercise":{"prompt":{"fr":"","en":"At maturity, the company settles net with A: it collects the difference between its receivable of €1,010,000 and its payable of €260,000. Post the settlement entry (accounts: case convention).","es":""},"explanation":{"fr":"","en":"Debit Payables to A €260,000 and Cash €750,000; credit Receivables from A €1,010,000; €260,000 + €750,000 = €1,010,000 and no profit or loss appears (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Recognising income on offsetting two balances.","es":""},"format":"JOURNAL_ENTRY","accounts":[{"id":"pay","text":{"fr":"","en":"Payables to A","es":""}},{"id":"cash","text":{"fr":"","en":"Cash","es":""}},{"id":"rec","text":{"fr":"","en":"Receivables from A","es":""}},{"id":"gain","text":{"fr":"","en":"Offsetting gain (profit or loss)","es":""}}],"lines":[{"id":"l1","account":"pay","side":"DEBIT","amount":260000},{"id":"l2","account":"cash","side":"DEBIT","amount":750000},{"id":"l3","account":"rec","side":"CREDIT","amount":1010000}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000083","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.CRITERIA","IAS32.OFFSETTING.LEGALLY_ENFORCEABLE_RIGHT","IAS32.OFFSETTING.INTENTION_NET_SETTLEMENT"],"dimension":"APPLICATION","format":"CLASSIFICATION","context":"DISTRIBUTION","tested_point":"OFFSET_FIVE_SITUATIONS","difficulty":"INTERMEDIATE","estimated_time_s":150,"lesson_id":"LS.IAS32.000012","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"example"},"references":["IAS 32 §42","IAS 32 §AG38A","IAS 32 §AG38B"],"exercise":{"prompt":{"fr":"","en":"For each situation (recognised amounts), say whether the presentation is net or gross.","es":""},"explanation":{"fr":"","en":"Net requires a currently enforceable right, valid on bankruptcy too, and the intention to settle net or simultaneously; a missing criterion requires gross (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Presenting net without both criteria being cumulatively met.","es":""},"format":"CLASSIFICATION","categories":[{"id":"net","text":{"fr":"","en":"Net presentation","es":""}},{"id":"gross","text":{"fr":"","en":"Gross presentation","es":""}}],"items":[{"id":"i1","text":{"fr":"","en":"The right of set-off applies in all circumstances, including bankruptcy, and the company settles net every month","es":""},"category":"net"},{"id":"i2","text":{"fr":"","en":"The right of set-off arises only on default of the counterparty; the company plans net settlement","es":""},"category":"gross"},{"id":"i3","text":{"fr":"","en":"The right is enforceable in all circumstances, but the company always pays and collects separately","es":""},"category":"gross"},{"id":"i4","text":{"fr":"","en":"The right is enforceable in all circumstances, and a settlement mechanism makes payments go out and come in at the same moment","es":""},"category":"net"},{"id":"i5","text":{"fr":"","en":"The right of set-off is recognised by the contract but not by the bankruptcy law of the jurisdiction","es":""},"category":"gross"}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000084","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.LEGALLY_ENFORCEABLE_RIGHT"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"DISTRIBUTION","tested_point":"MASTER_NETTING_ONLY_ON_DEFAULT","difficulty":"ADVANCED","estimated_time_s":120,"lesson_id":"LS.IAS32.000012","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-right"},"references":["IAS 32 §AG38A","IAS 32 §AG38B"],"exercise":{"prompt":{"fr":"","en":"A master netting agreement binds Odrel SA to its counterparty. It allows the balances to be set off only if one of the parties is in payment default. Both parties usually settle net. What is the conclusion?","es":""},"explanation":{"fr":"","en":"A right that arises only on default depends on a future event: the current right criterion is not met, so gross presentation despite the net settlement practice (IAS 32).","es":""},"common_error":{"fr":"","en":"Considering that a master netting agreement alone is enough to meet the enforceable right criterion.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Net presentation, because the practice of net settlement is enough to create the right","es":""},"correct":false,"feedback":{"fr":"","en":"A practice is not a currently enforceable legal right (IAS 32, para. 42).","es":""}},{"id":"B","text":{"fr":"","en":"Net presentation, because a master agreement is enough to meet the right criterion","es":""},"correct":false,"feedback":{"fr":"","en":"The agreement applies only on default: the right is not current (IAS 32).","es":""}},{"id":"C","text":{"fr":"","en":"Gross presentation: the right of set-off depends on a future event","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"Net presentation for half of the balances, according to the proportion settled net","es":""},"correct":false,"feedback":{"fr":"","en":"No proportion is provided for; the two criteria are cumulative (IAS 32, para. 42).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000085","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.INTENTION_NET_SETTLEMENT"],"dimension":"ANALYSIS","format":"SINGLE_CHOICE","context":"DISTRIBUTION","tested_point":"INTENTION_BEST_EVIDENCE","difficulty":"INTERMEDIATE","estimated_time_s":100,"lesson_id":"LS.IAS32.000012","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-intent"},"references":["IAS 32 §AG38E","IAS 32 §AG38F"],"exercise":{"prompt":{"fr":"","en":"To show the intention to settle net with a counterparty, which item is the most persuasive?","es":""},"explanation":{"fr":"","en":"Intention is shown by facts: past settlement practices and documented risk management outweigh a mere possibility or a statement (practice reading; IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Deducing the intention to settle net from the mere contractual possibility of doing so.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The contract clause that allows net settlement, with no observed practice","es":""},"correct":false,"feedback":{"fr":"","en":"The contractual possibility is not the intention to settle net (practice reading).","es":""}},{"id":"B","text":{"fr":"","en":"An oral statement by the treasurer announcing that he intends to settle net in future","es":""},"correct":false,"feedback":{"fr":"","en":"A statement without practice or written policy does not show the intention (practice reading).","es":""}},{"id":"C","text":{"fr":"","en":"The fact that the amounts of the receivable and the payable are close","es":""},"correct":false,"feedback":{"fr":"","en":"The closeness of the amounts says nothing about how they will be settled (practice reading).","es":""}},{"id":"D","text":{"fr":"","en":"Repeated net settlements, backed by a documented risk policy","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000086","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.LEGALLY_ENFORCEABLE_RIGHT","IAS32.OFFSETTING.CRITERIA"],"dimension":"RULE_KNOWLEDGE","format":"TRUE_FALSE","context":"DISTRIBUTION","tested_point":"RIGHT_NOT_TRANSFERABLE_TF","difficulty":"INTERMEDIATE","estimated_time_s":60,"lesson_id":"LS.IAS32.000012","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"pitfalls"},"references":["IAS 32 §42","IAS 32 §AG38B"],"exercise":{"prompt":{"fr":"","en":"A legally enforceable right of set-off with one counterparty does not allow the balances with the other counterparties to be presented net.","es":""},"explanation":{"fr":"","en":"The right and the intention are analysed for each relationship: the enforceable right with one does not hold for the others (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Extending the offsetting of one counterparty to all the others.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"LX.IAS32.000087","source":"V2","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.CRITERIA","IAS32.OFFSETTING.LEGALLY_ENFORCEABLE_RIGHT","IAS32.OFFSETTING.INTENTION_NET_SETTLEMENT"],"dimension":"PROFESSIONAL_JUDGMENT","format":"MINI_CASE","context":"DISTRIBUTION","tested_point":"OFFSET_PORTFOLIO_MINI_CASE","difficulty":"ADVANCED","estimated_time_s":300,"lesson_id":"LS.IAS32.000012","review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"judgment"},"references":["IAS 32 §42","IAS 32 §AG38A","IAS 32 §AG38B","IAS 32 §AG38E","IAS 32 §AG38F"],"exercise":{"prompt":{"fr":"","en":"Estrel SA: three counterparties, one balance sheet.","es":""},"explanation":{"fr":"","en":"Only counterparty A meets both criteria: B has no current right, C has not shown the intention to settle net; the balance sheet mixes one net and two gross presentations (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Offsetting all three counterparties because one of them meets both criteria.","es":""},"format":"MINI_CASE","scenario":{"fr":"","en":"Estrel SA presents, for each of its three counterparties, a recognised receivable and payable (case facts, in euros):\n\n- **Counterparty A**: receivable €595,000, payable €135,000. The right of set-off is enforceable in all circumstances, including bankruptcy; Estrel has settled net for several years and its risk policy documents it.\n- **Counterparty B**: receivable €375,000, payable €215,000. The contract allows set-off only on default of B; Estrel plans net settlement.\n- **Counterparty C**: receivable €275,000, payable €245,000. The right of set-off is enforceable in all circumstances, but Estrel always settles each amount separately.","es":""},"parts":[{"prompt":{"fr":"","en":"For which counterparty is the currently enforceable legal right criterion missing?","es":""},"explanation":{"fr":"","en":"For B, set-off depends on default, a future event: the right is not current (IAS 32).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Counterparty C, because Estrel settles separately","es":""},"correct":false,"feedback":{"fr":"","en":"Separate settlement affects the intention criterion, not the right criterion, which is met here (IAS 32, para. 42).","es":""}},{"id":"B","text":{"fr":"","en":"Counterparty B, whose right arises only on default","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"Counterparty A, because the right applies even on bankruptcy","es":""},"correct":false,"feedback":{"fr":"","en":"A right valid even on bankruptcy strengthens the right criterion (IAS 32).","es":""}}],"id":"p1","dimension":"ANALYSIS"},{"prompt":{"fr":"","en":"For which counterparty is the intention criterion missing although the right is met?","es":""},"explanation":{"fr":"","en":"For C, the right is enforceable but the separate settlements do not show the intention to settle net (practice reading; IAS 32, para. 42).","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Counterparty C, whose settlements are always separate","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"Counterparty A, whose settlements have been net for years","es":""},"correct":false,"feedback":{"fr":"","en":"Past practices and the documented policy show the intention here (practice reading).","es":""}},{"id":"C","text":{"fr":"","en":"Counterparty B, whose net settlement is only planned","es":""},"correct":false,"feedback":{"fr":"","en":"For B, it is the right criterion that is missing, not the announced intention (IAS 32, para. 42).","es":""}}],"id":"p2","dimension":"ANALYSIS"},{"prompt":{"fr":"","en":"Calculate the net amount of A, then the total receivables and the total payables presented on the balance sheet.","es":""},"explanation":{"fr":"","en":"A: €595,000 − €135,000 = €460,000 net; B and C stay gross. Receivables: €460,000 + €375,000 + €275,000 = €1,110,000; payables: €215,000 + €245,000 = €460,000 (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Also offsetting B and C: only counterparty A meets the offsetting conditions; the others stay gross.","es":""},"format":"CALCULATION","data":[{"label":{"fr":"","en":"Receivable from A","es":""},"value":"595000","unit":"EUR"},{"label":{"fr":"","en":"Payable to A","es":""},"value":"135000","unit":"EUR"}],"steps":[{"id":"c1","label":{"fr":"","en":"Net receivable presented for A","es":""},"answer":460000,"tolerance":0,"unit":"EUR"},{"id":"c2","label":{"fr":"","en":"Total receivables presented","es":""},"answer":1110000,"tolerance":0,"unit":"EUR"},{"id":"c3","label":{"fr":"","en":"Total payables presented","es":""},"answer":460000,"tolerance":0,"unit":"EUR"}],"id":"p3","dimension":"CALCULATION","formula":{"lines":[{"step":"c1","meaning":{"fr":"","en":"Net receivable presented for A","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Receivable from A","es":""},"value":595000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Payable to A","es":""},"value":135000,"unit":"EUR"}],"result":460000,"unit":"EUR"}],"references":["REF.IAS32.42"]}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000001","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_INSTRUMENT_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000001","tested_point":"QST.IAS32.000001","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"understand"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Alpha Bank subscribes to an issue of bonds by Beta SA. The issue contract is a financial asset for Alpha and a financial liability for Beta: each party reads it from its own side.","es":""},"explanation":{"fr":"","en":"A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another (IAS 32, para. 11). The bonds subscribed by Alpha are therefore a financial asset for Alpha and a financial liability for Beta. Trap: Describing the contract only from the issuer's point of view. Rule to remember: A single contract is read from both sides: a financial asset for one party, a financial liability or equity for the other (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Assessing the definition only from the issuer's point of view, without seeing what the contract represents for the counterparty.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000002","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_INSTRUMENT_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000002","tested_point":"QST.IAS32.000002","difficulty":"BEGINNER","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":80,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"understand"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Which sentence correctly defines a financial instrument under IAS 32?","es":""},"explanation":{"fr":"","en":"A financial instrument is a two-sided contract: it gives rise to a financial asset of one entity and a financial liability or equity instrument of another (IAS 32, para. 11). The definitions based on the right alone or on the commitment alone describe only one side. Trap: Confusing the financial instrument with one of its effects in a single party. Rule to remember: Financial instrument = contract creating a financial asset on one side and a financial liability or equity on the other (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Defining the financial instrument from one party's right or commitment, without the counterparty.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"An item of the statement of financial position that represents a right to receive cash, whether or not that right arises from a contract.","es":""},"correct":false,"feedback":{"fr":"","en":"A right to receive cash is not enough: the definition refers to a contract that creates, on both sides, a financial asset and a financial liability or equity instrument (IAS 32, para. 11). A right without a contract, such as a receivable of non-contractual origin, does not fit this logic.","es":""}},{"id":"B","text":{"fr":"","en":"A contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"A security held in a portfolio by an entity, assessed from its holder's point of view and without any counterparty being involved.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence keeps only the holder's side. The definition describes a contract that produces a financial asset for one party and, at the same time, a financial liability or equity instrument for the other (IAS 32, para. 11): without a counterparty there is no financial instrument.","es":""}},{"id":"D","text":{"fr":"","en":"A commitment to pay a sum of money, when it appears as a liability of the entity that contracted it with a third party.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence keeps only the issuer's side. The financial liability is one half of the definition: the contract must also create a financial asset for the counterparty (IAS 32, para. 11), which the isolated commitment described here does not show.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000003","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_INSTRUMENT_DEFINITION"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000003","tested_point":"QST.IAS32.000003","difficulty":"BEGINNER","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"understand"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"A trainee summarises the definition of a financial instrument for a loan granted by Sora SA to Terra SA. Which of the trainee's sentences is wrong?","es":""},"explanation":{"fr":"","en":"The loan is a single contract that creates a receivable, hence a financial asset, in the lender Sora, and an obligation to deliver cash, hence a financial liability, in the borrower Terra (IAS 32, para. 11). The wrong sentence swaps the points of view. Trap: Calling a loan a liability for the party that granted it. Rule to remember: The lender holds a financial asset, the borrower carries the financial liability (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Confusing the holder's point of view and the issuer's point of view for the same loan contract.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The loan is a financial asset for Sora, which holds a receivable from Terra.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the lender holds a right to receive cash, hence a financial asset, assessed from the holder's point of view (IAS 32, para. 11). It is not the wrong sentence.","es":""}},{"id":"B","text":{"fr":"","en":"The loan is a financial liability for Terra, which has to repay Sora.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the borrower has a contractual obligation to deliver cash, which falls under financial liability, assessed from the issuer's point of view (IAS 32, para. 11). It is not the wrong sentence.","es":""}},{"id":"C","text":{"fr":"","en":"The loan contract is a single financial instrument, seen from both sides by Sora and by Terra.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the same contract creates a financial asset in one party and a financial liability in the other (IAS 32, para. 11). It describes the definition itself and is not the wrong sentence.","es":""}},{"id":"D","text":{"fr":"","en":"The loan is a financial liability for Sora, which granted the credit.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000004","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_ASSET_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000004","tested_point":"QST.IAS32.000004","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Omega SA has to pay 40,000 to a supplier for a delivery already received. In Omega's accounts, this payable is a financial asset, since the contract relates to cash.","es":""},"explanation":{"fr":"","en":"A financial asset is assessed from the holder's point of view (cash, receivables, investments); a financial liability, from the issuer's point of view (IAS 32, para. 11). Omega has to pay: its payable to the supplier is a financial liability, whereas the matching receivable is a financial asset in the supplier. Trap: Calling any contract that relates to cash a financial asset. Rule to remember: The financial asset is the holder's; the same amount owed is a financial liability for the debtor (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Calling an amount owed a financial asset because the contract relates to cash.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000005","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_ASSET_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000005","tested_point":"QST.IAS32.000005","difficulty":"BEGINNER","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":80,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Élodie SA invests 100,000 in bonds issued by another company. How is this investment classified in Élodie's accounts?","es":""},"explanation":{"fr":"","en":"The holder of bonds has an investment, which is a financial asset; a financial asset is assessed from the holder's point of view, just as a financial liability is assessed from the issuer's point of view (IAS 32, para. 11). Trap: Carrying the issuer's classification over into the holder's accounts. Rule to remember: In the holder, cash, receivables and investments are financial assets (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Carrying the issuer's liability or equity classification over into the holder's accounts.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a financial asset, assessed from the holder's point of view.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"As a financial liability, since the bonds were issued by a company that has to repay the holders.","es":""},"correct":false,"feedback":{"fr":"","en":"The financial liability is the issuer's, which has to repay. Élodie is the holder: its investment is a financial asset, and the classification is made from the holder's point of view (IAS 32, para. 11). It does not carry the other company's liability.","es":""}},{"id":"C","text":{"fr":"","en":"As an equity instrument, since Élodie takes part in the financing of the issuing company.","es":""},"correct":false,"feedback":{"fr":"","en":"Equity is assessed in the issuer of an instrument, not in the holder of bonds. For Élodie, which holds an investment, financial asset is the classification (IAS 32, para. 11); financing another company does not change the side from which one judges.","es":""}},{"id":"D","text":{"fr":"","en":"As an item outside the scope of the definition, since the other company is a third party.","es":""},"correct":false,"feedback":{"fr":"","en":"That the issuing company is a third party is the very condition of the contract: a financial instrument binds two parties. Investments are among the examples of financial assets of the holder (IAS 32, para. 11); the definition therefore applies to Élodie.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000006","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_ASSET_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000006","tested_point":"QST.IAS32.000006","difficulty":"BEGINNER","source":"V1","format":"MULTIPLE_CHOICE","estimated_time_s":120,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Which statements about the financial asset are correct? Several answers are possible.","es":""},"explanation":{"fr":"","en":"Cash, receivables and investments are financial assets in the holder; a financial asset is assessed from the holder's point of view and a financial liability from the issuer's point of view (IAS 32, para. 11). The first two statements say this; the third reverses the sides and the fourth wrongly excludes receivables. Trap: Mixing the holder's side and the debtor's side. Rule to remember: In the holder: cash, receivables and investments; in the debtor: a financial liability (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Mixing the holder's side and the debtor's side, or excluding receivables from financial assets.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A financial asset is assessed from the point of view of the holder of the instrument, not from that of the issuer.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"A receivable is a financial asset for the debtor, because the contract relates to cash.","es":""},"correct":false,"feedback":{"fr":"","en":"The debtor has to pay: its payable is a financial liability. The receivable is a financial asset for the party that holds the right to receive the cash (IAS 32, para. 11); the fact that the contract relates to cash does not change the side.","es":""}},{"id":"C","text":{"fr":"","en":"Among the usual examples in the standard, cash is a financial asset and receivables are not.","es":""},"correct":false,"feedback":{"fr":"","en":"Receivables are precisely among the examples of financial assets of the holder, together with cash and investments (IAS 32, para. 11). There is no reason to set them aside in favour of cash alone.","es":""}},{"id":"D","text":{"fr":"","en":"In the holder, cash, a receivable and an investment are examples of financial assets.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000007","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_LIABILITY_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000007","tested_point":"QST.IAS32.000007","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"A contractual obligation to deliver cash to another entity is an element that characterises a financial liability, assessed from the issuer's point of view.","es":""},"explanation":{"fr":"","en":"A financial liability includes in particular a contractual obligation to deliver cash or another financial asset to another entity; it is assessed from the issuer's point of view (IAS 32, para. 11). Trap: Looking for the financial liability in the nature of the instrument rather than in the contractual obligation. Rule to remember: A contractual obligation to deliver cash or another financial asset = financial liability of the issuer (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Not linking the financial liability to the issuer's contractual obligation.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000008","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_LIABILITY_DEFINITION"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000008","tested_point":"QST.IAS32.000008","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"Zéphyr SA, whose functional currency is the euro, enters into a forward contract with a bank under which it will have to exchange USD 2,000,000 for euros at a rate fixed today (case facts). At the reporting date, the market rate may be more or less favourable to Zéphyr. Which element of the contract fits the definition of a financial liability?","es":""},"explanation":{"fr":"","en":"The definition of a financial liability includes the contractual obligation to exchange financial assets or financial liabilities with another entity on terms that are potentially unfavourable (IAS 32, para. 11). Case facts: Zéphyr will have to exchange dollars for euros at a rate fixed today, which may become unfavourable. That obligation falls under the definition of a financial liability. Trap: Reserving financial liability for deliveries of cash alone. Rule to remember: The obligation to exchange financial assets on potentially unfavourable terms also falls under financial liability (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Reserving financial liability for deliveries of cash and ignoring the obligation to exchange on potentially unfavourable terms.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Nothing in this contract: an exchange of dollars for euros is not a delivery of cash and therefore does not fall under financial liability.","es":""},"correct":false,"feedback":{"fr":"","en":"The definition is not limited to deliveries of cash: it also covers the contractual obligation to exchange financial assets or liabilities on potentially unfavourable terms (IAS 32, para. 11). Zéphyr's forward contract contains that obligation, whatever the future rate.","es":""}},{"id":"B","text":{"fr":"","en":"The right to receive euros, which makes the contract a financial asset for Zéphyr and rules out a classification as a liability.","es":""},"correct":false,"feedback":{"fr":"","en":"The same contract can give Zéphyr both a right and an obligation: the presence of a right to receive euros does not erase the obligation to exchange dollars on potentially unfavourable terms, which falls under financial liability (IAS 32, para. 11).","es":""}},{"id":"C","text":{"fr":"","en":"The contractual obligation to exchange financial assets with the bank on terms that are potentially unfavourable to Zéphyr.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"The fact that the rate is fixed today, which makes the obligation certain and distinguishes it from an obligation to exchange.","es":""},"correct":false,"feedback":{"fr":"","en":"Fixing the rate today does not take away the exchange nature of the obligation. It is precisely the obligation to exchange financial assets on potentially unfavourable terms that fits the definition of a financial liability (IAS 32, para. 11).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000009","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.FINANCIAL_LIABILITY_DEFINITION"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000009","tested_point":"QST.IAS32.000009","difficulty":"BEGINNER","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-views"},"references":["IAS 32 §11"],"exercise":{"prompt":{"fr":"","en":"An internal manual summarises the notion of financial liability. Which of these sentences is wrong?","es":""},"explanation":{"fr":"","en":"A financial liability is recognised by the issuer's contractual obligation, in particular to deliver cash or another financial asset, or to exchange financial assets or liabilities on potentially unfavourable terms (IAS 32, para. 11). The wrong sentence replaces that analysis with the legal form. Trap: Taking the legal form, share or debt, as the criterion of a financial liability. Rule to remember: The criterion of a financial liability is the issuer's contractual obligation, not the legal form (IAS 32, para. 11).","es":""},"common_error":{"fr":"","en":"Taking the legal form of the instrument (share or debt) as the criterion of a financial liability.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A financial liability includes in particular a contractual obligation to deliver cash or another financial asset to another entity.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the contractual obligation to deliver cash or another financial asset is a basic element of a financial liability (IAS 32, para. 11). It is not the wrong sentence.","es":""}},{"id":"B","text":{"fr":"","en":"A financial liability is assessed from the point of view of the issuer of the instrument, which is the party bound by the obligation.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: a financial liability is read on the issuer's side, bound by the obligation, whereas a financial asset is read on the holder's side (IAS 32, para. 11). It is not the wrong sentence.","es":""}},{"id":"C","text":{"fr":"","en":"An instrument issued in the form of a share is classified according to its legal form, without any need to examine the issuer's contractual obligations.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"An obligation to exchange financial assets or financial liabilities on potentially unfavourable terms can also be a financial liability.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the definition also covers the obligation to exchange financial assets or liabilities on potentially unfavourable terms (IAS 32, para. 11). It is not the wrong sentence.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000010","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EQUITY_INSTRUMENT_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000010","tested_point":"QST.IAS32.000010","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §11","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"An issued share is an equity instrument as soon as it is called a share, whatever its redemption terms.","es":""},"explanation":{"fr":"","en":"An issued instrument is an equity instrument only if there is no unavoidable contractual obligation to deliver cash or another financial asset (IAS 32, para. 16; see also the definition in para. 11). The name \"share\" has no effect on this criterion. Trap: Defining equity as ordinary shares alone, without examining the issuer's obligation. Rule to remember: The test is the issuer's contractual obligation, not the name of the instrument (IAS 32, para. 16).","es":""},"common_error":{"fr":"","en":"Defining equity as shares alone, without examining the issuer's contractual obligation.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000011","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EQUITY_INSTRUMENT_DEFINITION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000011","tested_point":"QST.IAS32.000011","difficulty":"BEGINNER","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":80,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §11","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Which condition must be met for an issued instrument to be an equity instrument?","es":""},"explanation":{"fr":"","en":"An issued instrument is an equity instrument when the issuer has no unavoidable contractual obligation to deliver cash or another financial asset (IAS 32, para. 16; definition in para. 11); for a contract settled in own shares, the fixed-for-fixed requirement is added. Trap: Relying on the name or the accounting caption of the instrument. Rule to remember: No unavoidable contractual obligation to deliver cash = equity instrument (IAS 32, para. 16).","es":""},"common_error":{"fr":"","en":"Relying on the name or recording caption of the instrument rather than on the issuer's contractual obligation.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The issuer has no unavoidable contractual obligation to deliver cash or another financial asset.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The instrument is recorded in the accounts under the capital caption and is worded as an ordinary share.","es":""},"correct":false,"feedback":{"fr":"","en":"The caption and the wording do not decide the classification: the test is the issuer's contractual obligation (IAS 32, para. 16). An ordinary share with no obligation to deliver cash will be in equity, but for that reason and not because of its name.","es":""}},{"id":"C","text":{"fr":"","en":"The holder cannot be repaid before liquidation, whatever the other terms of the contract.","es":""},"correct":false,"feedback":{"fr":"","en":"The absence of repayment before liquidation does not dispense with examining the other terms: a mandatory fixed dividend, for example, would be an obligation to deliver cash (IAS 32, para. 16). The criterion remains the absence of an unavoidable contractual obligation.","es":""}},{"id":"D","text":{"fr":"","en":"The issuer freely chooses the redemption date, even when it has committed to repay the holder in cash, which is enough to rule out any obligation to deliver cash.","es":""},"correct":false,"feedback":{"fr":"","en":"A commitment to repay in cash is an unavoidable contractual obligation, even if the date is left to the issuer's discretion; the instrument then contains a financial liability (IAS 32, para. 16). Choosing the date does not remove the obligation to deliver cash.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000012","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EQUITY_INSTRUMENT_DEFINITION"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000012","tested_point":"QST.IAS32.000012","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §11","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Ambre SA issues 10,000 perpetual securities for 1,000,000. Contract terms (case facts): no redemption date, no right of redemption for the holder; the dividend is paid only if the general meeting of Ambre so decides, and Ambre has no obligation to decide so. How does Ambre classify these securities at issue?","es":""},"explanation":{"fr":"","en":"Under the case terms, Ambre has neither an obligation to redeem nor an obligation to pay the dividend: it can avoid any delivery of cash. The instrument therefore contains no unavoidable contractual obligation and is an equity instrument (IAS 32, para. 16; definition in para. 11). Professional judgement: the conclusion rests on the discretionary nature of the dividend, a case fact. Trap: Classifying securities without maturity as a liability because they reward investors. Rule to remember: Without an unavoidable contractual obligation to deliver cash, the security is equity (IAS 32, para. 16).","es":""},"common_error":{"fr":"","en":"Classifying securities without maturity as a financial liability because they reward investors.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a financial liability, because perpetual securities are issued against a cash contribution that Ambre will one day have to return.","es":""},"correct":false,"feedback":{"fr":"","en":"The case rules out any redemption: the contribution does not have to be returned. Without an unavoidable contractual obligation to deliver cash or another financial asset, the instrument is not a financial liability (IAS 32, para. 16); receiving cash at issue is not enough to create a debt.","es":""}},{"id":"B","text":{"fr":"","en":"As a financial liability, because a security that rewards investors creates an obligation to reward them every year.","es":""},"correct":false,"feedback":{"fr":"","en":"A dividend that the meeting may or may not decide is not a contractual obligation: Ambre can avoid paying it, which the case facts confirm (IAS 32, para. 16). Rewarding investors becomes an obligation only if the contract imposes it.","es":""}},{"id":"C","text":{"fr":"","en":"As a financial liability until the meeting has decided not to distribute, and then as equity.","es":""},"correct":false,"feedback":{"fr":"","en":"Classification is made at issue according to the contract terms and does not swing with the decisions of a meeting: the contract contains no unavoidable obligation from issue, so the securities are equity from the start (IAS 32, para. 16).","es":""}},{"id":"D","text":{"fr":"","en":"As equity, because no term obliges Ambre to deliver cash or another financial asset.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000013","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.CONTRACTUAL_REQUIREMENT"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000013","tested_point":"QST.IAS32.000013","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-contract"},"references":["IAS 32 §13"],"exercise":{"prompt":{"fr":"","en":"An oral agreement, with no written document signed by the parties, cannot be a contract within the meaning of IAS 32.","es":""},"explanation":{"fr":"","en":"A contract within the meaning of the standard does not need to be in writing (IAS 32, para. 13). What matters in qualifying an obligation as a financial liability is its contractual nature, not the form of the document. Trap: Requiring a signed written document before recognising a financial instrument. Rule to remember: The contract may be oral or written; what rules out a financial liability is the absence of a contractual nature (IAS 32, para. 13).","es":""},"common_error":{"fr":"","en":"Requiring a written and signed contract before recognising a financial instrument.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000014","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.CONTRACTUAL_REQUIREMENT"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000014","tested_point":"QST.IAS32.000014","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000001","section_id":"rule-contract"},"references":["IAS 32 §AG12","IAS 32 §13"],"exercise":{"prompt":{"fr":"","en":"Sigma SA lists its obligations at 31 December to assess which are financial liabilities (case facts). Which of these obligations is not a financial liability, because it is not contractual?","es":""},"explanation":{"fr":"","en":"An obligation is a financial liability only if it is contractual. Taxes owed to the State arise from law and are not financial liabilities (IAS 32, para. AG12); on the other hand, a contract does not need to be in writing (IAS 32, para. 13), so the orally accepted order does create a contractual payable. Trap: Calling a tax owed to the State a financial liability. Rule to remember: A tax is not a financial liability; a debt born of an agreement, even an oral one, can be (IAS 32, paras. AG12 and 13).","es":""},"common_error":{"fr":"","en":"Calling a tax owed to the State a financial liability, or denying contract status to an oral agreement.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A payable to a supplier whose order was accepted orally, without any written document signed by the parties.","es":""},"correct":false,"feedback":{"fr":"","en":"The orally accepted order forms a contract: a contract within the meaning of the standard does not need to be in writing (IAS 32, para. 13). The payable to the supplier is therefore contractual and can be a financial liability, unlike the tax.","es":""}},{"id":"B","text":{"fr":"","en":"Corporate income tax owed to the State, which arises from law, not from a contract.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"A bank loan whose loan contract provides for repayment in cash on a fixed date.","es":""},"correct":false,"feedback":{"fr":"","en":"The loan is contractual: the loan contract creates an obligation to deliver cash on a fixed date, which falls under financial liability (IAS 32, para. 13; definition in para. 11). It is not the example sought.","es":""}},{"id":"D","text":{"fr":"","en":"A bond issued on the market and repayable in cash at maturity.","es":""},"correct":false,"feedback":{"fr":"","en":"The bond is contractual: it creates an obligation to deliver cash at maturity to the holders, which falls under financial liability (IAS 32, para. 13; definition in para. 11). It is not the example sought.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000015","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EXCLUSIONS","IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000015","tested_point":"QST.IAS32.000015","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"rule-exclusions"},"references":["IAS 32 §4","IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"Orme SA has set up a share option plan for its employees. To cover the plan, it buys back 20,000 of its own shares on the market (case facts). What treatment applies to this repurchase of treasury shares?","es":""},"explanation":{"fr":"","en":"The scope of IAS 32 excludes share-based payment transactions (IFRS 2), but treasury shares acquired, sold, issued or cancelled in connection with option plans remain subject to the rules on treasury shares (IAS 32, paras. 4 and 33). Orme therefore deducts the 20,000 repurchased shares from its equity. Trap: Extending the exclusion of share-based payment to the treatment of treasury shares. Rule to remember: The exclusion covers the plan, not the treasury shares bought back to cover it (IAS 32, paras. 4 and 33).","es":""},"common_error":{"fr":"","en":"Extending the exclusion of share-based payment to the treasury shares bought back to cover the plan.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The repurchase is excluded from IAS 32, since the option plan falls under IFRS 2, and the shares are recorded as an asset of Orme and the repurchase falls entirely outside the scope of the standard.","es":""},"correct":false,"feedback":{"fr":"","en":"The exclusion covers share-based payment transactions, not the treasury shares bought back to cover the plan: these remain subject to the rules on treasury shares, which deduct them from equity (IAS 32, paras. 4 and 33). Recording them as an asset is an error.","es":""}},{"id":"B","text":{"fr":"","en":"The repurchase is a financial asset measured at fair value, since it serves to cover a future cost of the option plan.","es":""},"correct":false,"feedback":{"fr":"","en":"Repurchased treasury shares are not presented as a financial asset: they are deducted from equity (IAS 32, para. 33), and the purpose of covering the plan changes nothing.","es":""}},{"id":"C","text":{"fr":"","en":"The repurchase is recognised as a staff cost, since it serves to remunerate the employees who benefit from the plan.","es":""},"correct":false,"feedback":{"fr":"","en":"The repurchase remunerates nobody: it is a transaction in the entity's own equity, with no gain or loss in profit or loss (IAS 32, para. 33). The cost of the plan falls under the standard on share-based payment, not under the repurchase.","es":""}},{"id":"D","text":{"fr":"","en":"The shares repurchased remain subject to the IAS 32 rules on treasury shares and are deducted from equity, even though the plan falls under another standard.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000016","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.EXCLUSIONS"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000016","tested_point":"QST.IAS32.000016","difficulty":"INTERMEDIATE","source":"V1","format":"MULTIPLE_CHOICE","estimated_time_s":120,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"rule-exclusions"},"references":["IAS 32 §4"],"exercise":{"prompt":{"fr":"","en":"Which items are among those that the standard excludes in principle from its scope, subject to the exceptions it provides? Several answers are possible.","es":""},"explanation":{"fr":"","en":"The scope of IAS 32 excludes in particular share-based payment transactions (IFRS 2), employers' rights and obligations under employee benefit plans (IAS 19), insurance contracts within IFRS 17 and interests accounted for under IFRS 10, IAS 27 or IAS 28, each with exceptions (IAS 32, para. 4). A bank loan or an investment in bonds are ordinary financial instruments, within the scope. Trap: Applying IAS 32 to every instrument issued, including share-based payments. Rule to remember: The exclusions are transactions that other standards deal with; loans and investments remain within IAS 32 (IAS 32, para. 4).","es":""},"common_error":{"fr":"","en":"Applying the standard to all instruments, including share-based payments and the other exclusions.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Share-based payment transactions, which fall under IFRS 2.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"A bank loan taken out by the entity from a credit institution.","es":""},"correct":false,"feedback":{"fr":"","en":"A bank loan is a typical financial liability, created by a contract that obliges the entity to repay in cash: it is within the scope of the standard and is not an exclusion (IAS 32, para. 4; definition in para. 11).","es":""}},{"id":"C","text":{"fr":"","en":"An employer's rights and obligations under its employee benefit plans, to which IAS 19 applies.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"An investment in listed bonds held by the entity to earn interest.","es":""},"correct":false,"feedback":{"fr":"","en":"An investment in bonds is a typical financial asset of the holder: it is within the scope and is not an exclusion (IAS 32, para. 4; definition in para. 11).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000017","standard_id":"IAS32","concept_ids":["IAS32.SCOPE.NON_FINANCIAL_ITEMS"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000017","tested_point":"QST.IAS32.000017","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"rule-nonfin"},"references":["IAS 32 §8"],"exercise":{"prompt":{"fr":"","en":"Cobalt SA, a cable manufacturer, enters into a contract to buy 500 tonnes of copper for delivery in six months at a fixed price. The contract could be settled net in cash, but Cobalt entered into it and holds it for its expected usage requirements in its production (case facts). Which conclusion is consistent with the rule on contracts for non-financial items?","es":""},"explanation":{"fr":"","en":"A contract to buy or sell a non-financial item that can be settled net in cash or through another financial instrument falls within the standard, unless it is held for the entity's expected purchase, sale or usage requirements (IAS 32, para. 8). Case facts: net settlement possible, but the contract was entered into and is held for use in production. Professional judgement: this assessment of the intention rests on the case facts. Trap: Ignoring the expected-requirements exception when net settlement is possible. Rule to remember: Net settlement possible: within the standard, unless the contract is held for the entity's expected requirements (IAS 32, para. 8).","es":""},"common_error":{"fr":"","en":"Bringing the contract within the standard as soon as net settlement is possible, without examining the entity's expected requirements.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The contract is within IAS 32, since it can be settled net in cash, whatever Cobalt's intentions.","es":""},"correct":false,"feedback":{"fr":"","en":"The possibility of net settlement is not enough to bring the contract within the standard: the exception for expected purchase, sale or usage requirements applies to a contract entered into and held for that purpose (IAS 32, para. 8), as the case facts indicate.","es":""}},{"id":"B","text":{"fr":"","en":"The contract is outside IAS 32, because it is held for Cobalt's expected usage requirements.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"The contract is within IAS 32, since copper trades in an active market where a reference price exists.","es":""},"correct":false,"feedback":{"fr":"","en":"The existence of an active market and a reference price does not decide the scope; what matters are the possibility of net settlement and the exception for expected usage requirements (IAS 32, para. 8). Here, the exception applies.","es":""}},{"id":"D","text":{"fr":"","en":"The contract is outside IAS 32, because a non-financial item cannot give rise to a financial instrument.","es":""},"correct":false,"feedback":{"fr":"","en":"A contract for a non-financial item can fall within the standard when it can be settled net in cash or through another financial instrument (IAS 32, para. 8). The conclusion is right here, but for another reason: the exception for expected usage requirements.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000018","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000018","tested_point":"QST.IAS32.000018","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"An instrument that imposes on the issuer a delivery of cash that it cannot avoid is a financial liability, even if the issuer presents it as an ownership security.","es":""},"explanation":{"fr":"","en":"An issued instrument is a financial liability when the issuer has a contractual obligation, which it cannot avoid, to deliver cash or another financial asset (IAS 32, para. 16). Presenting the instrument as an ownership security does not change this analysis. Trap: Classifying as equity an instrument that imposes a delivery of cash because it is presented as a share. Rule to remember: An obligation to deliver cash that cannot be avoided = financial liability (IAS 32, para. 16).","es":""},"common_error":{"fr":"","en":"Classifying as equity an instrument that imposes a delivery of cash because it is presented as a share.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000019","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTRACTUAL_OBLIGATION"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000019","tested_point":"QST.IAS32.000019","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-test"},"references":["IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Aube SA issues 50,000 preference shares at 20 each, or 1,000,000. The contract (case facts) requires Aube to redeem them in cash, at 20 each, five years after issue, with no possibility of refusing. How does Aube classify these shares at issue?","es":""},"explanation":{"fr":"","en":"Case facts: redemption in cash on a fixed date, with no possibility of refusal. Aube therefore has a contractual obligation, which it cannot avoid, to deliver cash; the preference shares are a financial liability from issue, whatever their name (IAS 32, para. 16). Trap: Classifying as equity an instrument that imposes a delivery of cash on a fixed date because it is presented as a share. Rule to remember: Mandatory redemption in cash = financial liability (IAS 32, para. 16).","es":""},"common_error":{"fr":"","en":"Classifying as equity an instrument that imposes a delivery of cash on a fixed date on the ground that it is presented as a share.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As equity, because the instrument is issued in the form of shares and, as such, takes part in the company's capital, whatever the other terms.","es":""},"correct":false,"feedback":{"fr":"","en":"The form of shares does not decide the classification: the test is the issuer's contractual obligation. Here, the contract imposes redemption in cash, which makes a financial liability despite the name (IAS 32, para. 16).","es":""}},{"id":"B","text":{"fr":"","en":"As equity for four years, then as a financial liability as the redemption date approaches.","es":""},"correct":false,"feedback":{"fr":"","en":"Classification is made from the contract terms at issue: the redemption obligation exists from day one, with a known maturity. There is no gradual shift from one classification to the other as the date approaches (IAS 32, para. 16).","es":""}},{"id":"C","text":{"fr":"","en":"As a financial liability, because the contract obliges it to deliver cash on a certain date.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"As equity, because the redemption price equals the issue price and therefore creates no gain or loss for Aube.","es":""},"correct":false,"feedback":{"fr":"","en":"Equality between the redemption price and the issue price does not change the nature of the instrument: what matters is the obligation to deliver cash, which the contract makes unavoidable. The amount is not the classification criterion (IAS 32, para. 16).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000021","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000021","tested_point":"QST.IAS32.000021","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-avoidance"},"references":["IAS 32 §25"],"exercise":{"prompt":{"fr":"","en":"Hélix SA issues securities that the contract obliges it to redeem in cash if the national stock index falls by 30% in a year. The event is outside the control of both Hélix and the holders, and the contract contains no clause allowing it to refuse this redemption (case facts). How does it classify these securities at issue?","es":""},"explanation":{"fr":"","en":"Case facts: redemption in cash if the index falls by 30%, an event outside the control of Hélix and of the holders, with no unconditional right to avoid delivery. Such an instrument is in principle a financial liability, except in particular cases (IAS 32, para. 25). Trap: Classifying as equity because settlement is uncertain or unlikely. Rule to remember: Settlement conditional on an event outside the control of both parties, with no unconditional right to avoid delivery: a financial liability in principle (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Classifying as equity an instrument whose settlement depends on an uncertain event, on the ground that the event is not certain.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a financial liability, because cash settlement depends on an uncertain event outside the control of both parties.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"As equity, because redemption falls due if the event occurs, which is not certain at issue.","es":""},"correct":false,"feedback":{"fr":"","en":"The uncertainty of the event does not make the securities an equity instrument: the standard targets precisely settlements that depend on an uncertain event outside the parties' control, and leads in principle to a liability when the issuer cannot avoid them (IAS 32, para. 25).","es":""}},{"id":"C","text":{"fr":"","en":"As equity, because the event is outside Hélix's control, so Hélix cannot be held responsible for the delivery.","es":""},"correct":false,"feedback":{"fr":"","en":"That the event is outside Hélix's control is exactly what leads to a liability: Hélix cannot avoid delivery if the event occurs and has no unconditional right to escape it (IAS 32, para. 25). It is not a ground for relief.","es":""}},{"id":"D","text":{"fr":"","en":"According to the probability of the event: as a financial liability if it exceeds 50%, as equity otherwise.","es":""},"correct":false,"feedback":{"fr":"","en":"The standard sets no probability threshold for this classification: the criterion is the absence of an unconditional right to avoid delivery when settlement depends on an uncertain event outside the parties' control (IAS 32, para. 25).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000022","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000022","tested_point":"QST.IAS32.000022","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-avoidance"},"references":["IAS 32 §25","IAS 32"],"exercise":{"prompt":{"fr":"","en":"A reviewer comments on the classification of redeemable shares issued by entities. Which of the reviewer's statements is wrong?","es":""},"explanation":{"fr":"","en":"An entity that does not have the unconditional right to avoid delivery of cash in principle carries a financial liability; members' shares are equity when it has the unconditional right to refuse redemption (IAS 32, para. 25; IFRIC 2, para. 7). A past practice of not redeeming is not a contractual right of refusal: the wrong statement confuses it with such a right. Trap: Confusing a past practice of not redeeming with a contractual right of refusal. Rule to remember: Only an unconditional contractual right allows delivery to be avoided, not past practice (IAS 32, para. 25; IFRIC 2, para. 7).","es":""},"common_error":{"fr":"","en":"Confusing a past practice of not redeeming with a contractual right of refusal.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As long as a board of directors has never redeemed any shares, its right to refuse a redemption is unconditional.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"A right of refusal subject to a liquidity threshold is not an unconditional right to avoid delivery.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: a right of refusal subject to a condition, for example a liquidity threshold, is not an unconditional right to avoid delivery of cash (IAS 32, para. 25; IFRIC 2, para. 7). It is not the wrong statement.","es":""}},{"id":"C","text":{"fr":"","en":"Members' shares are equity when the entity has the unconditional right to refuse their redemption.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: members' shares are equity when the entity has the unconditional right to refuse their redemption (IFRIC 2, para. 7). It is not the wrong statement.","es":""}},{"id":"D","text":{"fr":"","en":"When the issuer has no unconditional right to avoid delivery of cash, the instrument is in principle a financial liability.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: without an unconditional right to avoid delivery, the instrument is in principle a financial liability (IAS 32, para. 25; IFRIC 2, para. 7). It is not the wrong statement.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000024","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000024","tested_point":"QST.IAS32.000024","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"rule-test"},"references":["IAS 32 §22","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Iris SA, whose functional currency is the euro, issues a warrant to an investor: if the holder exercises it, Iris will deliver 10,000 of its own shares against a payment of 120,000 euros. The number of shares and the price are fixed in the contract and do not vary; settlement is by physical delivery (case facts). How does Iris classify this warrant?","es":""},"explanation":{"fr":"","en":"A contract settled by delivering a fixed number of own shares for a fixed amount of cash or another financial asset is an equity instrument (IAS 32, para. 22; see also para. 16). Case facts: 10,000 shares for 120,000 euros, issuer's functional currency, physical delivery. Both terms are fixed. Trap: Classifying a warrant as a liability on the ground that it is a derivative or that its value varies. Rule to remember: Fixed number of own shares for a fixed amount of cash = equity (IAS 32, para. 22).","es":""},"common_error":{"fr":"","en":"Classifying as a financial liability a warrant settled with a fixed number of shares for a fixed amount, on the ground that it is a derivative.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a derivative financial liability, because a warrant is a derivative whose value varies with the share price, whatever the settlement method.","es":""},"correct":false,"feedback":{"fr":"","en":"The derivative nature of the warrant does not decide the classification: when the fixed-for-fixed condition is met, which the case facts establish, the contract is an equity instrument. The variation in the warrant's value changes nothing (IAS 32, para. 22).","es":""}},{"id":"B","text":{"fr":"","en":"As a financial liability, because Iris commits to deliver a number of shares that may be worth more than 120,000 euros on the exercise date.","es":""},"correct":false,"feedback":{"fr":"","en":"The value of the shares to be delivered has no effect on the condition: what matters is that the number of shares and the amount of cash are fixed. Iris has to deliver no cash, so there is no financial liability (IAS 32, paras. 22 and 16).","es":""}},{"id":"C","text":{"fr":"","en":"As an equity instrument, because it will be settled by delivering a fixed number of own shares for a fixed amount of cash.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"As equity provided that the 10,000 shares are already held as treasury shares when the warrant is issued.","es":""},"correct":false,"feedback":{"fr":"","en":"The fixed-for-fixed condition does not depend on prior holding of the shares: issuing new shares for a fixed amount is enough, and classification is made from the contract terms (IAS 32, para. 22). The origin of the shares does not change the analysis.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000025","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000025","tested_point":"QST.IAS32.000025","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"rule-test"},"references":["IAS 32 §22","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"An analyst comments on the fixed-for-fixed condition applicable to contracts settled in the issuer's own equity instruments. Which of the analyst's statements is wrong?","es":""},"explanation":{"fr":"","en":"A contract settled by delivering a fixed number of own equity instruments for a fixed amount of cash or another financial asset is an equity instrument; if either term varies, it is not (IAS 32, paras. 16 and 22). The wrong statement relies on the settlement method alone. Trap: Classifying as equity an option whose number of instruments or amount of cash is variable. Rule to remember: Settlement in own equity instruments is not enough: a fixed number and a fixed amount are required (IAS 32, paras. 16 and 22).","es":""},"common_error":{"fr":"","en":"Classifying as equity an option whose number of instruments or amount of cash is variable.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A contract that requires delivery of a variable number of own equity instruments to match a fixed amount of cash does not meet the condition.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: when the number of instruments varies to offset a fixed amount of cash, the fixed-for-fixed condition is not met and the contract is not an equity instrument (IAS 32, paras. 16 and 22). It is not the wrong statement.","es":""}},{"id":"B","text":{"fr":"","en":"A contract settled in own equity instruments is an equity instrument by the mere fact of that settlement method, even if the number of instruments to deliver varies.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"The fixed-for-fixed condition assumes a fixed number of own equity instruments exchanged for a fixed amount of cash or another financial asset, so that both terms must be fixed.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: it sets out the fixed-for-fixed condition itself, with its two fixed terms (IAS 32, paras. 16 and 22). It is not the wrong statement.","es":""}},{"id":"D","text":{"fr":"","en":"An exercise price set in a currency other than the issuer's functional currency does not normally meet the condition.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: the amount of cash expressed in functional currency would be variable, which normally prevents the condition from being met (IAS 32, paras. 16 and 22). It is not the wrong statement.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000026","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FIXED_FOR_FIXED"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000026","tested_point":"QST.IAS32.000026","difficulty":"INTERMEDIATE","source":"V1","format":"MULTIPLE_CHOICE","estimated_time_s":120,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"rule-test"},"references":["IAS 32 §22","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Which statements about the fixed-for-fixed condition are correct? Several answers are possible.","es":""},"explanation":{"fr":"","en":"The fixed-for-fixed condition is met when the contract exchanges a fixed number of own equity instruments for a fixed amount of cash or another financial asset; a price set in a non-functional currency does not normally meet it (IAS 32, paras. 16 and 22). The other three statements forget one of the terms or the settlement method. Trap: Overlooking the effect of an exercise price set in a currency other than the functional currency. Rule to remember: Fixed number, fixed amount, and functional currency: three points to check (IAS 32, paras. 16 and 22).","es":""},"common_error":{"fr":"","en":"Overlooking the effect of an exercise price set in a currency other than the functional currency.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The condition is met as soon as the contract is settled in own equity instruments, whatever the number of instruments delivered at maturity.","es":""},"correct":false,"feedback":{"fr":"","en":"The settlement method is not enough: the number of instruments must also be fixed, in exchange for a fixed amount. A variable number of instruments does not meet the condition (IAS 32, paras. 16 and 22).","es":""}},{"id":"B","text":{"fr":"","en":"If the exercise price is set in a currency other than the issuer's functional currency, the condition is not normally met.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"The currency in which the exercise price is denominated has no bearing on the condition, which concerns the number of instruments alone.","es":""},"correct":false,"feedback":{"fr":"","en":"The currency matters: a price set in a currency other than the functional currency does not normally meet the condition, because the amount of cash in functional currency is variable (IAS 32, paras. 16 and 22). The condition therefore does not concern the number of instruments alone.","es":""}},{"id":"D","text":{"fr":"","en":"A possible settlement in net cash is compatible with equity classification as long as the amount of cash is fixed.","es":""},"correct":false,"feedback":{"fr":"","en":"A fixed amount of cash is not enough: if a party can choose net cash settlement, equity classification is not assured, because all the settlement alternatives would have to lead there (IAS 32, paras. 16 and 22). The settlement method matters too.","es":""}},{"id":"E","text":{"fr":"","en":"A contract settled by delivering a fixed number of own equity instruments for a fixed amount of cash is an equity instrument.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000027","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTINGENT_SETTLEMENT"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000027","tested_point":"QST.IAS32.000027","difficulty":"INTERMEDIATE","source":"V1","format":"MULTIPLE_CHOICE","estimated_time_s":120,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-contingent"},"references":["IAS 32 §25"],"exercise":{"prompt":{"fr":"","en":"Which statements about contingent settlement provisions are correct? Several answers are possible.","es":""},"explanation":{"fr":"","en":"A contingent settlement provision whose event is outside the control of both issuer and holder leads to a financial liability when the issuer does not have the unconditional right to avoid delivery, except in three cases: the part of the provision is not genuine, settlement can be required only on liquidation, or the instrument is a puttable instrument meeting paras. 16A and 16B (IAS 32, para. 25). A low probability of the event is not enough to set the provision aside. Trap: Ignoring a contingent settlement provision on the ground that the event is improbable. Rule to remember: An uncertain event outside the parties' control weighs on classification, unless the provision is not genuine (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Ignoring a contingent settlement provision on the ground that the event is improbable.","es":""},"format":"MULTIPLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Classification depends on the percentage probability that management attributes to the event at the issue date of the instrument.","es":""},"correct":false,"feedback":{"fr":"","en":"The standard does not retain a management probability estimate as the criterion: the analysis concerns the unconditional right to avoid delivery of cash when settlement depends on an event outside the parties' control (IAS 32, para. 25).","es":""}},{"id":"B","text":{"fr":"","en":"A provision that requires settlement in cash on an uncertain event outside the control of the issuer and the holder in principle leads to a financial liability if the issuer does not have the unconditional right to avoid delivery.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"A contingent provision has no effect on classification when the event that triggers it is independent of the issuer's will.","es":""},"correct":false,"feedback":{"fr":"","en":"That the event is independent of the issuer is precisely what creates the problem: the issuer cannot avoid delivery if the event occurs. The provision therefore weighs on classification (IAS 32, para. 25).","es":""}},{"id":"D","text":{"fr":"","en":"The fact that the event is unlikely is not, by itself, enough to leave the provision out of the classification analysis.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000028","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.CONTINGENT_SETTLEMENT"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000028","tested_point":"QST.IAS32.000028","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-contingent"},"references":["IAS 32 §25","IAS 32 §AG28"],"exercise":{"prompt":{"fr":"","en":"A working paper analyses the contingent settlement provisions of several issued instruments. Which of the working paper's conclusions is wrong?","es":""},"explanation":{"fr":"","en":"A contingent settlement provision whose event is outside the control of both parties in principle leads to a financial liability if the issuer does not have the unconditional right to avoid delivery (IAS 32, para. 25); only a non-genuine provision, extremely rare, highly abnormal and very unlikely, is set aside (IAS 32, para. AG28). The wrong conclusion invents a probability threshold. Professional judgement: deciding whether a provision is non-genuine depends on the facts of each instrument. Trap: Ignoring a provision on the ground that the event is improbable. Rule to remember: A low probability does not set the provision aside; only a non-genuine provision is (IAS 32, paras. 25 and AG28).","es":""},"common_error":{"fr":"","en":"Ignoring a contingent settlement provision on the ground that the event is improbable.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A non-genuine provision, extremely rare, highly abnormal and very unlikely, is not enough to classify the instrument as a liability.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: a non-genuine provision, that is, extremely rare, highly abnormal and very unlikely, does not impose liability classification (IAS 32, para. AG28). It is not the wrong conclusion.","es":""}},{"id":"B","text":{"fr":"","en":"A provision whose trigger is outside the control of the issuer and the holder is in principle analysed as an obligation to deliver cash.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: a settlement that depends on an uncertain event outside the control of both parties is in principle an obligation to deliver cash, with no unconditional right to escape it (IAS 32, para. 25). It is not the wrong conclusion.","es":""}},{"id":"C","text":{"fr":"","en":"When the issuer has the unconditional right to avoid delivery, the contingent provision does not in principle lead to a liability.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: the unconditional right to avoid delivery is precisely what rules out a financial liability for a contingent provision (IAS 32, para. 25). It is not the wrong conclusion.","es":""}},{"id":"D","text":{"fr":"","en":"A contingent settlement provision can be ignored as soon as management estimates the probability of the event at less than 10%.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000029","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.SETTLEMENT_OPTIONS"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000029","tested_point":"QST.IAS32.000029","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-options"},"references":["IAS 32 §26"],"exercise":{"prompt":{"fr":"","en":"Opale SA enters into a derivative on its own shares with a bank. At maturity, the bank chooses either to receive 5,000 Opale shares against a payment of 100,000 euros, or a net cash settlement of the difference between the value of the shares and 100,000 euros (case facts). How is this derivative classified?","es":""},"explanation":{"fr":"","en":"When one party chooses the settlement method of a derivative (for example net cash, or exchange of shares for cash), the derivative is a financial asset or liability, unless all the settlement alternatives would result in an equity instrument (IAS 32, para. 26). Case facts: the bank chooses between delivery of 5,000 shares for 100,000 euros and net cash settlement; the second alternative does not result in equity. Trap: Classifying as equity because one of the alternatives is delivery of a fixed number of shares. Rule to remember: A settlement option requires examining all the alternatives (IAS 32, para. 26).","es":""},"common_error":{"fr":"","en":"Classifying as equity a derivative on own shares because one of the settlement alternatives is delivery of a fixed number of shares.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As equity, because one of the settlement alternatives is the delivery of a fixed number of shares for a fixed amount of cash.","es":""},"correct":false,"feedback":{"fr":"","en":"A single alternative leading to equity is not enough: net cash settlement, also open to the bank, does not lead there. The derivative is therefore a financial asset or liability (IAS 32, para. 26).","es":""}},{"id":"B","text":{"fr":"","en":"As a financial asset or liability, because one party chooses the settlement method and not all the settlement alternatives would result in an equity instrument.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"As equity, because it is the bank, and not Opale, that chooses how the derivative is settled at maturity.","es":""},"correct":false,"feedback":{"fr":"","en":"The bank's choice does not bring the derivative closer to equity: the rule applies whether the choice lies with the issuer or with the counterparty, as long as not all alternatives lead to equity (IAS 32, para. 26).","es":""}},{"id":"D","text":{"fr":"","en":"As equity until maturity, then as a financial liability when the bank exercises its choice of net settlement, the alternative finally chosen determining the classification.","es":""},"correct":false,"feedback":{"fr":"","en":"Classification does not switch when the choice is exercised: it takes account of the settlement alternatives provided for by the contract from the outset. The derivative is a financial asset or liability from inception (IAS 32, para. 26).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000030","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.SETTLEMENT_OPTIONS"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000030","tested_point":"QST.IAS32.000030","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000005","section_id":"rule-options"},"references":["IAS 32 §26"],"exercise":{"prompt":{"fr":"","en":"A colleague drafts conclusions on the classification of derivatives on own equity instruments with a settlement option. Which of these conclusions is wrong?","es":""},"explanation":{"fr":"","en":"When one of the parties chooses the settlement method of a derivative, it is a financial asset or liability, unless all the settlement alternatives would result in an equity instrument (IAS 32, para. 26). The wrong conclusion is satisfied with a single alternative leading to equity. Trap: Classifying as equity a derivative on own shares because one of the settlement alternatives is delivery of a fixed number of shares. Rule to remember: All the alternatives must lead to equity, not just one (IAS 32, para. 26).","es":""},"common_error":{"fr":"","en":"Classifying as equity a derivative on own shares because one of the settlement alternatives is delivery of a fixed number of shares.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"A derivative for which one of the parties chooses the settlement method is a financial asset or liability, unless all the settlement alternatives lead to equity.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: it restates the rule on settlement options, with the exception where all the alternatives lead to equity (IAS 32, para. 26). It is not the wrong conclusion.","es":""}},{"id":"B","text":{"fr":"","en":"The choice of settlement method may lie with the issuer or with the counterparty without changing the classification of principle of the derivative, which remains that of a financial asset or liability.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: the rule covers the case where one of the parties chooses, whether the issuer or the counterparty (IAS 32, para. 26). It is not the wrong conclusion.","es":""}},{"id":"C","text":{"fr":"","en":"To conclude that an instrument is equity, every conceivable settlement alternative must itself result in equity.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: it rephrases the exception, under which all the alternatives must result in equity for the derivative to be equity (IAS 32, para. 26). It is not the wrong conclusion.","es":""}},{"id":"D","text":{"fr":"","en":"The presence of an alternative that delivers a fixed number of instruments for a fixed amount of cash is enough to classify the derivative as equity, even if another alternative is net settlement.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000031","standard_id":"IAS32","concept_ids":["IAS32.CLASSIFICATION.FOREIGN_CURRENCY_RIGHTS"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000031","tested_point":"QST.IAS32.000031","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000004","section_id":"rule-fx"},"references":["IAS 32 §22","IAS 32 §11","IAS 32 §16"],"exercise":{"prompt":{"fr":"","en":"Quartz SA, whose functional currency is the euro, issues a warrant to an investor: on exercise, the investor will receive 20,000 Quartz shares against 100,000 dollars (5 dollars per share), an amount fixed in the contract. The warrant is not offered pro rata to all existing shareholders (case facts). How does Quartz classify this warrant?","es":""},"explanation":{"fr":"","en":"An exercise price set in a currency other than the functional currency does not normally meet the fixed-for-fixed condition, because the amount of cash in functional currency is variable (IAS 32, paras. 11, 16 and 22); an exception exists for rights offered pro rata to all existing owners of the same class, which the case rules out. Case facts: price of 5 dollars per share, functional currency euro, warrant reserved for one investor. Trap: Overlooking the effect of an exercise price set in a currency other than the functional currency. Rule to remember: Price in a non-functional currency: fixed-for-fixed condition normally not met (IAS 32, paras. 16 and 22).","es":""},"common_error":{"fr":"","en":"Overlooking the effect of an exercise price set in a currency other than the functional currency.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a derivative financial liability, because the exercise price is set in a currency other than the functional currency, so that the amount of cash in euros varies.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"As equity, because the number of shares (20,000) and the amount (100,000 dollars) are fixed in the contract, whatever the currency.","es":""},"correct":false,"feedback":{"fr":"","en":"Both terms are fixed only in the currency of the price: expressed in euros, Quartz's functional currency, the amount of cash varies with the dollar rate. The fixed-for-fixed condition is therefore not normally met (IAS 32, paras. 16 and 22).","es":""}},{"id":"C","text":{"fr":"","en":"As equity, because settlement is by physical delivery of the shares, which is enough to meet the condition.","es":""},"correct":false,"feedback":{"fr":"","en":"Physical delivery does not suffice to meet the condition: the amount of cash must also be fixed in the issuer's functional currency, which is not the case for a price set in dollars (IAS 32, paras. 16 and 22).","es":""}},{"id":"D","text":{"fr":"","en":"As a financial liability, because a contract denominated in a foreign currency is by nature a currency derivative, regardless of its settlement method.","es":""},"correct":false,"feedback":{"fr":"","en":"The classification does not come from the currency derivative nature, but from the fixed-for-fixed condition: a price in a non-functional currency normally prevents it from being met (IAS 32, paras. 16 and 22). The reasoning proposed reaches the right conclusion for the wrong reason.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000032","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.PUTTABLE_CONDITIONS"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000032","tested_point":"QST.IAS32.000032","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-puttable"},"references":["IAS 32 §16A"],"exercise":{"prompt":{"fr":"","en":"The Cèdre fund issues units that the holder can put back to the fund for cash. The units belong to the most subordinated class of instruments, but the contract also obliges Cèdre to pay each year a fixed income of 3% of nominal value, independent of the fund's results (case facts). How does Cèdre classify these units?","es":""},"explanation":{"fr":"","en":"A puttable instrument is a financial liability in principle; by exception, it can be classified as equity if cumulative conditions are met, including subordination to the most subordinated class (16A(b)) and the absence of any other contractual obligation unfavourable to the issuer (16A(d)) (IAS 32, para. 16A). Case facts: subordinated units, but a mandatory fixed income of 3%: condition 16A(d) is not met. Professional judgement: each condition is assessed on the case facts. Trap: Applying the exception without checking all the cumulative conditions. Rule to remember: A single failed condition rules out the puttable instruments exception (IAS 32, para. 16A).","es":""},"common_error":{"fr":"","en":"Applying the puttable instruments exception without checking all the cumulative conditions.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As equity, because the units belong to the most subordinated class, which is enough to apply the puttable instruments exception.","es":""},"correct":false,"feedback":{"fr":"","en":"Subordination is only one of the cumulative conditions: the exception also requires the absence of any other contractual obligation unfavourable to the issuer, which the mandatory fixed income breaches (IAS 32, para. 16A). Applying the exception on a single condition is the error to avoid.","es":""}},{"id":"B","text":{"fr":"","en":"As equity, because the holder's put option is the main obligation to deliver cash and the annual fixed income is an ancillary element, which is enough to set aside the condition of no other unfavourable obligation.","es":""},"correct":false,"feedback":{"fr":"","en":"That an obligation is ancillary does not make it disappear from the analysis: a mandatory fixed income is a contractual obligation to deliver cash, which defeats the condition of no other unfavourable obligation (IAS 32, para. 16A).","es":""}},{"id":"C","text":{"fr":"","en":"As a financial liability, because the puttable instruments exception requires all the cumulative conditions to be met, including the absence of any other unfavourable contractual obligation, and the mandatory fixed income is one.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"As a financial liability, because an instrument that the holder can put back for cash cannot be classified as equity, whatever its other terms.","es":""},"correct":false,"feedback":{"fr":"","en":"The put option does not rule out equity classification: the standard's exception allows a puttable instrument to be classified as equity if its cumulative conditions are met (IAS 32, para. 16A). Here they are not, but for another reason.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000033","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.LIQUIDATION_OBLIGATIONS"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000033","tested_point":"QST.IAS32.000033","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-liquidation"},"references":["IAS 32 §16C"],"exercise":{"prompt":{"fr":"","en":"Aster is a limited-life company with a term of twenty years. Its units oblige Aster to deliver to the holder a pro rata share of its net assets only on liquidation, at the end of the twenty years (case facts). Case assumption: the conditions of the exception provided for this type of instrument are met. How does Aster classify these units?","es":""},"explanation":{"fr":"","en":"By exception, an instrument that requires the issuer to deliver to another party a pro rata share of its net assets only on liquidation can be classified as equity when the conditions of that exception are met (IAS 32, para. 16C). Case facts: obligation arising on liquidation, at the end of the twenty years; case assumption: conditions met. Professional judgement: in a real case, the conditions are assessed one by one. Trap: Treating the liquidation obligation as an ordinary obligation to deliver cash without examining the exception. Rule to remember: An obligation arising only on liquidation falls under an exception, to be examined condition by condition (IAS 32, para. 16C).","es":""},"common_error":{"fr":"","en":"Treating the liquidation obligation as an ordinary obligation to deliver cash, without examining the exception.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As a financial liability, because the obligation to deliver a pro rata share of net assets on liquidation is an obligation to deliver a financial asset at maturity, even if the triggering event is liquidation.","es":""},"correct":false,"feedback":{"fr":"","en":"That is the reading of principle, but the standard provides an exception for instruments whose obligation arises only on liquidation: if its conditions are met, the instrument can be classified as equity (IAS 32, para. 16C). The case states that these conditions are met.","es":""}},{"id":"B","text":{"fr":"","en":"As a financial liability, because the liquidation date is known in advance and makes the obligation certain for Aster, whatever the nature of the instrument.","es":""},"correct":false,"feedback":{"fr":"","en":"A liquidation date known in advance does not change the nature of the obligation, which arises only on liquidation. The standard's exception targets precisely this case and allows equity classification when its conditions are met (IAS 32, para. 16C).","es":""}},{"id":"C","text":{"fr":"","en":"As equity, by exception, because the obligation to deliver a pro rata share of net assets arises only on liquidation and the conditions of the exception are met.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"As equity, without examining the conditions of the exception, since any obligation arising on liquidation is excluded from the definition of a liability.","es":""},"correct":false,"feedback":{"fr":"","en":"The exception is not automatic: it applies only when its conditions are met. Here the case assumption states so, but the analyst must always check those conditions before concluding (IAS 32, para. 16C).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000034","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.PUTTABLE_VS_LIQUIDATION"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000034","tested_point":"QST.IAS32.000034","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":80,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-compare"},"references":["IAS 32 §16A","IAS 32 §16C"],"exercise":{"prompt":{"fr":"","en":"Among the conditions of the exception for instruments puttable by the holder, which one has no equivalent in the exception for instruments that oblige delivery of a pro rata share of net assets only on liquidation?","es":""},"explanation":{"fr":"","en":"Unlike the puttable instruments exception, where one condition concerns the absence of any other contractual obligation unfavourable to the issuer (16A(d)), the liquidation exception includes no condition of this kind; the IASB explains this by the timing at which the issuer might have to settle (IASB explanation, to be kept as background) (IAS 32, paras. 16A and 16C). Trap: Applying to the liquidation exception the condition of no other unfavourable obligation reserved for the puttable instruments exception. Rule to remember: 16A(d) has no equivalent in 16C (IAS 32, paras. 16A and 16C).","es":""},"common_error":{"fr":"","en":"Applying to the liquidation exception the condition of no other unfavourable obligation reserved for the puttable instruments exception.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The absence of any other contractual obligation unfavourable to the issuer (16A(d)), which the liquidation exception does not include.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The two exceptions do not differ: they rest on the same list of conditions and on the same reasoning.","es":""},"correct":false,"feedback":{"fr":"","en":"The two exceptions are not identical: the standard provides for the absence of another unfavourable obligation in the puttable instruments exception, but not in the liquidation exception (IAS 32, paras. 16A and 16C). Confusing them is the error to avoid.","es":""}},{"id":"C","text":{"fr":"","en":"The absence of another obligation unfavourable to the issuer, which is required for the liquidation exception but not for the puttable instruments exception.","es":""},"correct":false,"feedback":{"fr":"","en":"The difference is reversed: it is the puttable instruments exception (16A(d)) that includes the condition of no other unfavourable obligation, not the liquidation exception (IAS 32, paras. 16A and 16C).","es":""}},{"id":"D","text":{"fr":"","en":"The fact that the instrument is redeemable in cash at the holder's option, which is a condition specific to the liquidation exception.","es":""},"correct":false,"feedback":{"fr":"","en":"The possibility of redemption at the holder's option is what defines the instrument of the 16A exception, not a condition of the liquidation exception, where the obligation arises only on liquidation (IAS 32, paras. 16A and 16C).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000035","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.IFRIC_PUTTABLES_2009","IAS32.SPECIAL.PUTTABLE_VS_LIQUIDATION"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000035","tested_point":"QST.IAS32.000035","difficulty":"EXPERT","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000007","section_id":"rule-compare"},"references":["IAS 32","IAS 32 §16A"],"exercise":{"prompt":{"fr":"","en":"The Opale fund issues two classes of units: class A, redeemable at the holder's option, and class B, with no redemption option. On liquidation, class A ranks last, at the same rank as class B, and no other class is more subordinated (case facts). A colleague argues that class A's redemption option makes it less subordinated than class B and therefore rules out the exception. Which answer is consistent with the explanation the Committee gave in 2009 (background, not a rule)?","es":""},"explanation":{"fr":"","en":"In its March 2009 decision, the Committee recalled that the general liability-or-equity analysis comes first, the conditions of the exception being a second step, and that the subordination in 16A(b) depends on rank on liquidation, the existence of a redemption option not reducing it by itself (Committee explanation, to be kept as background and not as a rule) (IAS 32, para. 16A). Case facts: same rank on liquidation for both classes. Trap: Considering that a redemption option makes the instrument less subordinated. Rule to remember: Subordination is read in the rank on liquidation (IAS 32, para. 16A).","es":""},"common_error":{"fr":"","en":"Considering that a redemption option makes the instrument less subordinated.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The redemption option places class A ahead of class B in the order of payment on liquidation, so the colleague's argument is well founded.","es":""},"correct":false,"feedback":{"fr":"","en":"The redemption option does not, by itself, change the order of payment on liquidation: the case places the two classes at the same rank. Concluding that class A ranks ahead of B contradicts the facts and the Committee's explanation (IAS 32, para. 16A).","es":""}},{"id":"B","text":{"fr":"","en":"Subordination is assessed at the date the redemption option is exercised and not on liquidation, so the colleague's argument is well founded.","es":""},"correct":false,"feedback":{"fr":"","en":"The subordination in 16A(b) is assessed according to rank on liquidation, not at the date an option is exercised; moving the time of assessment does not make the argument well founded (IAS 32, para. 16A; 2009 explanation, background).","es":""}},{"id":"C","text":{"fr":"","en":"The Committee removed the exception for units with a redemption option, so the colleague's argument is well founded.","es":""},"correct":false,"feedback":{"fr":"","en":"The Committee only recalled the analytical approach: general analysis first, conditions of the exception second. It did not remove the exception for units with a redemption option (IAS 32, para. 16A; 2009 explanation, background).","es":""}},{"id":"D","text":{"fr":"","en":"Subordination is measured by rank on liquidation; the existence of a redemption option does not reduce it by itself, so the colleague's argument is not well founded.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000036","standard_id":"IAS32","concept_ids":["IAS32.SPECIAL.MEMBERS_SHARES_IFRIC2","IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000036","tested_point":"QST.IAS32.000036","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-avoidance"},"references":["IAS 32","IAS 32 §25"],"exercise":{"prompt":{"fr":"","en":"The Brande co-operative issues members' shares that each member may ask to have redeemed. Its statutes prohibit redemption when its liquidity ratio is below 8%; outside that situation, redemptions are due (case facts). How does Brande classify these shares?","es":""},"explanation":{"fr":"","en":"Members' shares are equity when the entity has the unconditional right to refuse their redemption (IFRIC 2, para. 7) or when law, regulation or statutes unconditionally prohibit redemption; a prohibition that applies only if certain conditions are met, for example liquidity constraints, does not have that effect (IFRIC 2, para. 8). Without an unconditional right to avoid delivery, the instrument is in principle a financial liability (IAS 32, para. 25). Case facts: prohibition subject to a liquidity ratio of 8%. Trap: Treating as unconditional a prohibition on redemption that applies only when a liquidity constraint is reached. Rule to remember: Conditional prohibition = not equity on that ground (IFRIC 2, para. 8).","es":""},"common_error":{"fr":"","en":"Treating as unconditional a prohibition on redemption that applies only when a liquidity constraint is reached.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"As equity, because the statutes contain a prohibition on redeeming, which is enough to rule out any obligation to deliver cash, without any need to examine its conditions.","es":""},"correct":false,"feedback":{"fr":"","en":"Only an unconditional prohibition by law, regulation or statutes makes the shares equity; a prohibition subject to a liquidity condition does not have that effect (IFRIC 2, para. 8). The existence of a prohibition clause is therefore not enough.","es":""}},{"id":"B","text":{"fr":"","en":"As financial liabilities in principle, because the prohibition on redeeming depends on a liquidity condition: it is not unconditional.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"As equity, because a liquidity constraint of statutory origin is equivalent to an unconditional prohibition written into law or the statutes.","es":""},"correct":false,"feedback":{"fr":"","en":"The liquidity constraint remains a condition: redemption is due as soon as the ratio exceeds the threshold. It is not an unconditional prohibition, even if it appears in the statutes (IFRIC 2, para. 8). The statutory origin of the clause does not change its conditional nature.","es":""}},{"id":"D","text":{"fr":"","en":"As financial liabilities for the portion of shares for which redemption is requested, and as equity for the rest of the shares.","es":""},"correct":false,"feedback":{"fr":"","en":"The standard does not split shares of the same nature into two classifications according to the redemption requests received: classification depends on the right of refusal or the prohibition, which is conditional here (IFRIC 2, paras. 7 and 8). This split has no support.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000037","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.RECOGNITION_AND_SPLIT"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000037","tested_point":"QST.IAS32.000037","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"understand"},"references":["IAS 32 §28"],"exercise":{"prompt":{"fr":"","en":"An interest-bearing bond convertible into a fixed number of the issuer's shares is split at initial recognition into a liability component and an equity component, recognised separately.","es":""},"explanation":{"fr":"","en":"An instrument that has both liability and equity characteristics, for example an interest-bearing bond convertible into a fixed number of shares, is split at initial recognition into a liability component and an equity component, recognised separately (IAS 32, para. 28). Trap: Recognising the convertible bond entirely as debt until conversion. Rule to remember: Compound instrument: two components from inception (IAS 32, para. 28).","es":""},"common_error":{"fr":"","en":"Recognising the convertible bond entirely as debt until conversion.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000038","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.RECOGNITION_AND_SPLIT"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000038","tested_point":"QST.IAS32.000038","difficulty":"BEGINNER","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"understand"},"references":["IAS 32 §28"],"exercise":{"prompt":{"fr":"","en":"A colleague summarises the treatment of an interest-bearing bond convertible into a fixed number of shares. Which of the colleague's sentences is wrong?","es":""},"explanation":{"fr":"","en":"An instrument that has both liability and equity characteristics is split at initial recognition into a liability component and an equity component, recognised separately (IAS 32, para. 28). The wrong sentence postpones the recognition of equity until conversion. Trap: Recognising the convertible bond entirely as debt until conversion. Rule to remember: The split is made at issue, not at conversion (IAS 32, para. 28).","es":""},"common_error":{"fr":"","en":"Recognising the convertible bond entirely as debt until conversion.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The split is made at initial recognition, and the two components are recognised separately from each other.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the split takes place at initial recognition, not at conversion, and the two components are recognised separately (IAS 32, para. 28). It is not the wrong sentence.","es":""}},{"id":"B","text":{"fr":"","en":"The bond has both liability characteristics, with its interest and repayment, and equity characteristics, with its conversion option.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: it is precisely because the bond has both liability and equity characteristics that it is split (IAS 32, para. 28). It is not the wrong sentence.","es":""}},{"id":"C","text":{"fr":"","en":"The split results in a financial liability for the debt part of the instrument and an equity instrument for the conversion option.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the debt part remains a financial liability and the conversion option into a fixed number of shares forms the equity component (IAS 32, para. 28). It is not the wrong sentence.","es":""}},{"id":"D","text":{"fr":"","en":"The bond is recognised entirely as debt until conversion, the equity component appearing only at that time.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000040","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL"],"dimension":"CALCULATION","context":"V1_QST.IAS32.000040","tested_point":"QST.IAS32.000040","difficulty":"ADVANCED","source":"V1","format":"NUMERICAL","estimated_time_s":200,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"rule-split"},"references":["IAS 32 §31","IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"Dalia SA issues on 1 January, at par, bonds convertible into a fixed number of shares: proceeds of {issue_proceeds}, repayment at par in {term_years}, annual coupon of {annual_coupon} paid at the end of each year. Case data, from management's judgement: a similar debt without a conversion option would be issued at a rate of {discount_rate} (a rate not imposed by the standard). Calculate, one flow at a time, the present value of the principal and of each of the three coupons, then the liability component and the residual equity component.","es":""},"explanation":{"fr":"","en":"Method, one flow at a time: principal 1,200,000 ÷ 1.08^3 = 952,598.69; year 1 coupon: 60,000 ÷ 1.08 = 55,555.56; year 2: 60,000 ÷ 1.08^2 = 51,440.33; year 3: 60,000 ÷ 1.08^3 = 47,629.93. Liability component = 952,598.69 + 55,555.56 + 51,440.33 + 47,629.93 = 1,107,224.51. Equity component = 1,200,000 − 1,107,224.51 = 92,775.49. The liability is measured first, at the fair value of a similar liability without an option, and equity is the residual (IAS 32, paras. 31 and 32). The 8% rate is a judgement datum of the case. Trap: Discounting at the coupon rate of the convertible bond instead of the rate of a similar debt without an option. Rule to remember: Liability first, at the rate of a debt without an option; equity by difference (IAS 32, paras. 31 and 32).","es":""},"common_error":{"fr":"","en":"Discounting at the coupon rate of the convertible bond instead of the rate of a similar debt without an option, or measuring equity first.","es":""},"format":"CALCULATION","placeholders":[{"id":"issue_proceeds","value":"1200000","unit":"EUR"},{"id":"annual_coupon","value":"60000","unit":"EUR"},{"id":"discount_rate","value":"8","unit":"PERCENT"},{"id":"term_years","value":"3","unit":"YEARS"}],"data":[{"label":{"fr":"","en":"Issue proceeds (equal to the principal repayable)","es":""},"value":"1200000","unit":"EUR"},{"label":{"fr":"","en":"Annual coupon","es":""},"value":"60000","unit":"EUR"},{"label":{"fr":"","en":"Rate of a similar debt without a conversion option","es":""},"value":"8","unit":"PERCENT"},{"label":{"fr":"","en":"Term until repayment","es":""},"value":"3","unit":"YEARS"}],"steps":[{"id":"LIABILITY_COMPONENT","label":{"fr":"","en":"Liability component","es":""},"answer":1107224.51,"tolerance":1,"unit":"EUR"},{"id":"EQUITY_COMPONENT","label":{"fr":"","en":"Residual equity component","es":""},"answer":92775.49,"tolerance":1,"unit":"EUR"}],"formula":{"lines":[{"step":"EQUITY_COMPONENT","meaning":{"fr":"","en":"Residual equity component","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds (equal to the principal repayable)","es":""},"value":1200000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Liability component","es":""},"value":1107224.51,"unit":"EUR"}],"result":92775.49,"unit":"EUR"}],"rationale":{"fr":"","en":"Liability first, at the rate of a debt without an option; equity by difference (IAS 32, paras. 31 and 32).","es":""},"references":["REF.IAS32.31","REF.IAS32.32"]}},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000041","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000041","tested_point":"QST.IAS32.000041","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"rule-split"},"references":["IAS 32 §31","IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"A colleague describes the steps of the initial split of a convertible bond. Which of the colleague's sentences is wrong?","es":""},"explanation":{"fr":"","en":"The liability component is measured first, at the fair value of a similar liability without a conversion option (IAS 32, para. 32); the equity component is the residual amount obtained by deducting that fair value from the fair value of the instrument as a whole (IAS 32, para. 31). The wrong sentence reverses the order. Trap: Measuring the equity component first and then deducting the liability. Rule to remember: Liability first, equity by difference (IAS 32, paras. 31 and 32).","es":""},"common_error":{"fr":"","en":"Measuring the equity component first and then deducting the liability.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"One first measures the liability component at the fair value of a similar liability that would not include a conversion option, that is, a loan of the same term and ranking.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the liability component is measured first, at the fair value of a similar liability without a conversion option (IAS 32, paras. 31 and 32). It is not the wrong sentence.","es":""}},{"id":"B","text":{"fr":"","en":"One first measures the equity component at the fair value of the conversion option, then deduces the liability component by difference from the proceeds.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"The equity component is the residual amount, obtained by deducting the fair value of the liability from the fair value of the instrument as a whole.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the equity component is the residual, obtained by deducting the fair value of the liability from the fair value of the instrument as a whole (IAS 32, paras. 31 and 32). It is not the wrong sentence.","es":""}},{"id":"D","text":{"fr":"","en":"Once the split is made at inception, it is not revised later, even when the value of the conversion option changes.","es":""},"correct":false,"feedback":{"fr":"","en":"This sentence is correct: the initial allocation is not revised later, even if exercise of the option becomes more or less likely or its value changes (IAS 32). It is not the wrong sentence.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000042","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.LIABILITY_FIRST_RESIDUAL"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000042","tested_point":"QST.IAS32.000042","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"rule-split"},"references":["IAS 32 §32"],"exercise":{"prompt":{"fr":"","en":"Opéra SA issues bonds convertible into a fixed number of shares, with a 3% coupon. Case facts: an ordinary loan of the same term and ranking and with no conversion option would be financed at 6.5%; the risk-free rate is 2%; shareholders expect a return of 11%. Which rate does management use to discount the cash flows of the liability component?","es":""},"explanation":{"fr":"","en":"The liability component is measured first, at the fair value of a similar liability without a conversion option (IAS 32, para. 32). Case facts: a loan of the same term, ranking and without an option would be financed at 6.5%. Professional judgement: this rate is a case datum, from management's assessment, and not a rate imposed by the standard. Trap: Discounting at the coupon rate of the convertible bond instead of the rate of a similar liability without an option. Rule to remember: Discount at the rate of a similar liability without a conversion option (IAS 32, para. 32).","es":""},"common_error":{"fr":"","en":"Discounting at the coupon rate of the convertible bond instead of the rate of a similar liability without a conversion option.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The 3% rate, that of the convertible bond's coupon, since it is the rate stipulated by the bond issue contract.","es":""},"correct":false,"feedback":{"fr":"","en":"The coupon rate reflects the price of a convertible bond, whose conversion option partly compensates for the interest. Discounting at that rate would overstate the liability; the liability component is measured at the value of a similar liability without an option (IAS 32, para. 32).","es":""}},{"id":"B","text":{"fr":"","en":"The 11% rate, that of the return expected by shareholders, since it measures the value of the conversion option offered.","es":""},"correct":false,"feedback":{"fr":"","en":"The return expected by shareholders measures the risk of an equity holding, not that of a liability without an option. The liability component is measured at the fair value of a similar liability, hence at a debt rate (IAS 32, para. 32).","es":""}},{"id":"C","text":{"fr":"","en":"The 6.5% rate, that of a similar liability without a conversion option, which is a judgement datum of the case and not a rate imposed by the standard.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"The 2% rate, that of a risk-free investment, whatever the issuer's own credit risk on the convertible bond.","es":""},"correct":false,"feedback":{"fr":"","en":"A risk-free rate ignores the issuer's credit risk: a similar liability without an option, issued by Opéra, would be financed at a rate reflecting it. The fair value of the liability takes that risk into account (IAS 32, para. 32).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000043","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000043","tested_point":"QST.IAS32.000043","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"rule-nogain"},"references":["IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"A working paper comments on the issue of a convertible bond. Which of its conclusions is wrong?","es":""},"explanation":{"fr":"","en":"No gain or loss arises from the separate recognition and presentation of the components of a compound instrument on initial recognition (IAS 32, para. 31): the liability component and the equity component add up to the issue proceeds. The wrong conclusion treats the gap with the nominal as a gain. Trap: Recognising a gain or loss at issue because the liability component differs from the nominal. Rule to remember: At issue, the two components equal the proceeds: no profit or loss (IAS 32, para. 31).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss at issue because the liability component differs from the nominal.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"If the liability component is below the nominal amount repayable, the gap is an issue gain in profit or loss.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The sum of the two components recognised at inception is equal to the proceeds of the issue of the instrument, with no gap or gain to recognise at that stage.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: liability component plus equity component equal the issue proceeds, with no gain or loss (IAS 32, para. 31). It is not the wrong conclusion.","es":""}},{"id":"C","text":{"fr":"","en":"Separate recognition of the liability and equity components generates no gain or loss at inception.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: it is the rule itself, no gain or loss arising from the separate recognition at inception (IAS 32, para. 31). It is not the wrong conclusion.","es":""}},{"id":"D","text":{"fr":"","en":"The equity component is the residual amount that brings the total to the proceeds of the issue.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: the equity component is the residual, which brings the sum of the components back to the issue proceeds (IAS 32, para. 31). It is not the wrong conclusion.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000044","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.NO_INITIAL_GAIN_LOSS"],"dimension":"CALCULATION","context":"V1_QST.IAS32.000044","tested_point":"QST.IAS32.000044","difficulty":"INTERMEDIATE","source":"V1","format":"NUMERICAL","estimated_time_s":200,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"rule-nogain"},"references":["IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"Mira SA issues bonds convertible into a fixed number of shares for proceeds of {issue_proceeds}. The fair value of a similar liability without a conversion option, which measures the liability component, is {liability_fair_value} (case data). Calculate the equity component, then the gain or loss recognised at issue.","es":""},"explanation":{"fr":"","en":"Method: equity component = 750,000 − 648,000 = 102,000. Check: 750,000 − (648,000 + 102,000) = 0. No gain or loss arises from the separate recognition and presentation of the components on initial recognition (IAS 32, para. 31): the two components add up exactly to the issue proceeds. Trap: Recognising a gain or loss at issue because the liability component differs from the nominal. Rule to remember: Liability + equity = issue proceeds; the profit or loss effect at inception is nil (IAS 32, para. 31).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss at issue because the liability component differs from the proceeds or the nominal.","es":""},"format":"CALCULATION","placeholders":[{"id":"issue_proceeds","value":"750000","unit":"EUR"},{"id":"liability_fair_value","value":"648000","unit":"EUR"}],"data":[{"label":{"fr":"","en":"Issue proceeds","es":""},"value":"750000","unit":"EUR"},{"label":{"fr":"","en":"Fair value of a similar liability without a conversion option","es":""},"value":"648000","unit":"EUR"}],"steps":[{"id":"EQUITY_COMPONENT","label":{"fr":"","en":"Equity component","es":""},"answer":102000,"tolerance":0,"unit":"EUR"},{"id":"GAIN_OR_LOSS","label":{"fr":"","en":"Gain or loss recognised at issue","es":""},"answer":0,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"EQUITY_COMPONENT","meaning":{"fr":"","en":"Equity component","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds","es":""},"value":750000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Fair value of a similar liability without a conversion option","es":""},"value":648000,"unit":"EUR"}],"result":102000,"unit":"EUR"},{"step":"GAIN_OR_LOSS","meaning":{"fr":"","en":"Gain or loss recognised at issue","es":""},"expression":"a - (b + c)","variables":[{"symbol":"a","meaning":{"fr":"","en":"Issue proceeds","es":""},"value":750000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Fair value of a similar liability without a conversion option","es":""},"value":648000,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Equity component","es":""},"value":102000,"unit":"EUR"}],"result":0,"unit":"EUR"}],"rationale":{"fr":"","en":"Liability + equity = issue proceeds; the profit or loss effect at inception is nil (IAS 32, para. 31).","es":""},"references":["REF.IAS32.31"]}},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000047","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.CONVERSION_AT_MATURITY"],"dimension":"CALCULATION","context":"V1_QST.IAS32.000047","tested_point":"QST.IAS32.000047","difficulty":"ADVANCED","source":"V1","format":"NUMERICAL","estimated_time_s":200,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"rule-conversion"},"references":["IAS 32 §AG32"],"exercise":{"prompt":{"fr":"","en":"Lux SA issued convertible bonds. At the start of the last year, the carrying amount of the liability component is {opening_liability}; the effective interest rate is {effective_rate} and the coupon paid at the end of the year is {coupon_paid}. The original equity component is {original_equity} (case data). At maturity, all the holders convert. Rule of the standard: the liability is reclassified to equity at its carrying amount and the original component stays in equity. Calculate the carrying amount of the liability on conversion, then the total equity attributable to the instrument after conversion.","es":""},"explanation":{"fr":"","en":"Method: interest charge = 935,000 × 7% = 65,450; carrying amount on conversion = 935,000 + 65,450 − 50,000 = 950,450; equity after conversion = 950,450 + 118,000 = 1,068,450. The converted liability joins equity at its carrying amount, with no gain or loss, and the original component stays there: treatment of conversion at maturity (IAS 32, para. AG32). Trap: Recognising a gain or loss on conversion at maturity. Rule to remember: Equity after conversion = converted liability at its carrying amount + original component (IAS 32, para. AG32).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss on conversion, or forgetting the interest charge of the last year.","es":""},"format":"CALCULATION","placeholders":[{"id":"opening_liability","value":"935000","unit":"EUR"},{"id":"effective_rate","value":"7","unit":"PERCENT"},{"id":"coupon_paid","value":"50000","unit":"EUR"},{"id":"original_equity","value":"118000","unit":"EUR"}],"data":[{"label":{"fr":"","en":"Carrying amount of the liability at the start of the last year","es":""},"value":"935000","unit":"EUR"},{"label":{"fr":"","en":"Effective interest rate","es":""},"value":"7","unit":"PERCENT"},{"label":{"fr":"","en":"Coupon paid at year end","es":""},"value":"50000","unit":"EUR"},{"label":{"fr":"","en":"Original equity component","es":""},"value":"118000","unit":"EUR"}],"steps":[{"id":"CLOSING_LIABILITY","label":{"fr":"","en":"Carrying amount of the liability on conversion","es":""},"answer":950450,"tolerance":0,"unit":"EUR"},{"id":"TOTAL_EQUITY_AFTER_CONVERSION","label":{"fr":"","en":"Equity attributable to the instrument after conversion","es":""},"answer":1068450,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"CLOSING_LIABILITY","meaning":{"fr":"","en":"Carrying amount of the liability on conversion","es":""},"expression":"a + (a * b) - c","variables":[{"symbol":"a","meaning":{"fr":"","en":"Carrying amount of the liability at the start of the last year","es":""},"value":935000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Effective interest rate","es":""},"value":7,"unit":"PERCENT"},{"symbol":"c","meaning":{"fr":"","en":"Coupon paid at year end","es":""},"value":50000,"unit":"EUR"}],"result":950450,"unit":"EUR"},{"step":"TOTAL_EQUITY_AFTER_CONVERSION","meaning":{"fr":"","en":"Equity attributable to the instrument after conversion","es":""},"expression":"a + b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Carrying amount of the liability on conversion","es":""},"value":950450,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Original equity component","es":""},"value":118000,"unit":"EUR"}],"result":1068450,"unit":"EUR"}],"rationale":{"fr":"","en":"Equity after conversion = converted liability at its carrying amount + original component (IAS 32, para. AG32).","es":""},"references":["REF.IAS32.AG32"]}},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000048","standard_id":"IAS32","concept_ids":["IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"CALCULATION","context":"V1_QST.IAS32.000048","tested_point":"QST.IAS32.000048","difficulty":"ADVANCED","source":"V1","format":"NUMERICAL","estimated_time_s":200,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"understand"},"references":["IAS 32 §31","IAS 32"],"exercise":{"prompt":{"fr":"","en":"Nuage SA issued convertible bonds on 1 January; the liability component was measured at {liability_at_issue}. The effective interest rate of the liability component is {effective_rate} per year (case data) and the coupon paid on 31 December is {coupon_paid}. Calculate the interest charge for the year and the carrying amount of the liability component at 31 December.","es":""},"explanation":{"fr":"","en":"Method: interest charge = 2,350,000 × 8% = 188,000; carrying amount at 31 December = 2,350,000 + 188,000 − 100,000 = 2,438,000. IAS 32 refers to IFRS 9 for the measurement of financial liabilities (IAS 32, para. 31): the liability component is measured at amortised cost (IFRS 9, para. 4.2.1), the charge is calculated on its carrying amount at the effective rate, not on the nominal, and the coupon paid reduces the liability. The equity component is not remeasured. Trap: Calculating the interest charge on the nominal instead of the carrying amount of the liability component. Rule to remember: Charge = opening carrying amount × effective rate; closing = opening + charge − coupon (IAS 32, para. 31; IFRS 9, para. 4.2.1).","es":""},"common_error":{"fr":"","en":"Calculating the interest charge on the nominal instead of the carrying amount of the liability component.","es":""},"format":"CALCULATION","placeholders":[{"id":"liability_at_issue","value":"2350000","unit":"EUR"},{"id":"effective_rate","value":"8","unit":"PERCENT"},{"id":"coupon_paid","value":"100000","unit":"EUR"}],"data":[{"label":{"fr":"","en":"Liability component at issue","es":""},"value":"2350000","unit":"EUR"},{"label":{"fr":"","en":"Annual effective interest rate","es":""},"value":"8","unit":"PERCENT"},{"label":{"fr":"","en":"Coupon paid on 31 December","es":""},"value":"100000","unit":"EUR"}],"steps":[{"id":"INTEREST_CHARGE","label":{"fr":"","en":"Interest charge for the year","es":""},"answer":188000,"tolerance":0,"unit":"EUR"},{"id":"CLOSING_LIABILITY","label":{"fr":"","en":"Carrying amount of the liability component at 31 December","es":""},"answer":2438000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"INTEREST_CHARGE","meaning":{"fr":"","en":"Interest charge for the year","es":""},"expression":"a * b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Liability component at issue","es":""},"value":2350000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Annual effective interest rate","es":""},"value":8,"unit":"PERCENT"}],"result":188000,"unit":"EUR"},{"step":"CLOSING_LIABILITY","meaning":{"fr":"","en":"Carrying amount of the liability component at 31 December","es":""},"expression":"a + b - c","variables":[{"symbol":"a","meaning":{"fr":"","en":"Liability component at issue","es":""},"value":2350000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Interest charge for the year","es":""},"value":188000,"unit":"EUR"},{"symbol":"c","meaning":{"fr":"","en":"Coupon paid on 31 December","es":""},"value":100000,"unit":"EUR"}],"result":2438000,"unit":"EUR"}],"rationale":{"fr":"","en":"Charge = opening carrying amount × effective rate; closing = opening + charge − coupon (IAS 32, para. 31; IFRS 9, para. 4.2.1).","es":""},"references":["REF.IAS32.31"]}},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000049","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000049","tested_point":"QST.IAS32.000049","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"understand"},"references":["IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"When an entity resells its own shares at a price higher than their repurchase cost, it recognises the difference as a gain in profit or loss for the year.","es":""},"explanation":{"fr":"","en":"The entity's own equity instruments that it reacquires are presented as a deduction from equity; no gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of these instruments, the consideration paid or received being recognised directly in equity (IAS 32, para. 33). Trap: Recognising a gain or loss in profit or loss on the resale of treasury shares. Rule to remember: Transactions in treasury shares go through equity, never through profit or loss (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Recognising a gain or loss in profit or loss on the resale of treasury shares.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000050","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TREASURY_SHARES"],"dimension":"CALCULATION","context":"V1_QST.IAS32.000050","tested_point":"QST.IAS32.000050","difficulty":"INTERMEDIATE","source":"V1","format":"NUMERICAL","estimated_time_s":200,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"understand"},"references":["IAS 32 §33"],"exercise":{"prompt":{"fr":"","en":"Rhône SA had repurchased 5,000 of its own shares for a total cost of {treasury_share_cost}. It resells them on the market for proceeds of {sale_proceeds}. Case convention: the difference is recorded under the caption \"share capital and share premium\". Calculate the amount of the resale difference.","es":""},"explanation":{"fr":"","en":"Method: 84,000 − 72,000 = 12,000. The difference is recognised directly in equity (here in share premium, under the case convention); no gain is recognised in profit or loss on the sale of treasury shares (IAS 32, para. 33). Trap: Recognising a gain or loss in profit or loss on the resale of treasury shares. Rule to remember: Resale of treasury shares: proceeds less cost, taken to equity (IAS 32, para. 33).","es":""},"common_error":{"fr":"","en":"Recognising in profit or loss the gain made on the resale of treasury shares.","es":""},"format":"CALCULATION","placeholders":[{"id":"sale_proceeds","value":"84000","unit":"EUR"},{"id":"treasury_share_cost","value":"72000","unit":"EUR"}],"data":[{"label":{"fr":"","en":"Resale proceeds","es":""},"value":"84000","unit":"EUR"},{"label":{"fr":"","en":"Repurchase cost of the treasury shares","es":""},"value":"72000","unit":"EUR"}],"steps":[{"id":"DIFFERENCE_IN_EQUITY","label":{"fr":"","en":"Resale difference recorded in equity","es":""},"answer":12000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"DIFFERENCE_IN_EQUITY","meaning":{"fr":"","en":"Resale difference recorded in equity","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Resale proceeds","es":""},"value":84000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Repurchase cost of the treasury shares","es":""},"value":72000,"unit":"EUR"}],"result":12000,"unit":"EUR"}],"rationale":{"fr":"","en":"Resale of treasury shares: proceeds less cost, taken to equity (IAS 32, para. 33).","es":""},"references":["REF.IAS32.33"]}},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000052","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.INTEREST_DIVIDENDS"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000052","tested_point":"QST.IAS32.000052","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"rule-follow"},"references":["IAS 32 §35"],"exercise":{"prompt":{"fr":"","en":"Dividends on a share classified as a financial liability are recognised in profit or loss, whereas distributions to holders of an equity instrument are recognised directly in equity.","es":""},"explanation":{"fr":"","en":"Interest, dividends, gains and losses relating to a financial instrument, or a component of it, classified as a financial liability are recognised in profit or loss; distributions to holders of an equity instrument are recognised directly in equity (IAS 32, para. 35). The treatment of the dividend therefore follows the classification of the instrument. Trap: Recognising in equity the dividend of a share classified as a financial liability. Rule to remember: The classification determines where the dividend goes: profit or loss for a liability, equity for an equity instrument (IAS 32, para. 35).","es":""},"common_error":{"fr":"","en":"Recognising in equity the dividend of a share classified as a financial liability.","es":""},"format":"TRUE_FALSE","answer":true},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000053","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.INTEREST_DIVIDENDS"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000053","tested_point":"QST.IAS32.000053","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"rule-follow"},"references":["IAS 32 §35"],"exercise":{"prompt":{"fr":"","en":"Pavot SA has two classes of shares: ordinary shares, which are equity instruments, and preference shares redeemable in cash on a fixed date, classified as a financial liability (case facts). The general meeting decides a dividend of 40,000 on the ordinary shares and of 25,000 on the preference shares. How does Pavot account for these two dividends?","es":""},"explanation":{"fr":"","en":"The treatment of a dividend follows the classification of the instrument: dividends on an instrument classified as a financial liability are recognised in profit or loss, distributions to holders of equity instruments directly in equity (IAS 32, para. 35). Pavot recognises 40,000 in equity and 25,000 in profit or loss. Trap: Recognising in equity the dividend of a share classified as a financial liability. Rule to remember: One dividend per class, according to the classification of the class (IAS 32, para. 35).","es":""},"common_error":{"fr":"","en":"Treating in the same way the dividends of two classes of shares classified differently.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The ordinary dividend of 40,000 is recognised directly in equity; the preference dividend of 25,000 is recognised in profit or loss, as a cost linked to the financial liability.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"Both dividends, 65,000 in total, are recognised directly in equity, since both are decided by Pavot's general meeting.","es":""},"correct":false,"feedback":{"fr":"","en":"The treatment follows the classification of each class of shares, not the body that decides the dividend. The dividend on the preference shares, classified as a liability, goes to profit or loss, not to equity (IAS 32, para. 35). The two classes are not analysed together.","es":""}},{"id":"C","text":{"fr":"","en":"Both dividends, 65,000 in total, are recognised in profit or loss, since part of Pavot's capital is classified as a financial liability.","es":""},"correct":false,"feedback":{"fr":"","en":"Each class is analysed separately: the dividend on the ordinary shares, equity instruments, is a distribution recognised directly in equity (IAS 32, para. 35). The presence of another class classified as a liability changes nothing.","es":""}},{"id":"D","text":{"fr":"","en":"The ordinary dividend is recognised in profit or loss and the preference dividend directly in equity, the distinction following the ranking of the holders, without the classification of the shares playing a part.","es":""},"correct":false,"feedback":{"fr":"","en":"The ranking of the holders does not decide the treatment: the classification of the instrument does. The dividend on the ordinary shares, classified as equity, is therefore not an expense, and that on the preference shares, classified as a liability, is not a distribution (IAS 32, para. 35).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000055","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.DISTRIBUTION_TAX"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000055","tested_point":"QST.IAS32.000055","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000011","section_id":"rule-tax"},"references":["IAS 32 §35A"],"exercise":{"prompt":{"fr":"","en":"Aster SA pays a dividend of 500,000 to its ordinary shareholders, holders of equity instruments. This distribution gives rise to an income tax effect for Aster (case facts). Which standard decides how this tax effect is accounted for?","es":""},"explanation":{"fr":"","en":"The income tax effects of distributions to holders of equity instruments, and of the transaction costs of an equity transaction, are accounted for in accordance with IAS 12 (IAS 32, para. 35A). Aster therefore applies IAS 12 to the tax effect of its 500,000 dividend. Trap: Forgetting that the tax effect of a distribution follows IAS 12 and not IAS 32. Rule to remember: Distribution to holders of equity: the tax effect falls under IAS 12 (IAS 32, para. 35A).","es":""},"common_error":{"fr":"","en":"Forgetting that the tax effect of a distribution follows IAS 12 and not IAS 32.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"IAS 32, which requires the tax effect to be taken to equity with the distribution of which it is the consequence, whatever the tax rule.","es":""},"correct":false,"feedback":{"fr":"","en":"IAS 32 does not itself set how the tax effect is accounted for: it refers to IAS 12 for the tax effects of distributions (IAS 32, para. 35A). Claiming that IAS 32 imposes the choice of a caption ignores this cross-reference.","es":""}},{"id":"B","text":{"fr":"","en":"IAS 32, which requires the tax effect to be taken to profit or loss, since tax is an expense of the year, whatever its cause.","es":""},"correct":false,"feedback":{"fr":"","en":"IAS 32 does not rule in favour of profit or loss either: the treatment of the tax effect of a distribution falls under IAS 12, to which it refers (IAS 32, para. 35A). The expense nature of tax is not the criterion retained.","es":""}},{"id":"C","text":{"fr":"","en":"IAS 12, which governs the income tax effect of a distribution to holders of equity instruments.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"The tax effect is not recognised, the distribution being a transaction between the entity and its own shareholders.","es":""},"correct":false,"feedback":{"fr":"","en":"The tax effect exists and has to be recognised: it is recognised in accordance with IAS 12, as the cross-reference in IAS 32 provides (IAS 32, para. 35A). The fact that the distribution is made to shareholders does not remove it.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000056","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TRANSACTION_COSTS"],"dimension":"CALCULATION","context":"V1_QST.IAS32.000056","tested_point":"QST.IAS32.000056","difficulty":"INTERMEDIATE","source":"V1","format":"NUMERICAL","estimated_time_s":200,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"rule-costs"},"references":["IAS 32 §37"],"exercise":{"prompt":{"fr":"","en":"Cèdre SA issues new shares for gross proceeds of {gross_proceeds}. It incurs {incremental_costs} of brokerage, legal advice and registration costs, directly attributable to the issue and that would have been avoided without it, and {general_communication_costs} of corporate communication costs with no direct link to the issue (case data). No tax effect is to be taken into account (case data). Calculate the net amount recorded in equity after the issue.","es":""},"explanation":{"fr":"","en":"Method: only the incremental costs directly attributable to the transaction, which would have been avoided without it, are deducted from equity (IAS 32, para. 37): 2,400,000 − 85,000 = 2,315,000. The 20,000 of corporate communication is not part of them and is not deducted. Trap: Recognising share issue costs as expenses of the period, or deducting costs with no direct link to the issue. Rule to remember: Incremental costs directly attributable to the issue are deducted from equity (IAS 32, para. 37).","es":""},"common_error":{"fr":"","en":"Deducting from equity general costs with no direct link to the issue, or charging the issue costs to expenses.","es":""},"format":"CALCULATION","placeholders":[{"id":"gross_proceeds","value":"2400000","unit":"EUR"},{"id":"incremental_costs","value":"85000","unit":"EUR"},{"id":"general_communication_costs","value":"20000","unit":"EUR"}],"data":[{"label":{"fr":"","en":"Gross proceeds of the issue","es":""},"value":"2400000","unit":"EUR"},{"label":{"fr":"","en":"Incremental costs directly attributable to the issue","es":""},"value":"85000","unit":"EUR"},{"label":{"fr":"","en":"Corporate communication costs with no direct link to the issue","es":""},"value":"20000","unit":"EUR"}],"steps":[{"id":"NET_EQUITY_AMOUNT","label":{"fr":"","en":"Net amount recorded in equity","es":""},"answer":2315000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"NET_EQUITY_AMOUNT","meaning":{"fr":"","en":"Net amount recorded in equity","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Gross proceeds of the issue","es":""},"value":2400000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Incremental costs directly attributable to the issue","es":""},"value":85000,"unit":"EUR"}],"result":2315000,"unit":"EUR","rationale":{"fr":"","en":"Method: only the incremental costs directly attributable to the transaction, which would have been avoided without it, are deducted from equity (IAS 32, para. 37): 2,400,000 − 85,000 = 2,315,000.","es":""}}],"rationale":{"fr":"","en":"Incremental costs directly attributable to the issue are deducted from equity (IAS 32, para. 37).","es":""},"references":["REF.IAS32.37"]}},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000057","standard_id":"IAS32","concept_ids":["IAS32.EQUITY_TRANSACTIONS.TRANSACTION_COSTS"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000057","tested_point":"QST.IAS32.000057","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000010","section_id":"rule-costs"},"references":["IAS 32 §37"],"exercise":{"prompt":{"fr":"","en":"An accountant comments on the treatment of the costs of an issue of new shares. Which of the accountant's statements is wrong?","es":""},"explanation":{"fr":"","en":"The transaction costs of an equity transaction are recognised as a deduction from equity, to the extent that they are incremental costs directly attributable to the transaction and that would otherwise have been avoided (IAS 32, para. 37). The wrong statement expenses them. Trap: Recognising the costs of issuing shares as expenses of the period. Rule to remember: Incremental issue costs: a deduction from equity, not expenses (IAS 32, para. 37).","es":""},"common_error":{"fr":"","en":"Recognising the costs of issuing shares as expenses of the period.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Transaction costs of an equity transaction are recognised as a deduction from equity, in line with the nature of the transaction, which concerns equity.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: transaction costs of an equity transaction are deducted from equity, not expensed (IAS 32, para. 37). It is not the wrong statement.","es":""}},{"id":"B","text":{"fr":"","en":"Costs directly attributable to an issue of shares are recognised as expenses of the period, since they create no asset for the entity.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"Incremental costs directly attributable to the transaction, which would have been avoided without it, are deducted from equity.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: it specifies which costs are deducted, namely the incremental costs directly attributable to the transaction and that would otherwise have been avoided (IAS 32, para. 37). It is not the wrong statement.","es":""}},{"id":"D","text":{"fr":"","en":"General costs of the entity, with no direct link to the issue, are not deducted from equity as costs of the issue.","es":""},"correct":false,"feedback":{"fr":"","en":"This statement is correct: incremental costs directly attributable to the transaction are deducted; general costs with no direct link to the issue are not (IAS 32, para. 37). It is not the wrong statement.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000058","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.CRITERIA"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000058","tested_point":"QST.IAS32.000058","difficulty":"BEGINNER","source":"V1","format":"TRUE_FALSE","estimated_time_s":45,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-criteria"},"references":["IAS 32 §42"],"exercise":{"prompt":{"fr":"","en":"A financial asset and a financial liability with the same counterparty are presented at their net amount as soon as the entity has a legally enforceable right to set them off, even without an intention to settle on a net basis.","es":""},"explanation":{"fr":"","en":"A financial asset and a financial liability are offset and presented at the net amount only if the entity currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously (IAS 32, para. 42). The two criteria are cumulative. Trap: Offsetting on the mere existence of a right of set-off, without the intention to settle net or simultaneously. Rule to remember: Offsetting = currently enforceable right AND intention of net or simultaneous settlement (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Offsetting on the mere existence of a right of set-off, without the intention to settle net or simultaneously.","es":""},"format":"TRUE_FALSE","answer":false},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000059","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.CRITERIA"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000059","tested_point":"QST.IAS32.000059","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-criteria"},"references":["IAS 32 §42"],"exercise":{"prompt":{"fr":"","en":"Pivoine SA has, with Cobalt SA, a receivable of 300,000 and a payable of 280,000. A contract gives it the currently legally enforceable right to set off these amounts. Pivoine nevertheless settles its receivables and payables with Cobalt separately, on different dates, and has no intention either of settling on a net basis or of realising the asset and settling the liability simultaneously (case facts). How does Pivoine present these two amounts?","es":""},"explanation":{"fr":"","en":"A financial asset and a financial liability are offset and presented at the net amount only if the entity currently has a legally enforceable right of set-off and the intention to settle on a net basis or simultaneously (IAS 32, para. 42). Case facts: enforceable right, but gross settlements on different dates, with no intention of net settlement. Professional judgement: the intention is assessed on the entity's own facts. Pivoine therefore presents 300,000 as an asset and 280,000 as a liability. Trap: Offsetting on the mere existence of a right of set-off. Rule to remember: Without an intention of net or simultaneous settlement, no offsetting (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Offsetting on the mere existence of a right of set-off, without the intention to settle net or simultaneously.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"At their net amount, an asset of 20,000, because the legally enforceable right of set-off is enough to allow offsetting.","es":""},"correct":false,"feedback":{"fr":"","en":"The enforceable right is not enough: the entity must also intend to settle on a net basis or to realise the asset and settle the liability simultaneously, which the case facts rule out (IAS 32, para. 42). The two criteria are cumulative.","es":""}},{"id":"B","text":{"fr":"","en":"At their net amount, an asset of 20,000, because both amounts are owed by and to the same counterparty, in the same currency.","es":""},"correct":false,"feedback":{"fr":"","en":"That both amounts relate to the same counterparty does not replace the intention criterion: without an intention of net or simultaneous settlement, offsetting is not allowed, whatever the currency (IAS 32, para. 42).","es":""}},{"id":"C","text":{"fr":"","en":"Separately, until the day Pivoine notifies Cobalt of its decision to set off, at which point it will present them net with no further condition.","es":""},"correct":false,"feedback":{"fr":"","en":"A notification of set-off might reflect a new intention, but it is not unconditional offsetting: the two criteria, currently enforceable right and intention of net or simultaneous settlement, remain to be assessed at the reporting date (IAS 32, para. 42).","es":""}},{"id":"D","text":{"fr":"","en":"Separately, a receivable of 300,000 and a payable of 280,000, because the intention criterion is not met.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000060","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.CRITERIA"],"dimension":"CALCULATION","context":"V1_QST.IAS32.000060","tested_point":"QST.IAS32.000060","difficulty":"ADVANCED","source":"V1","format":"NUMERICAL","estimated_time_s":200,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-criteria"},"references":["IAS 32 §42"],"exercise":{"prompt":{"fr":"","en":"Mistral SA has two counterparties. With A: a receivable of {receivable_a} and a payable of {payable_a}, with a currently legally enforceable right of set-off and the intention to settle on a net basis. With B: a receivable of {receivable_b} and a payable of {payable_b}, but the right of set-off is contingent on a future event (case facts). Calculate the net amount presented for A, then the total of the financial assets presented for A and B.","es":""},"explanation":{"fr":"","en":"Method: for A, both criteria are met (currently enforceable right and intention to settle net): 720,000 − 465,000 = 255,000 presented as a net asset. For B, the right is contingent on a future event: the criterion is not met, so the receivable of 90,000 stays in assets and the payable of 75,000 in liabilities. Total financial assets presented: 255,000 + 90,000 = 345,000 (IAS 32, para. 42). Trap: Presenting the net amount when the two criteria are not both met. Rule to remember: Net only if both criteria are met; otherwise, gross amounts (IAS 32, para. 42).","es":""},"common_error":{"fr":"","en":"Presenting the net amount when the two criteria are not both met, for example for counterparty B.","es":""},"format":"CALCULATION","placeholders":[{"id":"receivable_a","value":"720000","unit":"EUR"},{"id":"payable_a","value":"465000","unit":"EUR"},{"id":"receivable_b","value":"90000","unit":"EUR"},{"id":"payable_b","value":"75000","unit":"EUR"}],"data":[{"label":{"fr":"","en":"Receivable from A","es":""},"value":"720000","unit":"EUR"},{"label":{"fr":"","en":"Payable to A","es":""},"value":"465000","unit":"EUR"},{"label":{"fr":"","en":"Receivable from B","es":""},"value":"90000","unit":"EUR"},{"label":{"fr":"","en":"Payable to B","es":""},"value":"75000","unit":"EUR"}],"steps":[{"id":"NET_ASSET_A","label":{"fr":"","en":"Net asset presented for A","es":""},"answer":255000,"tolerance":0,"unit":"EUR"},{"id":"TOTAL_ASSETS_PRESENTED","label":{"fr":"","en":"Total financial assets presented (A and B)","es":""},"answer":345000,"tolerance":0,"unit":"EUR"}],"formula":{"lines":[{"step":"NET_ASSET_A","meaning":{"fr":"","en":"Net asset presented for A","es":""},"expression":"a - b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Receivable from A","es":""},"value":720000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Payable to A","es":""},"value":465000,"unit":"EUR"}],"result":255000,"unit":"EUR"},{"step":"TOTAL_ASSETS_PRESENTED","meaning":{"fr":"","en":"Total financial assets presented (A and B)","es":""},"expression":"a + b","variables":[{"symbol":"a","meaning":{"fr":"","en":"Net asset presented for A","es":""},"value":255000,"unit":"EUR"},{"symbol":"b","meaning":{"fr":"","en":"Receivable from B","es":""},"value":90000,"unit":"EUR"}],"result":345000,"unit":"EUR"}],"rationale":{"fr":"","en":"Net only if both criteria are met; otherwise, gross amounts (IAS 32, para. 42).","es":""},"references":["REF.IAS32.42"]}},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000061","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.LEGALLY_ENFORCEABLE_RIGHT"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000061","tested_point":"QST.IAS32.000061","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-right"},"references":["IAS 32 §AG38A","IAS 32 §AG38B"],"exercise":{"prompt":{"fr":"","en":"Jade SA holds a deposit of 500,000 with the bank Terra and a loan of 480,000 from the same bank. The agreement between Jade and Terra gives Jade the right to set off these amounts only in the event of default by Terra or Jade (case facts). Jade intends to settle on a net basis. Is the criterion of a legally enforceable right of set-off met?","es":""},"explanation":{"fr":"","en":"A right of set-off may be currently available or contingent on a future event; to meet the criterion of a current right, it must not be contingent on a future event (IAS 32, paras. AG38A and AG38B). Case facts: Jade's right arises only on default; it is therefore contingent on a future event and the criterion is not met, even though Jade intends to settle on a net basis. Trap: Considering that a right of set-off contingent on an event is enough. Rule to remember: Conditional right of set-off = criterion of a current right not met (IAS 32, paras. AG38A and AG38B).","es":""},"common_error":{"fr":"","en":"Considering that a right of set-off contingent on default or another future event meets the criterion.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"Yes: Jade's intention to settle on a net basis is enough to meet the criterion, since the right exists in the contract, with no other condition.","es":""},"correct":false,"feedback":{"fr":"","en":"The intention to settle on a net basis is another criterion: it does not replace the current right. A right that exists only on default is contingent on a future event and does not meet the criterion (IAS 32, paras. AG38A and AG38B).","es":""}},{"id":"B","text":{"fr":"","en":"No: the right is contingent on a future event, the default; it is therefore not current.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"Yes: a right of set-off provided for in the contract is current from signature, whatever the conditions of its exercise.","es":""},"correct":false,"feedback":{"fr":"","en":"A right provided for in the contract is not thereby current: the conditions of its exercise matter. A right that arises only on default is contingent on a future event (IAS 32, paras. AG38A and AG38B).","es":""}},{"id":"D","text":{"fr":"","en":"No: a right of set-off is not enforceable unless a court has recognised it before the counterparty's default.","es":""},"correct":false,"feedback":{"fr":"","en":"The criterion does not require prior court recognition: it requires a current right, not contingent on a future event, and legally enforceable (IAS 32, paras. AG38A and AG38B). Default is precisely the future event that deprives the right of its current character.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000062","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.LEGALLY_ENFORCEABLE_RIGHT"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000062","tested_point":"QST.IAS32.000062","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-right"},"references":["IAS 32 §AG38A","IAS 32 §AG38B"],"exercise":{"prompt":{"fr":"","en":"A working paper analyses the criterion of a legally enforceable right of set-off. Which of its conclusions is wrong?","es":""},"explanation":{"fr":"","en":"A right of set-off may be contingent on a future event, such as a default (IAS 32, para. AG38A). To meet the criterion, it must not be, and it must be legally enforceable in the normal course of business, in the event of default and in the event of insolvency or bankruptcy of the entity and all of the counterparties (IAS 32, para. AG38B). A master agreement that applies only on default is therefore not enough by itself. Trap: Considering that a master netting agreement is enough by itself to meet the enforceable right criterion. Rule to remember: A current, unconditional right, enforceable in every circumstance, for the entity and all counterparties (IAS 32, paras. AG38A and AG38B).","es":""},"common_error":{"fr":"","en":"Considering that a master netting agreement is enough by itself to meet the enforceable right criterion.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The right of set-off must not be contingent on a future event in order to meet the criterion of a current right.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: to meet the criterion, the right of set-off must not be contingent on a future event (IAS 32, para. AG38B). It is not the wrong conclusion.","es":""}},{"id":"B","text":{"fr":"","en":"The right must be legally enforceable in the normal course of business, in the event of default and in the event of insolvency or bankruptcy.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: the right must be legally enforceable in the normal course of business, in the event of default and in the event of insolvency or bankruptcy, of the entity and of all the counterparties (IAS 32, para. AG38B). It is not the wrong conclusion.","es":""}},{"id":"C","text":{"fr":"","en":"The analysis of whether the right is enforceable concerns the law applicable to the agreement and to the counterparties concerned.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: the analysis of enforceability concerns the law applicable to the parties concerned (IAS 32, para. AG38B). It is not the wrong conclusion.","es":""}},{"id":"D","text":{"fr":"","en":"A master netting agreement is enough by itself to meet the enforceable right criterion, even when its exercise depends on a default.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000063","standard_id":"IAS32","concept_ids":["IAS32.OFFSETTING.INTENTION_NET_SETTLEMENT"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000063","tested_point":"QST.IAS32.000063","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000012","section_id":"rule-intent"},"references":["IAS 32 §AG38E"],"exercise":{"prompt":{"fr":"","en":"Hydre SA has, towards Kappa SA, a receivable and a payable with a legally enforceable right of set-off, and the contract allows net settlement. For three years, however, Hydre has settled its receivables and payables with Kappa separately, on different dates, and its documented liquidity risk management policy provides for gross settlement (case facts). What does Hydre conclude on the criterion of intention to settle net?","es":""},"explanation":{"fr":"","en":"The two offsetting criteria are cumulative (IAS 32, para. 42); having a right to settle net does not establish the intention to do so, as the entity may still settle separately (IAS 32, para. AG38E). Case facts: gross settlement for three years and a liquidity risk management policy providing for gross settlement. Professional judgement, supported by a practice reading (past practices and documented policy as evidence): the intention criterion is not met. Trap: Inferring the intention of net settlement from the mere contractual possibility of it. Rule to remember: The right to settle net does not prove the intention (IAS 32, para. AG38E).","es":""},"common_error":{"fr":"","en":"Inferring the intention of net settlement from the mere contractual possibility of it.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The intention criterion is not met: past gross settlement practices and documented risk management contradict an intention to settle on a net basis.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The intention criterion is met, since the contract provides for the possibility of net settlement and that contractual possibility is enough to establish the intention.","es":""},"correct":false,"feedback":{"fr":"","en":"The contractual possibility of net settlement does not establish the intention: it is assessed from the entity's actual practices, which the case facts show are oriented to gross settlement (IAS 32, para. AG38E).","es":""}},{"id":"C","text":{"fr":"","en":"The intention criterion is met, since both amounts are owed to the same counterparty and expressed in the same currency.","es":""},"correct":false,"feedback":{"fr":"","en":"That the amounts are owed to the same counterparty, in the same currency, says nothing about the intention to settle; the entity may settle separately even when it has the right to settle net (IAS 32, para. AG38E).","es":""}},{"id":"D","text":{"fr":"","en":"The intention criterion need not be examined: the review is limited to the legally enforceable right criterion where the contract provides for net settlement, which makes the review of settlement practices unnecessary.","es":""},"correct":false,"feedback":{"fr":"","en":"The intention criterion is separate from the enforceable right criterion, and both must be met to offset. The contractual possibility of net settlement therefore does not dispense with examining it (IAS 32, para. AG38E).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000064","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.IFRS9","IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"RULE_KNOWLEDGE","context":"V1_QST.IAS32.000064","tested_point":"QST.IAS32.000064","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":80,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"rule-ifrs9"},"references":["IAS 32","IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"A compound instrument has just been issued. Which sentence correctly describes the split of roles between IAS 32 and IFRS 9 in respect of it?","es":""},"explanation":{"fr":"","en":"IAS 32 decides on the classification (liability or equity) and on the split of the compound instrument into a liability component and an equity component; for the measurement of financial assets and liabilities, it refers to IFRS 9 (IAS 32, para. 31), which then measures the financial liability, in principle at amortised cost (IFRS 9, para. 4.2.1). Trap: Remeasuring the equity component of a compound instrument at each reporting date. Rule to remember: IAS 32 classifies and splits, IFRS 9 measures the liability (IAS 32, para. 31).","es":""},"common_error":{"fr":"","en":"Attributing to IFRS 9 the classification and the split, or to IAS 32 the subsequent measurement of the liability.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"IFRS 9 decides on the classification as liability or equity, and IAS 32 then measures each of the components at every reporting date.","es":""},"correct":false,"feedback":{"fr":"","en":"The roles are reversed: classification and split fall under IAS 32, and subsequent measurement of the liability under IFRS 9. The equity component is not remeasured at each reporting date (IAS 32, para. 31).","es":""}},{"id":"B","text":{"fr":"","en":"IAS 32 decides on classification, on the split and on the subsequent measurement of the liability component at the effective interest rate.","es":""},"correct":false,"feedback":{"fr":"","en":"IAS 32 does not contain the subsequent measurement of the financial liability: that falls under IFRS 9, to which the standard refers. IAS 32 stops at classification and the initial split (IAS 32, para. 31).","es":""}},{"id":"C","text":{"fr":"","en":"IAS 32 decides on the classification and the split into liability and equity components; IFRS 9 then measures the financial liability.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"IFRS 9 decides on the split of the instrument into components, and IAS 32 on the recognition of interest on the liability component.","es":""},"correct":false,"feedback":{"fr":"","en":"The split into liability and equity components is made under IAS 32, not under IFRS 9, which comes in only afterwards to measure the financial liability (IAS 32, para. 31). The allocation of roles proposed is the wrong way round.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000065","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.IFRS9","IAS32.COMPOUND.SUBSEQUENT_MEASUREMENT"],"dimension":"ANALYSIS","context":"V1_QST.IAS32.000065","tested_point":"QST.IAS32.000065","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":100,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000009","section_id":"rule-ifrs9"},"references":["IAS 32","IAS 32 §30","IAS 32 §31"],"exercise":{"prompt":{"fr":"","en":"A closing file comments on the subsequent accounting for a convertible bond that has already been split. Which of its conclusions is wrong?","es":""},"explanation":{"fr":"","en":"The equity component of a compound instrument is not remeasured at each reporting date: the classification of the components is not revised later (IAS 32, para. 30) and only the financial liability is measured after inception, under IFRS 9 (IAS 32, para. 31). The wrong conclusion treats the equity component as a liability measured at fair value. Trap: Remeasuring the equity component of a compound instrument at each reporting date. Rule to remember: Equity is not remeasured; the liability is measured under IFRS 9 (IAS 32, paras. 30 and 31).","es":""},"common_error":{"fr":"","en":"Remeasuring the equity component of a compound instrument at each reporting date.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The initial allocation between the liability component and the equity component is not revised later, even if market conditions change.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: the initial split is not revised later (IAS 32, paras. 30 and 31). It is not the wrong conclusion.","es":""}},{"id":"B","text":{"fr":"","en":"The liability component is measured after inception under IFRS 9, whereas the equity component is not remeasured.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: only the liability component is measured subsequently, under IFRS 9, whereas the equity component stays at its original amount (IAS 32, paras. 30 and 31). It is not the wrong conclusion.","es":""}},{"id":"C","text":{"fr":"","en":"At each reporting date, the equity component is remeasured at fair value, the change being recognised in profit or loss.","es":""},"correct":true},{"id":"D","text":{"fr":"","en":"IAS 32 deals with classification and the split; the measurement of the financial liability falls under IFRS 9.","es":""},"correct":false,"feedback":{"fr":"","en":"This conclusion is correct: the standard deals with classification and the split, and refers to IFRS 9 for the measurement of the financial liability (IAS 32, paras. 30 and 31). It is not the wrong conclusion.","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000066","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.IAS33","IAS32.COMPOUND.RECOGNITION_AND_SPLIT"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000066","tested_point":"QST.IAS32.000066","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000008","section_id":"understand"},"references":["IAS 32","IAS 32 §28"],"exercise":{"prompt":{"fr":"","en":"Lagune SA has issued convertible bonds split into a liability component and an equity component. To calculate diluted earnings per share under the if-converted method, leaving aside the case of antidilutive instruments, how is the convertible bond taken into account?","es":""},"explanation":{"fr":"","en":"Diluted earnings per share reflects the dilutive effect of convertible instruments (IAS 33, para. 49): profit is adjusted for the after-tax effect of the interest recognised on the liability component (IAS 33, para. 33) and the number of shares is increased by the shares from the assumed conversion (IAS 33, para. 36); an antidilutive instrument is excluded (IAS 33, para. 41). The IAS 32 split (IAS 32, para. 28) does not dispense with this adjustment. Trap: Adding the conversion shares to the denominator without adjusting the interest in the numerator. Rule to remember: Numerator: after-tax interest added back; denominator: additional shares added (IAS 32, para. 28; IAS 33, paras. 33 and 36).","es":""},"common_error":{"fr":"","en":"Adding the conversion shares to the denominator without adjusting the interest in the numerator.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The interest on the liability component, net of tax, is added to the numerator, and the additional shares from the assumed conversion are added to the denominator.","es":""},"correct":true},{"id":"B","text":{"fr":"","en":"The additional shares are added to the denominator without adjusting the interest in the numerator, because interest remains an expense of the year.","es":""},"correct":false,"feedback":{"fr":"","en":"Adding the shares without adjusting the interest double counts the cost of the bond: the assumed conversion removes the interest charge from the numerator (after tax) while it adds the shares (cross-reference to IAS 33, background; IAS 32, para. 28).","es":""}},{"id":"C","text":{"fr":"","en":"The interest is deducted from the numerator and no shares are added to the denominator, since the bond has not yet been converted, which reduces earnings with no effect on the number of shares.","es":""},"correct":false,"feedback":{"fr":"","en":"Deducting the interest from the numerator would impoverish earnings with no counterpart; the method adds back after-tax interest and the additional shares (cross-reference to IAS 33, background; IAS 32, para. 28). Conversion need not be actual.","es":""}},{"id":"D","text":{"fr":"","en":"The bond is excluded from the calculation, because the liability component remains a financial liability until actual conversion.","es":""},"correct":false,"feedback":{"fr":"","en":"Excluding the bond from the calculation ignores the if-converted method, which treats convertible instruments as if they had been converted, unless they are antidilutive (cross-reference to IAS 33, background; IAS 32, para. 28).","es":""}}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000067","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.IFRS2","IAS32.SCOPE.EXCLUSIONS"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000067","tested_point":"QST.IAS32.000067","difficulty":"INTERMEDIATE","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000002","section_id":"rule-exclusions"},"references":["IAS 32","IAS 32 §4"],"exercise":{"prompt":{"fr":"","en":"Brise SA buys fabric from a supplier and will pay for it in cash, for an amount linked to Brise's share price at the settlement date (case facts). Which standard relates to this transaction, with regard to the scope of IAS 32?","es":""},"explanation":{"fr":"","en":"Share-based payment transactions fall under IFRS 2 and are excluded from the scope of IAS 32, with exceptions (IAS 32, para. 4). IFRS 2 also applies to goods acquired for a cash payment whose amount depends on the value of the entity's shares (IFRS 2, para. 2): this is the case of the fabric bought by Brise. Trap: Applying IAS 32 to all issued instruments, including transactions within IFRS 2. Rule to remember: Payment linked to the entity's share: IFRS 2, outside the scope of IAS 32 (IAS 32, para. 4).","es":""},"common_error":{"fr":"","en":"Applying IAS 32 to a share-based payment transaction.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"IAS 32, because the payable to the supplier is a financial liability settled in cash, which is enough to bring it within the standard.","es":""},"correct":false,"feedback":{"fr":"","en":"A payable settled in cash remains in principle within IAS 32, but not when the payment is share-based: the link between the amount due and the share price places the transaction outside the scope of IAS 32 (IAS 32, para. 4; cross-reference to IFRS 2, background).","es":""}},{"id":"B","text":{"fr":"","en":"IAS 32, because the amount depends on the share price, which makes the commitment an equity instrument of Brise.","es":""},"correct":false,"feedback":{"fr":"","en":"An amount linked to the share price does not make the contract an equity instrument: it makes the transaction a share-based payment, excluded from IAS 32 and dealt with by IFRS 2 (IAS 32, para. 4; cross-reference to IFRS 2, background).","es":""}},{"id":"C","text":{"fr":"","en":"Neither IAS 32 nor IFRS 2, because the purchase of fabric is an ordinary commercial transaction and its counterpart a trade payable.","es":""},"correct":false,"feedback":{"fr":"","en":"A share-based payment transaction is not a mere commercial transaction: it falls under IFRS 2, a standard to which the scope of IAS 32 refers (IAS 32, para. 4; cross-reference to IFRS 2, background).","es":""}},{"id":"D","text":{"fr":"","en":"IFRS 2, because it is a share-based payment, excluded from the scope of IAS 32.","es":""},"correct":true}]},"scope":"CORE_STUDENT"},{"key":"QST.IAS32.000068","standard_id":"IAS32","concept_ids":["IAS32.INTERACTIONS.FICE_PROPOSALS","IAS32.CLASSIFICATION.OBLIGATION_AVOIDANCE"],"dimension":"APPLICATION","context":"V1_QST.IAS32.000068","tested_point":"QST.IAS32.000068","difficulty":"ADVANCED","source":"V1","format":"SINGLE_CHOICE","estimated_time_s":130,"lesson_id":null,"review":{"standard_id":"IAS32","lesson_id":"LS.IAS32.000003","section_id":"rule-avoidance"},"references":["IAS 32","IAS 32 §25"],"exercise":{"prompt":{"fr":"","en":"A colleague at Fjord SA proposes applying right now, to classify an instrument with a contingent settlement provision, a clarification contained in the November 2023 exposure draft of the FICE project, which would lead to a different classification. Case fact: no final amendment to IAS 32 has been published to date. Which answer is correct?","es":""},"explanation":{"fr":"","en":"The IASB's FICE project proposes amending IAS 32; the November 2023 exposure draft is under renewed deliberation, and its proposals are not requirements: until final amendments have been published, IAS 32 in force remains the reference (exposure draft, to be kept as background and not as a rule). For the contingent settlement provision, Fjord applies the rule in force (IAS 32, para. 25). Trap: Applying a proposal in the exposure draft as a rule in force. Rule to remember: A proposal is not a rule; one classifies under IAS 32 in force (IAS 32, para. 25).","es":""},"common_error":{"fr":"","en":"Applying a proposal in the exposure draft as a rule in force.","es":""},"format":"SINGLE_CHOICE","options":[{"id":"A","text":{"fr":"","en":"The exposure draft applies as soon as it is published to later issues, because the IASB publishes proposals intended to be applied immediately, without waiting for a final amendment.","es":""},"correct":false,"feedback":{"fr":"","en":"An exposure draft is not a standard: it puts proposals out for comment without making them applicable. Until final amendments have been published, IAS 32 in force applies (IAS 32, para. 25; exposure draft, background).","es":""}},{"id":"B","text":{"fr":"","en":"The exposure draft is a proposal under deliberation, not a rule in force: Fjord classifies the instrument under IAS 32 as currently in force, for example under its para. 25.","es":""},"correct":true},{"id":"C","text":{"fr":"","en":"The exposure draft applies early if management judges that its clarification better reflects the substance of the instrument issued.","es":""},"correct":false,"feedback":{"fr":"","en":"Early application is conceivable only for final amendments that permit it. A clarification proposed in an exposure draft cannot be applied at management's choice (IAS 32, para. 25; exposure draft, background).","es":""}},{"id":"D","text":{"fr":"","en":"The exposure draft replaces IAS 32 for instruments with a contingent provision as soon as the comments received have been made public.","es":""},"correct":false,"feedback":{"fr":"","en":"Publication of the comments received does not turn an exposure draft into a standard. The document remains a proposal under deliberation, and IAS 32 in force continues to apply (IAS 32, para. 25; exposure draft, background).","es":""}}]},"scope":"CORE_STUDENT"}],"reviewTitles":{"LX.IAS32.000001":"What is a financial instrument? One contract, two points of view — Understand: the same contract seen from both sides","LX.IAS32.000002":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","LX.IAS32.000003":"What is a financial instrument? One contract, two points of view — Example: reading five items of Alvira's balance sheet","LX.IAS32.000004":"What is a financial instrument? One contract, two points of view — The contract requirement: written or not, but not a statutory duty","LX.IAS32.000005":"What is a financial instrument? One contract, two points of view — Points of attention","LX.IAS32.000006":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","LX.IAS32.000007":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","LX.IAS32.000008":"Scope: what falls outside IAS 32 and the link to IFRS 2 — Understand: a broad definition, a delimited scope","LX.IAS32.000009":"Scope: what falls outside IAS 32 and the link to IFRS 2 — The rule: the main exclusions","LX.IAS32.000010":"Scope: what falls outside IAS 32 and the link to IFRS 2 — Example: sorting six Brelan transactions","LX.IAS32.000011":"Scope: what falls outside IAS 32 and the link to IFRS 2 — Contracts on non-financial items: settled net, unless for own needs","LX.IAS32.000012":"Scope: what falls outside IAS 32 and the link to IFRS 2 — Professional judgement: documenting expected needs","LX.IAS32.000013":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","LX.IAS32.000014":"Liability or equity: the unavoidable contractual obligation — The right to avoid delivery must be unconditional","LX.IAS32.000015":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","LX.IAS32.000016":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","LX.IAS32.000017":"Liability or equity: the unavoidable contractual obligation — Example: four instruments issued by Marvik","LX.IAS32.000018":"Liability or equity: the unavoidable contractual obligation — Professional judgement: reading the whole contract, not just the title","LX.IAS32.000019":"Liability or equity: the unavoidable contractual obligation — Understand: two \"preference shares\", two conclusions","LX.IAS32.000020":"Liability or equity: the unavoidable contractual obligation — Professional judgement: reading the whole contract, not just the title","LX.IAS32.000021":"Liability or equity: the unavoidable contractual obligation — Example: four instruments issued by Marvik","LX.IAS32.000022":"Instruments settled in own shares: the \"fixed-for-fixed\" test — Example: three Orvel contracts analysed","LX.IAS32.000023":"Instruments settled in own shares: the \"fixed-for-fixed\" test — The rule: two fixed items, the number and the amount","LX.IAS32.000024":"Instruments settled in own shares: the \"fixed-for-fixed\" test — The rule: two fixed items, the number and the amount","LX.IAS32.000025":"Instruments settled in own shares: the \"fixed-for-fixed\" test — Foreign currency price and rights offered pro rata","LX.IAS32.000026":"Instruments settled in own shares: the \"fixed-for-fixed\" test — Points of attention","LX.IAS32.000027":"Instruments settled in own shares: the \"fixed-for-fixed\" test — Professional judgement: reading the clauses that move the number or the price","LX.IAS32.000028":"Contingent settlement and settlement options — The rule: who controls the event, and is the clause genuine?","LX.IAS32.000029":"Contingent settlement and settlement options — The rule: who controls the event, and is the clause genuine?","LX.IAS32.000030":"Contingent settlement and settlement options — The rule: who controls the event, and is the clause genuine?","LX.IAS32.000031":"Contingent settlement and settlement options — The rule: when one party chooses the settlement method","LX.IAS32.000032":"Contingent settlement and settlement options — The rule: when one party chooses the settlement method","LX.IAS32.000033":"Contingent settlement and settlement options — Example: four clauses, one line of reasoning","LX.IAS32.000034":"Contingent settlement and settlement options — Professional judgement: is a clause genuine, who controls the event?","LX.IAS32.000035":"Members' shares in a cooperative: the right to refuse redemption — Example: three cooperatives, three conclusions","LX.IAS32.000036":"Members' shares in a cooperative: the right to refuse redemption — Understand: shares the member can ask to get back","LX.IAS32.000037":"Members' shares in a cooperative: the right to refuse redemption — The rule: the prohibition on redeeming must be unconditional","LX.IAS32.000038":"Members' shares in a cooperative: the right to refuse redemption — Points of attention","LX.IAS32.000039":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — Understand: shares the holder can hand back at any time","LX.IAS32.000040":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The puttable instruments exception: cumulative conditions","LX.IAS32.000041":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The puttable instruments exception: cumulative conditions","LX.IAS32.000042":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — Comparing the two exceptions: why one requires an extra condition","LX.IAS32.000043":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — Comparing the two exceptions: why one requires an extra condition","LX.IAS32.000044":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The 2009 Committee decision: two steps and the rank on liquidation","LX.IAS32.000045":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The 2009 Committee decision: two steps and the rank on liquidation","LX.IAS32.000046":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The FICE project: a proposal, not a rule","LX.IAS32.000047":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The FICE project: a proposal, not a rule","LX.IAS32.000048":"Splitting a compound instrument: the liability first, equity as the residual — Numeric example: the split of Taurel's proceeds","LX.IAS32.000049":"Splitting a compound instrument: the liability first, equity as the residual — Numeric example: the split of Taurel's proceeds","LX.IAS32.000050":"Splitting a compound instrument: the liability first, equity as the residual — Numeric example: the split of Taurel's proceeds","LX.IAS32.000051":"Splitting a compound instrument: the liability first, equity as the residual — The issue entry","LX.IAS32.000052":"Splitting a compound instrument: the liability first, equity as the residual — The issue entry","LX.IAS32.000053":"Splitting a compound instrument: the liability first, equity as the residual — Professional judgement: choosing and justifying the rate of a similar liability","LX.IAS32.000054":"Splitting a compound instrument: the liability first, equity as the residual — The rule: measure the liability first, deduce equity","LX.IAS32.000055":"Splitting a compound instrument: the liability first, equity as the residual — The rule: measure the liability first, deduce equity","LX.IAS32.000056":"Splitting a compound instrument: the liability first, equity as the residual — Points of attention","LX.IAS32.000057":"Splitting a compound instrument: the liability first, equity as the residual — Professional judgement: choosing and justifying the rate of a similar liability","LX.IAS32.000058":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Numeric example: the schedule of Taurel's liability","LX.IAS32.000059":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Numeric example: the schedule of Taurel's liability","LX.IAS32.000060":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — The entries for the charge and the coupon","LX.IAS32.000061":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Conversion at maturity: the liability becomes equity","LX.IAS32.000062":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Understand: the liability grows, then is drained by the coupon","LX.IAS32.000063":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Numeric example: the schedule of Taurel's liability","LX.IAS32.000064":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Conversion at maturity: the liability becomes equity","LX.IAS32.000065":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — The link with IFRS 9: IAS 32 classifies and splits, IFRS 9 measures","LX.IAS32.000066":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — The link with IAS 33: assumed conversion in diluted earnings","LX.IAS32.000067":"Treasury shares and issue costs: everything happens within equity — Numeric example: buying back then reselling part of the shares","LX.IAS32.000068":"Treasury shares and issue costs: everything happens within equity — Understand: buying back your own shares is not buying an asset","LX.IAS32.000069":"Treasury shares and issue costs: everything happens within equity — Numeric example: buying back then reselling part of the shares","LX.IAS32.000070":"Treasury shares and issue costs: everything happens within equity — The costs of a share issue: deducted from equity","LX.IAS32.000071":"Treasury shares and issue costs: everything happens within equity — The buy-back and resale entries","LX.IAS32.000072":"Treasury shares and issue costs: everything happens within equity — The buy-back and resale entries","LX.IAS32.000073":"Treasury shares and issue costs: everything happens within equity — The buy-back and resale entries","LX.IAS32.000074":"Treasury shares and issue costs: everything happens within equity — The costs of a share issue: deducted from equity","LX.IAS32.000075":"Interest and dividends: classification decides where they go — The entries for Pharel's two dividends","LX.IAS32.000076":"Interest and dividends: classification decides where they go — The entries for Pharel's two dividends","LX.IAS32.000077":"Interest and dividends: classification decides where they go — The rule: the treatment follows the classification, component by component","LX.IAS32.000078":"Interest and dividends: classification decides where they go — The tax effect of distributions: a reference to IAS 12","LX.IAS32.000079":"Interest and dividends: classification decides where they go — The tax effect of distributions: a reference to IAS 12","LX.IAS32.000080":"Interest and dividends: classification decides where they go — The rule: the treatment follows the classification, component by component","LX.IAS32.000081":"Offsetting: an enforceable right and the intention to settle net — The rule: two cumulative criteria, a net or gross presentation","LX.IAS32.000082":"Offsetting: an enforceable right and the intention to settle net — The rule: two cumulative criteria, a net or gross presentation","LX.IAS32.000083":"Offsetting: an enforceable right and the intention to settle net — Example: three Calvor counterparties","LX.IAS32.000084":"Offsetting: an enforceable right and the intention to settle net — The legally enforceable right: current, and valid in all circumstances","LX.IAS32.000085":"Offsetting: an enforceable right and the intention to settle net — The intention to settle net: a question of facts","LX.IAS32.000086":"Offsetting: an enforceable right and the intention to settle net — Points of attention","LX.IAS32.000087":"Offsetting: an enforceable right and the intention to settle net — Professional judgement: showing the right and the intention across a portfolio","QST.IAS32.000001":"What is a financial instrument? One contract, two points of view — Understand: the same contract seen from both sides","QST.IAS32.000002":"What is a financial instrument? One contract, two points of view — Understand: the same contract seen from both sides","QST.IAS32.000003":"What is a financial instrument? One contract, two points of view — Understand: the same contract seen from both sides","QST.IAS32.000004":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","QST.IAS32.000005":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","QST.IAS32.000006":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","QST.IAS32.000007":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","QST.IAS32.000008":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","QST.IAS32.000009":"What is a financial instrument? One contract, two points of view — The rule: the asset on the holder, the liability on the issuer","QST.IAS32.000010":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","QST.IAS32.000011":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","QST.IAS32.000012":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","QST.IAS32.000013":"What is a financial instrument? One contract, two points of view — The contract requirement: written or not, but not a statutory duty","QST.IAS32.000014":"What is a financial instrument? One contract, two points of view — The contract requirement: written or not, but not a statutory duty","QST.IAS32.000015":"Scope: what falls outside IAS 32 and the link to IFRS 2 — The rule: the main exclusions","QST.IAS32.000016":"Scope: what falls outside IAS 32 and the link to IFRS 2 — The rule: the main exclusions","QST.IAS32.000017":"Scope: what falls outside IAS 32 and the link to IFRS 2 — Contracts on non-financial items: settled net, unless for own needs","QST.IAS32.000018":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","QST.IAS32.000019":"Liability or equity: the unavoidable contractual obligation — The rule: the obligation test, clause by clause","QST.IAS32.000021":"Liability or equity: the unavoidable contractual obligation — The right to avoid delivery must be unconditional","QST.IAS32.000022":"Liability or equity: the unavoidable contractual obligation — The right to avoid delivery must be unconditional","QST.IAS32.000024":"Instruments settled in own shares: the \"fixed-for-fixed\" test — The rule: two fixed items, the number and the amount","QST.IAS32.000025":"Instruments settled in own shares: the \"fixed-for-fixed\" test — The rule: two fixed items, the number and the amount","QST.IAS32.000026":"Instruments settled in own shares: the \"fixed-for-fixed\" test — The rule: two fixed items, the number and the amount","QST.IAS32.000027":"Contingent settlement and settlement options — The rule: who controls the event, and is the clause genuine?","QST.IAS32.000028":"Contingent settlement and settlement options — The rule: who controls the event, and is the clause genuine?","QST.IAS32.000029":"Contingent settlement and settlement options — The rule: when one party chooses the settlement method","QST.IAS32.000030":"Contingent settlement and settlement options — The rule: when one party chooses the settlement method","QST.IAS32.000031":"Instruments settled in own shares: the \"fixed-for-fixed\" test — Foreign currency price and rights offered pro rata","QST.IAS32.000032":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The puttable instruments exception: cumulative conditions","QST.IAS32.000033":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — The liquidation exception: an obligation that arises only at the end","QST.IAS32.000034":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — Comparing the two exceptions: why one requires an extra condition","QST.IAS32.000035":"Special cases: puttable instruments, liquidation, the 2009 decision and the FICE project — Comparing the two exceptions: why one requires an extra condition","QST.IAS32.000036":"Liability or equity: the unavoidable contractual obligation — The right to avoid delivery must be unconditional","QST.IAS32.000037":"Splitting a compound instrument: the liability first, equity as the residual — Understand: a bond that is both a debt and an option","QST.IAS32.000038":"Splitting a compound instrument: the liability first, equity as the residual — Understand: a bond that is both a debt and an option","QST.IAS32.000040":"Splitting a compound instrument: the liability first, equity as the residual — The rule: measure the liability first, deduce equity","QST.IAS32.000041":"Splitting a compound instrument: the liability first, equity as the residual — The rule: measure the liability first, deduce equity","QST.IAS32.000042":"Splitting a compound instrument: the liability first, equity as the residual — The rule: measure the liability first, deduce equity","QST.IAS32.000043":"Splitting a compound instrument: the liability first, equity as the residual — No gain or loss on issue","QST.IAS32.000044":"Splitting a compound instrument: the liability first, equity as the residual — No gain or loss on issue","QST.IAS32.000047":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Conversion at maturity: the liability becomes equity","QST.IAS32.000048":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — Understand: the liability grows, then is drained by the coupon","QST.IAS32.000049":"Treasury shares and issue costs: everything happens within equity — Understand: buying back your own shares is not buying an asset","QST.IAS32.000050":"Treasury shares and issue costs: everything happens within equity — Understand: buying back your own shares is not buying an asset","QST.IAS32.000052":"Interest and dividends: classification decides where they go — The rule: the treatment follows the classification, component by component","QST.IAS32.000053":"Interest and dividends: classification decides where they go — The rule: the treatment follows the classification, component by component","QST.IAS32.000055":"Interest and dividends: classification decides where they go — The tax effect of distributions: a reference to IAS 12","QST.IAS32.000056":"Treasury shares and issue costs: everything happens within equity — The costs of a share issue: deducted from equity","QST.IAS32.000057":"Treasury shares and issue costs: everything happens within equity — The costs of a share issue: deducted from equity","QST.IAS32.000058":"Offsetting: an enforceable right and the intention to settle net — The rule: two cumulative criteria, a net or gross presentation","QST.IAS32.000059":"Offsetting: an enforceable right and the intention to settle net — The rule: two cumulative criteria, a net or gross presentation","QST.IAS32.000060":"Offsetting: an enforceable right and the intention to settle net — The rule: two cumulative criteria, a net or gross presentation","QST.IAS32.000061":"Offsetting: an enforceable right and the intention to settle net — The legally enforceable right: current, and valid in all circumstances","QST.IAS32.000062":"Offsetting: an enforceable right and the intention to settle net — The legally enforceable right: current, and valid in all circumstances","QST.IAS32.000063":"Offsetting: an enforceable right and the intention to settle net — The intention to settle net: a question of facts","QST.IAS32.000064":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — The link with IFRS 9: IAS 32 classifies and splits, IFRS 9 measures","QST.IAS32.000065":"After issue: interest, coupons, conversion at maturity and links with IFRS 9 and IAS 33 — The link with IFRS 9: IAS 32 classifies and splits, IFRS 9 measures","QST.IAS32.000066":"Splitting a compound instrument: the liability first, equity as the residual — Understand: a bond that is both a debt and an option","QST.IAS32.000067":"Scope: what falls outside IAS 32 and the link to IFRS 2 — The rule: the main exclusions","QST.IAS32.000068":"Liability or equity: the unavoidable contractual obligation — The right to avoid delivery must be unconditional"}}