CERTYNEX IFRS ACADEMY

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?

As a financial liability, because cash settlement depends on an uncertain event outside the control of both parties.

As equity, because redemption falls due if the event occurs, which is not certain at issue.

As equity, because the event is outside Hélix's control, so Hélix cannot be held responsible for the delivery.

According to the probability of the event: as a financial liability if it exceeds 50%, as equity otherwise.