CERTYNEX IFRS ACADEMY

A reviewer comments on the classification of redeemable shares issued by entities. Which of the reviewer's statements is wrong?

As long as a board of directors has never redeemed any shares, its right to refuse a redemption is unconditional.

A right of refusal subject to a liquidity threshold is not an unconditional right to avoid delivery.

Members' shares are equity when the entity has the unconditional right to refuse their redemption.

When the issuer has no unconditional right to avoid delivery of cash, the instrument is in principle a financial liability.