CERTYNEX IFRS ACADEMY

An accountant comments on the treatment of the costs of an issue of new shares. Which of the accountant's statements is wrong?

Transaction costs of an equity transaction are recognised as a deduction from equity, in line with the nature of the transaction, which concerns equity.

Costs directly attributable to an issue of shares are recognised as expenses of the period, since they create no asset for the entity.

Incremental costs directly attributable to the transaction, which would have been avoided without it, are deducted from equity.

General costs of the entity, with no direct link to the issue, are not deducted from equity as costs of the issue.