CERTYNEX IFRS ACADEMY

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?

IFRS 9 decides on the classification as liability or equity, and IAS 32 then measures each of the components at every reporting date.

IAS 32 decides on classification, on the split and on the subsequent measurement of the liability component at the effective interest rate.

IAS 32 decides on the classification and the split into liability and equity components; IFRS 9 then measures the financial liability.

IFRS 9 decides on the split of the instrument into components, and IAS 32 on the recognition of interest on the liability component.