CERTYNEX IFRS ACADEMY

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?

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.

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.

The exposure draft applies early if management judges that its clarification better reflects the substance of the instrument issued.

The exposure draft replaces IAS 32 for instruments with a contingent provision as soon as the comments received have been made public.