Boundary with IAS 32

Learning objectives

• Distinguish what falls within IAS 32 (liability / equity distinction, presentation) from what falls within IFRS 9 (classification and measurement); interaction only.L2
• Support in writing, from the facts of the case, the judgement made on the boundary with IAS 32 (liability or equity).L2

Normative references

• IFRS 9 §4.2.1Financial liabilities are classified as subsequently measured at amortised cost, except: (a) financial liabilities at FVTPL, including derivative liabilities, measured at fair value; (b) financial liabilities arising when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies; (c) financial guarantee contracts and (d) commitments to provide a loan at a below-market interest rate, measured by the issuer at the higher of the loss allowance determined in accordance with Section 5.5 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with IFRS 15; (e) contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies, measured at fair value through profit or loss.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Thêta SA issues a financial instrument. Which allocation between IAS 32 and IFRS 9 is correct?L2