International GAAP 2021

Chapter 47Financial instruments: Financial liabilities and equity

• 1 INTRODUCTION
  • 1.1 Background
  • 1.2 Development of IFRS on classification of liabilities and equity
• 2 OBJECTIVE AND SCOPE
  • 2.1 Objective
  • 2.2 Scope
• 3 DEFINITIONS
• 4 CLASSIFICATION OF INSTRUMENTS
  • 4.1 Definition of equity instrument
  • 4.2 Contractual obligation to deliver cash or other financial assets
    • 4.2.1 Relationship between an entity and its members
    • 4.2.2 Implied contractual obligation to deliver cash or other financial assets
  • 4.3 Contingent settlement provisions
    • 4.3.1 Contingencies that are ‘not genuine’
    • 4.3.2 Liabilities that arise only on liquidation
    • 4.3.3 Liabilities that arise only on a change of control
    • 4.3.4 Some typical contingent settlement provisions
  • 4.4 Examples of equity instruments
    • 4.4.1 Issued instruments
    • 4.4.2 Contracts to issue equity instruments
  • 4.5 Preference shares and similar instruments
    • 4.5.1 Instruments redeemable mandatorily or at the holder's option
    • 4.5.2 Instruments redeemable only at the issuer's option or not redeemable
    • 4.5.3 Instruments with a ‘dividend blocker’ or a ‘dividend pusher’ clause
      • 4.5.3.A Instruments with a ‘dividend blocker’
      • 4.5.3.B Instruments with a ‘dividend pusher’
    • 4.5.4 Perpetual instruments with a ‘step-up’ clause
    • 4.5.5 Relative subordination
    • 4.5.6 Economic compulsion
    • 4.5.7 ‘Linked’ instruments
    • 4.5.8 ‘Change of control’, ‘taxation change’ and ‘regulatory change’ clauses
  • 4.6 Puttable instruments and instruments repayable only on liquidation
    • 4.6.1 ...