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Proposed amendments of the IASB – classification as financial liabilities or equity?

The IASB has published proposals to amend certain standards to address long-standing practice issues in the classification of financial instruments and to enhance information provided to investors.

Under new proposals from the IASB, some companies could see changes in the classification of their financial instruments as financial liabilities or equity. Many would also need to disclose substantially more information about their equity instruments and certain types of financial liabilities.

To address some common challenges companies face, the IASB is proposing to amend:

  1. IAS 32 Financial Instruments: Presentation to clarify some of the underlying principles on classification and add application guidance; and
  2. IAS 1 Presentation of Financial Statements and IFRS 7 Financial Instruments: Disclosures to improve the information companies provide on financial instruments they issue.

Take this opportunity to read the proposals and provide your comments to the IASB by 29 March 2024.