IASB publish Exposure Draft for Amendments to IAS 32

Today, the IASB have published the Exposure Draft ED/2023/5 Financial Instruments with Characteristics of Equity. The ED proposes amendments to IAS 32, as well as to IFRS 7 and IAS 1, affecting the distinction between equity and debts (IASB News).

This exposure draft aims at clarifying the existing principles for distinguishing equity and debts as well as addressing particular practice issues. In particular, the IASB proposes the following:

• Amendments to IAS 32 regarding the classification of instruments

1. affected by relevant laws or regulations,
2. when the fixed-for-fixed condition apply,
3. containing an obligation for to purchase its own equity instruments,
4. with contingent settlement provisions,
5. affected by shareholder discretion,
6. under circumstances that might lead to a reclassification after initial recognition.

• Amendments to IFRS 7 regarding disclosures about the specific instruments addressed by the aforementioned amendments;
• Amendments to IAS 1 requiring the separate presentation of amounts attributable to ordinary shareholders in financial statements (ie. statement of financial position, statement of comprehensive income and statement of changes in equity).

The Exposure Draft is open for comments until 29 March 2024.