IASB January 2009

The Board published the discussion paper Financial Instruments with Characteristics of Equity in February 2008. In October the Board considered an analysis of the comment letters received and decided to begin future deliberations using the principles underlying the perpetual and basic ownership approaches.

At this meeting, the Board discussed the classification of puttable and mandatorily redeemable instruments.

The Board directed the staff to analyse further an approach that would identify different types of such instruments and consider whether those types should be classified differently. For example, the Board discussed the following types of instruments:

• instruments that are puttable or mandatorily redeemable on a specified date or dates
• instruments that are puttable or mandatorily redeemable upon the occurrence of an event that is certain to occur

The Board also discussed the conceptual definitions of a liability and equity. The Board directed the staff to develop an approach that separates the objectives of:

• determining what things qualify for potential recognition (a conceptual definition) and
• determining how those things should be classified
  (a standards-level principle or principles).