The International Accounting Standards Board (IASB) tentatively decided to explore making clarifying amendments to IAS 32 Financial Instruments: Presentation to address common accounting challenges that arise in practice when applying IAS 32. The IASB aims to address those challenges by clarifying some underlying principles in IAS 32 and adding application guidance to facilitate consistent application of those principles. In addition, it intends to further develop some presentation and disclosure requirements. The IASB'S tentative decisions were made after considering feedback on the Discussion Paper Financial Instruments with Characteristics of Equity, which was published in June 2018.
The Discussion Paper set out the IASB'S preferred approach to classification of a financial instrument, as a financial liability or an equity instrument, from an issuer’s perspective. The IASB also explored enhanced presentation and disclosure requirements that would provide further information about financial instruments’ effects on an issuer's financial position and financial performance.
The IASB met on 20 September 2022 to continue its discussions on the accounting for financial instruments containing obligations for an entity to redeem its own equity instruments, including written put options on non-controlling interests.
The IASB tentatively decided to propose amendments to IAS 32 Financial Instruments: Presentation to clarify:
The IASB also tentatively decided to clarify that written put options and forward purchase contracts on an entity’s own equity instruments are required to be presented gross, instead of net, in order:
Ten of 11 IASB members agreed with these decisions.