You are recognising it as a holder I guess, in that case, not expected to satisfy the SPPI criteria because even though it can be converted into a variable number of shares, it seems that there is a cap "90% of the lowest [...]".
FVPL
Search found 930 matches
- 20 Dec 2023, 10:14
- Forum: IFRS-related topics
- Topic: Convertible Promissory Note
- Replies: 7
- Views: 1007
- 19 Dec 2023, 18:18
- Forum: IFRS-related topics
- Topic: Preference shares
- Replies: 15
- Views: 1863
Preference shares
Hi, 1. A preference shares which gives the issuer the choice either to settle in cash for deliver a variable number of ordinary shares based on the fair value of an ordinary share at conversion date, is an equity instrument or a liability? My view it's a liability, notwithstanding that the issuer ca...
- 19 Dec 2023, 15:17
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
Or maybe an equity instrument with a derivative component, accounted separately? I've no idea
- 19 Dec 2023, 15:15
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
But the issuer can avoid to settle it in cash, and deliver fixed number of shares instead. That looks like equity to me. Because they bear the risk of the change in the price of the shares, similar to a shareholder.
- 19 Dec 2023, 15:00
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
On what basis please, I'm confused again
- 19 Dec 2023, 11:04
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
"And to your last point, the issuer may have the option to either pay in cash or a variable number of ordinary shares, but it does not have the right to avoid paying one or the other. It is a financial liability." That's clear thanks DJP. Sorry for being redundant, if the issuer can choose...
- 19 Dec 2023, 10:53
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
even that the prefs can be converted into a variable number of ordinary shares (e.g., XX ordinary shares at maturity or anytime based on the fair value of the shares at that time) To summarise: The issuer can avoid to pay cash or deliver another financial asset. However, the preference shares can be...
- 19 Dec 2023, 10:31
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
And that's even that the issuer have an option to not pay cash or another financial asset right?
- 18 Dec 2023, 18:25
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
Thanks DJP. One more question from the perspective of the issuer. If the prefs can be converted into a variable number of shares. Even though there is no mandatory payment in cash, can this still be considered as equity instrument?
- 18 Dec 2023, 10:21
- Forum: IFRS-related topics
- Topic: IAS 36 allocation of goodwill to CGUs
- Replies: 14
- Views: 2086
Re: IAS 36 allocation of goodwill to CGUs
Are you talking about the individual accounts
- 18 Dec 2023, 10:06
- Forum: IFRS-related topics
- Topic: IAS 36 allocation of goodwill to CGUs
- Replies: 14
- Views: 2086
Re: IAS 36 allocation of goodwill to CGUs
I haven't come across a goodwill that didn't arise from a BS. Where did the goodwill come from?
- 17 Dec 2023, 12:18
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
So my point above is also that an entity delivers its own equity instrument is not a financial asset.
- 17 Dec 2023, 12:17
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
Sorry DJP, that was a question. In IAS 32, it says: Financial asset: any asset that is: cash, an equity instrument of another entity a contractual right [...] SO, I'm wondering, if an entity delivers a financial asset that is settled in entity's own instrument, may look at this definition of a finan...
- 17 Dec 2023, 00:35
- Forum: IFRS-related topics
- Topic: Redeemable preference shares
- Replies: 7
- Views: 54395
Re: Redeemable preference shares
Any thoughts guys
- 17 Dec 2023, 00:29
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
"The PIK dividends seem to be a financial liability because the issuer has a contractual obligation to deliver another financial asset (more pref shares)."
HI DJP, I think "another financial assets" are defined as equity instrument of another entity?
HI DJP, I think "another financial assets" are defined as equity instrument of another entity?
- 17 Dec 2023, 00:17
- Forum: IFRS-related topics
- Topic: IFRS 9/ IAS 32 - Penny Warrants
- Replies: 4
- Views: 985
Re: IFRS 9/ IAS 32 - Penny Warrants
It looks like a derivative, it hinges on whether you will get a fixed number of shares on conversion for a fixed amount. I think the warrants should be treated separately.
- 14 Dec 2023, 16:23
- Forum: IFRS-related topics
- Topic: SPPI on convertible note
- Replies: 4
- Views: 555
Re: SPPI on convertible note
that's very clear thanks DJP
- 14 Dec 2023, 14:58
- Forum: General accounting and financial reporting discussion
- Topic: Convertible debentures
- Replies: 7
- Views: 13112
Re: Convertible debentures
The convertible debt from the holder's perspective should first be assessed against SPPI test. If it fails SPPI, it goes to FVPL. It looks like a debt instrument that fails the SPPI test, I would classify it as FVPL. The OCI option is either available for equity instrument or debt instrument that pa...
- 14 Dec 2023, 14:31
- Forum: IFRS-related topics
- Topic: SPPI on convertible note
- Replies: 4
- Views: 555
Re: SPPI on convertible note
Comparing the view of EY vs PWC. Worth noting that EY's publication is dated 2015. So, views may have changed since?
- 14 Dec 2023, 14:23
- Forum: IFRS-related topics
- Topic: SPPI on convertible note
- Replies: 4
- Views: 555
Re: SPPI on convertible note
On top of what I've said, convertible note with conversion feature that allows a holder to convert into a variable number of shares based on the fair value of the note is more frequent than conversion into a fixed number of shares.
- 14 Dec 2023, 14:17
- Forum: IFRS-related topics
- Topic: SPPI on convertible note
- Replies: 4
- Views: 555
SPPI on convertible note
Hi, I agree that convertible note with a feature that allow the investors to convert into a fixed number of shares at maturity date fails the SPPI test. However, I've come across a case where it says that the instrument might satisfy the SPPI if the note is convertible into a variable number of shar...
- 13 Dec 2023, 11:19
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
without being able to opt for FVOCI option?
- 12 Dec 2023, 14:44
- Forum: IFRS-related topics
- Topic: Preference shares - PIK dividends
- Replies: 28
- Views: 3066
Re: Preference shares - PIK dividends
I would go with financial asset classified as FVTPL and reclassified to Equity upon conversion. However, I would be interested if someone can quote the paragraph from IFRS 9 that mentions preference shares considered as a debt instrument instead of Equity instrument?
- 04 Dec 2023, 15:30
- Forum: IFRS-related topics
- Topic: Intercompany Receivable/Payable
- Replies: 8
- Views: 1319
Re: Intercompany Receivable/Payable
I think that's a consolidation question not an IFRS one. Intercompany balances are eliminated, you'll only get the payable position towards the third party.
- 04 Dec 2023, 15:27
- Forum: IFRS-related topics
- Topic: Lessor accounting
- Replies: 2
- Views: 441
Re: Lessor accounting
Thanks Marek, that's very clear.
- 03 Dec 2023, 17:19
- Forum: IFRS-related topics
- Topic: Lessor accounting
- Replies: 2
- Views: 441
Lessor accounting
Just a quick confirmation, the only difference between dealer lessor or not a dealer lessor is that: No dealer lessor still recognises a gain & loss in the P&L but the dealer lessor recognise the revenue and cost of sale in the P&L. Is that correct? But in both case, the P&L impact i...
- 25 Nov 2023, 01:33
- Forum: IFRS-related topics
- Topic: Investment perperty (IAS40) classification in a sublease
- Replies: 2
- Views: 446
Investment perperty (IAS40) classification in a sublease
Hi,
If a company X (landlord) lease a property (finance lease) to company Y (intermediate lessor) (finance lease) which in turn, lease the same property to company Z.
Should company X classify the property as an investment property? is that mandatory?
Same for the company Y.
Thanks
If a company X (landlord) lease a property (finance lease) to company Y (intermediate lessor) (finance lease) which in turn, lease the same property to company Z.
Should company X classify the property as an investment property? is that mandatory?
Same for the company Y.
Thanks
- 22 Nov 2023, 18:08
- Forum: IFRS-related topics
- Topic: Lessee stays behind, lessor moves out of group - IFRS 16
- Replies: 3
- Views: 363
Re: Lessee stays behind, lessor moves out of group - IFRS 16
I think an impact in equity would make sense. But I'm not sure whether you should take it to the pl on disposal or not.
- 20 Nov 2023, 22:33
- Forum: IFRS-related topics
- Topic: Lessee stays behind, lessor moves out of group - IFRS 16
- Replies: 3
- Views: 363
Re: Lessee stays behind, lessor moves out of group - IFRS 16
Hi,
do you mean that the delta is recognised in Equity in the consolidated accounts of Holding C?
do you mean that the delta is recognised in Equity in the consolidated accounts of Holding C?
- 15 Nov 2023, 23:13
- Forum: IFRS-related topics
- Topic: Leaseback
- Replies: 5
- Views: 525
Leaseback
Hi, An operation whereby an entity sells its property to entity B, and entity B lease it back to entity A is a leaseback operation. However, if entity A sells to entity B, and entity B sublease it to entity C, and entity C lease it back to entity A, is that a leaseback operation? Or, just a sell fol...