Stock warrants- derivative liability.

[AQS]

Hello Members,

Need some clarification. We have issued stock warrants & have recognized them as derivative liability under IAS 32. We FV them every month & take the difference to our PL. These warrants were based on net settlement (i.e. at the time of exercise we will issue only 90000 shares instead of 100,000).
Now on exercise date should we take the exercise date FV of 100,000 shares to equity or of 90,000. ( by prorating the revise date FV)

Thanks

[Marek Muc]

Hi, in my opinion the liability should be remeasured to FV on exercise date (via P/L), and the issuance of shares is recorded DR liability CR equity. So you credit the equity with the ultimate FV of liability