Receivables to Equity Swaps

[Luboobi]

Hello,

I needed guidance on whether a company that has amounts receivable with a customer say A can choose to convert that amount into equity in company A. Is the treatment the same as the debt equity swaps?

[Marek Muc]

Whether this can be executed is determined by laws and regulations, not by IFRS. Regarding accounting, see the final paragraph in this section: https://ifrscommunity.com/knowledge-bas ... uity-swaps

[Luboobi]

I want to provide more clarity. So the issue at hand arose from a financial model i was developing where I was proposing that this company A provides services and has their invoice amount split between amounts they will treat as receivables and then the rest as sweat equity to their customers.

[Marek Muc]

That's a different story

https://ifrscommunity.com/knowledge-bas ... sideration