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IAS 32 Financial Instruments: Presentation

IAS 32 Financial Instruments: Presentation sets out the principles for presenting financial instruments as liabilities or equity and for offsetting financial assets and liabilities.

Revised December 2003. Effective 1 January 2005.

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IAS 32 classifies financial instruments into:

  • Financial assets
  • Financial liabilities
  • Equity

...in accordance with the substance of the arrangement and the definitions of these elements. In certain cases, such as convertible debt, the instrument is split into a liability and equity element. Financial assets and liabilities may only be offset where there is a legally enforceable right to offset and the entity intends to settle on a net basis. Any treasury shares are deducted from equity.

Interest, dividends, losses and gains related to a financial liability are recognised in profit or loss; dividends in relation to equity instruments are recognised directly in equity.

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This unaccompanied version does not include additional content that accompanies the full standard, such as illustrative examples, implementation guidance and bases for conclusions.

Which version of the standard?

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Recent amendments

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The following interpretations refer to IAS 32

Current proposals

  1. The IASB is engaged in a research project to investigate potential improvements to the classification of liabilities and equity and the presentation and disclosure requirements for financial instruments with the characteristics of equity regardless of whether they are classified as equity or liabilities. A discussion paper was issued in June 2018 and the next stage is expected to be an exposure draft.

This page was last updated 30 August 2022.