neoaccounting

The International Accounting Standards Board (IASB) is seeking comment on proposed guidance that seeks to clarify when a financial instrument should be classified as a liability or as equity. The distinction between liabilities and equity is an important consideration in how companies and other entities present financial information. That’s because the classification of these financial instruments affects how an entity’s financial position and performance are depicted. An IFRS Standards  Discussion Paper  published Thursday is designed to address diversity in accounting practices related to International Accounting Standard (IAS) No. 32,  Financial Instruments: Presentation , which currently outlines how a company that issues financial instruments should distinguish financial liabilities from equity instruments. While IAS 32 has worked well for most financial instruments, some companies have found it difficult to classify some complex financial instruments that co...