Financial instruments – Liability or equity?

Financial instruments – Liability or equity?

The IASB aims to resolve a debate on the classification of financial instruments in IFRS.


KPMG in the UK


Related content

KPMG IFRS Financial Instruments: Breaking news

The IASB has turned its attention to financial instruments with characteristics of equity.

Tentative steps forward

Having finalised its new financial instruments standard earlier this year, the IASB has turned its focus to a long-running source of debate – the distinction between liabilities and equity.

As a result, in its October meeting the Board agreed to start work on its project on financial instruments with characteristics of equity, which may result in a discussion paper.


"Given the current issues in practice around equity and liability classification that have been raised with the IFRS Interpretations Committee, the IASB is taking tentative steps forward in this challenging area."


Project to focus on IAS 32

The Board decided that the project will focus on improvements to the requirements in IAS 32 Financial Instruments: Presentation and will be split between two work streams – classification, and presentation and disclosure.

It may also result in amendments to the definitions of a liability and of equity in the Conceptual Framework for Financial Reporting.

For the latest developments in this project, as well as all our thinking on the completed version of IFRS 9, visit our IFRS – Financial instruments hot topics page.

© 2016 KPMG IFRG Limited is a UK company, limited by guarantee. All rights reserved. KPMG IFRG Limited, registered in England No 5253019. Registered office: 15 Canada Square, London, E14 5GL, UK.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG's new digital platform