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Financial Instruments – The puttables exception

Financial Instruments – The puttables exception

This IFRS newsletter reports on the IASB’s November discussions on financial instruments

Nick Quayle

Partner: Audit

KPMG in the Isle of Man


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We report on the IASB’s latest discussions on its project on financial instruments with characteristics of equity.

Further progress has been made in exploring classification under the Gamma approach.

The discussions continue…

At its November meeting, the Board discussed the classification under the Gamma approach of instruments meeting the existing puttables exception in IAS 32 and the merits of retaining the exception. 


“The discussion about retaining the IAS 32 puttables exception emphasises that no classification approach can portray all the information that is important to users.”

Chris Spall

KPMG’s global IFRS financial instruments leader


The Board noted that one of the objectives of the FICE project is to reinforce the underlying rationale of the distinction between liabilities and equity in IAS 32, but not to perform a fundamental review of IAS 32.

The macro hedge accounting project was not discussed during the November meeting.

For more detail on these discussions, read Issue 34 of our IFRS Newsletter: Financial Instruments.

Next steps for the project

The next steps for the project will be to consider the:

  • substance of rights and obligations in contracts and the interaction with legal and regulatory requirements; and
  • recognition, derecognition and reclassification of equity instruments.

Find out more

Visit our IFRS Newsletters page for the latest discussions on these issues.

And go to our IFRS – Financial instruments hot topics page for more on these and other aspects of financial instruments accounting under IFRS.

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