A financial asset is defined in IAS 32 ‘Financial Instruments: Presentation’. Amongst assets meeting the definition of financial assets are those assets that are equity instruments of other entities and contractual rights to receive other financial assets from another entity. In brief, these are referred to as equity and debt respectively.
This session will look at holders of debt and equity assets holistically.
In the case of debt assets, these are normally within the scope of IFRS 9 ‘Financial Instruments’. For such assets, specific considerations need to be made in terms of classification and measurement. These considerations change when companies prepare their financial statements under GAPSME.
In the case of equity instruments, the starting point is always the extent of involvement by the entity in the investee. The extent of involvement ranges from no significant influence to significant influence, joint control and control. This will impact the classification and measurement of equity instruments. Some different considerations also apply when entities are preparing their financial statements under GAPSME.
This seminar will delve into the considerations required under both IFRS and GAPSME for debt and equity financial assets.