14-12-2009 | EFRAG requests comments on its draft endorsement advice and draft effects study report on IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

EFRAG has issued an Invitation to Comment relating to the endorsement for use in the EU of IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. It is consulting both on its assessment of the Interpretation against the EU endorsement criteria and on its initial assessment of the costs and benefits that would arise from its application in the EU. Comments are requested by 17 January 2010.
	IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments provides guidance on how a debtor should account for its equity instruments issued in full or partial settlement of a financial liability following renegotiation of the terms of the liability sometimes referred to as a ‘debt-for-equity swap’. IFRIC 19 concludes that equity instruments issued to extinguish a financial liability should be treated as ‘consideration paid’ and shall be measured at their fair value as determined on the date when the financial liability is extinguished, unless that value cannot be reliably measured in which case the fair value of the financial liability extinguished shall be used. Partial extinguishment is also addressed. A gain or loss resulting from a debt-for-equity swap shall be recognised in profit or loss and presented as a separate line item in the statement of comprehensive income. EFRAG has issued an Invitation to Comment relating to the endorsement, for use in the EU, of IFRIC 19. It is consulting both on its assessment of the Interpretation against the EU endorsement criteria and on its initial assessment of the costs and benefits that would arise from the implementation of the Interpretation in the EU. Comments are requested by 17 January 2010.
Document : EFRAGs Invitation to Comment on IFRIC 19 - Draft endorsement and Draft effects study report.doc
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