Global Standards for the world economy

Wednesday 20 November 2019

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Project news


The Financial Instruments with Characteristics of Equity research project was discussed at the December 2016 IASB meeting.

 13 December 2016


The Board met on 13 December 2016 to discuss the research project on Financial Instruments with Characteristics of Equity (FICE).

The Board was given a summary of discussions to date (Agenda Paper 5A, which was provided for information only).

Agenda Paper 5B: Application of the Gamma approach to derivatives on ‘own equity’

At this meeting, the Board discussed how the Gamma approach would apply to classifying derivatives whose classification under IAS 32 Financial Instruments: Presentation has been challenging in practice. The Board discussed whether a derivative with particular variables would be solely dependent on the residual amount.

In addition to the analysis set out in Agenda Paper 5B, the Board requested the staff to consider the application of the Gamma approach to the classification of derivatives on non-controlling interests with an exercise price denominated in a foreign currency.

The Board was not asked for any decisions.

Next steps

At a future meeting the Board will discuss:

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