Global Standards for the world economy

Tuesday 18 December 2018

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IAS 32 Financial Instruments: Presentation—Accounting for a written put option over non-controlling interests to be settled by a variable number of the parent’s shares


 Work in progress—Tentative agenda decision

IAS 32 Financial Instruments: Presentation—Accounting for a written put option over non-controlling interests to be settled by a variable number of the parent’s shares

The Interpretations Committee received a request regarding how an entity accounts for a written put option over non-controlling interests (NCI put) in its consolidated financial statements. The NCI put has a strike price that will, or may, be settled by the exchange of a variable number of the parent’s own equity instruments.

Specifically, the Interpretations Committee was asked to consider whether, in its consolidated financial statements, the parent recognises:

  1. a financial liability representing the present value of the option’s strike price—in other words, a gross liability; or

  2. a derivative financial liability presented on a net basis measured at fair value.

The Interpretations Committee was also asked whether the parent applies the same accounting for NCI puts for which the parent has the choice to settle the exercise price either in cash or a variable number of its own equity instruments to the same value.

Project stages

Board deliberations

On 8 November 2016 the Interpretations Committee decided not to add this topic to its agenda.