Financial liability

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Revision as of 17:40, 20 April 2014 by imported>Doug Williamson (Link with Derivative page and categorise the page.)
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IAS 32 defines a financial liability as liability that is any of the following:


1. A contractual obligation either to:

  • Deliver cash or another financial asset to another entity; or
  • Exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the reporting entity.


2. A contract that will or may be settled in the reporting entity's own equity instruments, and is either:

  • A non-derivative for which the entity is or may be obliged to deliver a variable number of the reporting entity's own equity instruments; or
  • A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the reporting entity's own equity instruments.


See also