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Previous article, we talked about the two basic principles of distinguishing financial liabilities and equity tools. Friends who have not read it can click Accounting Practice | Read the new financial instrument standards in one article (20): The difference between financial liabilities and equity tools for reading.
Using the principle of distinction mentioned above, we can basically judge whether most financial instruments are financial liabilities or equity instruments. However, there are special circumstances that are not applicable.
Today we will talk about the distinction between special financial instruments and the reclassification between financial liabilities and equity instruments.
1. Distinguishing of special financial instruments
2. Reclassification between financial liabilities and equity instruments
When the initial account is recorded, will it be time for good to distinguish financial liabilities and equity instruments?
Due to the conditions or matters stipulated in the original contract terms of the issuance of financial instruments, it may lead to the reclassification of the issuance of financial instruments .
In other words, financial liabilities may become equity tools, and equity tools may also become financial liabilities. Therefore, we need to regularly evaluate whether there has been any changes, whether to reclassify and then re-measure it.
or above are the classification issues of special financial instruments, as well as the reclassification between financial liabilities and equity instruments. OK, that’s all for today’s sharing.
Next article Xiaowu will introduce to you the accounting treatment of interest, dividends, gains and losses related to financial instruments issued by , as well as the offset of financial assets and financial liabilities .
More explanations of corporate accounting standards, please follow "51 Accounting Room" .
