The revisions eliminate the option previously in IAS 32 to measure the liability component of a

compound financial instrument on initial recognition either as a residual amount after separating the
equity component, or by using a relative-fair-value method. Thus, any asset and liability components are
separated first and the residual is the amount of any equity component. These requirements for
separating the liability and equity components of a compound financial instrument are conformed to
both the definition of an equity instrument as residual and the measurement requirements in IFRS 9.

Treasury Shares
IAS 32 incorporates the conclusion previously in SIC-16 Share Capital-Required
Own Equity Instruments (Treasury Shares) that the acquisition or subsequent resale
by an entity of its own equity instruments does not result in gain or loss for the
instruments who have given up their equity interest and those who continue to hold
an equity instrument.

Interest, dividends, losses and gains

IAS 32 incorporates the guidance previously in SIC-17 Equity-Costs of an Equity
Transaction. Transaction costs incurred as a necessary part of completing an equity
transaction are accounted for as part of that transaction and are deducted from
equity.

Presentation If an entity has issue an instrument that contains both a liability and an
equity component and the instrument has multiple embedded derivatives
And Disclosure whose values are interdependent (such as a callable convertible dept
instrument), it shall disclose the existence of those features.
Principles