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CA Final · Financial Reporting · Financial Instruments: Equity and Financial Liabilities

Under Ind AS 109 Appendix D, which matter is outside the scope of the appendix on extinguishing financial liabilities with equity instruments?

The creditor's accounting is outside the scope. Appendix D addresses only the debtor entity that renegotiates a financial liability and issues equity instruments to the creditor to extinguish all or part of it, and it explicitly states that it does not address the accounting by the creditor.

  1. AThe accounting by the creditor receiving the equity instrumentsCorrect
  2. BThe debtor's accounting when terms are renegotiated and equity is issued
  3. CThe debtor's partial extinguishment of a liability
  4. DThe debtor's measurement of equity issued

Explanation

The scope covers the entity (debtor) whose liability terms are renegotiated, resulting in issue of equity to a creditor to extinguish all or part of the liability. It expressly does not address the accounting by the creditor.

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