Liability or equity?

I have submitted a comment letter to the IASB on 2 aspects of its Exposure Draft Financial Instruments with Characteristics of Equity, available at IFRS – Exposure Draft and comment letters: Financial Instruments with Characteristics of Equity—Proposed amendments to IAS 32, IFRS 7 and IAS 1 The comment deadline is 26 March 2024. The text… Continue reading Liability or equity?


When the IASB developed the 2018 version of its Conceptual Framework for Financial Statements (2018), it created a set of principles that it believed would provide a more coherent base for its future decisions on recognition. The post summarises how those principles differ from the recognition criteria contained in the previous (2010) version of the… Continue reading Recognition

Equity is not a residual

People often describe equity as a residual. That description is not fully accurate and may mislead people. There are probably three reasons why some people use that description: the definition of equity includes the word residual. the total amount of reported equity is measured as a residual. the pre-2018 version of the IASB’s Conceptual Framework… Continue reading Equity is not a residual