IAS 32 – Presentation of financial instruments

Content of the training

• Definitions of a financial instrument, financial asset, financial liability, equity instrument  
• Explanation of the main principle – contractual obligation to deliver cash  
• Special areas of the assessment – contingent settlement provisions, economic incentives, indirect obligations
• Decision tree for assessment of non-convertible instruments 
• Decision tree for classification of instruments convertible into equity instruments of the issuer – conversion into fixed/variable amount
• Accounting for equity instruments from the perspective of the issuer 
• Accounting for compound instruments from the perspective of the issuer 
• Derivatives settled with own equity instruments (own shares) of the entity – decision tree, assessment of fixed amount vs fixed number, redemption obligation, examples
• Presentation requirements explained based on instruments commonly issued by banks – CET1, AT 1, Tier 2 and subordinated debts, senior non-preferred debt

After completing the training the participants will understand

• definitions in the are of financial instruments including split into debt instrument, equity instruments and derivatives
• principles for the distinction between financial liabilities (i.e. debt instruments) and equity instruments both from the issuer’s and holder’s perspective
• specific requirements for compound instruments containing both equity and liability components
• requirements for derivatives settled with own shares of the entity
• application of the presentation principles to the main types of instruments issued by banks

Target audience

• At banks and other financial institutions mainly employees at following departments: accounting, reporting, risk management, treasury, ALM, back office, middle office, controlling, internal audit, financial analyses of IFRS statements of customers 
• At non-financial companies mainly employees at following departments: accounting, reporting, risk management, controlling, internal audit  
•  Audit firms
• Supervisors and enforcers in the area of financial institutions accounting