Home › CA Final › financialreporting › equityvsliability › Which of the following is NOT a financial liabil…
Which of the following is NOT a financial liability under Ind AS 32?
AIncome tax liability owed to the government for the year
BBank loan repayable in cash on maturity
CTrade payables for purchase of goods on credit
DMandatorily redeemable preference shares with fixed cash redemption
Answer & Solution
Correct answer: A. Income tax liability owed to the government for the year
Income tax is a STATUTORY obligation, not a contractual one. Ind AS 32.AG12 explicitly excludes statutory liabilities from the financial-instrument definition. Bank loans, trade payables, and mandatorily redeemable preference shares all create a contractual obligation to deliver cash and are financial liabilities.
Related questions
A puttable ordinary share otherwise qualifies for equity classification, EXCEPT that the hWhen an instrument is reclassified from FINANCIAL LIABILITY to EQUITY under Ind AS 32 (becPQR Ltd. issues a call option to ABC Ltd. that allows ABC to buy PQR's equity at ₹100 per Restrictions like LACK OF ACCESS TO FOREIGN CURRENCY or NEED FOR REGULATORY APPROVAL to maLMN Ltd. issues preference shares redeemable in 5 years for cash. The issuer also has the D Ltd. issues preference shares to G Ltd. The HOLDER has an option to convert these preferT Motors Ltd. has issued two classes of puttable ordinary shares: ordinary shares (one votP Ltd. has issued puttable ordinary shares to Q Ltd. Q Ltd. has also entered into an asset