Settlement-choice derivative is a liability unless?
AHolder paid an upfront premium
BIt is traded on exchange
CIt is deeply out of money
DAll settlement options give equity
Answer & Solution
Correct answer: D. All settlement options give equity
Only if all possible settlement methods give equity does the choice not make it an asset or liability.
Keep practising Ind AS 32 Financial Instruments: Presentation
Browse all Ind AS 32 Financial Instruments: Presentation questions for CA Final, or explore more Financialreporting topics.
Related questions
Pro rata rights at a fixed price in any currency are?Which are 'entities' under Ind AS 32?Must a financial instrument contract be written?On reclassifying equity to liability, difference goes to?Puttable equity must sit in which class?Puttable equity must entitle holders to?A master netting arrangement provides?Is a sinking fund offset against the debentures?