With Regards To Redeemable Preference Shares An Option By Issuer To Redeem The S
With regards to redeemable preference shares, an option by issuer to redeem the share is accounted for as an equity instrument.
I believe that the above statement is true, but i just want to make double sure, because from my understanding, if it is at the option of the issuer, i.e. the company’s discretion, it is accounted for as an equity instrument, as there is no present obligation to transfer financial assets to the shareholder. However, if there is a fixed date that provides mandatory redemption by the issuer, it becomes a financial liability for the issuer. Am I understanding it correctly? Thank you very much.
