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If a redeemable preference share issued at a premium ($100 par and $5 premium), and is to be classified as a financial liability in accordance to IFRS, should the premium portion of the redeemable preference shares be also reclassify to liability instead of in equity? The company will redeem at $100 per preference share
If we’re only going to pay $100, why would we show $105 as a liability?
Company law states that whenever shares are issued, whether for cash or otherwise, for an amount in excess of their nominal value, an amount equal to that excess shall be transferred to the Share Premium Account
OK?
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