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equity – financial liability, why?

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › equity – financial liability, why?

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  • December 17, 2020 at 12:48 pm #600186
    Noah098
    Member
    • Topics: 935
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    • ☆☆☆☆☆

    sir why is equity considered as a financial liability for the issuing company if there is no real contractual obligation to pay any dividends or repay capital either?

    December 22, 2020 at 8:48 pm #600601
    P2-D2
    Keymaster
    • Topics: 4
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    • ☆☆☆☆☆

    Hi,

    Equity is not considered as a financial liability. What is making you think that it is? Let me know and I can help explain.

    Thanks

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