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- The topic ‘Redeemable preference shares issued at a premium’ is closed to new replies.
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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Redeemable preference shares issued at a premium
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?
3 days and no response! I’m closing the thread