Under IAS 32, how should an equity instrument be classified?
A. It must always be classified as equity by its very nature.
B. The entity has the option of classifying it as a liability or equity.
C. If it contains a contractual obligation that meets the definition of a financial liability, it should be classified as a liability.
D. The entity should apportion the classification between liability and equity if there is a contractual obligation that meets the definition of a financial liability.
Answer:C
Under IAS 32, how should an equity instrument be classified?
A. It must always be classified as equity by its very nature. B. The entity has the option of classifying it as a liability or equity. C. If it contains a contractual obligation that meets the definition of a financial liability, it should be classified as a liability. D. The entity should apportion the classification between liability and equity if there is a contractual obligation that meets the definition of a financial liability.