IFRS Guidance Opens for Public Comment
IFRS are the international sets of standards for accounting which are to help the companies are organisations all over the globe to be able to prepare their balance sheets. Apart from that know how to prepare as well as make the financial data available for public. These set of standards have been made by a non profit organisation the IASB (international accounting standards board)
The people who have been eager to put forward their own comments and reviews on policies now the draft for guidance on put options is open for public comment.
To get the public to comment IASB and IFRS have projected assistance for the accounting related put options which are written on issue of shares of the subordinate which are owned by a shareholder who is non controlling. This is authored by patent entity.
The type of contract which allows the owner of that option to hold the right which makes him able sell certain asset to author of specified option at a given price and during a certain specified time period is known as a put option.
In case of the parent entity being subjected to buy shares of the subsidiary whether in form liquid assets like cash of any other financial asset. It (Parent entity) in this case must realise that there is a financial risk or problem in the financial statements regarding its value in the present of the exercise price option. The existence of this diversity in practice resulted in the request to the Interpretations Committee to regard the possibility of being able to consequently measure the existing financial liability.
As a result the committee of interpretations has put forward the idea that every change which is pointed in the financial liability is to be considered as either profit or a loss. This is to be done in accordance to the IAS 39 and IFRS 9. Both being financial instruments.
The public comment is to be done before the first of October in 2012, after that the draft would be closed for public comment. For more details you can visit the official IFRS website.