doc__table__2839

| A9 | On 1 January 20X1 the maximum amount payable under the redemption provisions is 20 000 shares at CU10 each and accordingly the entity classifies CU200 000 as financial liability and CU800 000 as equity. However, on 1 January 20X2 because of the new issue of shares at CU20, the maximum amount payable under the redemption provisions increases to 40 000 shares at CU20 each. The issue of additional shares at CU20 creates a new liability that is measured on initial recognition at fair value. The liability after these shares have been issued is 20 per cent of the total shares in issue (200 000), measured at CU20, or CU800 000. This requires recognition of an additional liability of CU600 000. In this example no gain or loss is recognised. Accordingly the entity now classifies CU800 000 as financial liabilities and CU2 200 000 as equity. This example assumes these amounts are not changed between 1 January 20X1 and 31 December 20X2.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-08 · Text as adopted (Official Journal); later amendments are not incorporated in this text.