The Accounting Standards Board (ASB) has today issued an amendment to FRS 25 (IAS 32) Financial Instruments: Presentation ‘Classification of Rights Issues’. The amendment requires a rights issue involving the exchange of a fixed number of an entity’s own equity instruments for a fixed amount of cash denominated in a foreign currency to be classified as an equity instrument.

The amendment follows the issue of ‘Classification of Rights Issues – Amendment to IAS 32’ published by the International Accounting Standards Board (IASB) in October 2009.

The ASB published a Financial Reporting Exposure Draft (FRED) in November 2009 proposing parallel amendments to FRS 25. Respondents to the FRED were supportive of the ASB’s proposals on the basis that the amendment ensures consistency with IAS 32 Financial Instruments: Presentation.

Entities are required to apply the amendment for annual periods beginning on or after 1 February 2010.
 

1. The Accounting Standards Board (ASB) is an operating body of the Financial Reporting Council (FRC), the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the ASB, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy Discipline and Investigation Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
2. The role of the ASB is to oversee the financial reporting requirements for UK entities. This is done by maintaining and improving UK Financial Reporting Standards (FRS) and influencing the development of international standards. The ASB achieves this by collaborating with accounting standard-setters from other countries and the International Accounting Standards Board (IASB).
3. The ASB has ten Board members, of whom two (the Chairman and the Technical Director) are full-time, and the remainder, who have a variety of experiences as preparers, auditors and users of financial reports, are part-time.
4. The Amendment can be downloaded, free of charge, from the ASB’s website at www.frc.org.uk/asb/publications. Hard copies of the Amendments can be obtained at a cost of £10.00 (post-free) from FRC Publications, 145 London Road, Kingston Upon Thames, Surrey, KT2 6SR (020 8247 1274). Web: www.frcpublications.com.
5. The IASB amendments can be obtained from the IASCF Publications Department – e-mail: publications@iasb.org. Website: www.iasb.org.
6. Press enquiries should be directed to Ian Mackintosh (Chairman) on 020 7492 2434, David Loweth (Technical Director) on 020 7492 2420 or Deepa Raval (Project Director) on 020 7492 2424.