Amendment to FRS 25 'Classification of Rights Issues'

The ASB has, in January, published 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 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.