EFRAG Draft comment letter DP Equity vs liability

XX XXXX 2008 International Accounting Standards Board 30 Cannon Street London EC4M 6XH UK DRAFT COMMENT LETTER Comments should be sent to Commentletter@efrag.org or uploaded via our website www.efrag.org by 5 September 2008 Dear Sir/Madam, Discussion Paper Financial Instruments with Characteristics of Equity On behalf of the European Financial Reporting Advisory Group (EFRAG), I am writing to comment on the IASB Discussion Paper Financial Instruments with Characteristics of Equity This letter is submitted in EFRAG’s capacity of contributing to the IASB’s due process and does not necessarily indicate the conclusions that would be reached in its capacity of advising the European Commission on endorsement of the definitive IFRS. The Discussion Paper is the first stage of a possible IASB project to improve the equity versus liability classification requirements in IAS 32 Financial Instruments: Presentation. This is a subject of fundamental importance to accounting. It has become increasingly clear over the last few years that there are significant problems with the existing IFRS literature on the equity/liability distinction and on the classification of financial instruments between assets, liabilities and equity. As a result, a fundamental review—and perhaps some fairly significant changes to the existing requirements—has been urgently needed. We are therefore grateful to the IASB for issuing this Discussion Paper. We would ...