Under IFRS, mandatorily redeemable preferred shares (term preferred shares) are treated as
A) a liability.
B) equity.
C) a contra-asset.
D) either a liability or a contra-asset.

Question

Quizplus · Accepted Answer

Under IFRS, mandatorily redeemable preferred shares are treated as a liability because they represent a financial obligation for the issuer to pay a fixed amount of cash or other assets to the holders of these shares on a predetermined date. These shares are not considered equity because they do not represent ownership interest in the company.

Under IFRS, Mandatorily Redeemable Preferred Shares (Term Preferred Shares) Are