In accordance with AASB 107,what is the appropriate classification for the conversion of preference shares to ordinary shares?
A) inflow in investing activity
B) inflow in financing activity
C) non-cash investing item
D) non-cash financing item

Question

Quizplus · Accepted Answer

The conversion of preference shares to ordinary shares involves a non-cash transaction and results in a change in the financing structure of the company rather than the acquisition or disposal of an asset, so it is classified as a non-cash financing item in accordance with AASB 107.

In Accordance with AASB 107,what Is the Appropriate Classification for the Conversion