When financial instruments are issued that are to appear in the statement of financial position the issuer is required to determine whether the item should be disclosed as a liability or as equity.

Question

Quizplus · Accepted Answer

This statement is true. When financial instruments are issued, the issuer must determine whether to classify them as liabilities or equity, based on their characteristics and terms. This classification will determine how they are presented in the statement of financial position.

When Financial Instruments Are Issued That Are to Appear in the Statement