Redeemable ordinary shares at balance sheet date

Do you have to revalue redeemable ordinary share cap. at balance sheet date to FV?

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A company issues redeemable ordinary shares, which are held in liabilities. Shares issued above par value. 

The company completes a capital reduction, reallocating the share premium of the redeemable ordinary shares to reserves (this can be done via court order) to show distributable reserves. 

Question: the nominal share cap. that is still sitting in the liabilities, at the balance sheet date, would this not need to be re-valued to fair value, which would be the current share price, meaning that the liablity is increased back to the amount that it was prior to a capital reduction and therefore wiping the reserves out again?

Does anyone know of any way that you would not have to re-value this with ref. to IFRS?


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By paul.benny
05th Aug 2022 11:49

I think this is one where you're going to have to trawl through the standards - IFRS9 and IAS32. Much will depend on the detail of your accounting policies and the precise terms of he shares. I would say, though, if you're of a size that you're reporting under IFRS, do you not have decent advisers who can help?

You can download the standard from - free but registration required

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