Once a financial instrument has been classified as a liability in the balance sheet,under AASB 132 the reporting entity is not permitted to reclassify it unless a specific transaction or other specific action by the holder or issuer of the instrument alters the substance of the financial instrument:

Question

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According to AASB 132, a financial instrument that has been classified as a liability cannot be reclassified unless there is a specific transaction or action that changes the substance of the instrument.

Once a Financial Instrument Has Been Classified as a Liability