Redeemable preference shares are always considered to be compound financial instruments that contain both equity and liability components.

Question

Quizplus · Accepted Answer

Redeemable preference shares are not always considered to be compound financial instruments. They are typically classified as liabilities if they provide for mandatory redemption by the issuer, but they do not inherently contain both equity and liability components unless they have features that meet the criteria for such classification under relevant accounting standards.

Redeemable Preference Shares Are Always Considered to Be Compound Financial