Once a financial instrument has been classified as a liability in the statement of financial position,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

Quizplus · Accepted Answer

According to AASB 132, once a financial instrument is classified as a liability, it cannot be reclassified unless a specific transaction or action alters the substance of the instrument. Therefore, the statement is true.

Once a Financial Instrument Has Been Classified as a Liability