What is the significance of Ind AS 32
Ind AS 32 is the converged Accounting Standard of IAS 32
Ind AS 32 deals with financial instruments from the perspective of an issuer and provides guidance as to how an entity should present a financial instrument either as a financial asset or financial liability or as equity instrument. Ind AS 32 also provides guidance about the bifurcation of compound instruments into liability and equity components.
The classification is extremely important because this has a wider import regarding the way the instruments are presented in the balance sheet as well as the manner in which income and expenses arising on account of such financial instruments affect the balance sheet as well as the profit and loss account. Ind AS 32 consequently addresses the issues relating to the classification of interest, and dividends, losses and gains as well as the offsetting of financial assets and financial liabilities under certain conditions.
