APPENDIX A
Equity vs. Debt Securities A Global Definition
FROM 2007 to mid-2010, a joint task force of the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) labored to build the basis for global definition of equity.
During their deliberations on the Financial Instruments with the Characteristics of Equity in April 2007 and for the following year, the task force proposed that “the distinction between equity (risk capital) and liabilities is based exclusively on the ability or inability of capital to absorb losses incurred by the entity, with losses being tentatively understood as accounting losses.”1
However, at the joint board meeting in October 2007, the IASB used a new definition called the ...
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