| 12.3 | This section applies to all financial instruments except for: |
| (a) | Those covered by Section 11. |
| (b) | Investments in subsidiaries (see Section 9 Consolidated and Separate Financial Statements), associates (see Section 14 Investments in Associates) and joint ventures (see Section 15 Investments in Joint Ventures). |
| (c) | Employers' rights and obligations under employee benefit plans (see Section 28 Employee Benefits). |
| (d) | Insurance contracts (including reinsurance contracts) that the entity issues and reinsurance contracts that the entity holds (see FRS 103). |
| (e) | Financial instruments that meet the definition of an entity's own equity and the equity component of compound financial instruments issued by the reporting entity that contain both a liability and an equity component (see Section 22 Liabilities and Equity). |
| (f) | Leases (see Section 20 Leases) unless the lease could, as a result of non-typical contractual terms, result in a loss to the lessor or the lessee. |
| (g) | Contracts for contingent consideration in a business combination (see Section 19 Business Combinations and Goodwill). This exemption applies only to the acquirer. |
| (h) | Any forward contract between an acquirer and a selling shareholder to buy or sell an acquiree that will result in a business combination at a future acquisition date. The term of the forward contract should not exceed a reasonable period normally necessary to obtain any required approvals and to complete the transaction. |
| (i) | Financial instruments, contracts and obligations to which Section 26 Share-based Payment applies, except for contracts within the scope of paragraph 12.5. |
| (j) | Financial instruments issued by an entity with a discretionary participation feature (see FRS 103). |
| (k) | Reimbursement assets accounted for in accordance with Section 21 Provisions and Contingencies. |
| (l) | Financial guarantee contracts (see Section 21). [AMD 330] |
| 12.4 | Most contracts to buy or sell a non-financial item such as a commodity, inventory, or property, plant and equipment are excluded from this section because they are not financial instruments. However, this section applies to all contracts that impose risks on the buyer or seller that are not typical of contracts to buy or sell non-financial items. For example, this section applies to contracts that, as a result of its contractual terms, could result in a loss to the buyer or seller that is unrelated to changes in the price of the non-financial item, changes in foreign exchange rates, or a default by one of the counterparties. |
| 12.5 | In addition to the contracts described in paragraph 12.4, this section applies to contracts to buy or sell non-financial items if the contract can be settled net in cash or another financial instrument, or by exchanging financial instruments as if the contracts were financial instruments, with the following exception: contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements are not financial instruments for the purposes of this section. |
| AMD 330 Amendment Paragraph 12.3 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 12.3 Section 12 applies to all financial instruments except the following: (a) Those covered by Section 11. (b) Investments in subsidiaries (see Section 9 Consolidated and Separate Financial Statements), associates (see Section 14 Investments in Associates) and joint ventures (see Section 15 Investments in Joint Ventures). Employers' rights and obligations under employee benefit plans (see Section 28 Employee Benefits) (d) Insurance contracts (including reinsurance contracts) that the entity issues and reinsurance contracts that the entity holds (see FRS 103 Insurance Contracts). (e) Financial instruments that meet the definition of an entity's own equity and the equity component of compound financial instruments issued by the reporting entity that contain both a liability and an equity component (see Section 22 Liabilities and Equity). (f) Leases (see Section 20 Leases) unless the lease could, as a result of non-typical contractual terms, result in a loss to the lessor or the lessee. (g) Contracts for contingent consideration in a business combination (see Section 19 Business Combinations and Goodwill). This exemption applies only to the acquirer. (h) Any forward contract between an acquirer and a selling shareholder to buy or sell an acquiree that will result in a business combination at a future acquisition date. The term of the forward contract should not exceed a reasonable period normally necessary to obtain any required approvals and to complete the transaction. (i) Financial instruments, contracts and obligations to which Section 26 Share-based Payment applies, except for contracts within the scope of paragraph 12.5. (j) Financial instruments issued by an entity with a discretionary participation feature (see FRS 103). (k) Reimbursement assets (see Section 21 Provisions and Contingencies). (l) Financial guarantee contracts (see Section 21). A reporting entity that issues the financial instruments set out in (d) or (j) or holds the financial instruments set out in (d) is required by paragraph 1.6 to apply FRS 103 to those financial instruments. |
|
|
Licence and copyright | © 2018, LexisNexis Group a division of Reed Elsevier (UK) Ltd. All rights reserved. |