Reclassification of financial instruments as debt or equity

The decisions subject to some targeted refinements in order to: 

• clarify that the reclassification requirements would apply to changes in the substance of a contractual arrangement that do not create or extinguish contractual rights or obligations, nor modify the contractual terms; 
• clarify that ‘circumstances external to the contractual arrangement’ refer to events that arise after a financial instrument is initially classified, are significant to the entity’s operations, demonstrable to external parties and generally expected to occur infrequently; and 
• require an entity to reclassify a financial instrument containing an obligation to deliver its own equity instruments from financial liability to equity when the substance of the contractual arrangement changes because a contractual term stops being effective.