Which of the Following Is/are Not True Regarding the Classification

question 172

Multiple Choice

Which of the following is/are not true regarding the classification of redeemable preferred shares on the balance sheet?

• A)The classification of redeemable preferred shares on the balance sheet depends on the conditions for redemption.
• B)If only the issuing firm has the option to redeem, then the preferred shares are part of its shareholders' equity.
• C)If the issuing firm must redeem the preferred shares (so-called "mandatory redemption"), either at a specified time or upon a specified condition certain to occur, the issuing firm treats the preferred shares as its shareholders' equity.
• D)If the preferred shareholders have the option to require redemption, then the preferred shares appear between liabilities and shareholders' equity under U.S.GAAP.
• E)If the preferred shareholders have the option to require redemption, then the preferred shares appear as a liability under IFRS.

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