Disclosure and presentation

Interest, Dividends, Losses and Gains 
36. 
Interest, dividends, losses and gains relating to a financial instrument, or 
a component part, classified as a financial liability shall be reported in 

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FINANCIAL INSTRUMENTS: DISCLOSURE AND PRESENTATION 
IPSAS 15 
402
the statement of financial performance as expense or revenue. 
Distributions to holders of a financial instrument classified as an equity 
instrument shall be debited by the issuer directly to net assets/equity.
37. 
The classification of a financial instrument in the statement of financial 
position determines whether interest, dividends, losses and gains relating to 
that instrument are classified as expenses or revenue and reported in the 
statement of financial performance. Thus, dividend payments on shares 
classified as liabilities are classified as expenses in the same way as interest 
on a bond and reported in the statement of financial performance. Similarly, 
gains and losses associated with redemptions or refinancings of instruments 
classified as liabilities are reported in the statement of financial performance, 
while redemptions or refinancings of instruments classified as net 
assets/equity of the issuer are reported as movements in net assets/equity.
38. 
Dividends classified as an expense may be presented in the statement of 
financial performance either with interest on other liabilities or as a separate 
item. Disclosure of interest and dividends is subject to the requirements of 
IPSAS 1. In some circumstances, because of significant differences between 
interest and dividends with respect to matters such as tax deductibility, it is 
desirable to disclose them separately within the statement of financial 
performance. For entities subject to income taxes, guidance on the disclosure 
of the amounts of tax effects can be found in IAS 12.