Maike Lutterbach shows how classification conflicts arise in the context of hybrid financial instruments and proposes solutions
Maike Lutterbach shows how classification conflicts arise in the context of hybrid financial instruments and proposes solutions
Hybrid financial instruments1 are financial instruments which consist of both equity and debt elements. Examples are preference shares profit participation convertible bonds.2 The economic characteristics of hybrids may be inconsistent with their legal form3 — that is the legal form of an instrument can appear to show that it is a debt instrument whereas the economic characteristics show that it is in fact an equity instrument. Hybrids may have several different economic characteristics which impede their classification as debt or equity capital.4
For taxation purposes the characterisation as debt or equity is crucial ...
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Maike Lutterbach shows how classification conflicts arise in the context of hybrid financial instruments and proposes solutions
Maike Lutterbach shows how classification conflicts arise in the context of hybrid financial instruments and proposes solutions
Hybrid financial instruments1 are financial instruments which consist of both equity and debt elements. Examples are preference shares profit participation convertible bonds.2 The economic characteristics of hybrids may be inconsistent with their legal form3 — that is the legal form of an instrument can appear to show that it is a debt instrument whereas the economic characteristics show that it is in fact an equity instrument. Hybrids may have several different economic characteristics which impede their classification as debt or equity capital.4
For taxation purposes the characterisation as debt or equity is crucial ...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
