Your managing director has recently read an article which referred to Financial Reporting Standard 4 (FRS 4)

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Your managing director has recently read an article which referred to Financial Reporting Standard 4 (FRS 4) – Capital instruments. He has requested a report from you about FRS 4.

Requirement Write a report to the managing director explaining the nature of capital instruments, giving three examples of capital instruments together with their required accounting treatment as specified in FRS 4.

CIMA, Financial Reporting, May 1995 (20 marks)

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