Wedding Cake Ltd has its shares listed on a securities exchange. It has entered a contractual agreement
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Wedding Cake Ltd has its shares listed on a securities exchange. It has entered a contractual agreement to issue $10 million of its ordinary shares to Island Ltd in two years’ time. The number of shares to be ultimately issued will depend on the market price of the shares in two years’ time. Should Wedding Cake Ltd recognise a financial liability, or an equity instrument, in relation to this agreement?
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It should recognise a financial liability Wedding Cake Ltd will receiv...View the full answer
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