For example, where a contract requires the entity to deliver as many of the entity’s own equity instruments as are equal in value to a certain amount, the holder of the contract would be indifferent whether it received cash or shares to the value of that amount. Thus, this contract would be treated as debt.

　　Other factors that may result in an instrument being classified as debt are:

　　• is redemption at the option of the instrument holder?

　　• is there a limited life to the instrument?

　　• is redemption triggered by a future uncertain event that is beyond the control of both the holder and issuer of the instrument?

　　• are dividends non-discretionary?

　　Similarly, other factors that may result in the instrument being classified as equity are whether the shares are non-redeemable, whether there is no liquidation date or where the dividends are discretionary.