Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Amended Codes of Good Practice (2013)

Amended Code Series 100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 100: The General Principles for Measuring Ownership

Key measurement principles

3.14 Equity Instruments carrying preference rights
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3.14EQUITY INSTRUMENTS CARRYING PREFERENCE RIGHTS

 

3.14.1An Equity Instrument carrying Preferential Rights is measurable in the same manner as an ordinary Equity Instrument.

 

3.14.2An Equity Instrument carrying Preferential Rights that have the characteristics of a debt, regardless of whether the debt is that of an Entity or of a Participant, must be treated as an ordinary loan. If the debt is that of a Black Participant, it may be subject to measurement under Net Value.

 

3.14.3In evaluating an instrument that has a hybrid nature including the characteristics of a debt, only that portion that represents a debt, will be measured under current equity interest. The remainder is measurable as an ordinary equity instrument.