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

Industry Charters

Financial Services  Charter

Code Series FS100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 100: The General Principles for Measuring Ownership

9. Equity Instruments carrying preferential rights
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9.1An Equity Instrument carrying preferential rights is measurable in the same manner as an ordinary Equity Instrument.

 

9.2An Equity Instrument carrying preferential rights that has the characteristics of a debt, regardless of whether the debt is that of an enterprise or of a participant, is an ordinary loan. If the debt is that of a black participant, it may be subject to measurement under Current Equity Interest.

 

9.3In 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.