BC64 Issues similar to those raised by constituents relating to classification of puttable financial instruments apply to some financial instruments that create an obligation only on liquidation of the entity.
BC65 In the exposure draft published in June 2006, the Board proposed to exclude from the definition of a financial liability a contractual obligation that entitles the holder to a pro rata share of the net assets of the entity only on liquidation of the entity. The liquidation of the entity may be:
(a) certain to occur and outside the control of the entity (limited life entities); or
(b) uncertain to occur but at the option of the holder (for example, some partnership interests).
BC66 Respondents to that exposure draft were generally supportive of the proposed amendment.
BC67 The Board decided that an exception to the definition of a financial liability should be made for instruments that entitle the holder to a pro rata share of the net assets of an entity only on liquidation i
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