Is preference share a debt or equity?

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740 viewsMay 7, 2013Accounting

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Chancellor December 2, 2012 0 Comments

I know that ordinary shares is part of the equity but what about the preference shares? Is it equity or debt?

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score 0 · Answer 1 · 2012-12-02T22:51:42+00:00

Preference shares can be both equity and debt. If the shares are redeemable, then it is debt (something like a bond).If the shares are not redeemable, then the preference shares are part of the equity.