Is preference share a debt or equity?

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511 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 · 2013-05-07T23:18:47+00:00

IF the preference share is irredeemable then it’s equity. If the preference shares are redeemable , then they are considered as debt and actually, the dividend paid is considered as finance cost and it’s included on the income statement.