IAS 32 shall be applied by all undertakings to all types of financial instruments except:

1) those interests in subsidiaries, associates or joint ventures.

(In some cases, an undertaking can account for these interests using IFRS 9; in those cases, undertakings shall apply the requirements of IAS 32. Undertakings shall also apply IAS 32 to all derivatives linked to interests in subsidiaries, associates or joint ventures.)

2) employers' rights and obligations under employee benefit plans, to which IAS 19 applies.

3) insurance contracts as defined in IFRS 17. However, IAS 32 applies to derivatives that are embedded in insurance contracts, if IFRS 9 requires the undertaking to account for them separately. Moreover, an issuer shall apply IAS 32 to financial guarantee contracts, if the issuer applies IFRS 9 in recognizing and measuring the contracts, but shall apply IFRS 17 if the issuer elects.

4) financial instruments that are within the scope of IFRS 17, as they contain a discretionary participation feature.

The issuer of these instruments is exempt from applying to these features’ paragraphs regarding the distinction between financial liabilities and equity instruments.

However, these instruments are subject to all other requirements of IAS 32. Furthermore, IAS 32 applies to derivatives that are embedded in these instruments (see IFRS 9).

IAS 32 shall be applied to those contracts to buy, or sell, a non-financial item (such as a commodity) that can be settled net in cash, or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into, and continue to be held, for the purpose of the receipt, or delivery, of a non-financial item (such as property, or a commodity), in accordance with the undertaking's expected purchase, sale, or usage requirements (delivery is expected).