On July 31, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) aimed at improving guidance for certain financial instruments with characteristics of liabilities and equity, including convertible instruments.
The ASU would reduce the number of accounting models for convertible debt instruments and convertible preferred stock. It would revise the derivatives scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The ASU also would improve and amend the related disclosure and earnings-per-share guidance.
Stakeholders are asked to review and provide comment on the proposed ASU by October 14, 2019. Read FASB’s news release.