FASB proposes guidance on induced conversions of convertible debt instruments
Dec 20, 2023
On December 20, 2023, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) aimed at improving the application and relevance of accounting guidance related to induced conversions of convertible debt instruments.
Stakeholders provided input to the FASB that it is unclear how to apply the existing induced conversion guidance to convertible debt instruments with cash conversion and other features that have become prevalent in the market since this guidance was originally issued.
The proposed ASU would address this feedback by clarifying the requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features, should be accounted for as induced conversions.
Public comments will be accepted through March 18, 2024.
Access the news release on the FASB website.