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FASB amends guidance on accounting for financial instruments with characteristics of liabilities and equity

  • FASB document Image

Jul 13, 2017

The FASB has issued a two-part Accounting Standards Update (ASU) No. 2017-11, “(Part I) Accounting for Certain Financial Instruments With Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception.” The guidance in the new standard is based on recommendations from the Private Company Council and is intended to simplify current accounting.

The ASU will (1) “change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features” and (2) improve the readability of ASC 480-10 by replacing the indefinite deferral of certain pending content with scope exceptions.

For more in­for­ma­tion, see the press release and ASU on the FASB’s Web site.

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