Heads Up on accounting for convertible debt
16 Sep 2007
We have posted the 7 September 2007 Edition of the Heads Up Newsletter published by Deloitte & Touche LLP (United States).
This issue of Heads Up summarises the impact that proposed FASB Staff Position No. APB 14-a would have on the financial statements of issuers of convertible debt securities. The guidance is proposed to be effective for fiscal years beginning after 15 December 2007 and would be retrospectively applied in prior-period financial statements issued for comparison purposes.
The proposed FSP, titled Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement), would require 'split accounting' on initial recognition, that is, separation of the convertible security into two components:
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Click to view 7 September 2007 Edition of the Heads Up Newsletter (PDF 142k).