FASB is seeking feedback through Friday, May 30, on its proposed accounting guidance for debt exchange transactions involving multiple creditors.
The proposed Accounting Standards Update (ASU) is based on a recommendation of the Emerging Issues Task Force.
The proposed ASU would specify that an exchange of debt instruments that meets certain requirements should be accounted for by the debtor as the issuance of a new debt obligation and the extinguishment of the existing debt obligation.
The board said the proposed ASU would improve the decision usefulness of financial reporting information provided to investors by requiring that economically similar exchanges of debt instruments be accounted for similarly. Read more.