The FASB issued Wednesday, Aug. 5, a new Accounting Standards Update (ASU) to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity.
The ASU simplifies accounting for convertible instruments by removing major separation models required under current generally accepted accounting principles (GAAP).
The ASU also removes certain settlement conditions required for equity contracts to qualify for the derivative scope exceptions, which will allow more equity contracts to qualify for it. Learn more.