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FASB Ratifies EITF Issue on Statement of Cash Flows

At its June 29 Board meeting, the Financial Accounting Standards Board (“FASB”) ratified the consensus reached at its June 10 Emerging Issues Task Force meeting regarding Issue No. 15-F, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” In particular, the FASB reached a consensus on the following issues: Debt Prepayment or Debt Extinguishment Costs Settlement of Zero-Coupon Debt Instruments and Other Debt Instruments with Insignificant Coupon Interest Rates Contingent Consideration Payments Made after a Business Combination Proceeds from the Settlement of Insurance Claims Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance. Read More.

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FASB Updates Guidance for Assessing Put and Call Options

Impacting companies that invest in or issue debt instruments (or hybrid financial instruments with a debt host) with embedded call (put) options, the Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update No. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments. The Update clarifies the steps companies are required to take when assessing whether or not the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts. When a call (put) option is contingently exercisable, a company does not have. Read More.

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