Liabilities and Equity Targeted Improvements Proposed
The Financial Accounting Standards Board (“FASB”) has issued for comment the proposed Accounting Standards Update, Distinguishing Liabilities from Equity (Topic 480): I. Accounting for Certain Financial Instruments with Down Round Features; 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 proposal is split into two parts. In Part I, the FASB proposes when an entity determines certain financial instruments are to be classified as liabilities or equity instruments, they should not include the down round feature when measuring whether the financial instrument is indexed. Read More.