What is contributing to the popularity of financial instruments?

  • The amendment simplifies accounting for convertible instruments, as more contracts will be accounted for as traditional convertible debt instruments and will qualify for equity classification
  • The interest rate of convertible debt instruments will be closer to the coupon rate than the higher interest rate resulting from the separation of the convertible’s features
  • The interest expense for the convertible instruments will be lower
  • More convertible instruments will be eligible for the fair value option under ASC 825
  • The amendment may significantly reduce the effort and time required to determine whether an embedded derivative feature can be exempt from derivative accounting

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/