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

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store