Last month the FASB released proposed updates to the US GAAP Financial Reporting Taxonomy (GRT) related to a proposed Accounting Standards Update (ASU) on Debt with Conversion and Other Options. Updates to the proposed taxonomy will include new elements and reference modifications. The proposed updates to the GRT are just some of several updates released throughout the year as proposed ASUs are issued. The GRT, which includes all of these taxonomy updates, is published in the last quarter of each calendar year.
The amendments in the proposed update would apply to entities that settle convertible debt instruments for which the conversion privileges were altered in order to induce conversion. Current GAAP guidance for determining whether the transaction would be accounted for as an induced conversion as opposed to a debt extinguishment was created in the context of share-settled convertible debt before cash convertible instruments became more mainstream. These amendments would help clarify questions regarding this process.
The public may email feedback on the proposed updates through March 18, 2024. Comments should be submitted directly to the FASB via email to xbrled@fasb.org. Although the proposed GRT update is available for public comment, it does not indicate SEC approval of any potential regulatory changes concerning the EDGAR Filer Manual. The SEC staff encourages filers, investors, analysts, software service providers, and other interested parties to participate in this public review to continue to improve the process for creating and using XBRL-structured financial statements.
For updates on when the SEC approves changes related to the EDGAR Filer Manual, refer to the SEC’s EDGAR webpage. The taxonomy version for proposed updates related to proposed ASUs will be determined based on the effective date of each final ASU.
Sources:
FASB Issues Proposed Updates for Future* Version of U.S. GAAP Financial Reporting Taxonomy Related to Proposed ASU on Debt with Conversion and Other Options (sec.gov)
Proposed Accounting Standards Update (sec.gov)
