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- US GAAP
This Roadmap provides an overview of the requirements in ASC 470-20 related to
convertible debt and our insights into and interpretations of how to apply them in
practice. For ease of reference, we have accompanied our discussion with the related
authoritative text and other relevant literature.
Determining the appropriate accounting for convertible debt instruments can often be
time-consuming and complex and frequently requires the involvement of technical
accounting specialists. To properly apply the numerous rules and exceptions in U.S.
GAAP, an issuer may need to closely analyze an instrument’s terms and conditions and
the related facts and circumstances. The outcome of this analysis can significantly
affect the classification, measurement, and earnings impact of the convertible
instrument and the associated financial statement ratios.
This Roadmap is intended to help an issuer navigate the guidance, organize its
analysis, and arrive at appropriate accounting conclusions.