Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.
Wednesday, October 4, 2023 FASB Board Meeting
Codification improvements—amendments to remove references to the Concepts Statements. The Board discussed comment letter feedback and issues for redeliberations on Section A of the proposed Accounting Standards Update, Codification Improvements, which was issued on November 26, 2019.
Proposed Amendments
The Board decided to issue a final Accounting Standards Update for Issues 1-16 in Section A of the proposed Update.
Transition
The Board decided to provide transition guidance for the final Update. An entity may use either of the following transition approaches:
The Board decided that the final Update will be effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2024. For all other entities, the final Update will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2025.
The Board decided that early adoption will be permitted for all entities.
Analysis of Costs and Benefits and Permission to Ballot
The Board concluded that it has received sufficient information and analysis to make an informed decision on the expected costs and expected benefits of the amendments and that the expected benefits of those amendments would justify the expected costs.
The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.
Ratification of EITF consensus-for-exposure on EITF Issue No. 23-A, “Induced Conversions of Convertible Debt Instruments.” The Board ratified the consensus-for-exposure reached by the EITF at its September 14, 2023 meeting and directed the staff to draft a proposed Accounting Standards Update reflecting the consensus-for-exposure for vote by written ballot.
The Board concluded that it has received sufficient information and analysis to make an informed decision on the expected costs and expected benefits of the amendments in the proposed Update and that the expected benefits of the amendments would justify the expected costs.
The Board decided to provide a 90-day comment period for the proposed Update.
EITF Consensus-for-Exposure
The Task Force reached a consensus-for-exposure to amend the induced conversions guidance to improve its relevance. The Task Force reached a consensus-for-exposure to:
Wednesday, October 4, 2023 FASB Board Meeting
Codification improvements—amendments to remove references to the Concepts Statements. The Board discussed comment letter feedback and issues for redeliberations on Section A of the proposed Accounting Standards Update, Codification Improvements, which was issued on November 26, 2019.
Proposed Amendments
The Board decided to issue a final Accounting Standards Update for Issues 1-16 in Section A of the proposed Update.
Transition
The Board decided to provide transition guidance for the final Update. An entity may use either of the following transition approaches:
- Prospective application for all new transactions recognized on or after the date that the entity first applies the amendments in the final Update.
- Retrospective application to the beginning of the earliest comparative period presented in which the amendments in the final Update were first applied with an adjustment to the opening balance of retained earnings as of the beginning of the earliest comparative period presented.
The Board decided that the final Update will be effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2024. For all other entities, the final Update will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2025.
The Board decided that early adoption will be permitted for all entities.
Analysis of Costs and Benefits and Permission to Ballot
The Board concluded that it has received sufficient information and analysis to make an informed decision on the expected costs and expected benefits of the amendments and that the expected benefits of those amendments would justify the expected costs.
The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.
Ratification of EITF consensus-for-exposure on EITF Issue No. 23-A, “Induced Conversions of Convertible Debt Instruments.” The Board ratified the consensus-for-exposure reached by the EITF at its September 14, 2023 meeting and directed the staff to draft a proposed Accounting Standards Update reflecting the consensus-for-exposure for vote by written ballot.
The Board concluded that it has received sufficient information and analysis to make an informed decision on the expected costs and expected benefits of the amendments in the proposed Update and that the expected benefits of the amendments would justify the expected costs.
The Board decided to provide a 90-day comment period for the proposed Update.
EITF Consensus-for-Exposure
The Task Force reached a consensus-for-exposure to amend the induced conversions guidance to improve its relevance. The Task Force reached a consensus-for-exposure to:
- Pursue the preexisting contract approach for induced conversion assessment. Under this approach, only conversions that include the issuance of all the consideration (in form and amount) pursuant to conversion privileges included in the terms of the debt at issuance would be accounted for as induced conversions.
- Include clarifications that, under the preexisting contract approach, when evaluating whether the amount of cash (or combination of cash and shares) issuable under the original conversion privileges is preserved by the inducement offer:
- An entity should determine the amount of cash and number of shares that would be issued based on the fair value of the entity’s shares as of the offer acceptance date.
- If within a year leading up to the offer acceptance date the debt has been exchanged or modified without being deemed to be substantially different, then the debt terms that existed a year ago should be used in place of the terms of the debt at issuance.
- Apply induced conversion accounting to all convertible debt instruments, including instruments that are not currently convertible, so long as those instruments contained a substantive conversion feature as of the time of issuance and are within the scope of the guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options.