Tentative Board Decisions
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, February 3, 2021 FASB Board Meeting
Distinguishing liabilities from equity (phase 2). The Board continued initial deliberations by discussing the project direction to help focus the staff’s research and outreach efforts.
The Board decided that the project scope should include the following instruments and features:
- Freestanding financial instruments that have all the characteristics of a derivative instrument
- Freestanding instruments that potentially are settled in an entity’s own stock, regardless of whether the instrument has all the characteristics of a derivative instrument
- Embedded features that have the characteristics of a derivative instrument.
Additionally, the Board directed the staff to develop alternatives for indexation guidance that focus on:
- Both a qualitative principle and a quantitative threshold, rather than alternatives that are solely qualitative or quantitative in nature
- Instruments or features that are not indexed to an entity’s own equity, rather than instruments or features that are indexed to an entity’s own equity.