Media Advisory 10-26-20

FASB Proposes Clarifications to the Issuer’s Accounting for Certain Modifications of Freestanding Equity-Classified Forwards and Options

Norwalk, CT—October 26, 2020—The Financial Accounting Standards Board (FASB) today issued a proposed Accounting Standards Update (ASU) that would clarify an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified forwards and options (for example, warrants) that remain equity classified after modification. Stakeholders are asked to review and provide input on the proposed ASU by December 28, 2020.

The proposed ASU is based on a consensus of the FASB’s Emerging Issues Task Force (EITF). The proposed ASU would provide guidance on how an issuer would measure and recognize the effect of these transactions. Specifically, it would provide a principles-based framework to determine whether an issuer would recognize the modification or exchange as an adjustment to equity or an expense.

The proposed ASU, including information on how to submit comments, is available at