Big Four-Led Push to Fix Convertible Debt Accounting Moves Ahead

US accounting standard-setters agreed Wednesday to clarify complex convertible debt accounting rules after the four largest accounting firms said they had trouble wading through the rules.

The Financial Accounting Standards Board’s forthcoming update aims to answer questions about how businesses should treat convertible debt instruments that allow the issuer to settle them wholly or partly in cash. The new guidance, to be published by year end, will update Subtopic 470-20, Debt—Debt with Conversion and Other Options. The update is meant to help companies figure out when certain settlements of convertible debt instruments should be accounted for as so-called induced ...