To the Point - New guidance on issuer’s accounting for modifications or exchanges of certain equity-classified contracts
Overview
The FASB issued final guidance that requires issuers to account for a modification or exchange of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. The guidance is applied prospectively and is effective for all entities for fiscal years beginning after 15 December 2021, and interim periods within those fiscal years. Early adoption is permitted.
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