Accounting for Financial Instruments- Liabilities


Overview
This course covers the classification and measurement guidelines for financial instruments on the liability and equity side of the balance sheet beginning with the principles of how to determine what constitutes debt versus equity.  You will learn how to identify embedded derivatives and account for conversion features in debt and preferred stock instruments. 

The course will touch lightly on the topics of derivatives and fair value accounting.  Additionally, a “sister” offering of this course covers financial instruments from the asset side of the balance sheet (e.g. loans, securities and other investments).

Objectives
Upon completion of this course, participants will have knowledge in:

  • Determining the proper classification of a company’s borrowing – both determining liability or equity as well as current and non-current
  • How to identify and account for embedded derivatives and hybrid instruments
  • The types of debt conversion features and how to account for them
  • How to account for preferred stock offerings
  • How to account for debt modifications
  • How and when company’s may apply the fair value option for liabilities
  • Challenges related to the valuation of financial liabilities
  • The FASB’s current project to amend the accounting for financial instruments
Emphasis
  • Accounting principles related to debt / equity classifications
  • Key accounting concepts surrounding embedded derivatives, conversion features and the accounting for hybrid instruments
  • Accounting guidance on debt modifications and  troubled debt restructuring
  • Accounting guidance for preferred stock offerings
  • Basic concepts behind fair value accounting and the application to certain investments
Prerequisite
Working knowledge of US GAAP rules

Preparation
No advance preparation required

Level of Knowledge
Intermediate

CPE Credit
2 Hours

Delivery Method  
Group Internet Based

NASBA Field of Study
Accounting