Global Standards for the world economy

Friday 20 January 2017

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Financial Instruments with Characteristics of Equity

Meeting summaries and observer notes

 IASB / FASB July 2009



The boards discussed an approach to displaying in the statement of comprehensive income the changes in the fair value of a liability instrument. That approach�the cost of capital approach�would separate the total changes in the fair value of liabilities into: 

  • a line item in profit or loss that is similar to accrued interest but can be computed for many types of liability instruments, including derivative instruments with the issuer�s own equity instruments as their underlyings, and 
  • the remainder of the change in fair value, which would be reported separately as a residual.
    The Boards decided tentatively not to pursue the cost of capital approach.

Date: 7/23/2009