Accounting for Convertible Debt Instruments (CDIs)
The Financial Accounting Standards Board has recently completed its guidance regarding accounting for convertible debt instruments. The new guidance has in many cases changed certain advantages that convertible debt instruments used to offer. Companies should have a detailed understanding of the new guidance as it will undoubtedly result in significant reporting changes. The Knowledge Congress is assembling a panel of distinguished professionals and key regulators to help you understand the new CDI guidance on your firm and the broader market. The speakers will present their expert opinions, which include best practices in a two-hour LIVE webinar.
SEGMENT 1: Grant Casner, Manager with Regulatory & Capital Markets Consulting, Deloitte & Touche LLP 1. Common convertible instruments seen today: what they are and why they are used? a. Instrument C b. Instrument X 2. What makes convertible debt instruments so complex from an accounting standpoint? a. Identification of embedded derivatives, host contract and EPS implications. 3. Common features seen in today’s convertible debt instruments: a. Contingent conversion features b. Redemption features c. Bond hedges 4. Proposed revisions to SFAS 128 and its impact on Instrument X SEGMENT 2: Mark Scoles, Partner, Grant Thornton LLP - FSP APB 14-1 - Convertible Debt Instruments That May Be Settled in Cash upon Conversion » Background of Instrument C and Instrument X » Initial recognition and measurement » Subsequent measurement » De-recognition and modifications » Effective date and transition SEGMENT 3: Matthew A. Stevens, Partner, Alston & Bird LLP - Tax Aspects of Convertible Debt - Treatment of fixed-coupon convertible debt. » No allocation of issue price to option feature (compare bond-warrant issuance) » Conversion option ignored prior to conversion » No gain recognized to holder upon conversion - Call spread overlays » Synthetically increases conversion premium » Creates issuer discount for tax purposes » IRS will not challenge if properly structured - Contingent convertible debt
Who Should Attend:
- Tax Managers and Executive
- Tax Lawyers
- Internal Audits
- Financial Planners/Executives
- Tax and Audit Consultants
Grant Casner is a Manager with Regulatory & Capital Markets Consulting at Deloitte & Touche LLP in Los Angeles. Grant serves in the Complex Accounting & Valuation practice, providing accounting consultation regarding financial instrument matters to Deloitte colleagues (client service professionals) as well as to non-attest relationship clients of the Firm. Grant also serves as a financial instrument and valuation subject matter resource to the Deloitte & Touche LLP audit practice.
Grant’s primary areas of responsibility include providing advisory services related to the fair value measurement and fair value option standards, accounting for complex structured financial transactions, including those involving convertible financial instruments, securitizations and hybrid financial instruments, accounting for transfers of financial assets, accounting for derivative instruments (including embedded derivatives) and hedging activities, and providing financial instrument valuation support.
In addition to the items described above, Grant has also participated in the development of services related to IFRS, particularly around those standards related to the accounting for financial instruments.
Prior to joining Regulatory & Capital Markets Consulting in September 2005, Grant spent three years in the Deloitte Audit Practice.
Grant received his B.A. in Economics with a Minor in Accounting from the University of California, Los Angeles.
Grant Casner is a Manager with Regulatory & Capital Markets Consulting at Deloitte & Touche LLP in Los Angeles. Grant …
Mark Scoles is a partner in the Accounting Principles Group of Grant Thornton LLP with over twenty years of experience in public accounting. He is responsible for technical matters relating to accounting, auditing, and the SEC practice with emphasis on transfers of financial assets, financial instruments and derivatives, fair value measurements, and debt and equity arrangements. Mark has assisted a number of audit partners and their clients in a variety of accounting and financial reporting matters. Prior to rejoining Grant Thornton in 1998, Mark had seven years of management experience with a national real estate financial services company.
Mark served three years as a member of the Auditing Standards Board of the American Institute of Certified Public Accountants. He also served as a member of the Technical Standards Subcommittee of the American Institute of Certified Public Accountants Division of Professional Ethics.
Mark is a member of the American Institute of Certified Public Accountants, the Illinois CPA Society and the Missouri Society of Certified Public Accountants.
Experience Mark Scoles is a partner in the Accounting Principles Group of Grant Thornton LLP with over twenty years of …
Matthew Stevens, a partner in the International Tax Group, advises clients on a wide range of tax-related issues. He handles planning and controversy matters regarding the U.S. federal income tax consequences of transactions, specializing in the design, structuring and implementation of domestic and international financial transactions, including structures involving preferred stock financing transactions, swaps, options, all types of debt instruments (including hybrid debt and bond-hedge transactions), forward contracts, and Tier One capital financing transactions. Matthew also has substantial experience in international tax issues involving foreign tax credits, Subpart F and PFICs, withholding taxes, dual consolidated losses, hybrid and reverse hybrid entities and tax treaties.
From 2002 to 2004, Matthew served as special counsel to the Chief Counsel for the Internal Revenue Service. He advised the Chief Counsel regarding published guidance, including regulations, revenue rulings and notices involving contingent convertible debt instruments, prepaid forward contracts, debt-forward contract units, partnership options, and notional principal contracts.
Matthew serves as Chair of the Practising Law Institute program “Taxation of Financial Products and Transactions” which is held semi-annually in both New York City and San Francisco. He co-teaches the Georgetown University Law Center class entitled United States Taxation of International Income – II. He has published a number of articles dealing with international aspects of U.S. income tax and with the taxation of financial products and transactions.
Matthew Stevens, a partner in the International Tax Group, advises clients on a wide range of tax-related issues. He handles …
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