Technical Practice Aid developed on assessing derivative instruments.

• Position: Accounting & auditing news

An AICPA task force has prepared a working draft of a Technical Practice Aid designed to be a reference guide addressing the accounting considerations when analyzing freestanding and embedded and derivative financial instruments indexed to and potentially settled in a company's own stock. Preparers and practitioners often find it difficult to navigate the applicable standards because two or three must often be considered in contemplation of one another before reaching a final conclusion on the appropriate accounting for a financial instrument.

The TPA, Convertible Debt, Convertible Preferred Shares, Warrants, and Other Equity-Related Financial Instruments, is not intended to...