ASU 2020-06: Convertible Debt and Convertible Preferred Stock

Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, will be effective for calendar year end private companies this year. Accounting guidance for convertible instruments (including convertible debt instruments and convertible preferred stock) is complex and difficult to navigate. The FASB determined that many financial statement users do not find the current separation models for