FASB Preliminary Views on Financial Instruments with Characteristics of Equity: KPMG's 'Defining Issues'

The attached edition of KPMG’s Defining Issues describes the Financial Accounting Standards Board's (FASB) preliminary preference for the “basic ownership approach” to distinguishing between instruments that should be classified as equity or as liabilities or assets.

The approach classifies as equity only claims to the company’s assets that have no priority over other claims, and is one of three approaches presented in the FASB’s Preliminary Views document. Read the full document here.