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PCLN » Topics » The Financial Accounting Standards Board is expected to propose a Staff Position that would significantly impact the accounting for our convertible debtThis excerpt taken from the PCLN 10-Q filed Mar 10, 2008. The
Financial Accounting Standards Board is expected to propose a Staff Position
that would significantly impact the accounting for our convertible debt.
The Financial Accounting Standards Board (“FASB”) is expected to propose a FASB Staff Position (“FSP”) that would significantly impact the accounting for convertible debt. The FSP would require cash settled convertible debt, such as our $570 million aggregate principal amount of convertible senior notes that are currently outstanding, to be separated into debt and equity components at issuance and a value to be assigned to each. The value assigned to the debt component would be the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value would be recorded as a debt discount and amortized to interest expense over the life of the bond. Although the FSP would have no impact on our actual past or future cash flows, it would require us to record a significant amount of non-cash interest expense as the debt discount is amortized. As a result, there would be a material adverse impact on our results of operations and earnings per share. The FSP, if approved, would likely become effective January 1, 2008,
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and likely require retrospective application.
This excerpt taken from the PCLN 10-Q filed Aug 8, 2007. The Financial Accounting Standards Board is
expected to propose a Staff Position that would significantly impact the
accounting for our convertible debt.
The Financial Accounting Standards Board (“FASB”) is expected to propose a FASB Staff Position (“FSP”) that would significantly impact the accounting for convertible debt. The FSP would require cash settled convertible debt, such as our $570 million aggregate principal amount of convertible senior notes that are currently outstanding, to be separated into debt and equity components at issuance and a value to be assigned to each. The value assigned to the debt component would be the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value would be recorded as a debt discount and amortized to interest expense over the life of the bond. Although the FSP would have no impact on our actual past or future cash flows, it would require us to record a significant amount of non-cash interest expense as the debt discount is amortized. As a result, there would be a material adverse impact on our results of operations and earnings per share. The FSP, if approved, would likely become effective January 1, 2008, 39 and likely require retrospective application. | EXCERPTS ON THIS PAGE:
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