Convertible debt accounting: Making sense of complex terms

PwC's accounting podcast · Jul 14, 2026 · 28m · transcript

Convertible debt can offer an issuer a lower-cost financing alternative, but the accounting can be complex depending on the instrument’s terms, settlement features, and related transactions. This episode discusses the key accounting models for convertible debt, including bifurcation under ASC 815, the own stock scope exception, substantial premium model, single instrument model, related features such as capped calls and contingent interest, and diluted EPS considerations.

For further guidance on the accounting for this topic, see chapter 6 of PwC’s Financing transactions guide.

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