FASB STAFF POSITION No. APB 14-1

Introduction
This FASB Staff Position (FSP) clarifies that convertible debt instruments that
may be settled in cash upon conversion (including partial cash settlement) are not
addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and
Debt Issued with Stock Purchase Warrants. Additionally, this FSP specifies that issuers
of such instruments should separately account for the liability and equity components in a
manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost
is recognized in subsequent periods. This FSP is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years.