The Financial Accounting Standards Board (FASB) has finalized targeted changes to simplify the guidance distinguishing debt from equity. Under Accounting Standards Update (ASU) 2017-11, a financial instrument with a down-round feature would no longer be classified as a liability solely because of that feature’s existence. Rather than creating a new measurement model, the ASU relies on existing guidance for subsequent measurement, depending on whether the instrument is classified as equity or a liability. The changes will provide the greatest relief in accounting for free-standing warrants with a down-round feature. A small number of instruments with down-round features will continue to be classified as a liability; bifurcation would no longer be required, and accounting would be governed by existing complicated guidance on beneficial conversion features.