PERSPECTIVE AND ISSUES
ASC 470, Debt, consists of six subtopics:
- ASC 470-10, Overall, which provides guidance on classification of obligations, such as:
- Short-term debt expected to be refinanced on a long-term basis,
- Due-on-demand loans,
- Callable debt,
- Sales of future revenue,
- Increasing rate debt, debt with covenants,
- Revolving credit agreements subject to lockbox arrangements and subjective acceleration clauses, and
- Indexed debt.
- ASC 470-20, Debt with Conversion and Other Options, which provides guidance on debt and certain preferred stock with specific conversion features:
- Debt instruments with detachable warrants,
- Convertible securities in general,
- Beneficial conversion features,
- Interest forfeiture,
- Induced conversions,
- Conversion upon issuer’s exercise of call option,
- Convertible instruments issued to nonemployees for goods and services, and
- Own-share lending arrangements issued in contemplation of convertible debt issuance.
- ASC 470-30, Participating Mortgage Loans, which provides guidance on the borrower’s accounting for a participating mortgage loan if the lender is entitled to participate in appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project.
- ASC 470-40, Product Financing Arrangements, which provides guidance for determining whether an arrangement involving the sale of inventory is in substance a financing arrangement.
- ASC 470-50, Modifications and Extinguishments ...