Wiley GAAP 2024

60ASC 852 REORGANIZATIONS

• Perspective and Issues
  • Subtopics
  • Scope and Scope Exceptions
  • Overview
• Definitions of Terms
• Concepts, Rules, and Examples
  • Corporate Bankruptcy and Reorganizations
    • Entities Operating under and Emerging from Protection of the Bankruptcy Laws
  • ASC 852-20, Quasi-Reorganizations
  • Disclosures and Presentation
  • Sources

PERSPECTIVES AND ISSUES

Subtopics

ASC 852, Reorganizations, contains two subtopics:

• ASC 852-10, Overall, which provides guidance for entities that have filed petitions in the Bankruptcy Court and expect to reorganize as going concerns under Chapter 11
• ASC 852-20, Quasi-Reorganizations

  (ASC 852-10-05-1 and 05-2)

Scope and Scope Exceptions

ASC 852-10 applies to all entities except governmental organizations but does not apply to debt restructurings outside of Chapter 11 and reorganizations consisting of liquidation or adoption of plans of liquidation under the Bankruptcy Code. (ASC 852-10-15-3)

ASC 852-20 applies to public and nonpublic corporations. (ASC 852-20-15-1) It applies only to “readjustments in which the current income, or retained earnings or accumulated deficit account, or the income account of future years is relieved of charges that would otherwise be made against it.” (ASC 852-20-15-2) Further, it does not apply to:

1. Quasi-reorganizations involving only deficit reclassifications
2. Charges against additional paid-in capital in other types of readjustments such as readjustments for the purpose of correcting erroneous ...