Wiley GAAP: Financial Statement Disclosure Manual

34ASC 480 DISTINGUISHING LIABILITIES FROM EQUITY

1. Authoritative Literature
   1. Subtopic
   2. Scope and Scope Exceptions
   3. Overview
   4. Initial Recognition and Measurement
      1. Mandatorily Redeemable Financial Instruments
      2. Obligations to Repurchase Shares
      3. Obligations to Issue a Variable Number of Shares
   5. Subsequent Measurement
      1. Certain Physically Settled Forward Purchase Contracts and Mandatorily Redeemable Financial Instruments
      2. Contingent Consideration in a Business Combination
      3. All Other Financial Instruments
      4. Freestanding Instrument Involving Multiple Components That May Be Settled in a Variable Number of Shares
2. Practice Alert
3. Presentation and Disclosure Requirements
   1. Presentation
   2. Disclosure
4. Presentation and Disclosure Examples
   1. Example 34.1: Presentation of Mandatorily Redeemable Shares in the Statement of Financial Position with Related Note
   2. Example 34.2: Accounting Policy—Shares Subject to Redemption
   3. Example 34.3: Accounting for Warrants at Fair Value
   4. Example 34.4: Derivative Liabilities—Change in Fair Value
   5. Example 34.5: Down‐Round Features
   6. Example 34.6: Redeemable Preferred Stock

AUTHORITATIVE LITERATURE

Subtopic

ASC 480, Distinguishing Liabilities from Equity, contains one Subtopic:

• ASC 480‐10, Overall, which provides guidance on how an issuer classifies and measures financial instruments with characteristics of both liabilities and equity.

Scope and Scope Exceptions

ASC 480:

• Applies to all entities and to any freestanding financial instrument, including financial instruments ...