Appendix F — Roadmap Updates for 2024 | DART – Deloitte Accounting Research Tool

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Appendix F — Roadmap Updates for 2025

The table below summarizes the substantive changes made in the 2025 edition of this Roadmap.

Section	Title	Description
4.3.5.1	Adjustments Based on the Entity’s Stock Price	Revised guidance and added Example 4-6 on the basis of recent views expressed by the SEC staff on how to evaluate warrants with early settlement features. Renumbered subsequent examples.
4.3.5.3	Adjustments Based on Dividends	Replaced discussion with cross-reference to Section 4.3.7.1, which addresses a warrant holder’s right to participate in distributions.
4.3.5.5	Adjustments Based on Stock Price Volatility	Amended guidance and added Example 4-7 to discuss whether determining volatility on the basis of the greater of two or more inputs precludes a contract from being indexed to the entity’s stock. Renumbered subsequent examples.
4.3.7.1	Antidilution Adjustments	Updated Example 4-16 to reflect adjustments based on the declaration of a cash dividend. Also added discussion of how to evaluate warrants that entitle the holder to participate in cash distributions as if the holder held all the shares into which the warrant was exercisable.
4.3.7.15	Most-Favored-Nation Clauses	Added a new section and Example 4-22 to address the assessment of MFN clauses.
4.3.8	Foreign Currency Provisions	Added discussion of the assessment of conversion options embedded in the debt issued by a subsidiary whose functional currency differs from that of its parent.
5.2.1	Settlement Methods — Overview	Added discussion of whether settlement of a contract in prefunded warrants (rather than in shares) could meet the conditions in ASC 815-40.
5.2.3.4	Change-of-Control Clauses	Added guidance on the assessment of net-cash-settled change-of-control clauses.
5.3.3	Entity Has Sufficient Authorized and Unissued Shares	Clarified guidance on partial reclassifications.
5.4.1	Ongoing Reassessment of Classification Requirements — Overview	Clarified guidance on partial reclassifications and added Example 5-8 to illustrate the potential consequences related to an issuer that makes an irrevocable election to settle conversions in cash rather than shares. Renumbered subsequent examples.
6.1.3	Settlements	Added Example 6-2 to illustrate the accounting for the issuance of common stock upon the settlement of an equity-classified warrant. Renumbered subsequent examples.
6.2.4	Modifications or Exchanges	Clarified guidance on the accounting for the change in fair value attributable to the modification or exchange of an equity-linked financial instrument that is classified as an asset or liability.
8.4.2	Separation of Equity Components	Clarified discussion of the separation of equity components under U.S. GAAP.
Appendix C	Glossary of Selected Terms	Incorporated the edits made by ASU 2024-02 to the definitions of “financial instrument” and “transaction.”

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