A.13 ASC 470, Debt
ASC 470-20
50-1D An entity shall disclose the
following information for each convertible debt instrument as of
each date for which a statement of financial position is
presented.
- The unamortized premium, discount, or issuance costs and, if applicable, the premium amount recorded as paid-in capital in accordance with paragraph 470-20-25-13
- The net carrying amount
- For public business entities, the fair value of the entire instrument and the level of the fair value hierarchy in accordance with paragraphs 825-10-50-10 through 50-15.
See Example 11 (paragraph 470-20-55-69A) for an
illustration of this disclosure requirement.
50-1H If a convertible debt instrument
is measured at fair value in accordance with the Fair Value
Option Subsections of Subtopic 825-10, an entity shall provide
disclosures in accordance with Subtopic 820-10 and Subtopic
825-10 in addition to the disclosures required by this Section,
if applicable.
Own-Share Lending
Arrangements Issued in Contemplation of Convertible Debt
Issuance
50-2A An entity that enters into a
share-lending arrangement on its own shares in contemplation of
a convertible debt offering or other financing shall disclose
all of the following. The disclosures must be made on an annual
and interim basis in any period in which a share-lending
arrangement is outstanding. . . .
d. The fair value of the outstanding loaned shares as
of the balance sheet date . . . .
50-2C In
the period in which an entity concludes that it is probable that
the counterparty to its share-lending arrangement will default,
the entity shall disclose the amount of expense reported in the
statement of earnings related to the default. The entity shall
disclose in any subsequent period any material changes in the
amount of expense as a result of changes in the fair value of
the entity’s shares or the probable recoveries. If default is
probable but has not yet occurred, the entity shall disclose the
number of shares related to the share-lending arrangement that
will be reflected in basic and diluted earnings per share when
the counterparty defaults.
Example 11: Disclosure of
the Information in the Statement of Financial
Position
55-69A This Example provides an
illustration of the guidance in paragraph 470-20-50-1D based on
the assumption that Entity A is a public business entity and has
two convertible debt instruments outstanding as of December 31,
20X7, and 20X6.
55-69B The following illustrates the
disclosures in a tabular format.
The following is a summary of Entity A’s
convertible debt instruments as of December 31, 20X7 (in
thousands).
The following is a summary of Entity A’s
convertible debt instruments as of December 31, 20X6 (in
thousands).
55-69C The disclosures may be provided
alternatively in narrative descriptions.
1.2 Percent Convertible Debt
Instrument Due on December 31, 20X8
As of December 31, 20X7, and 20X6, the net carrying
amount of the convertible debt instrument was $982,000
and $965,000, respectively, with unamortized debt
discount and issuance costs of $18,000 and $35,000. The
estimated fair value (Level 2) of the convertible debt
instrument was $1,100,000 and $1,015,000, respectively,
as of December 31, 20X7, and 20X6.
Zero-Coupon Convertible Debt
Instrument Due on December 31, 20X9
As of December 31, 20X7, and 20X6, the net carrying
amount of the convertible debt instrument was $491,000
and $486,000, respectively, with unamortized debt
discount and issuance costs of $9,000 and $14,000. The
estimated fair value (Level 3) of the convertible debt
instrument was $462,000 and $450,000, respectively, as
of December 31, 20X7, and 20X6.
ASC 470-30
50-1 The
borrower’s financial statements shall disclose both of the
following:
- The aggregate amount of participating mortgage obligations at the balance sheet date, with separate disclosure of the aggregate participation liabilities and related debt discounts
- Terms of the participations by the lender in either the appreciation in the fair value of the mortgaged real estate project or the results of operations of the mortgaged real estate project, or both.