A.13 ASC 470, Debt
ASC 470-20
Pending Content (Transition Guidance: ASC
815-40-65-1)
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
Pending Content (Transition Guidance: ASC
815-40-65-1)
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.