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Appendix A — Fair Value Disclosure Requirements of Other Codification Topics

A.13 ASC 470, Debt

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.
  1. 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
  2. The net carrying amount
  3. 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).
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The following is a summary of Entity A’s convertible debt instruments as of December 31, 20X6 (in thousands).
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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.