13.2 Scope
13.2.1 Entities
ASC 210-10
05-4 . . .
The balance sheets of most entities show separate
classifications of current assets and current
liabilities (commonly referred to as classified balance
sheets) permitting ready determination of working
capital.
15-3 The
guidance in this Subtopic that relates to separate
classification of current assets and current liabilities
(that is, a classified balance sheet) applies only when
an entity is preparing a classified balance sheet for
financial accounting and reporting purposes.
The guidance in ASC 470-10 on the balance sheet classification of debt applies to
debtors that present a classified balance sheet, which (as indicated in ASC
210-10-05-4) includes most debtors. Further, Regulation S-X, Rule 5-02
(reproduced in ASC 210-10-S99-1), requires SEC registrants within the scope of
that rule (i.e., commercial and industrial companies) to present a classified
balance sheet when filing financial statements with the SEC. However, that
requirement does not apply to registered investment companies, employee stock
purchase, savings and similar plans, insurance companies, bank holding companies
and banks, brokers and dealers, and real estate entities.
13.2.2 Instruments
ASC 210-10 contains broadly applicable guidance on the classification of assets
and liabilities as current or noncurrent. Further, ASC 470-10 requires entities
to classify the following types of obligations as current or noncurrent on a
classified balance sheet:
-
Debt repayable on demand (see Section 13.4).
-
Long-term debt that includes covenants that, if violated, make the debt repayable (see Section 13.5).
-
Long-term obligations that contain a subjective acceleration clause (SAC) (see Section 13.6).
-
Short-term obligations expected to be refinanced on a long-term basis (see Section 13.7).
-
Revolving-credit arrangements, including those with lockbox arrangements (see Section 13.8).
-
Increasing-rate debt (see Section 13.9).
For discussion of the application of the classification guidance to convertible
debt, see Section 13.10.