Deloitte
Accounting Research Tool
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Chapter 2 — Scope

2.2 General Considerations

2.2 General Considerations

ASC 470-20
05-1 This Subtopic provides accounting and reporting guidance for debt (and certain preferred stock) with specific conversion features and other options as follows:
  1. Debt instruments with detachable warrants
  2. Convertible securities — general
  3. Beneficial conversion features
  4. Interest forfeiture
  5. Induced conversions
  6. Conversion upon issuer’s exercise of call option
  7. Convertible instruments issued to nonemployees for goods and services
  8. Own-share lending arrangements issued in contemplation of convertible debt issuance.
05-1A This Subtopic presents guidance in the following two Subsections:
  1. General
  2. Cash Conversion
15-1 The guidance in this Subtopic applies to all entities.
15-2 The guidance in this Subtopic applies to all debt instruments. The guidance on beneficial conversion features and conversion features that reset applies also to convertible preferred stock. The guidance in the General Subsections does not apply to those instruments within the scope of the Cash Conversion Subsections. The guidance on own-share lending arrangements applies to an equity-classified share-lending arrangement on an entity’s own shares when executed in contemplation of a convertible debt offering or other financing.

Footnotes

1
As discussed below, this Roadmap only addresses accounting considerations for convertible instruments issued in the form of a share that are classified as liabilities.