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Deloitte's Roadmap: Distinguishing Liabilities From Equity

Distinguishing Liabilities From Equity

This Roadmap provides an overview of the guidance in ASC 480-10 as well as insights into and interpretations of how to apply it in practice.

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  • US GAAP
This Roadmap provides an overview of the guidance in ASC 480-10 as well as insights into and interpretations of how to apply it in practice. ASC 480-10 requires (1) issuers to classify certain types of shares of stock and certain share-settled contracts as liabilities or, in some circumstances, as assets and (2) SEC registrants to classify certain types of redeemable equity instruments as temporary equity.
The 2022 edition of the Roadmap includes updated and expanded guidance that reflects, among other changes, amendments made by ASU 2020-06 to ASC 260 under which an entity, when calculating diluted earnings per share, may no longer overcome the presumption of share settlement for a contract that may be settled in stock or cash.