8.1 Presentation
ASC 480-10
45-1 Items within the scope of this Subtopic shall be presented as liabilities (or assets in some circumstances). Those items shall not be presented between the liabilities section and the equity section of the statement of financial position.
Instruments within the scope of ASC 480 must be presented as either assets or
liabilities. Unlike securities with redemption features outside the control of the
issuer (e.g., puttable shares) that are subject to ASC 480-10-S99-3A (see Chapter 9), such instruments
cannot be presented in a mezzanine section between liabilities and equity.
While mandatorily redeemable financial instruments are always classified as
liabilities, freestanding financial instruments within the scope of ASC 480-10-25-8
and ASC 480-10-25-14 are either assets or liabilities depending on whether their
fair value is positive or negative. For example, a forward contract or collar on
equity shares may be in either a gain or loss position for the issuer.
An issuer that has no equity-classified instruments outstanding presents liability-classified shares that are subject to mandatory redemption, and related payments and accruals, separately from other liabilities in the issuer’s financial statements (see Section 8.3).
See Chapter 9
for presentation considerations related to equity instruments that are classified in
temporary equity. For a discussion of presentation matters related to other equity
instruments, see Chapter
10.