Roadmap
Distinguishing Liabilities From
Equity (March 2022)
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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.
Note that this Roadmap replaces the
Deloitte Q&As that were contained in ASC 480. To find the text in the Roadmap
that corresponds to a former Q&A, select the “Liabilities From Equity” tab at
the bottom of the Q&A to
Roadmap Quick Reference Guide and search for the Q&A’s
number or title.
Be sure to check out other titles in Deloitte’s Roadmap
series, our comprehensive, easy-to-understand collection of
accounting guides on selected topics of broad interest to the financial reporting
community.