Deloitte
Accounting Research Tool
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Chapter 5 — Classification Guidance

5.2 Settlement Methods

5.2 Settlement Methods

Footnotes

1
Even if Entity A were to be required to pay an equivalent amount of cash instead of delivering 0.33 fractional shares, the contract would still be considered net share settled. The payment (receipt) of cash for fractional shares does not affect the classification of an equity-linked contract under ASC 815-40-25.
2
It is uncommon that (1) the issuer has the unconditional right to reinstate the equity-linked instrument or (2) the instrument is automatically reinstated when such payments are made.