Appendix F — Roadmap Updates for 2023
The table below summarizes the substantive
changes made in the 2023 edition of this Roadmap.
Section
|
Title
|
Description
|
---|---|---|
Contingently Issuable Contracts
|
Enhanced discussion of contract analysis for freestanding
equity-linked instruments that are contingently issuable,
exercisable, or settleable and addressed when such
instruments are embedded in a hybrid financial instrument.
Updated Examples 2-6 and
2-7.
| |
Examples
|
Expanded guidance in Example 3-8.
| |
Adjustments Based on the Entity’s Stock Price
|
Enhanced discussion and added Example
4-5 to discuss warrants that allow holders to
select the share price input used in a net share settlement.
| |
Adjustments Based on a Percentage of Equity
|
Added Example 4-10 to
address SEPAs.
| |
Reimbursement of the Holder’s Taxes
|
Added section that discusses equity-linked
financial instruments that require the entity to reimburse
holder-specific taxes.
| |
Identity of the Holder
|
Added section that discusses equity-linked
instruments for which the settlement amount depends on the
holder.
| |
Adjustment Contingent on the Occurrence or Nonoccurrence of
an IPO or a Change of Control
|
Expanded discussion to address considerations applicable to
share-settleable earn-out arrangements.
| |
Adjustments Based on a Formula or a
Table
|
Added Connecting the Dots to discuss the
engagement of specialists for assistance in evaluating
make-whole tables.
| |
Buy-In and Share Delivery Failure Payments
|
Added section that addresses how buy-in and share-delivery
failure provisions affect indexation.
| |
Cash Settlement Provisions in the Shares Underlying the
Contract
|
Added section that discusses cash settlement provisions in
the shares underlying an equity-linked instrument.
| |
Net Cash Settlement Within the Entity’s Control
|
Added Connecting the Dots to address
SEPAs.
| |
Change of Control Clauses
|
Added Connecting the Dots to address the
definition of a change of control.
| |
Cash Payments Other Than Net Cash Settlements
|
Enhanced discussion of penalty payments and payments of stamp
duties, transfer taxes, or other governmental charges that
are obligations of the issuer.
| |
Buy-In and Share Delivery Failure Payments
|
Added section to address how buy-in and share-delivery
failure provisions affect classification.
| |
No Required Cash Payment if Entity Fails to File on a Timely
Basis
|
Added Connecting the Dots to address
whether penalty payments preclude equity classification.
| |
Initial and Subsequent Measurement
|
Added guidance on the accounting for issuance costs.
| |
Settlements
|
Added Connecting the Dots to discuss the
excise tax provision in the Inflation Reduction Act of 2022.
| |
Modifications or Exchanges
|
Replaced discussions of the accounting
before and after adoption of ASU 2021-04 with guidance on
the accounting for modifications and exchanges.
| |
Initial and Subsequent Measurement
|
Enhanced discussion of the allocation of proceeds and
recognition of issuance costs associated with freestanding
equity-linked instruments that are classified as assets or
liabilities.
| |
Modifications or Exchanges
|
Enhanced discussion of the accounting for modifications or
exchanges of equity-linked instruments that are classified
as assets or liabilities.
| |
Standby Equity Purchase Agreements
|
Added section, including Example
6-4, to address the initial and subsequent
accounting for SEPAs.
|