Handbooks | October 2020

 

Insight

Handbook: Debt and equity financing

New KPMG in-depth guide uses Q&As and examples to explain the principles of accounting for debt and equity financings.

Mahesh Narayanasami

Mahesh Narayanasami

Partner, Dept. of Professional Practice, KPMG US

+1 212-954-7355

Patrick Garguilo

Patrick Garguilo

Partner, Dept. of Professional Practice, KPMG US

+1 212-954-2852

Louise Santacruz

Louise Santacruz

Executive Director, Dept. of Professional Practice, KPMG US

+1 212-909-5090

Lisa Blackburn

Lisa Blackburn

Executive Director, Dept. of Professional Practice, KPMG US


The capital structures of many corporate entities are quite complex, comprising equity, debt, warrants, options and other instruments. This complexity creates accounting issues regarding how these financial instruments are classified, measured and presented in financial statements. This Handbook uses Q&As and examples to simplify the complexities of accounting for these financial instruments in the scope of ASC 405, ASC 470, ASC 480, ASC 505 and ASC 815.

Applicability

  • All entities

Relevant dates

  • Effective immediately

Report contents

  • Identifying relevant accounting guidance for debt and equity instruments
  • Debt
  • Troubled debt restructurings, other debt modifications and extinguishments
  • Equity
  • Distinguishing liabilities from equity 
  • SEC guidance on redeemable equity-classified instruments 
  • Contracts in an entity’s own equity
  • Hybrid instruments with embedded features
  • Convertible instruments

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