Accounting Standards Codification (ASC) Topic 965, Plan Accounting, covers the financial reporting requirements for health and welfare benefit plans. These plans are designed to provide participants with benefits such as medical, dental, and disability coverage. ASC 965-20 specifically focuses on the measurement of plan expenses and the accounting treatment for these expenses. This article will discuss the various types of plan expenses, their significance in health and welfare benefit plans, and the journal entries used to record these transactions.
When a company borrows funds for the purpose of acquiring or constructing a qualifying asset, it incurs interest costs. ASC 520-10-25, Borrowing Costs - Overall - Recognition, provides guidance on the capitalization of interest costs in a company's financial statements. This article explains the capitalization of interest costs transaction under ASC 520-10-25, along with illustrative journal entries.
When companies issue equity securities to raise capital, they often incur costs associated with the issuance process. ASC 505-10, Equity - Overall, provides guidance on the accounting treatment of equity issuance costs in a company's financial statements. This article explains equity issuance costs transactions under ASC 505-10, along with illustrative journal entries.
Redeemable equity instruments are financial instruments that give the holder the right to require the issuer to redeem the instrument for cash, other assets, or other equity instruments. ASC 480-10, Redeemable Financial Instruments - Overall, provides guidance on the classification and measurement of redeemable equity instruments in a company's financial statements. This article explains the classification of redeemable equity instruments transactions under ASC 480-10, along with illustrative journal entries.
Companies may occasionally face challenges in meeting their debt obligations, leading to the need for debt restructuring. ASC 470-50, Debt - Modifications and Extinguishments, provides guidance on accounting for modifications and extinguishments of debt, including debt restructuring transactions. This article explains debt restructuring transactions under ASC 470-50, along with illustrative journal entries.