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.
Financial guarantees are contractual agreements where one party assumes responsibility for a specified obligation of another party if the latter party fails to fulfill its obligation. ASC 460-10, Guarantees - Overall, provides guidance on accounting for financial guarantees and recognizing the associated liabilities. This article explains financial guarantee liability transactions under ASC 460-10, along with illustrative journal entries.
Accounting Standards Codification (ASC) Topic 860, "Transfers and Servicing," provides guidance on accounting for securitization transactions, which involve the transfer of financial assets to a special purpose entity (SPE) that issues securities backed by the transferred assets. Securitization is a common practice used by financial institutions to diversify their funding sources, manage risk, and improve liquidity. This article will explain the concept of securitization transactions under ASC 860 and provide examples of journal entries that illustrate the proper accounting treatment for these transactions.
Real estate transactions are significant events for both buyers and sellers, often involving large sums of money and long-term commitments. ASC 360-20, Property, Plant, and Equipment - Real Estate Sales, provides guidance on accounting for real estate sales and the recognition of profit in such transactions. This article explains profit recognition under ASC 360-20, along with illustrative journal entries.