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ASC 852 — Reorganizations

Below is an overview of FASB Accounting Standards Codification Topic 852, Reorganizations, as well as a list of FASB Accounting Standards Updates (ASUs) and proposed ASUs related to this Topic.


ASC 852 comprises three Subtopics (Overall, Quasi-Reorganizations, and Income Taxes). Below is an overview of each Subtopic.

852-10 Overall

ASC 852-10 notes the following:


This Subtopic addresses the accounting and financial statement disclosure for entities that have filed petitions with the Bankruptcy Court and expect to reorganize as going concerns under Chapter 11 of the Bankruptcy Code.

852-20 Quasi-Reorganizations

ASC 852-20 notes the following:


This Subtopic addresses the accounting applicable to a corporate readjustment procedure in which, without the creation of a new corporate entity and without the intervention of formal court proceedings, an entity restates its balance sheet to fair value. This corporate readjustment procedure may eliminate an accumulated deficit and/or prevent future charges to its income statement that otherwise would be made. The accounting permitted through such a procedure is an exception to the general rule discussed in paragraph 852-20-25-2.

Readjustments of this kind fall in the category of what are called quasi-reorganizations. This Subtopic does not deal with the general question of quasi-reorganizations, but only with cases in which the exception permitted in paragraph 852-20-25-2 is availed of by a corporation. Such cases are referred to as readjustments. The accounting and reporting issues that arise and are addressed in this Subtopic consist of what is permitted in a readjustment and what is permitted thereafter.

This Subtopic does not address quasi-reorganizations involving only deficit reclassifications.

852-740 Income Taxes

ASC 852-740 notes the following:


This Subtopic provides incremental guidance on accounting for income taxes if an entity:

  1. Has filed a petition with the Bankruptcy Court and expects to reorganize as a going concern under Chapter 11 of the Bankruptcy Code and qualifies for fresh-start reporting under paragraph 852-10-45-19
  2. Has undertaken a corporate readjustment procedure known as a quasi-reorganization.

The full text of ASC 852 can be found in the FASB Accounting Standards Codification (link to the FASB's Web site; registration required). Also, the full text of the Codification and Deloitte-authored Q&As related to the Codification are available in the Deloitte Accounting Research Tool (DART) Web site (subscription required).

Content from the FASB Accounting Standards Codification® included at is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, and is reproduced with permission.

FASB Accounting Standards Updates

    The following ASUs amended the guidance in this Topic:

    Proposed FASB Accounting Standards Updates

      No current proposed ASUs on Topic 852.

      Correction list for hyphenation

      These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.