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ASC 505 — Equity

Below is an overview of FASB Accounting Standards Codification Topic 505, Equity, as well as a list of FASB Accounting Standards Updates (ASUs) and proposed ASUs related to this Topic.


ASC 505 comprises five Subtopics (Overall, Stock Dividends and Stock Splits, Treasury Stock, Equity-Based Payments to Non-Employees, and Spinoffs and Reverse Spinoffs). Below is an overview of each Subtopic.


505-10 Overall

ASC 505-10 notes the various Subtopics of the Equity Topic and provides guidance on equity-related issues not specifically addressed in other ASC 505 Subtopics or other Topics that address equity issues.


505-20 Stock Dividends and Stock Splits

ASC 505-20 provides guidance for both recipients and issuers of stock dividends and stock splits.


505-30 Treasury Stock

ASC 505-30 notes that this Subtopic "addresses the accounting and reporting for an entity’s repurchase of its own outstanding common stock as well as the subsequent constructive or actual retirement of those shares."


505-50 Equity-Based Payments to Non-Employees

ASC 505-50 notes the following:


This Subtopic addresses the accounting and reporting for both the issuer (that is, the purchaser or grantor) and recipient (that is, the goods or service provider or grantee) for a subset of share-based payment transactions. Topic 718 also addresses a subset of these transactions. The applicable accounting and reporting requirements for a specific transaction substantially depend on whether the grantee meets the definition of an employee (see the definition for determining which guidance to apply to a particular transaction). The accounting and reporting required may differ significantly depending on whether that definition of employee is met for the grantee. With certain exceptions, this Subtopic provides guidance when the grantee does not meet that definition of an employee.

505-60 Spinoffs and Reverse Spinoffs

ASC 505-60 notes the following:


This Subtopic provides guidance related to the distribution of nonmonetary assets that constitute a business to owners of an entity in transactions commonly referred to as spinoffs. This Subtopic also addresses spinoff transactions in which the substance of the transaction may differ from the legal form, and provides guidance on how to determine such situations and their required accounting and reporting.

The full text of ASC 505 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 505.

      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.