On the Radar — Contracts on an Entity's Own Equity

Published on: 01 Apr 2024

Entities raising capital must apply the highly complex, rules-based guidance in U.S. GAAP to determine whether (1) freestanding contracts such as warrants, options, and forwards to sell equity shares are classified as liabilities or equity instruments and (2) convertible instruments contain embedded equity features that require separate accounting as derivative liabilities.

The On the Radar is available on the Deloitte Accounting Research Tool Web site.

On the Radar — Contracts on an Entity's Own Equity Image

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