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A debt-equity swap shall be measured at fair value at the date the transaction is agreed to by both parties. Debt-equity swaps have characteristics similar to both the acquisition of assets contemplated by Topics 805 and 845 and the receipt of assets in satisfaction of a loan contemplated by Subtopic 310-20.
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Since the secondary market for debt of financially troubled countries may be considered to be thin, it may not be the best indicator of the fair value of the equity investment or of net assets received. In light of this thin secondary market and of the unique nature of the transaction, it is also necessary to examine the fair value of the equity investment or net assets received. In arriving at the fair value of a debt-equity swap, both the secondary market price of the loan given up and the fair value of the equity investment or net assets received shall be considered.
","snippet":"Since the secondary market for debt of financially troubled countries may be considered to be thin, it may not be the best indicator of the fair value of the equity investment or of net assets received. In light of this …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eab90c287b8eab49e6e7e75e687f2a531eb31fea7677300dca269d1c6021af24","downloaded_from":"2026-09-09T23:29:13.270Z","last_downloaded_at":"2026-09-09T23:29:13.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477009","source_sha256":"6d5dc504f50aeeacf62615cb1b27132d335ec6428057e4db6c5d61de6ad1c256"}},{"citation":"310-942-30-3","para":"30-3","html":"
It is the responsibility of management to measure fair value considering all of the circumstances and to see that the measurement of fair value is based on reasonable methods and assumptions consistent with Topic 820, including, as needed, information from independent appraisals. Factors to consider in measuring fair values include the following:
  1. a
    Similar transactions for cash
  2. b
    Estimated cash flows from the equity investment or net assets received
  3. c
    Fair value of similar equity investments, if any
  4. d
    Currency restrictions, if any, affecting dividends, the sale of the investment, or the repatriation of capital.
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