# ASC 321-958-55: Investments—Equity Securities — Not-for-Profit Entities — 55 Implementation Guidance and Illustrations

Source: FASB Accounting Standards Codification, Basic View

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## ASC 321-958-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/321/958/#55-implementation-guidance-and-illustrations)

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#### Implementation Guidance

##### [321-958-55-1](https://asc.understandingaccounting.org/asc/321/958/#321-958-55-1)

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The term [equity security](https://asc.understandingaccounting.org/glossary/e/#equity-security "Any security representing an ownership interest in an entity (for example, common, preferred, or other capital stock) or the right to acquire (for example, warrants, rights, forward purchase contracts, and call options) or dispose of (for example, put options and forward sale contracts) an ownership interest in an entity at fixed or determinable prices. The term equity security does not include any of the following: Written equity options (because they represent obligations of the writer, not investments) Cash-settled options on equity securities or options on equity-based indexes (because those instruments do not represent ownership interests in an entity) Convertible debt or preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor.") does not include any of the following securities:

1.  a
    
    Convertible debt
    
2.  b
    
    Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor
    
3.  c
    
    Written equity options because they represent obligations of the writer, not investments
    
4.  d
    
    Cash-settled options on equity securities or options on equity-based indexes, because those instruments do not represent ownership interests in an entity.