# ASC 470-20-25: Debt — Debt with Conversion and Other Options — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/470/20/#25-recognition) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:ba5952da4fdc9ca95500577ec689b42720a33f876d4d9224ec6f6d20b0eee27b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/470/20/#25-recognition) SEC content: no #### Overall ##### [470-20-25-1](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:0808a47cf7acea9dba8f6610ba1be4768d2b302d21becf453061de423456e002 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Section shall be considered after consideration of the guidance in the Fair Value Option Subsections of Subtopic 825-10 on financial instruments and the guidance in Subtopic 815-15 on bifurcation of embedded derivatives, as applicable. The guidance in this Section is organized as follows: 1. a Debt instruments with detachable warrants 2. b [Subparagraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). 3. c [Subparagraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). 4. d Convertible debt instruments 5. e [Subparagraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). 6. f Own-share lending arrangements issued in contemplation of convertible debt issuance. #### Debt Instruments with Detachable Warrants ##### [470-20-25-2](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:e98111dec0e5a0f59b8eabeb94c1664e257740a08c7869ed32f5eb0ce634fa55 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Proceeds from the sale of a debt instrument with stock purchase warrants (detachable call options) shall be allocated to the two elements based on the relative [fair values](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of the debt instrument without the warrants and of the warrants themselves at [time of issuance](https://asc.understandingaccounting.org/glossary/t/#time-of-issuance "The date when agreement as to terms has been reached and announced, even though the agreement is subject to certain further actions, such as directors' or stockholders' approval."). The portion of the proceeds so allocated to the warrants shall be accounted for as paid-in capital. The remainder of the proceeds shall be allocated to the debt instrument portion of the transaction. This usually results in a discount (or, occasionally, a reduced premium), which shall be accounted for under Topic 835. ##### [470-20-25-3](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:ae29f5091fb86caefc9a1020a1eee300da1e932fc711708d83c49eb393c3fff3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The same accounting treatment applies to issues of debt instruments (issued with detachable warrants) that may be surrendered in settlement of the exercise price of the warrant. However, if stock purchase warrants are not detachable from the debt instrument and the debt instrument must be surrendered to exercise the warrant, the two instruments taken together are substantially equivalent to a convertible debt instrument and the accounting specified in paragraph [470-20-25-12](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-12) shall apply. ##### [470-20-25-4](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:99de836a69115f40530e577a2631c59877e798c256e0029d3efccefbaa778eb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-5](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:2a13685fda6e246d1b9f43cba899d98aa32ffddacd2f483644e5d8c8d0f246c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-6](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:f3cca43de3c8187e4e3e101aead5474771c27fc3b70dc03c2c223aaa4459517d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-7](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:37ca1e170fce1d0bd22ed178dae99cc5cbfa61ba9a1350125055d46458f61968 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-8](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:eb1e0398ac8c869a39a9de4bb25e8b7854ce8fe0766558f8e92b5041a5292172 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-9](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:e7dcb7356f05e62fd194cfe0e56b89968609ffc7724cfad6a041af9c2d4354d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). #### Convertible Debt Instruments ##### [470-20-25-10](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:b3cb2cc6e884aefad5cb77122f4cdd7c50c1ee9b41e7124b1bec8ceb71b94aa0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-11](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:4333f54a63c9a820bd0c3a8cf15616a01d6d23bb3e2fe97ee9f01f1797ef8843 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-12](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:60f95b2c412511645143d2437938d88a4f449a24d6ebd6a57723b44f29c3817f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A debt with an embedded conversion feature shall be accounted for in its entirety as a liability and no portion of the proceeds from the issuance of the convertible debt instrument shall be accounted for as attributable to the conversion feature unless the conversion feature is required to be accounted for separately as an embedded derivative under Subtopic 815-15 or the conversion feature results in a premium that is subject to the guidance in paragraph [470-20-25-13](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-13). ##### [470-20-25-13](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:5df4d57108694d788e13798a397aeb77ba6d2a3a937c200abd639a147eabc291 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a convertible debt instrument is issued at a substantial premium, there is a presumption that such premium represents paid-in capital. ##### [470-20-25-14](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:da0a646e727d0a25c51a454f923df0160d8b70834756333f99e5a97a33851ed4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a debt instrument has a conversion option that continuously resets as the underlying stock price increases or decreases so as to provide a fixed value of common stock to the holder at any conversion date, the instrument shall be considered stock-settled debt that is subject to the guidance in Subtopic 480-10 or other Subtopics (such as Subtopic 718-10, 815-15, or 825-10). Example 4 (see paragraph [470-20-55-18](https://asc.understandingaccounting.org/asc/470/20/#470-20-55-18)) illustrates application of the guidance in this paragraph. ##### [470-20-25-15](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:56cb42f65c2d3f518f44356323541d6036830431eaeb38f6e846cef99af10643 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the issuance transaction for a convertible debt instrument within the scope of this Subtopic includes other unstated (or stated) rights or privileges in addition to the convertible debt instrument, a portion of the initial proceeds shall be attributed to those rights and privileges based on the guidance in other applicable U.S. generally accepted accounting principles (GAAP). ##### [470-20-25-16](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:1a66fb7e2d154ba6335dc45e41af20b6a9719c7e794bb5023202089549df290a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-17](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:eb12d27b409e5846e15527c48f0747577fbe5032af9b18174aacc22923faffbc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-18](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:5d95bda23680b313babff8d0fc67c1615b6f74e39d207588c284825063a1daae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-19](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:fa52adb4d7fce495b47e9554befbf3a605f242666faf3b15fcc86245db4ad9dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-20](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:8330399cecb6b9ef5451e4da2dc09adcc27928b17368ce30adb69ce058534927 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). #### Own-Share Lending Arrangements Issued in Contemplation of Convertible Debt Issuance ##### [470-20-25-20A](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-20A) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:3e4e394bbf08f3558f3d38d69f07c21db547cc171caf68b6e40db9e004bc8b6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date of issuance, a share-lending arrangement entered into on an entity's own shares in contemplation of a convertible debt offering or other financing shall be measured at fair value (in accordance with Topic 820) and recognized as an issuance cost, with an offset to additional paid-in capital in the financial statements of the entity. ### Cash Conversion ##### [470-20-25-21](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:6080b601cd5c18e007be1fa731e71ce0aff08be3d3f900147735d73f1b8c1722 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-22](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:a4fce9c020729e2204fb025a2b61bbc2a983371b4b990c5f48eff5b0e1075003 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-23](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:4d12e81376cf03f1cb5f0975f7b6452a5a03815e8c6ccbc4a0cf3b0dddf5f04a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-24](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:905b9bc65e4390e18855eaa5c4b14fabf725346d62287a51d49e870704d575bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-25](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:35d1b507deb7c5b42c161955df1bf597417f6ac875a0bcf333207f6274588518 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-26](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:b9cef7ef30b8cb6273e27e6200bfe04cc740ee25bd1284be99f22bbd8a60803d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). ##### [470-20-25-27](https://asc.understandingaccounting.org/asc/470/20/#470-20-25-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:31:23.281Z to 2026-09-10T00:31:23.281Z Record version: sha256:15bc242ff8f4519cee46be91f8a31f034f99fdcff52cc9c49c19a82fb3ba44de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/).