{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/470/20/#sec-99-sec-materials","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"470","topic_title":"Debt","subtopic":"470-20","subtopic_title":"Debt with Conversion and Other Options","section":{"number":"S99","label":"SEC 99 SEC Materials","anchor":"sec-99-sec-materials","is_sec":true,"groups":[{"block":null,"heading":"SEC Staff Guidance","paragraphs":[{"citation":"470-20-S99-1","para":"S99-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">The following is the text of the SEC Observer Comment: Debt Exchangeable for the Stock of Another Entity.<ul class=\"ul simple\" id=\"SL6105177-162327__GUID-BC81D9CE-D305-4E51-BCB3-1A5DDA6C2895\"><li class=\"li\" id=\"SL6105177-162327__SL6401505-162327\"><div class=\"p\"><span class=\"sfragment\" id=\"sfr_61A54684-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"> An issue has been discussed involving an enterprise that holds investments in common stock of other enterprises and issues debt securities that permit the holder to acquire a fixed number of shares of such common stock. These types of transactions are commonly affected through the sale of either debt with detachable warrants that can be exchanged for the stock investment or debt without detachable warrants (the debt itself must be exchanged for the stock investment - also referred to as \"exchangeable\" debt). Those debt issues differ from traditional warrants or convertible instruments because the traditional instruments involve exchanges for the equity securities of the issuer. There have been questions as to whether the exchangeable debt should be treated similar to traditional convertibles as specified in Subtopic <a altsource=\"GUID-C52C214F-3DD7-444D-AA95-8D4A8B0ED4FD.ditamap\" class=\"ditamap\">470-20</a> or whether the transaction requires separate accounting for the exchangeability feature. The SEC staff believes that Subtopic <a altsource=\"GUID-C52C214F-3DD7-444D-AA95-8D4A8B0ED4FD.ditamap\" class=\"ditamap\">470-20</a> does not apply to the accounting for debt that is exchangeable for the stock of another entity and therefore separation of the debt element and exchangeability feature is required</span></span></div></li></ul></div></div>","snippet":"The following is the text of the SEC Observer Comment: Debt Exchangeable for the Stock of Another Entity.\nAn issue has been discussed involving an enterprise that holds investments in common stock of other enterprises an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0a6a58840a9f78cd4a30ea0c51701de46703a49ab47c269dccff2596a2150696","downloaded_from":"2026-09-10T00:31:53.248Z","last_downloaded_at":"2026-09-10T00:31:53.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480036","source_sha256":"de0e8ffcc2f1a44da7db8fe174dc5440b5c47e6fe2d776dbde13364187d780a9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55c77d4954f46d77786ab95a16853e2de00e22fa4d6720545908887e67d3a7a8","downloaded_from":"2026-09-10T00:31:53.248Z","last_downloaded_at":"2026-09-10T00:31:53.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480036","source_sha256":"de0e8ffcc2f1a44da7db8fe174dc5440b5c47e6fe2d776dbde13364187d780a9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1b9c17d89e9107cc2fd9f0f49613e8e89347450204297f9e16fa3e9b043b19ac","downloaded_from":"2026-09-10T00:31:53.248Z","last_downloaded_at":"2026-09-10T00:31:53.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480036","source_sha256":"de0e8ffcc2f1a44da7db8fe174dc5440b5c47e6fe2d776dbde13364187d780a9"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1b9c17d89e9107cc2fd9f0f49613e8e89347450204297f9e16fa3e9b043b19ac","downloaded_from":"2026-09-10T00:31:53.248Z","last_downloaded_at":"2026-09-10T00:31:53.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480036","source_sha256":"de0e8ffcc2f1a44da7db8fe174dc5440b5c47e6fe2d776dbde13364187d780a9"}}