{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/470/50/#15-scope-and-scope-exceptions","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":"470-50","subtopic_title":"Modifications and Extinguishments","section":{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Entities","paragraphs":[{"citation":"470-50-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all entities.
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The guidance in this Subtopic applies, in part, to the following transactions and activities:
  1. a
    Extinguishments of debt effected by issuance of common or preferred stock, including redeemable and fixed-maturity preferred stock, that do not represent the exercise of a conversion right contained in the terms of the debt at issuance.
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The guidance in this Subtopic does not apply to the following transactions and activities:
  1. a
    Conversions of debt into equity securities of the debtor pursuant to conversion privileges provided in the terms of the debt at issuance. Additionally, the guidance in this Subtopic does not apply to conversions of convertible debt instruments pursuant to terms that reflect changes made by the debtor to the conversion privileges provided in the debt at issuance (including changes that involve the payment of consideration) for the purpose of inducing conversion. Guidance on conversions of debt instruments (including induced conversions) is contained in paragraphs 470-20-40-13 and 470-20-40-15.
  2. b
    Extinguishments of debt through a troubled debt restructuring. (See Section 470-60-15 for guidance on determining whether a modification or exchange of debt instruments is a troubled debt restructuring. If it is determined that the modification or exchange does not result in a troubled debt restructuring, the guidance in this Subtopic shall be applied.)
  3. c
    Transactions entered into between a debtor or a debtor's agent and a third party that is not the creditor.
Transition date:(P) December 16, 2025; (N) December 16, 2025Transition guidance:
470-20-65-4The guidance in this Subtopic does not apply to the following transactions and activities:
  1. a
    Conversions of debt instruments pursuant to conversion privileges provided in the terms of those instruments. Additionally, the guidance in this Subtopic does not apply to conversions of convertible debt instruments pursuant to terms that reflect changes made by the debtor to the conversion privileges provided in the existing terms of those debt instruments (including changes that involve the payment of consideration) for the purpose of inducing conversion. Guidance on conversions of debt instruments (including induced conversions) is contained in paragraphs 470-20-40-4, 470-20-40-13, and 470-20-40-15.
  2. b
    Extinguishments of debt through a troubled debt restructuring. (See Section 470-60-15 for guidance on determining whether a modification or exchange of debt instruments is a troubled debt restructuring. If it is determined that the modification or exchange does not result in a troubled debt restructuring, the guidance in this Subtopic shall be applied.)
  3. c
    Transactions entered into between a debtor or a debtor's agent and a third party that is not the creditor.
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The general guidance for the extinguishment of liabilities is contained in Subtopic 405-20and defines transactions that the debtor shall recognize as an extinguishment of a liability.
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