# ASC 505-10-15: Equity — Overall — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/505/10/#15-scope-and-scope-exceptions) 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): 2026-09-10T00:36:36.763Z to 2026-09-10T00:36:36.763Z Record version: sha256:ee4ff7b3bd137dba35aca0fd5db5e77a40f44676c3573a4e74e7227ac931d097 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 505-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/505/10/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [505-10-15-1](https://asc.understandingaccounting.org/asc/505/10/#505-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:36:36.763Z to 2026-09-10T00:36:36.763Z Record version: sha256:0472912ab842463a98de293eb0c15dba64f24a418a75db565c0bf7fcdaa1123f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities, unless more specific guidance is provided in other Topics. #### Instruments ##### [505-10-15-2](https://asc.understandingaccounting.org/asc/505/10/#505-10-15-2) Pending content: yes Source downloaded (UTC): 2026-09-10T00:36:36.763Z to 2026-09-10T00:36:36.763Z Record version: sha256:b67eaf217b59f82905c2c8f9a5542ef5e96d3bb80acf9b0987d1695ced39e4fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all of the following instruments and activities: 1. a Transactions in an entity's own common stock 2. b Receivables related to the issuance of equity interests and the appropriation of retained earnings 3. c [Subparagraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). 4. d Convertible preferred stock, unless the guidance in other Subtopics (such as Subtopic 470-20 on debt with conversion and other options or 480-10 on distinguishing liabilities from equity) requires that the convertible preferred stock be classified as a liability. The relevant guidance in this Subtopic shall be considered after an issuer's determination under Subtopic 815-15 on embedded derivatives of whether an embedded conversion option or other embedded feature in convertible preferred stock should be accounted for separately as a derivative instrument (see paragraph [815-15-55-76B](https://asc.understandingaccounting.org/asc/815/15/#815-15-55-76B)). The guidance in this Subtopic does not apply to convertible preferred stock that is issued as awards to a grantee in exchange for goods or services received (or to be received) that are within the scope of Topic 718 on stock compensation unless the instrument is modified in accordance with and no longer subject to the guidance in that Topic. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [505-10-65-1](https://asc.understandingaccounting.org/asc/505/10/#505-10-65-1)The guidance in this Subtopic applies to all of the following instruments and activities: 1. a Transactions in an entity's own common stock 2. b Receivables related to the issuance of equity interests and the appropriation of retained earnings 3. c [Subparagraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). 4. d Convertible preferred stock, unless the guidance in other Subtopics (such as Subtopic 470-20 on debt with conversion and other options or 480-10 on distinguishing liabilities from equity) requires that the convertible preferred stock be classified as a liability. The relevant guidance in this Subtopic shall be considered after an issuer's determination under Subtopic 815-15 on embedded derivatives of whether an embedded conversion option or other embedded feature in convertible preferred stock should be accounted for separately as a derivative instrument (see paragraph [815-15-55-76B](https://asc.understandingaccounting.org/asc/815/15/#815-15-55-76B)). The guidance in this Subtopic does not apply to convertible preferred stock that is issued as awards to a grantee in exchange for goods or services received (or to be received) that are within the scope of Topic 718 on stock compensation unless the instrument is modified in accordance with and no longer subject to the guidance in that Topic. 5. e Paid-in-kind dividends on [preferred stock](https://asc.understandingaccounting.org/glossary/p/#preferred-stock "A security that has preferential rights compared to common stock.") (see paragraph [505-10-15-3](https://asc.understandingaccounting.org/asc/505/10/#505-10-15-3)). The guidance on paid-in-kind dividends on preferred stock applies to preferred stock classified as equity, including preferred stock that is classified as temporary equity in accordance with SEC Staff Announcement, Classification and Measurement of Redeemable Securities (see paragraph [480-10-S99-3A](https://asc.understandingaccounting.org/asc/480/10/#480-10-S99-3A)). #### Paid-in-Kind Dividends on Preferred Stock ##### [505-10-15-3](https://asc.understandingaccounting.org/asc/505/10/#505-10-15-3) Pending content: yes Source downloaded (UTC): 2026-09-10T00:36:36.763Z to 2026-09-10T00:36:36.763Z Record version: sha256:6f7bcbd6e19c87810880f7da537c34acf4307d5372fec21940fb2edc28972be0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [505-10-65-1](https://asc.understandingaccounting.org/asc/505/10/#505-10-65-1)Paid-in-kind dividends are dividends that an issuer satisfies by either: 1. a Delivering to the holder additional preferred stock with the same terms as the original preferred stock 2. b Increasing the value of the original preferred stock in accordance with the preferred stock agreement (for example, by increasing the original preferred stock’s liquidation value). An entity shall apply the guidance in paragraph [505-10-30-1](https://asc.understandingaccounting.org/asc/505/10/#505-10-30-1) on paid-in-kind dividends on preferred stock when the monetary value of the paid-in-kind dividends varies on the basis of the additional preferred stock issued or the increase in the original preferred stock’s liquidation value. ##### [505-10-15-4](https://asc.understandingaccounting.org/asc/505/10/#505-10-15-4) Pending content: yes Source downloaded (UTC): 2026-09-10T00:36:36.763Z to 2026-09-10T00:36:36.763Z Record version: sha256:ea93791572c836a908cdb8b55dd4199cd6f4822328da8d9a444e7fcc5287b5aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [505-10-65-1](https://asc.understandingaccounting.org/asc/505/10/#505-10-65-1)The guidance in paragraph [505-10-30-1](https://asc.understandingaccounting.org/asc/505/10/#505-10-30-1) shall not apply if: 1. a The issuer satisfies the dividend obligation by issuing a variable number of shares of the same preferred stock instrument that has a fixed monetary value. For example, a dividend obligation of $1,000 satisfied by delivering a variable number of shares with a current fair value of $1,000 to preferred shareholders would not be within the scope of the guidance in paragraph [505-10-15-2(e)](https://asc.understandingaccounting.org/asc/505/10/#505-10-15-2). 2. b The transaction represents a deemed dividend (for example, certain redemptions of preferred stock).