{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/505/10/#60-relationships","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":"505","topic_title":"Equity","subtopic":"505-10","subtopic_title":"Overall","section":{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Comprehensive Income","paragraphs":[{"citation":"505-10-60-1","para":"60-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FC8F6836-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For guidance on the required presentation and disclosure related to other comprehensive income, see paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/220/10/#220-10-45-1\" class=\"xref\">220-10-45-1 through 45-17</a></div>. </span></span></div></div>","snippet":"For guidance on the required presentation and disclosure related to other comprehensive income, see paragraphs 220-10-45-1 through 45-17.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ec22c78950a518ad7f4ca9374db91258340bb30f97aed48b576f0ac012ee3734","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:61fa5a95b9f9789f2b5e79a99ff7b5565b980b6076de4d1bd597e133dffa628a","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"block":null,"heading":"Debt","paragraphs":[{"citation":"505-10-60-2","para":"60-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><a href=\"/updates/asu-2020-06/\" class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2020-06</a>.</div></div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2020-06.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:53ae8885b1ce9026991d42a6f30a0e8999c7d62bcbec2d127a2916e9199dbfb4","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"citation":"505-10-60-3","para":"60-3","html":"<div class=\"asc-body\"><div class=\"norm-text\">For guidance on the need to allocate <span class=\"sfragment\" id=\"sfr_FC8F69CB-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">proceeds from the sale of debt with stock purchase warrants to the debt and the warrants, see Subtopic <a altsource=\"GUID-C52C214F-3DD7-444D-AA95-8D4A8B0ED4FD.ditamap\" class=\"ditamap\">470-20</a>. </span></span></div></div>","snippet":"For guidance on the need to allocate proceeds from the sale of debt with stock purchase warrants to the debt and the warrants, see Subtopic 470-20.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:301e3074135a85bc7a12f4a40508092a0b6e102cd8ee2233049b7fc0d7cde317","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7aae3dec866659a67f885f9786f9bfc421cb3ca41134a6f77e03d1aedb94be80","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"block":null,"heading":"Distinguishing Liabilities from Equity","paragraphs":[{"citation":"505-10-60-3A","para":"60-3A","html":"<div class=\"asc-body\"><div class=\"norm-text\">For guidance on whether a specific financial instrument shall be classified as equity or outside of the equity classification, see Topic <a altsource=\"GUID-AE097C79-B098-4CDF-AD11-A6A27694968A.ditamap\" class=\"ditamap\">480</a>.</div></div>","snippet":"For guidance on whether a specific financial instrument shall be classified as equity or outside of the equity classification, see Topic 480.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:28c4bd447f7d17fee257e9b62a855f5d1d0e5d166d18453510cf9ea93fd1500a","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:51fd596ade0c09e7e3641c575f84e47eb1533283076c510490b5d27a20ef7429","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"block":null,"heading":"Consolidation","paragraphs":[{"citation":"505-10-60-4","para":"60-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FC8F6B10-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For guidance on the treatment of shares of a parent held by its subsidiary in the consolidated balance sheet, see paragraph <a href=\"/asc/810/10/#810-10-45-5\" class=\"xref\">810-10-45-5</a>. </span></span><span class=\"sfragment\" id=\"sfr_FC8F6C41-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For guidance on the accounting for the purchase (early extinguishment) of a wholly owned subsidiary's mandatorily redeemable <a href=\"/glossary/p/#preferred-stock\" class=\"term\" title=\"A security that has preferential rights compared to common stock.\"><span>preferred stock</span></a>, see paragraphs <a href=\"/asc/810/10/#810-10-40-1\" class=\"xref\">810-10-40-1 through 40-2A</a>. </span></span></div></div>","snippet":"For guidance on the treatment of shares of a parent held by its subsidiary in the consolidated balance sheet, see paragraph 810-10-45-5. For guidance on the accounting for the purchase (early extinguishment) of a wholly …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ddabf603fa0487a81bdc8b49c13d3333fe0d057b8a0ce2b4db4300feffb40ee","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26a6578bb40fa3c19db7e0927f502b380ec025e876c865805a9b6b4fca4a29a4","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"block":null,"heading":"Derivatives and Hedging","paragraphs":[{"citation":"505-10-60-5","para":"60-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FC8F6D7A-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For guidance on the potential classification of an embedded derivative as an equity instrument, see Topic <a altsource=\"GUID-128369CC-8E3A-4A7E-8F25-33E42B0761E4.ditamap\" class=\"ditamap\">815</a>. </span></span></div></div>","snippet":"For guidance on the potential classification of an embedded derivative as an equity instrument, see Topic 815.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9541d5bd9767eb2628c687baa851771a3145224fb30f2e4c2a77985b2b942582","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ced057bd7e2e4880949a75525aabd581e0d3ac51ef07bd53f0f922a98fcabea3","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"block":null,"heading":"Financial Instruments","paragraphs":[{"citation":"505-10-60-6","para":"60-6","html":"<div class=\"asc-body\"><div class=\"norm-text\">For guidance on the accounting for a <a href=\"/glossary/r/#registration-payment-arrangement\" class=\"term\" title=\"An arrangement with both of the following characteristics: It specifies that the issuer will endeavor to do either of the following: File a registration statement for the resale of specified financial instruments and/or for the resale of equity shares that are issuable upon exercise or conversion of specified financial instruments and for that registration statement to be declared effective by the U.S. Securities and Exchange Commission (SEC) (or other applicable securities regulator if the registration statement will be filed in a foreign jurisdiction) within a specified grace period Maintain the effectiveness of the registration statement for a specified period of time (or in perpetuity). It requires the issuer to transfer consideration to the counterparty if the registration statement for the resale of the financial instrument or instruments subject to the arrangement is not declared effective or if effectiveness of the registration statement is not maintained. That consideration may be payable in a lump sum or it may be payable periodically, and the form of the consideration may vary. For example, the consideration may be in the form of cash, equity instruments, or adjustments to the terms of the financial instrument or instruments that are subject to the registration payment arrangement (such as an increased interest rate on a debt instrument).\"><span>registration payment arrangement</span></a>, see Subtopic <a altsource=\"GUID-657D8285-2449-47DF-9AC2-4AFE6E02007A.ditamap\" class=\"ditamap\">825-20</a>.</div></div>","snippet":"For guidance on the accounting for a registration payment arrangement, see Subtopic 825-20.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5ccc2455dce288bbbb42b5572288884efbe529d7bb884d6464a21454d5c15a55","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"citation":"505-10-60-7","para":"60-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FC8F6EA6-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For guidance on the accounting for an equity-classified freestanding <a href=\"/glossary/f/#financial-instrument\" class=\"term\" title=\"Cash, evidence of an ownership interest in an entity, or a contract that both: Imposes on one entity a contractual obligation either: To deliver cash or another financial instrument to a second entity To exchange other financial instruments on potentially unfavorable terms with the second entity. Conveys to that second entity a contractual right either: To receive cash or another financial instrument from the first entity To exchange other financial instruments on potentially favorable terms with the first entity. The use of the term financial instrument in this definition is recursive (because the term financial instrument is included in it), though it is not circular. The definition requires a chain of contractual obligations that ends with the delivery of cash or an ownership interest in an entity. Any number of obligations to deliver financial instruments can be links in a chain that qualifies a particular contract as a financial instrument. Contractual rights and contractual obligations encompass both those that are conditioned on the occurrence of a specified event and those that are not. All contractual rights (contractual obligations) that are financial instruments meet the definition of asset (liability) set forth in FASB Concepts Statement No. 6, Elements of Financial Statements, although some may not be recognized as assets (liabilities) in financial statements—that is, they may be off-balance-sheet—because they fail to meet some other criterion for recognition. For some financial instruments, the right is held by or the obligation is due from (or the obligation is owed to or by) a group of entities rather than a single entity. (P) December 16, 2024; (N) December 16, 2025105-10-65-9Cash, evidence of an ownership interest in an entity, or a contract that both: Imposes on one entity a contractual obligation either: To deliver cash or another financial instrument to a second entity To exchange other financial instruments on potentially unfavorable terms with the second entity. Conveys to that second entity a contractual right either: To receive cash or another financial instrument from the first entity To exchange other financial instruments on potentially favorable terms with the first entity. The use of the term financial instrument in this definition is recursive (because the term financial instrument is included in it), though it is not circular. The definition requires a chain of contractual obligations that ends with the delivery of cash or an ownership interest in an entity. Any number of obligations to deliver financial instruments can be links in a chain that qualifies a particular contract as a financial instrument. Contractual rights and contractual obligations encompass both those that are conditioned on the occurrence of a specified event and those that are not. Some contractual rights (contractual obligations) that are financial instruments may not be recognized in financial statements—that is, they may be off-balance-sheet—because they fail to meet some other criterion for recognition. For some financial instruments, the right is held by or the obligation is due from (or the obligation is owed to or by) a group of entities rather than a single entity.\"><span>financial instrument</span></a> with a <a href=\"/glossary/d/#down-round-feature\" class=\"term\" title=\"A feature in a financial instrument that reduces the strike price of an issued financial instrument if the issuer sells shares of its stock for an amount less than the currently stated strike price of the issued financial instrument or issues an equity-linked financial instrument with a strike price below the currently stated strike price of the issued financial instrument. A down round feature may reduce the strike price of a financial instrument to the current issuance price, or the reduction may be limited by a floor or on the basis of a formula that results in a price that is at a discount to the original exercise price but above the new issuance price of the shares, or may reduce the strike price to below the current issuance price. A standard antidilution provision is not considered a down round feature.\"><span>down round feature</span></a>, see Topic <a altsource=\"GUID-CEB2BD89-21CC-43D3-8A32-5406F3B53EE0.ditamap\" class=\"ditamap\">260</a> on earnings per share.</span></span></div></div>","snippet":"For guidance on the accounting for an equity-classified freestanding financial instrument with a down round feature, see Topic 260 on earnings per share.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0e669135e58bd7c244b48b1d0273f5b66726cd37ca828e10737f929fd89f48b","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},{"citation":"505-10-60-8","para":"60-8","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FC8F6FB4-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For guidance on accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange, see Subtopic <a altsource=\"GUID-661263AB-F547-49BF-BEA8-1701C5581479.ditamap\" class=\"ditamap\">815-40</a> on contracts in entity's own equity. </span></span></div></div>","snippet":"For guidance on accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange, see Subtopic 815-40 o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cff47bb5b14f503411573801afd790e2834409bdc221e2a84be02d1a9b744349","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b1c5d6a78c1441e5c5e63b1b873b04e2c11f59ce187fa180661d349b4f5b72ef","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bf7dedd046dba0dfbd8aed02b8d82f9e1322ee8937bc31b7f658d5bada26bdca","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bf7dedd046dba0dfbd8aed02b8d82f9e1322ee8937bc31b7f658d5bada26bdca","downloaded_from":"2026-09-10T00:36:57.989Z","last_downloaded_at":"2026-09-10T00:36:57.989Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481554","source_sha256":"11cb0923a1bb8532c41078c4b3f088c16371ba87c131aa3863bb692df3f0a0a7"}}