The following represents the transition and effective date information related to Accounting Standards Update No. 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock:Effective date and early adoption
- a
All entities shall apply the pending content that links to this paragraph for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.
- b
Early adoption of the pending content that links to this paragraph is permitted in an interim or annual reporting period in which the financial statements have not yet been issued or made available for issuance. If an entity adopts the pending content that links to this paragraph in an interim reporting period, it shall apply the pending content as of the beginning of the annual reporting period that includes that interim reporting period.
Transition method
- c
An entity shall apply the pending content that links to this paragraph using either of the following transition methods:
- 1
On a prospective basis to paid-in-kind dividends recognized on preferred stock on or after the initial application date of the pending content that links to this paragraph.
- 2
On a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity) as of the beginning of the earliest period presented. Under this transition method, an entity shall apply the pending content that links to this paragraph to paid-in-kind dividends recognized on preferred stock that is outstanding as of the initial application date of the pending content.
Transition disclosures
- d
An entity that applies the pending content that links to this paragraph prospectively in accordance with (c)(1) shall provide the following transition disclosures in the financial statements of both the interim reporting period (if applicable) and the annual reporting period in which the pending content is applied:
- 1
The nature of the change in accounting principle, including an explanation of the newly adopted accounting principle
- 2
The method of applying the change.
- e
An entity that applies the pending content that links to this paragraph on a modified retrospective basis in accordance with (c)(2) shall provide the following transition disclosures in the financial statements of both the interim reporting period (if applicable) and the annual reporting period in which the pending content is applied:
- 1
The nature of the change in accounting principle, including an explanation of the newly adopted accounting principle
- 2
The method of applying the change
- 3
The cumulative effect of the change on retained earnings or other components of equity in the statement of financial position as of the beginning of the earliest period presented
- 4
The effect of the change on income available to common shareholders, any other affected financial statement line items, and any affected per-share amounts for the current reporting period and any prior reporting periods retrospectively adjusted.