{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/505/60/","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.","number":"505-60","topic":"505","title":"Spinoffs and Reverse Spinoffs","area":"Equity","paragraphs":33,"summary":"ASC 505-60 governs the pro rata distribution of nonmonetary assets that constitute a business to an entity's owners (a spinoff). Such distributions are recorded at the carrying (recorded) amount of the distributed business, reduced for any indicated impairment, and are never accounted for as a sale of the spinnee followed by a distribution of proceeds — even if the spun-off operations are sold immediately afterward. When the substance of the transaction differs from its legal form, the legal spinnee is treated as the accounting spinnor (reverse spinoff accounting).","concepts":["spinoff","reverse spinoff","accounting spinnor and spinnee","nonmonetary distribution to owners","carrying value recognition","substance over legal form","discontinued operations","business definition"],"categories":["Debt and equity","Derecognition","Presentation","Initial measurement"],"level":"intermediate","topic_title":"Equity","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"505-60-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
BusinessAmendedAccounting Standards Update No. 2017-0101/05/2017
505-60-15-1AmendedAccounting Standards Update No. 2016-1912/14/2016
505-60-45-1AmendedAccounting Standards Update No. 2014-0804/10/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nBusiness | Amended | Accounting Standards Update No. 2017-01 | 01/05/2017 |\n| | | |\n505-…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d6694da221629996ebef67c20dc4aeb9ccf1f0c7af632f51069a1baf4d9cbbc6","downloaded_from":"2026-09-10T00:39:16.049Z","last_downloaded_at":"2026-09-10T00:39:16.049Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481540","source_sha256":"4aad8f93c850d2788fcf77ccc17a2563f3e6a37cd3403ca939ed076d194571c6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0dd7833694fa09ae92ced4389155a608e64f0e15a175b9fc60ea89e4c5f593a","downloaded_from":"2026-09-10T00:39:16.049Z","last_downloaded_at":"2026-09-10T00:39:16.049Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481540","source_sha256":"4aad8f93c850d2788fcf77ccc17a2563f3e6a37cd3403ca939ed076d194571c6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e00263b2abf7c9ceb3e9ad4921987a6c9f1ceb1927d7cf1539dca20993f24a82","downloaded_from":"2026-09-10T00:39:16.049Z","last_downloaded_at":"2026-09-10T00:39:16.049Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481540","source_sha256":"4aad8f93c850d2788fcf77ccc17a2563f3e6a37cd3403ca939ed076d194571c6"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"505-60-05-1","para":"05-1","html":"
This Subtopic provides guidance related to the distribution of nonmonetary assets that constitute a business to owners of an entity in transactions commonly referred to as spinoffs. This Subtopic also addresses spinoff transactions in which the substance of the transaction may differ from the legal form, and provides guidance on how to determine such situations and their required accounting and reporting.
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An entity may desire to reorganize its operations in response to its business needs. For example, an entity (the spinnor) may transfer assets into a new legal spun-off entity (the spinnee) and distribute the shares of the spinnee to its shareholders, without the surrender by the shareholders of any stock of the spinnor. Such a transaction is commonly referred to as a spinoff. An illustration of a spinoff is presented in Example 1 (see paragraph 505-60-55-1).
","snippet":"An entity may desire to reorganize its operations in response to its business needs. For example, an entity (the spinnor) may transfer assets into a new legal spun-off entity (the spinnee) and distribute the shares of th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1346198813ffa536b759a7ebf69344f43cec18f4b1a37ad332c767fb74fdaacb","downloaded_from":"2026-09-10T00:39:19.800Z","last_downloaded_at":"2026-09-10T00:39:19.800Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481509","source_sha256":"01bb9afa177b83bc67b8b12dfb3b9a431a00da5462feff78f10fb6f70961910b"}},{"citation":"505-60-05-3","para":"05-3","html":"
A spinoff allows an entity to be reorganized in a manner that allows it to meet the needs of its owners. However, there may be other benefits as well. If the spinoff qualifies as a nontaxable reorganization, the distribution results in no taxable gain being recognized by either the spinnor or its shareholders. Additionally, if the spinnee is subsequently sold by the shareholders, the double taxation that would have occurred if an entity sold its subsidiary directly and distributed the proceeds to its shareholders is avoided.
","snippet":"A spinoff allows an entity to be reorganized in a manner that allows it to meet the needs of its owners. However, there may be other benefits as well. If the spinoff qualifies as a nontaxable reorganization, the distribu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d8aa501658b5508060b406e4d70d6c6aad1eb043d556848331745a60ec984305","downloaded_from":"2026-09-10T00:39:19.800Z","last_downloaded_at":"2026-09-10T00:39:19.800Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481509","source_sha256":"01bb9afa177b83bc67b8b12dfb3b9a431a00da5462feff78f10fb6f70961910b"}},{"citation":"505-60-05-4","para":"05-4","html":"
In certain cases, the spinoff of a subsidiary to its shareholders is such that the legal form of the transaction does not match its substance. That is, in certain circumstances, the spinnee will be the continuing entity and the transaction will commonly be referred to as a reverse spinoff. An entity needs to determine whether to account for a spinoff as a reverse spinoff based on the substance instead of the legal form of the transaction. An illustration of a reverse spinoff is presented in Example 2 (see paragraph 505-60-55-4).
","snippet":"In certain cases, the spinoff of a subsidiary to its shareholders is such that the legal form of the transaction does not match its substance. That is, in certain circumstances, the spinnee will be the continuing entity …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1af9be9d1e733da01adc4def7136b48e7ddcfbc05c3888c32752550c84b0ad4a","downloaded_from":"2026-09-10T00:39:19.800Z","last_downloaded_at":"2026-09-10T00:39:19.800Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481509","source_sha256":"01bb9afa177b83bc67b8b12dfb3b9a431a00da5462feff78f10fb6f70961910b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c27c17f220f9375bdfe8b8b1287278e19b46bb03f4af63f14795a5ce169d93bf","downloaded_from":"2026-09-10T00:39:19.800Z","last_downloaded_at":"2026-09-10T00:39:19.800Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481509","source_sha256":"01bb9afa177b83bc67b8b12dfb3b9a431a00da5462feff78f10fb6f70961910b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cfbbe59034d68820c302b215cf8339e358f069514781dc677557ac6db2422601","downloaded_from":"2026-09-10T00:39:19.800Z","last_downloaded_at":"2026-09-10T00:39:19.800Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481509","source_sha256":"01bb9afa177b83bc67b8b12dfb3b9a431a00da5462feff78f10fb6f70961910b"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Entities","paragraphs":[{"citation":"505-60-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all entities, unless more specific guidance is provided in other Topics.
","snippet":"The guidance in this Subtopic applies to all entities, unless more specific guidance is provided in other Topics.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d9b17fbf29ab7d8c4e47190dbecf0e8bca318c1a53df52568e7c694d904cbe60","downloaded_from":"2026-09-10T00:39:23.278Z","last_downloaded_at":"2026-09-10T00:39:23.278Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481483","source_sha256":"9f86fe986f53031e9256f3604c26587cab8f3a3fdb28175dde338ea540d0e342"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0e556fcf2dc4a2fee90658dc5c1cf03024ce37eb2a20d0b64d1f61c5d116d8c6","downloaded_from":"2026-09-10T00:39:23.278Z","last_downloaded_at":"2026-09-10T00:39:23.278Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481483","source_sha256":"9f86fe986f53031e9256f3604c26587cab8f3a3fdb28175dde338ea540d0e342"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"505-60-15-2","para":"15-2","html":"
The guidance in this Subtopic applies to all transactions involving the distribution of nonmonetary assets that constitute a business to owners of an entity.
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The guidance in this Subtopic does not apply to distributions of nonmonetary assets that do not constitute a business.
","snippet":"The guidance in this Subtopic does not apply to distributions of nonmonetary assets that do not constitute a business.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39284d628c35f80ca7c2c6c9f3e86bb23970863352cfbfeb24063f645a664755","downloaded_from":"2026-09-10T00:39:23.278Z","last_downloaded_at":"2026-09-10T00:39:23.278Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481483","source_sha256":"9f86fe986f53031e9256f3604c26587cab8f3a3fdb28175dde338ea540d0e342"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bcca5285f260c3d20fcbe12ee27eaf3523f0ddcea7ca8b8789787cae27a9cb87","downloaded_from":"2026-09-10T00:39:23.278Z","last_downloaded_at":"2026-09-10T00:39:23.278Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481483","source_sha256":"9f86fe986f53031e9256f3604c26587cab8f3a3fdb28175dde338ea540d0e342"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e1c208332f099446d1537a5ee36edb2f34e01de8b1ae0a722c3574fd09e8ce84","downloaded_from":"2026-09-10T00:39:23.278Z","last_downloaded_at":"2026-09-10T00:39:23.278Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481483","source_sha256":"9f86fe986f53031e9256f3604c26587cab8f3a3fdb28175dde338ea540d0e342"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"505-60-25-1","para":"25-1","html":"
This Section identifies the required accounting for a spinoff transaction. It also provides guidance on when a spinoff shall be treated as a reverse spinoff and the accounting required by that determination.
","snippet":"This Section identifies the required accounting for a spinoff transaction. It also provides guidance on when a spinoff shall be treated as a reverse spinoff and the accounting required by that determination.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5659b2ee09d702e213929d8fae9120b2f11d9b41417c3ead24f8abae331ad960","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1eaae44975ca4832255e583997d5bac54f218c21821d30b4e5d1fd6c9e468479","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}},{"block":null,"heading":"Required Accounting for Spinoffs, Including Reverse Spinoffs","paragraphs":[{"citation":"505-60-25-2","para":"25-2","html":"
Paragraph 845-10-30-10 requires that the accounting for the distribution of nonmonetary assets to owners of an entity in a spinoff be based on the recorded amount (after reduction, if appropriate, for an indicated impairment of value). As specified in Section 505-60-15, a further requirement of the nonmonetary assets being distributed is that they constitute a business. Accordingly, an entity's distribution of the shares of a wholly owned or consolidated subsidiary to its shareholders shall be recorded based on the carrying value of the subsidiary. Regardless of whether the spun-off operations will be sold immediately after the spinoff, the transaction shall not be accounted for as a sale of the accounting spinnee followed by a distribution of the proceeds.
","snippet":"Paragraph 845-10-30-10 requires that the accounting for the distribution of nonmonetary assets to owners of an entity in a spinoff be based on the recorded amount (after reduction, if appropriate, for an indicated impair…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b1bda9ba18ccaabf8c8b1fba462acfec3473906ca45e4d83e3d99b2b0f90976d","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}},{"citation":"505-60-25-3","para":"25-3","html":"
See Example 1 (paragraph 505-60-55-1) for an illustration of a spinoff transaction.
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In a reverse spinoff, the legal spinnee shall be treated as though it were the spinnor for accounting purposes (accounting spinnor). This is referred to as reverse spinoff accounting.
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Accounting for a reverse spinoff transaction based on its legal form would present the legal spinnor as the accounting spinnor and the legal spinnee as the accounting spinnee. However, in substance, the legal spinnor has disposed of its own operations and continued the operations of the legal spinnee. The legal form of the spinoff may have been driven primarily by tax planning strategies. Accounting for the transaction based on its substance depicts the legal spinnee as the accounting spinnor and the legal spinnor as the accounting spinnee.
","snippet":"Accounting for a reverse spinoff transaction based on its legal form would present the legal spinnor as the accounting spinnor and the legal spinnee as the accounting spinnee. However, in substance, the legal spinnor has…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d98f5fa290555774020754fe3758d98bfb1dca0c07d19a8063c3fdb249414105","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}},{"citation":"505-60-25-6","para":"25-6","html":"
See Example 2 (paragraph 505-60-55-4) for an illustration of a reverse spinoff transaction.
","snippet":"See Example 2 (paragraph 505-60-55-4) for an illustration of a reverse spinoff transaction.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:79f4e08172ce5c63ab184d55a8f737e25fe1fecf93b12492e24a6978c7856c86","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}},{"citation":"505-60-25-7","para":"25-7","html":"
Reverse spinoff accounting is appropriate if treatment of the legal spinnee as the accounting spinnor results in the most accurate depiction of the substance of the transaction for shareholders and other users of the financial statements. The determination of whether reverse spinoff accounting is appropriate is a matter of judgment that depends on an evaluation of all relevant facts and circumstances. The following paragraph provides guidance on making the required determination.
","snippet":"Reverse spinoff accounting is appropriate if treatment of the legal spinnee as the accounting spinnor results in the most accurate depiction of the substance of the transaction for shareholders and other users of the fin…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3b8712231d0a7d9bfdc0c3284b1817cd53f7e52f0888b29944b7a8857db1b42a","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8dca864b8620d7a6e34f61233e532c41bd96e902579e08ab435631d16787821a","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}},{"block":null,"heading":"Determining the Accounting Spinnor and Spinnee","paragraphs":[{"citation":"505-60-25-8","para":"25-8","html":"
In order to determine the required accounting and reporting in a spinoff transaction, an entity needs to determine which party is the accounting spinnor and which is the accounting spinnee. In determining whether reverse spinoff accounting is appropriate, a presumption shall exist that a spinoff be accounted for based on its legal form, in other words, that the legal spinnor is also the accounting spinnor. However, that presumption may be overcome. An evaluation of the following indicators shall be considered in that regard. Nevertheless, no one indicator shall be considered presumptive or determinative. The following are indicators that a spinoff should be accounted for as a reverse spinoff:
  1. a
    The size of the legal spinnor and the legal spinnee. All other factors being equal, in a reverse spinoff, the accounting spinnor (legal spinnee) is larger than the accounting spinnee (legal spinnor). The determination of which entity is larger is based on a comparison of the assets, revenues, and earnings of the two entities. There are no established bright lines that shall be used to determine which entity is the larger of the two.
  2. b
    The fair value of the legal spinnor and the legal spinnee. All other factors being equal, in a reverse spinoff, the fair value of the accounting spinnor (legal spinnee) is greater than that of the accounting spinnee (legal spinnor).
  3. c
    Senior management. All other factors being equal, in a reverse spinoff, the accounting spinnor (legal spinnee) retains the senior management of the formerly combined entity. Senior management generally consists of the chairman of the board, chief executive officer, chief operating officer, chief financial officer, and those divisional heads reporting directly to them, or the executive committee if one exists.
  4. d
    Length of time to be held. All other factors being equal, in a reverse spinoff, the accounting spinnor (legal spinnee) is held for a longer period than the accounting spinnee (legal spinnor). A proposed or approved plan of sale for one of the separate entities concurrent with the spinoff may identify that entity as the accounting spinnee.
See Examples 3 and 4 (paragraphs
505-60-55-7 through 55-12
) for illustrations of the determination of the accounting spinnor and spinnee.
","snippet":"In order to determine the required accounting and reporting in a spinoff transaction, an entity needs to determine which party is the accounting spinnor and which is the accounting spinnee. In determining whether reverse…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:80407ca229ef601e80c90028850bda6fd53f7e2a460973f6cac206b808b50c55","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:115cb95ed2d8e4f551bddedefc8a530fc316b688dcecef70e8d7fa0015e79355","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b9afd3a1d86961f89908bd494298bb522d982b850f949368e73b061ed4bb625","downloaded_from":"2026-09-10T00:39:28.173Z","last_downloaded_at":"2026-09-10T00:39:28.173Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481423","source_sha256":"58a09c0674c97207529e292ae2ac9b5d66af81ebb5295b90994eae5f55b03160"}},{"number":"45","label":"45 Other Presentation Matters","anchor":"45-other-presentation-matters","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"505-60-45-1","para":"45-1","html":"
The determination of the accounting spinnor and spinnee under the requirements of paragraph 505-60-25-8 may have significant implications with regard to the reporting of discontinued operations in accordance with Subtopic 205-20. That is, the accounting spinnee shall be reported as a discontinued operation by the accounting spinnor if the spinnee is a discontinued operation and meets the conditions for such reporting contained in paragraphs
205-20-45-1A through 45-1C
.
","snippet":"The determination of the accounting spinnor and spinnee under the requirements of paragraph 505-60-25-8 may have significant implications with regard to the reporting of discontinued operations in accordance with Subtopi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d78a61266d494377c5d0629c2b56ed0737983e4291ce064ec1286e50c63db1ee","downloaded_from":"2026-09-10T00:39:30.567Z","last_downloaded_at":"2026-09-10T00:39:30.567Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481393","source_sha256":"7505587fcd7528460ad83eafbc43adf7612f70cc11424d4e1055dfee922ed372"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e75aa77963b9e098d7b838e915832a731dcddb920c6a0c268873ef38a79aac46","downloaded_from":"2026-09-10T00:39:30.567Z","last_downloaded_at":"2026-09-10T00:39:30.567Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481393","source_sha256":"7505587fcd7528460ad83eafbc43adf7612f70cc11424d4e1055dfee922ed372"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:573bcf10c376625407dc0419e2e2f21fc3337e89901140709e8fb829264273e6","downloaded_from":"2026-09-10T00:39:30.567Z","last_downloaded_at":"2026-09-10T00:39:30.567Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481393","source_sha256":"7505587fcd7528460ad83eafbc43adf7612f70cc11424d4e1055dfee922ed372"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"505-60-55-1","para":"55-1","html":"
This Example presents an illustration of a spinoff.
","snippet":"This Example presents an illustration of a spinoff.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:579c3fba49bef4e7c430b76babff77a53881e24deabebf32de2bbfeda026ccf7","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-2","para":"55-2","html":"
Big Company owns and operates a mall and a retail store that occupies the anchor store position in that mall. The mall and the store are managed by two separate divisions. The shareholders of Big Company would like to split Big Company into two entities so that each can focus on its own operations. To achieve this, Big Company transfers the mall's assets and operations into a newly created subsidiary, Mall Company, and distributes the shares of Mall Company to its shareholders on a pro rata basis in a spinoff.
","snippet":"Big Company owns and operates a mall and a retail store that occupies the anchor store position in that mall. The mall and the store are managed by two separate divisions. The shareholders of Big Company would like to sp…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52cf4ef5b3854029e701c9617e956561c233864437db62d17c3470ca61745f4e","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-3","para":"55-3","html":"
Paragraph 505-60-25-2 provides guidance on the accounting for a spinoff.
","snippet":"Paragraph 505-60-25-2 provides guidance on the accounting for a spinoff.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:57b77dea75893ca7495648ccf1db904032f6b7af4defb5cbefd8b002bd1d4ca5","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-4","para":"55-4","html":"
This Example presents an illustration of a reverse spinoff.
","snippet":"This Example presents an illustration of a reverse spinoff.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e90ba16d58184f70b409ce9df82c28f4380d618ff929faeef549fed379b21c6e","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-5","para":"55-5","html":"
Snack Food Company owns two subsidiaries—Ice Cream Subsidiary and Snack Subsidiary. Ice Cream Subsidiary is significantly larger and more profitable than Snack Subsidiary. The shareholders of Snack Food Company would like to continue the ice cream operations and dispose of the snack food operations. To facilitate this, Snack Food Company distributes the shares of Ice Cream Subsidiary to the shareholders thereby creating Ice Cream Company. The shareholders are then able to dispose of the operations of Snack Food Company (now solely comprising Snack Subsidiary operations) by selling the shares directly to a third party and, at the same time, retain ownership of the Ice Cream Company.
","snippet":"Snack Food Company owns two subsidiaries—Ice Cream Subsidiary and Snack Subsidiary. Ice Cream Subsidiary is significantly larger and more profitable than Snack Subsidiary. The shareholders of Snack Food Company would lik…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:faa33c01898f92e4826120e03a1e4be1c9a5dd7910e2572547937821fe4a9316","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-6","para":"55-6","html":"
Paragraphs
505-60-25-4 through 25-7
provide guidance on the accounting for a reverse spinoff.
","snippet":"Paragraphs 505-60-25-4 through 25-7 provide guidance on the accounting for a reverse spinoff.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:63395f323d0f69865c33f49b13a2d40f4c86501dc2aaeb5a94ba70102c3c70d4","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-7","para":"55-7","html":"
This Example demonstrates the application of the requirements in paragraph 505-60-25-8 to identify the accounting spinnor and spinnee, which may differ from the legal spinnor and spinnee. This Example has the following assumptions:
  1. a
    Retail Company, a retail store chain, has a wholly owned restaurant subsidiary. The retail and restaurant operations are operated independently with a small executive management team overseeing both. Because the two have unrelated operations, the shareholders believe that the two operations should be separated by way of a spinoff. They believe that this will allow those separate entities to pursue opportunities in their respective industries and maximize their individual value.
  2. b
    In order to accomplish the spinoff, Retail Company creates a new legal entity, Restaurant Company, into which the assets and operations of the restaurant subsidiary are transferred. The shares of Restaurant Company are then distributed to the shareholders of Retail Company on a pro rata basis.
  3. c
    The executive management team of Retail Company will be divided between the two entities. A comparison of the two entities is as follows.
    • \"
      (In 000s) Assets Revenues Net Income Fair Value Retail $500 $410 $150 $675 Restaurant $100 $75 $21 $170
","snippet":"This Example demonstrates the application of the requirements in paragraph 505-60-25-8 to identify the accounting spinnor and spinnee, which may differ from the legal spinnor and spinnee. This Example has the following a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e73785dcdae31ad048448623024d23a419c9d5a1b40fc6613e7dcc80766ed249","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-8","para":"55-8","html":"
Based on an analysis of the indicators contained in paragraph 505-60-25-8, the spinoff should be accounted for in accordance with its legal form. That is, the transaction should not be accounted for as a reverse spinoff. Retail Company should be designated as the accounting spinnor based on the first two of the following indicators:
  1. a
    Retail Company has substantially larger operations than Restaurant Company.
  2. b
    The fair value of Retail Company is greater than Restaurant Company.
  3. c
    The management team is allocated between the two operations.
  4. d
    There are no planned or likely disposals of either Retail Company or Restaurant Company.
","snippet":"Based on an analysis of the indicators contained in paragraph 505-60-25-8, the spinoff should be accounted for in accordance with its legal form. That is, the transaction should not be accounted for as a reverse spinoff.…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9108962afcaa3161fb7128d9c105c45e7659f8f2915e3dea0fd29310dcf65dc5","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-9","para":"55-9","html":"
The designation of Retail Company as the accounting spinnor will provide the most accurate depiction of the transaction to shareholders and other users of the financial statements because, in substance, Retail Company has spun off its Restaurant Company into a separate entity.
","snippet":"The designation of Retail Company as the accounting spinnor will provide the most accurate depiction of the transaction to shareholders and other users of the financial statements because, in substance, Retail Company ha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8825711e9141f248c2d2070d8b5c5c50db00b5dd07d90c052bd4ee1d19c66185","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-10","para":"55-10","html":"
This Example demonstrates the application of the requirements in paragraph 505-60-25-8 to identify the accounting spinnor and spinnee, which may differ from the legal spinnor and spinnee. This Example has the following assumptions:
  1. a
    Retail Company, a retail store chain, has a wholly owned restaurant subsidiary. The retail and restaurant operations are operated independently, with a small executive management team overseeing both. While the restaurant subsidiary has grown rapidly, the retail operations have deteriorated steadily due to increased competition. The shareholders believe that the two operations should be separated by way of a spinoff. Management intends to dispose of the retail operations.
  2. b
    In order to accomplish the spinoff, Retail Company creates a new legal entity, Restaurant Company, into which the assets and operations of the restaurant subsidiary are transferred. The shares of Restaurant Company are then distributed to the shareholders of Retail Company on a pro rata basis.
  3. c
    The executive management team of the combined entity will be assigned primarily to Restaurant Company, as the intent is to dispose of Retail Company (now solely comprising the retail operations). A comparison of certain statistics of the two entities is as follows.
    • (In 000s) Assets Revenues Net Income Fair Value Retail $300 $210 $35 $375 Restaurant $600 $450 $150 $700\t
","snippet":"This Example demonstrates the application of the requirements in paragraph 505-60-25-8 to identify the accounting spinnor and spinnee, which may differ from the legal spinnor and spinnee. This Example has the following a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e6a1d78a5d00b252c67152fbb1cdb955143c05d708457f2d13ed125a2d2df52a","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-11","para":"55-11","html":"
Based on an analysis of the indicators contained in paragraph 505-60-25-8, the spinoff should be accounted for as a reverse spinoff. Restaurant Company, although the legal spinnee, should be designated as the accounting spinnor based on the following:
  1. a
    Restaurant Company has substantially larger operations than Retail Company.
  2. b
    The fair value of Restaurant Company is greater than that of Retail Company.
  3. c
    The management team is primarily assigned to Restaurant Company.
  4. d
    Management intends to dispose of Retail Company upon finalizing the spinoff.
","snippet":"Based on an analysis of the indicators contained in paragraph 505-60-25-8, the spinoff should be accounted for as a reverse spinoff. Restaurant Company, although the legal spinnee, should be designated as the accounting …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ea88e252089247f990155f7ecb42b53f6159374608b636bf1129e1d70e8d9ba5","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"citation":"505-60-55-12","para":"55-12","html":"
The designation of Restaurant Company as the accounting spinnor will provide the most accurate depiction of the transaction to shareholders and other users of the financial statements, as, in substance, Retail Company has disposed of its retail operations and continued its restaurant operations.
","snippet":"The designation of Restaurant Company as the accounting spinnor will provide the most accurate depiction of the transaction to shareholders and other users of the financial statements, as, in substance, Retail Company ha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e8817c875fbc10d4cff8d9aa3d42ad57a7d6c86547c0f6b0a0d7542c1040e203","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:63d41f0982f6229b0b4bd7cd25a328a8e86b44bd350aed9a8c35e63a1c853675","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:194616d4cba45b830e917e533799068b717efad6917014efdf0762edee919c43","downloaded_from":"2026-09-10T00:39:33.301Z","last_downloaded_at":"2026-09-10T00:39:33.301Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481363","source_sha256":"0851f2c33e580a230537813a96bce0de274caf400017837076308af2f6857b34"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Compensation—Stock Compensation","paragraphs":[{"citation":"505-60-60-1","para":"60-1","html":"
For compensation-related consequences of exchanges of share options or other equity instruments or changes to their terms in conjunction with an equity restructuring, see Topic 718.
","snippet":"For compensation-related consequences of exchanges of share options or other equity instruments or changes to their terms in conjunction with an equity restructuring, see Topic 718.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:617b2bba43a66f79ceb88ed887c9abde330e659b3df89b5695d0cf94817a3ccf","downloaded_from":"2026-09-10T00:39:35.416Z","last_downloaded_at":"2026-09-10T00:39:35.416Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481331","source_sha256":"f66508dadf140516f15758e0ec6db68a509a98ccdc2a16b61bae997b390d1e61"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:057a0edf1d92b7cebbd2ee8d931c5ffa909ecce5c5238e4ec51d266b206bb94e","downloaded_from":"2026-09-10T00:39:35.416Z","last_downloaded_at":"2026-09-10T00:39:35.416Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481331","source_sha256":"f66508dadf140516f15758e0ec6db68a509a98ccdc2a16b61bae997b390d1e61"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:80619ecb7a3695377e6d2aea34367cbb74b98804e15f591088866eeab51bdcea","downloaded_from":"2026-09-10T00:39:35.416Z","last_downloaded_at":"2026-09-10T00:39:35.416Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481331","source_sha256":"f66508dadf140516f15758e0ec6db68a509a98ccdc2a16b61bae997b390d1e61"}},{"number":"S00","label":"SEC 00 Status","anchor":"sec-00-status","is_sec":true,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"505-60-S00-1","para":"S00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
505-60-S99-1AmendedAccounting Standards Update No. 2012-0308/27/2012
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\n505-60-S99-1 | Amended | Accounting Standards Update No. 2012-03 | 08/27/2012 |","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b885df9bdc20afde9a7db94effed4bcd79ba5d47403ba7a0a3dde22a4ddb0b16","downloaded_from":"2026-09-10T00:39:42.689Z","last_downloaded_at":"2026-09-10T00:39:42.689Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479769","source_sha256":"96cc2f5308de6fbd0142b1d57697a568bf1c3fd59c6bd6b39063c1f7377883cc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:62c8e4bde0cf742bebea02efc0a6b7abfaad39d5f4e0cbb91cfee4e0a450a2ee","downloaded_from":"2026-09-10T00:39:42.689Z","last_downloaded_at":"2026-09-10T00:39:42.689Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479769","source_sha256":"96cc2f5308de6fbd0142b1d57697a568bf1c3fd59c6bd6b39063c1f7377883cc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d9f139ec199b182bf0ba7aabc47485e935ef8fc28b3fba281b4674024da2f0b5","downloaded_from":"2026-09-10T00:39:42.689Z","last_downloaded_at":"2026-09-10T00:39:42.689Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479769","source_sha256":"96cc2f5308de6fbd0142b1d57697a568bf1c3fd59c6bd6b39063c1f7377883cc"}},{"number":"S45","label":"SEC 45 Other Presentation Matters","anchor":"sec-45-other-presentation-matters","is_sec":true,"groups":[{"block":null,"heading":"Accounting for the Spinoff of a Subsidiary","paragraphs":[{"citation":"505-60-S45-1","para":"S45-1","html":"
See paragraph 505-60-S99-1, SAB Topic 5.Z.7, for SEC Staff views on whether a spinoff transaction can be reflected as a change in the reporting entity.
","snippet":"See paragraph 505-60-S99-1, SAB Topic 5.Z.7, for SEC Staff views on whether a spinoff transaction can be reflected as a change in the reporting entity.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a3bad03935937a833b38bdee2ef026d9b8fb33303965c3e8f1db2f443adbacbd","downloaded_from":"2026-09-10T00:39:46.673Z","last_downloaded_at":"2026-09-10T00:39:46.673Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479739","source_sha256":"727a6b7d2b4c1c1b67f937c96c118e5408125cf48ab9b8e605385d8e92722705"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:08c99653700f2793233e781a14f3af75eebce84024dad2bff23810868c227f3f","downloaded_from":"2026-09-10T00:39:46.673Z","last_downloaded_at":"2026-09-10T00:39:46.673Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479739","source_sha256":"727a6b7d2b4c1c1b67f937c96c118e5408125cf48ab9b8e605385d8e92722705"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3d73fc55ced3e1f672570578531814f1c08863c762b68b576794a74ed4cf7f4","downloaded_from":"2026-09-10T00:39:46.673Z","last_downloaded_at":"2026-09-10T00:39:46.673Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479739","source_sha256":"727a6b7d2b4c1c1b67f937c96c118e5408125cf48ab9b8e605385d8e92722705"}},{"number":"S99","label":"SEC 99 SEC Materials","anchor":"sec-99-sec-materials","is_sec":true,"groups":[{"block":null,"heading":"SEC Staff Guidance","paragraphs":[{"citation":"505-60-S99-1","para":"S99-1","html":"
The following is the text of SAB Topic 5.Z.7, Accounting for the Spin-off of a Subsidiary.
","snippet":"The following is the text of SAB Topic 5.Z.7, Accounting for the Spin-off of a Subsidiary.\nFacts: A Company disposes of a business through the distribution of a subsidiary's stock to the Company's shareholders on a pro r…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:277f995cb820c191a85a822ed0456796fb3768e4f1400e0bdf4b787dc5075933","downloaded_from":"2026-09-10T00:39:50.123Z","last_downloaded_at":"2026-09-10T00:39:50.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479704","source_sha256":"d709bcfc21a7424b0267f32aafe8a074736067b5b2a28f9af2ba1baa1dbd211d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9349637230d2e0b4756bf15cf16e51da475bdcc753e144d96e68ffd3b57c8d8","downloaded_from":"2026-09-10T00:39:50.123Z","last_downloaded_at":"2026-09-10T00:39:50.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479704","source_sha256":"d709bcfc21a7424b0267f32aafe8a074736067b5b2a28f9af2ba1baa1dbd211d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:de0ec0b79dec54a7866fef3e13c9edd348597fcc0097b4ebce3dd87d2b57599b","downloaded_from":"2026-09-10T00:39:50.123Z","last_downloaded_at":"2026-09-10T00:39:50.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479704","source_sha256":"d709bcfc21a7424b0267f32aafe8a074736067b5b2a28f9af2ba1baa1dbd211d"}}],"enrichment":{"summary":"ASC 505-60 governs the pro rata distribution of nonmonetary assets that constitute a business to an entity's owners (a spinoff). Such distributions are recorded at the carrying (recorded) amount of the distributed business, reduced for any indicated impairment, and are never accounted for as a sale of the spinnee followed by a distribution of proceeds — even if the spun-off operations are sold immediately afterward. When the substance of the transaction differs from its legal form, the legal spinnee is treated as the accounting spinnor (reverse spinoff accounting).","key_points":["The Subtopic applies only to distributions of nonmonetary assets to owners that constitute a business; distributions of nonmonetary assets that do not constitute a business are outside its scope (505-60-15-2 through 15-3).","Per paragraph 845-10-30-10, as applied in 505-60-25-2, a spinoff of a wholly owned or consolidated subsidiary is recorded at the subsidiary's carrying value (after reduction for any indicated impairment of value), and the transaction is not accounted for as a sale of the accounting spinnee followed by a distribution of proceeds, regardless of an immediate post-spinoff sale.","In a reverse spinoff, the legal spinnee is treated as the spinnor for accounting purposes (the accounting spinnor) because in substance the legal spinnor disposed of its own operations and continued the legal spinnee's operations (505-60-25-4 through 25-5).","A presumption exists that a spinoff is accounted for based on its legal form (legal spinnor = accounting spinnor); that presumption may be overcome only by judgment based on all relevant facts and circumstances (505-60-25-7 through 25-8).","The four indicators of reverse spinoff accounting — relative size (assets, revenues, earnings), relative fair value, retention of senior management, and length of time to be held (a concurrent plan of sale suggests that entity is the accounting spinnee) — are evaluated together, and no single indicator is presumptive or determinative (505-60-25-8(a) through (d)).","The identification of the accounting spinnee matters for reporting: the accounting spinnee is reported as a discontinued operation by the accounting spinnor if it qualifies and meets the conditions in 205-20-45-1A through 45-1C (505-60-45-1).","Compensation consequences of exchanging or modifying share options or other equity instruments in connection with an equity restructuring are addressed in Topic 718 (505-60-60-1)."],"categories":["Debt and equity","Derecognition","Presentation","Initial measurement"],"audience_level":"intermediate","student_note":"Exam traps: (1) no gain is recognized — the distributed business comes off the books at carrying value, even if the shareholders sell it the next day; and (2) the \"reverse\" label is not optional dressing — if the legal spinnee is bigger, more valuable, keeps senior management, and the legal spinnor is slated for sale, you must flip the accounting so the legal spinnor's operations are shown as disposed (often as a discontinued operation).","related_topics":["845-10","205-20","718","805","810","360-10"],"key_concepts":["spinoff","reverse spinoff","accounting spinnor and spinnee","nonmonetary distribution to owners","carrying value recognition","substance over legal form","discontinued operations","business 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