{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/825/20/#30-initial-measurement","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":"825","topic_title":"Financial Instruments","subtopic":"825-20","subtopic_title":"Registration Payment Arrangements","section":{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"825-20-30-1","para":"30-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_D016212B-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An entity shall measure 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> as a separate unit of account from the <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>(s) subject to that arrangement. </span></span></div></div>","snippet":"An entity shall measure a registration payment arrangement as a separate unit of account from the financial instrument(s) subject to that arrangement.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4bda7752989c388fead0b01f29e025f479cbe1628210706086fab6cae503f39","downloaded_from":"2026-09-10T01:45:00.078Z","last_downloaded_at":"2026-09-10T01:45:00.078Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482854","source_sha256":"e99c2c4770c4f30618ed3a47ab59cfc67208a7f9817b3181ce97f6bc717dca92"}},{"citation":"825-20-30-2","para":"30-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_D0162255-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The financial instrument(s) subject to the registration payment arrangement shall be measured in accordance with other applicable generally accepted accounting principles (GAAP) (for example, Subtopics <a altsource=\"GUID-F827BBCC-41BF-479A-9C1D-5A5E98904787.ditamap\" class=\"ditamap\">815-10</a>; <a altsource=\"GUID-661263AB-F547-49BF-BEA8-1701C5581479.ditamap\" class=\"ditamap\">815-40</a>; and <a altsource=\"GUID-AC91EF11-EBBC-437D-9F54-32678EDA632A.ditamap\" class=\"ditamap\">835-30</a>) without regard to the contingent obligation to transfer consideration pursuant to the registration payment arrangement. </span></span></div></div>","snippet":"The financial instrument(s) subject to the registration payment arrangement shall be measured in accordance with other applicable generally accepted accounting principles (GAAP) (for example, Subtopics 815-10; 815-40; an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ad022386daf90435bd51edf2fb4360397c3c98a79681b325a201c1246001d329","downloaded_from":"2026-09-10T01:45:00.078Z","last_downloaded_at":"2026-09-10T01:45:00.078Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482854","source_sha256":"e99c2c4770c4f30618ed3a47ab59cfc67208a7f9817b3181ce97f6bc717dca92"}},{"citation":"825-20-30-3","para":"30-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_D0162354-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement shall be measured separately in accordance with Subtopic <a altsource=\"GUID-E13146CA-1337-48D7-BF5C-574604DA8631.ditamap\" class=\"ditamap\">450-20</a>. </span></span></div></div>","snippet":"The contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement shall be measured separately in accordance with Subtopic 450-20.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7a244b0d49f0bbd4e230251e15d7f9e21fb1927228a5ece65de23c391f95382c","downloaded_from":"2026-09-10T01:45:00.078Z","last_downloaded_at":"2026-09-10T01:45:00.078Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482854","source_sha256":"e99c2c4770c4f30618ed3a47ab59cfc67208a7f9817b3181ce97f6bc717dca92"}},{"citation":"825-20-30-4","para":"30-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_D0162440-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If the transfer of consideration under a registration payment arrangement is probable and can be reasonably estimated at inception, the contingent liability under the registration payment arrangement shall be included in the allocation of proceeds from the related financing transaction using the measurement guidance in Subtopic <a altsource=\"GUID-E13146CA-1337-48D7-BF5C-574604DA8631.ditamap\" class=\"ditamap\">450-20</a>. </span></span><span class=\"sfragment\" id=\"sfr_D0162557-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The remaining proceeds shall be allocated to the financial instrument(s) issued in conjunction with the registration payment arrangement based on the provisions of other applicable GAAP. </span></span><span class=\"sfragment\" id=\"sfr_D016267E-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">A financial instrument issued concurrently with a registration payment arrangement might be initially measured at a discount to its principal amount under this allocation methodology. </span></span><span class=\"sfragment\" id=\"sfr_D016275F-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For example, if the financial instruments issued concurrently with the registration payment arrangement are a debt instrument and an equity-classified warrant, the remaining proceeds after recognizing and measuring a liability for the registration payment arrangement under that Subtopic would be allocated on a relative <a href=\"/glossary/f/#fair-value\" class=\"term\" title=\"The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.\"><span>fair value</span></a> basis between the debt and the warrant pursuant to paragraph <a href=\"/asc/470/20/#470-20-25-3\" class=\"xref\">470-20-25-3</a>. </span></span></div></div>","snippet":"If the transfer of consideration under a registration payment arrangement is probable and can be reasonably estimated at inception, the contingent liability under the registration payment arrangement shall be included in…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c71595e5ea3cee172c45068d80e43a197c6de71b5bc0ca0d39d67049e2516b1f","downloaded_from":"2026-09-10T01:45:00.078Z","last_downloaded_at":"2026-09-10T01:45:00.078Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482854","source_sha256":"e99c2c4770c4f30618ed3a47ab59cfc67208a7f9817b3181ce97f6bc717dca92"}},{"citation":"825-20-30-5","para":"30-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_D0162863-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If all of the following criteria are met, the issuer's share price at the reporting date shall be used to measure the contingent liability under Subtopic <a altsource=\"GUID-E13146CA-1337-48D7-BF5C-574604DA8631.ditamap\" class=\"ditamap\">450-20</a>: </span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_D016296B-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An entity would be required to deliver shares under a registration payment arrangement. </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_D0162A36-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The transfer of that consideration is probable. </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">c</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_D0162AFC-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The number of shares to be delivered can be reasonably estimated. </span></span></div></li></ol></div></div>","snippet":"If all of the following criteria are met, the issuer's share price at the reporting date shall be used to measure the contingent liability under Subtopic 450-20:\n(a) An entity would be required to deliver shares under a …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b588f4e480ed100fb200db6323b99022c839ebcdb40fea1254b692174d6e3e80","downloaded_from":"2026-09-10T01:45:00.078Z","last_downloaded_at":"2026-09-10T01:45:00.078Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482854","source_sha256":"e99c2c4770c4f30618ed3a47ab59cfc67208a7f9817b3181ce97f6bc717dca92"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:93956f818fbe8fd7608a6c909fcc3a4abc85a55258fcfdb966f7fdbe93fd9688","downloaded_from":"2026-09-10T01:45:00.078Z","last_downloaded_at":"2026-09-10T01:45:00.078Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not 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