{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/852/10/#05-overview-and-background","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":"852","topic_title":"Reorganizations","subtopic":"852-10","subtopic_title":"Overall","section":{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"852-10-05-1","para":"05-1","html":"
The Reorganizations Topic includes the following Subtopics:
  1. a
    Overall
  2. b
    Quasi-Reorganizations
  3. c
    Income Taxes.
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This Subtopic addresses the accounting and financial statement disclosure for entities that have filed petitions with the Bankruptcy Court and expect to reorganize as going concerns under Chapter 11 of the Bankruptcy Code. This Subtopic necessarily contains many references to provisions of the Bankruptcy Code; however, the material in this Subtopic should not be relied upon as definitive interpretations of the law for any purposes. The accounting and reporting guidance in this Subtopic is incremental to guidance that otherwise applies to an entity.
","snippet":"This Subtopic addresses the accounting and financial statement disclosure for entities that have filed petitions with the Bankruptcy Court and expect to reorganize as going concerns under Chapter 11 of the Bankruptcy Cod…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ae6a6a289395352208a051129d353c925a4ac98f0f691ff15d50c8f7a8b731a","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-3","para":"05-3","html":"
An entity enters reorganization under Chapter 11 by filing a petition with the Bankruptcy Court, an adjunct of the United States District Courts. The filing of the petition starts the reorganization proceeding. The goal of the proceeding is to maximize recovery by creditors and shareholders by preserving it as a viable entity with a going concern value. For that purpose, the entity prepares a plan of reorganization intended to be confirmed by the court. The plan provides for treatment of all the assets and liabilities of the debtor, which might result in forgiveness of indebtedness. For the plan to be confirmed and the reorganization proceedings thereby concluded, the consideration to be received by parties in interest under the plan must exceed the consideration they would otherwise receive on liquidation of the entity under Chapter 7 of the Bankruptcy Code. The court may confirm a plan even if some classes of creditors or some of the stockholders have not accepted it, provided that it meets standards of fairness required by Chapter 11 to the dissenting class of creditors or the dissenting stockholders.
","snippet":"An entity enters reorganization under Chapter 11 by filing a petition with the Bankruptcy Court, an adjunct of the United States District Courts. The filing of the petition starts the reorganization proceeding. The goal …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7170f19d8f79ea66ad28e51782ee338a8210c74c83488a806c070c9c7051bfec","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-4","para":"05-4","html":"
The plan is the heart of every Chapter 11 reorganization. The provisions of the plan specify the treatment of all creditors and equity holders upon its approval by the Bankruptcy Court. Moreover, the plan shapes the financial structure of the entity that emerges.
","snippet":"The plan is the heart of every Chapter 11 reorganization. The provisions of the plan specify the treatment of all creditors and equity holders upon its approval by the Bankruptcy Court. Moreover, the plan shapes the fina…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0dd13eb30188c0ebbeb78c26573e823d17dec9f26939272cc71b20fef73d3e5b","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-5","para":"05-5","html":"
Chapter 11 provides that, unless a trustee is appointed, the debtor has the exclusive right to file a plan for the first 120 days of the case, or such longer or shorter time as the Bankruptcy Court decrees, for cause. If a plan is filed within the exclusive period, additional time is provided to allow the debtor to obtain plan acceptance. The appointment of the trustee immediately terminates the debtor's exclusive right to file a plan, and any party in interest may then do so.
","snippet":"Chapter 11 provides that, unless a trustee is appointed, the debtor has the exclusive right to file a plan for the first 120 days of the case, or such longer or shorter time as the Bankruptcy Court decrees, for cause. If…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:27acdd67a0c9db7fbf5d88ae065d824ee98c6d0b80540c4c04e33af2dd3220e3","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-6","para":"05-6","html":"
Except to the extent that specific debts are determined by the Bankruptcy Court not to be discharged by the plan, the provisions of a confirmed plan bind the debtor, any entity issuing securities under the plan, any entity acquiring assets under the plan, and any creditor, equity security holder, or general partner in the debtor, regardless of whether the claim is impaired under the plan and whether such creditor, equity security holder, or general partner has accepted the plan. A claim is impaired if, subject to certain rights to cure defaults, its legal rights are affected adversely by the plan.
","snippet":"Except to the extent that specific debts are determined by the Bankruptcy Court not to be discharged by the plan, the provisions of a confirmed plan bind the debtor, any entity issuing securities under the plan, any enti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:87611302f00a10589dc017138318e26a8722adf6344a59c9465323bf01decaf5","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-7","para":"05-7","html":"
In general, except as provided in the plan or in the order confirming the plan, confirmation of the plan discharges the debtor from all preconfirmation claims and terminates all rights and interest of equity security holders or general partners as provided for in the plan.
","snippet":"In general, except as provided in the plan or in the order confirming the plan, confirmation of the plan discharges the debtor from all preconfirmation claims and terminates all rights and interest of equity security hol…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7aa53606e06167e2411d830a5dce7a96b2c560f830c129328ce0416217f806cb","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-8","para":"05-8","html":"
The Bankruptcy Court confirms a plan if it finds all of the following:
  1. a
    The plan and the plan proponent have complied with various technical requirements of the Bankruptcy Code.
  2. b
    Disclosures made in soliciting acceptance of the plan have been adequate.
  3. c
    Dissenting members of consenting classes of impaired claims would receive under the plan at least the amount they would have received under a Chapter 7 proceeding.
  4. d
    Claims entitled to priority under the Bankruptcy Code will be paid in cash.
  5. e
    Confirmation of the plan is not likely to be followed by liquidation or further reorganization.
  6. f
    At least one class of impaired claims, apart from insiders, has accepted the plan.
  7. g
    The plan proponent has obtained the consent of all impaired classes of claims or equity securities, or the plan proponent can comply with the cram-down provisions of the Bankruptcy Code. Under the cram-down provisions, the court may confirm a plan even if one or more classes of holders of impaired claims or equity securities do not accept it, as long as the court finds the plan does not discriminate unfairly and is fair and equitable to each nonconsenting class impaired by the plan.
","snippet":"The Bankruptcy Court confirms a plan if it finds all of the following:\n(a) The plan and the plan proponent have complied with various technical requirements of the Bankruptcy Code.\n(b) Disclosures made in soliciting acce…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:580b08c5691890b50bcbc4ee51c55c1b25bd8d9646c40ae7d4873503374381cf","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-9","para":"05-9","html":"
In general, a secured claim is deemed to be treated fairly and equitably if it remains adequately collateralized and will receive a stream of payments whose discounted value equals the amount of the secured claim on the effective date of the plan. In general, an unsecured claim is deemed to be treated fairly and equitably if it receives assets whose discounted value equals the allowed amount of the claim, or if the holder of any claim or equity security interest that is junior to the dissenting class will not receive or retain any assets under the plan. Similarly, an equity security interest is deemed fairly and equitably treated if that interest receives assets whose discounted value equals the greatest of any fixed liquidation preference, any fixed redemption price, or the value of such interest, or if no junior equity security interest will receive any assets under the plan.
","snippet":"In general, a secured claim is deemed to be treated fairly and equitably if it remains adequately collateralized and will receive a stream of payments whose discounted value equals the amount of the secured claim on the …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b567ef55a2c2fd9f9ecf6c318fdfed332a25984d53eef56a9b851e8703164fb9","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8752df2d338e9de0ab2485f7d5119e6b32e7124245bcc4a928d6f0ad611c63c2","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"block":null,"heading":"Reorganization Value","paragraphs":[{"citation":"852-10-05-10","para":"05-10","html":"
An important part of the process of developing a plan is the determination of the reorganization value of the entity that emerges from bankruptcy. Reorganization value generally approximates fair value of the entity before considering liabilities and approximates the amount a willing buyer would pay for the assets of the entity immediately after the restructuring. The reorganization value of an entity is the amount of resources available and to become available for the satisfaction of postpetition liabilities and allowed claims and interest, as negotiated or litigated between the debtor-in-possession or trustee, the creditors, and the holders of equity interests. Reorganization value includes the sum of the value attributed to the reconstituted entity and other assets of the debtor that will not be included in the reconstituted entity. Reorganization value and the terms of the plan are determined only after extensive arm's-length negotiations or litigation between the interested parties. Before the negotiations, the debtor-in-possession, creditors, and equity holders develop their own ideas on the reorganization value of the entity that will emerge from Chapter 11. Several methods are used to determine the reorganization value; however, generally it is determined by discounting future cash flows for the reconstituted business that will emerge from Chapter 11 and from expected proceeds or collections from assets not required in the reconstituted business, at rates reflecting the business and financial risks involved.
","snippet":"An important part of the process of developing a plan is the determination of the reorganization value of the entity that emerges from bankruptcy. Reorganization value generally approximates fair value of the entity befo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:65f44fa7335826fb7cd0c286dac875dd5980044daafa8e2388f90dae73c05a61","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:769533947023f98edbca0f981bb8db7c4da0018fcafb7bfde0257a14dffb72d6","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"block":null,"heading":"The Disclosure Statement","paragraphs":[{"citation":"852-10-05-11","para":"05-11","html":"
A disclosure statement approved by the court is transmitted to all parties entitled to vote on the plan at or before the time their acceptance of the plan is solicited. The disclosure statement provides information that enables them to make informed judgments about the plan.
","snippet":"A disclosure statement approved by the court is transmitted to all parties entitled to vote on the plan at or before the time their acceptance of the plan is solicited. The disclosure statement provides information that …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e38a9fe9f54eafedd041fee536d90b35ffafa0e1e7866a9576c96fd1bee681e1","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-12","para":"05-12","html":"
No postpetition solicitation of acceptance of a plan may be made unless by the time of the solicitation a disclosure statement previously approved by the Bankruptcy Court has been sent to those whose acceptance is required. The disclosure statement must contain adequate information, which is defined in the Bankruptcy Code as information that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan, as far as it is reasonably practicable to provide in light of the nature and history of the emerging entity and the condition of the emerging entity's records. Examples of the kinds of items that may be included in disclosure statements to provide such information include a summary of the reorganization plan, historical and prospective financial information, and a pro forma balance sheet reporting the reorganization value and the capital structure of the emerging entity.
","snippet":"No postpetition solicitation of acceptance of a plan may be made unless by the time of the solicitation a disclosure statement previously approved by the Bankruptcy Court has been sent to those whose acceptance is requir…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7adf9c1968e22fae5b158b401a0ba09b219d662190eb602c3dc627b9f9f7a275","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-13","para":"05-13","html":"
What constitutes adequate information depends on the circumstances of the entity in Chapter 11, the nature of the plan, and the sophistication of the various classes whose acceptance is required. Although a valuation is not required for a Bankruptcy Court's approval of a disclosure statement, the instances in which valuations are not made are generally restricted to those in which the reorganization value of the emerging entity is greater than the liabilities or in which holders of existing voting shares retain more than 50 percent of the emerging entity's voting shares when the entity emerges from reorganization.
","snippet":"What constitutes adequate information depends on the circumstances of the entity in Chapter 11, the nature of the plan, and the sophistication of the various classes whose acceptance is required. Although a valuation is …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:25dc19de40d974ee946ecdb07ffd1613382162cdea69793295c1fc8cccfff8ad","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-14","para":"05-14","html":"
After reorganization proceedings have started, acceptances of a plan may not be solicited by any person without a disclosure statement approved by the court, but acceptances obtained before the proceedings started may be counted if they were solicited in compliance with applicable nonbankruptcy law governing the adequacy of disclosure or there is not any applicable nonbankruptcy law but there was in fact adequate information provided at the time of the prebankruptcy solicitation of acceptances of the plan.
","snippet":"After reorganization proceedings have started, acceptances of a plan may not be solicited by any person without a disclosure statement approved by the court, but acceptances obtained before the proceedings started may be…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:00926ed759bd46e5cc602d5bf38a8bfa232315c300c788ac6d42264176ca5422","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"citation":"852-10-05-15","para":"05-15","html":"
While the court determines the adequacy of the disclosure statement, entities that expect to adopt fresh-start reporting (see Section 852-10-45 for guidance on what is referred to as fresh-start reporting) should report information about the reorganization value in the disclosure statement, so that creditors and stockholders can make an informed judgment about the plan. The most likely place to report the reorganization value is in the pro forma balance sheet that is commonly part of the disclosure statement. Because reorganization value may not have been allocated to individual assets concurrently with the preparation of the pro forma balance sheet included in the disclosure statement in some cases, it may be necessary to include in the pro forma balance sheet a separate line item to reflect the difference of the total reorganization value of the emerging entity over recorded amounts. When possible, reorganization value should be segregated into major categories.
","snippet":"While the court determines the adequacy of the disclosure statement, entities that expect to adopt fresh-start reporting (see Section 852-10-45 for guidance on what is referred to as fresh-start reporting) should report …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c4631e6537726739da799b2392e612cc3ab9287fa1e377a888b07c958de39429","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52365d5bfb28ccb67aaccc4c7e818ce190cf4e498648082f837513003310e35d","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"block":null,"heading":"The Financial Reporting Consequences of the Absolute Priority Doctrine","paragraphs":[{"citation":"852-10-05-16","para":"05-16","html":"
Under the absolute priority doctrine of the Bankruptcy Code, if the amount of postpetition liabilities and allowed claims exceeds the reorganization value of the emerging entity, existing shareholders lose their legal right to any economic interest without the consent of creditors. Therefore, any equity interest in the emerging entity ultimately held by existing shareholders is given to them by the creditors. Among the reasons the creditors might give such shareholders equity interests in the emerging entity are to avoid the expensive and time-consuming legal proceedings necessary to implement the cram-down provisions of the Bankruptcy Code or to preserve continuity of management. Consequently, in this situation, if all of the conditions stated in paragraph 852-10-45-19 are met, then upon an entity's emergence from Chapter 11, this Subtopic requires the entity to adopt fresh-start reporting.
","snippet":"Under the absolute priority doctrine of the Bankruptcy Code, if the amount of postpetition liabilities and allowed claims exceeds the reorganization value of the emerging entity, existing shareholders lose their legal ri…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:160dffa31530152c4a89e1668055190a771a89d5f8bb65beea37d41e49603e63","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:db4c78b0809c0010f82c7ec1ed4f2e51ba28eb1bd66cb0bddb5aab34927b8b40","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},{"block":null,"heading":"Terms","paragraphs":[{"citation":"852-10-05-17","para":"05-17","html":"
The following terms are widely used when addressing reorganizations, yet are not included in the text of the standards:
  1. a
    Administrative expenses
  2. b
    Obligations subject to compromise
  3. c
    Undersecured claim.
","snippet":"The following terms are widely used when addressing reorganizations, yet are not included in the text of the standards:\n(a) Administrative expenses\n(b) Obligations subject to compromise\n(c) Undersecured claim.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:412bc5ddefed68bcf1c01ab388c8d9bf3997afd08b52b4f965926808f5bf37bb","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cd2f9e9ebffa50f59cf0033223ad44c6c50849c1bcc4bcabc387b62f03a95ea4","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cb16dfa6a7b149616227466c377214d8ef3fd5fe40e67791cdf3594755ee9f8c","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cb16dfa6a7b149616227466c377214d8ef3fd5fe40e67791cdf3594755ee9f8c","downloaded_from":"2026-09-10T02:02:55.129Z","last_downloaded_at":"2026-09-10T02:02:55.129Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481181","source_sha256":"ec3c092fd6c62d6b638bba79eb2b2b5b277d9b918baf313a526b5666c27ecaa1"}}