This Section provides incremental disclosure guidance for entities with transactions within the scope of this Subtopic. It is incremental to disclosure guidance otherwise applicable to an entity under other generally accepted accounting principles (GAAP).
The notes to financial statements of an entity in Chapter 11 shall disclose both of the following:
- a
Claims not subject to reasonable estimation based on the provisions of Subtopic 450-20 - b
The principal categories of the claims subject to compromise.
The extent to which reported interest expense differs from stated contractual interest shall be disclosed. It may be appropriate to disclose this parenthetically on the face of the statement of operations.
Paragraph
852-10-45-16 identifies a situation in which disclosure of a probable issuance of common stock or common stock equivalents is required.
Example 1 (see paragraph
852-10-55-2) provides an illustration of financial statements and notes thereto for an entity operating under
Chapter 11.
Paragraph
852-10-45-21 requires additional information to be disclosed in the notes to the initial fresh-start financial statements when fresh-start reporting is adopted. That additional information consists of all of the following:
- a
Adjustments to the historical amounts of individual assets and liabilities
- b
The amount of debt forgiveness
- c
Significant matters relating to the determination of reorganization value, including all of the following: - 1
The method or methods used to determine reorganization value and factors such as discount rates, tax rates, the number of years for which cash flows are projected, and the method of determining terminal value - 2
Sensitive assumptions—that is, assumptions about which there is a reasonable possibility of the occurrence of a variation that would have significantly affected measurement of reorganization value
- 3
Assumptions about anticipated conditions that are expected to be different from current conditions, unless otherwise apparent.