# ASC 852-20-05: Reorganizations — Quasi-Reorganizations — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/852/20/#05-overview-and-background)

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.

Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure.

Source downloaded (UTC): 2026-09-10T02:03:26.455Z to 2026-09-10T02:03:26.455Z

Record version: sha256:536245e11c009ab9879344f7fbcc6bee8a9729dc080041b6dd20de50c70f4990

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 852-20-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/852/20/#05-overview-and-background)

SEC content: no

##### [852-20-05-1](https://asc.understandingaccounting.org/asc/852/20/#852-20-05-1)

Pending content: no

Source downloaded (UTC): 2026-09-10T02:03:26.455Z to 2026-09-10T02:03:26.455Z

Record version: sha256:b5f0c66945c529ef543743e96baf48d03373cdf01ed288de1228e44cdf852cb6

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


This Subtopic addresses the accounting applicable to a corporate readjustment procedure in which, without the creation of a new corporate entity and without the intervention of formal court proceedings, an entity restates its balance sheet to fair value. This corporate readjustment procedure may eliminate an accumulated deficit and/or prevent future charges to its income statement that otherwise would be made. The accounting permitted through such a procedure is an exception to the general rule discussed in paragraph [852-20-25-2](https://asc.understandingaccounting.org/asc/852/20/#852-20-25-2).

##### [852-20-05-2](https://asc.understandingaccounting.org/asc/852/20/#852-20-05-2)

Pending content: no

Source downloaded (UTC): 2026-09-10T02:03:26.455Z to 2026-09-10T02:03:26.455Z

Record version: sha256:e31b30252c61202353a20c7aac398ef8bb4cbd53ce914a6583979e180259acc6

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Readjustments of this kind fall in the category of what are called quasi-reorganizations. This Subtopic does not deal with the general question of quasi-reorganizations, but only with cases in which the exception permitted in paragraph [852-20-25-2](https://asc.understandingaccounting.org/asc/852/20/#852-20-25-2) is availed of by a corporation. Such cases are referred to as readjustments. The accounting and reporting issues that arise and are addressed in this Subtopic consist of what is permitted in a readjustment and what is permitted thereafter.

##### [852-20-05-3](https://asc.understandingaccounting.org/asc/852/20/#852-20-05-3)

Pending content: no

Source downloaded (UTC): 2026-09-10T02:03:26.455Z to 2026-09-10T02:03:26.455Z

Record version: sha256:38a4466bdf7f6d8be3e88725fe5a4ea8744d1454649259d3e4106ec90b4da695

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


This Subtopic does not address quasi-reorganizations involving only deficit reclassifications.