allocation of proceeds

Broad Transactions1

1. 825-20Registration Payment Arrangements825 Financial Instruments

   ASC 825-20 governs registration payment arrangements — agreements in which an issuer must file/obtain effectiveness of a registration statement (or obtain/maintain a stock exchange listing) for financial instruments and must transfer cash or shares to the counterparty if it fails. The core rule is that the arrangement is a separate unit of account: the underlying financial instruments are recognized and measured under other GAAP (e.g., 815-10, 815-40, 835-30) ignoring the contingent obligation, while the contingent obligation itself is recognized and measured under the loss-contingency model in Subtopic 450-20. Extensive disclosures are required even if payment is remote.