NAA2405. Is it Debt or Equity?

In this session, participants will learn about the challenges in determining whether a financial instrument should be classified as a liability or as equity. The session will address situations where legal form equity must nonetheless be presented as debt in the balance sheet. The session will also describe the GAAP guidelines around classifying equity-linked contracts as either liabilities or equity.

Learning Objectives:

• Determine the effect of redemption features on the classification of legal form equity instruments
• Apply the requirements in GAAP to determine whether an equity-linked contract should be classified as a liability or equity