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Absent any conversion or exchange provisions, preferred stock is generally classified in equity. However, reporting entities should consider whether substantive redemption features exist, in which case it may be classified outside of equity (e.g., mezzanine equity), or as a liability. See FG 7.3.
In addition to the general disclosure requirements outlined in FSP 5.4, a reporting entity with non-redeemable preferred stock should state on the face of the balance sheet (or if more than one issue is outstanding, in the footnotes) the following for each issue in accordance with S-X 5-02 (28):
  • Title
  • Dollar amount
  • Dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable
On the face of the balance sheet or in the footnotes, the reporting entity should disclose the number of shares authorized and the number of shares issued or outstanding for each issue. In the footnotes or in a separate statement, it should disclose the changes in each class of non-redeemable preferred stock for each period an income statement is presented.

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