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ASU 2020-06 includes new disclosure requirements as follows:
  • Scope of disclosure requirements
The scope of ASC 815-40-50 was modified to apply only to freestanding instruments regardless of whether the contract meets the criteria in ASC 815-40-15 and ASC 815-40-25 (see FG 5.6 for further information).
The amended guidance also states that equity-classified contracts under the provisions of ASC 815-40 are not required to provide the equity disclosures required by ASC 505-10-50, other than those described in ASC 815-40-50-5.
  • Interaction with disclosures about capital structure
The detail required for the existing disclosure requirement in ASC 815-40-50-5(d) was clarified by specifically requiring a description of each settlement alternative, and for each settlement, the amounts that would be paid or the number of shares that would be issued for each settlement alternative and their fair value if the settlement were to occur at the reporting date, as well as how changes in the fair value of the issuer’s equity shares affect those settlement amounts.
These disclosures are in addition to existing requirements outlined in FSP 5.7.

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