Financial Services Industry
Industry: Email Alert RSS FeedSFAS 150: Accounting for financial instruments with characteristics of both liability and equity
Pennsylvania CPA Journal, October, 2003 by Velky, Gayle A
If your company or client has buy-sell agreements that obligate the corporation to purchase the stock of shareholders upon death or termination, then you will be affected.
In May 2003, the Financial Accounting Standards Board (FASB) released SFAS No. 150 to provide clarification on certain financial instruments that have characteristics of both liabilities and equity. The impact on financial statements prepared under generally accepted accounting principles could be that the balance sheet does not reflect any equity. Assets could just equal liabilities.
If you handle buy-sell agreements that obligate the corporation to purchase the stock of shareholders upon their death or termination, then you will be affected. GAAP financial statements will look different.**
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