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Exceptions to the assumption of share settlement if the entity has the choice of net cash settlement or share settlement relate primarily to differences in the economic value of the settlement alternatives (net cash versus shares) or if one of the settlement alternatives is fixed, capped, floored or collared. These differences in economic value could result in disregarding the uneconomic alternative and overcome the assumption of net cash settlement. The economic value difference would have to be significant (at least 10%) and this difference would have to be evaluated at each balance sheet date as part of the classification reevaluation process required under ASC 815.

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