| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The accompanying interim condensed
consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared
in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and
the rules and regulations of the SEC for interim financial information. Certain information and note disclosures normally included in
the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, the accompanying interim condensed consolidated financial statements include all adjustments
(consisting of normal recurring adjustments) necessary for the fair presentation of the interim periods presented. Interim results are
not necessarily indicative of the results that may be expected for any other interim period or for the entire fiscal year. The accompanying
unaudited financial information should be read in conjunction with the audited financial statements and the notes thereto included in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 30, 2023, from which
the condensed consolidated balance sheet as of December 31, 2022 has been derived. Following Financial Accounting
Standards Board guidance related to the accounting for reverse acquisitions, CrossingBridge’s historical carve-out financial statements
replaced the Company’s (as the successor registrant to Enterprise Diversified) historical financial statements. Accordingly, the
capital structure, and per share amounts presented in CrossingBridge’s historical carve-out financial statements for the periods
prior to the Closing Date were recast to reflect the capital activity in accordance with the Merger Agreement. The CrossingBridge Advisors, LLC
carve-out for activity prior to the Closing Date is part of the Cohanzick financial statements. Prior to the Closing Date of the Mergers,
CBA was a wholly owned subsidiary of Cohanzick. The historical financial carve-out statements of CBA reflect the assets, liabilities,
revenue, and expenses directly attributable to CBA, as well as allocations deemed reasonable by management, to present the financial position,
statements of operations, statements of changes in stockholders’ equity, and statements of cash flows of CBA on a stand-alone basis
and do not necessarily reflect the financial position, statements of operations, statements of changes in stockholders’ equity,
and statements of cash flows of CBA in the future or what they would have been had CBA been a separate, stand-alone entity during the
periods presented that include activity prior to the Closing Date. Use
of Estimates In
accordance with GAAP, the preparation of these condensed consolidated financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount
of revenues and expenses during the reporting period. On
an ongoing basis, management evaluates its estimates and judgments, including, among other items, those related to fair value of investments,
revenue recognition, accrued expenses, financing operations, fair value of goodwill, fixed asset lives and impairment, lease right-of-use
assets and impairment, deferred tax assets, liabilities and valuation allowance, other assets, the present value of lease liabilities,
and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under
different assumptions and conditions. These accounting policies are described at relevant sections in the notes to the unaudited condensed
consolidated financial statements. Concentration
of Credit Risk Financial
instruments, which potentially subject the Company to concentrations of credit risk, consist of cash, cash equivalents, accounts receivable,
and notes receivable. The Company places its cash with high-quality financial institutions and, at times, exceeds the FDIC and CDIC insurance
limit. The Company extends credit based on an evaluation of customers’ financial condition, generally without collateral. Exposure
to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for
credit losses and maintains allowances for anticipated losses. Cash
and Cash Equivalents For
purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid instruments purchased with a maturity
and/or liquidation option of three months or less. Investments The
Company holds various investments through its other operations segment. Investments are typically short-term, highly liquid investments,
including vehicles such as: mutual funds, ETFs, commercial paper, and corporate and municipal bonds. Occasionally, the Company also invests
in comparably less liquid, opportunistic investments. Investments held at fair value are remeasured to fair value on a recurring basis.
Certain assets held through the other operations segment do not have a readily determinable value as these investments are either not
publicly traded, do not have published sales records, or do not routinely make current financial information available. Assets that do
not have a readily determinable value are remeasured when additional valuation inputs become observable. See Note 6 for more information. Accounts
Receivable The
Company’s CrossingBridge operations segment records receivable amounts for management fee shares earned on a monthly basis. Management
fee shares are calculated and collected on a monthly basis. The Company historically has had no collection issues with management fee
shares and the overall possibility for non-collection is extremely low. For these reasons, management has determined that it is not necessary
to record an allowance against these receivables. The
Company’s Willow Oak operations segment records receivable amounts for management fee shares and fund management services revenue
earned on a monthly basis. Management fee shares and fund management services fees are calculated and collected on either a monthly or
quarterly basis as dictated by the respective partnership agreement. The Company historically has had no collection issues with management
fee shares and fund management receivables and the overall possibility for non-collection is extremely low. For these reasons, management
has determined that it is not necessary to record an allowance against these receivables. The
Company’s Willow Oak operations segment also records receivable amounts for performance fee shares earned on an annual basis. Performance
fee shares are dependent upon exceeding specified relative or absolute investment return thresholds, which vary by affiliate relationship,
and typically include annual measurement periods. The Company historically has had no collection issues with performance fee shares and
the overall possibility for non-collection is extremely low. For these reasons, management has determined that it is not necessary to
record an allowance against these receivables. The
Company grants credit in the form of unsecured accounts receivable to its customers through its internet operations segment. The current expected credit loss methodology is based on management’s
assessment of the net amount expected to be collected from each customer. Specific customer receivables are
considered past due when they are outstanding beyond their contractual terms and are written off from the allowance for credit losses
when an account or invoice is individually determined to be uncollectible. The internet operations segment attempts to reduce the risk
of non-collection by including a late-payment fee and a manual-processing-payment fee to customer accounts. Receivables more than 90
days past due are no longer included in accounts receivable and are turned over to a collection agency. Accounts receivable more than
30 days are considered past due. As
of September 30, 2023 and December 31, 2022, allowances offsetting gross accounts receivable on the accompanying condensed consolidated
balance sheets totaled $ 2,007 2,283 143 177 1,537 Notes
Receivable The
Company does not routinely acquire notes receivable in the ordinary course of business, but when a business opportunity arises, a subsidiary
may acquire a note if it appears to be favorable to the Company. Notes receivable are recorded at their principal amount and interest is
accrued quarterly based on the applicable interest rate. The Company makes an assessment of the ultimate collectability of each note
receivable on an annual basis based upon the financial condition of the borrower and adjusts the carrying value of the note receivable
as deemed appropriate. Property
and Equipment Property
and equipment are recorded at cost. Expenditures for maintenance and repairs are charged to operations as incurred, while renewals and
betterments are capitalized. Gains and losses on disposals are included in the results of operations. Depreciation is computed using
the straight-line method based on the estimated useful lives for each of the following asset classifications. SCHEDULE
OF PROPERTY, PLANT AND EQUIPMENT, USEFUL LIFE
Furniture
and fixtures (in years) 5
Equipment
(in years) 7 The
Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there
are indications of impairment, then the Company uses estimated future undiscounted cash flows of the related asset or asset grouping
over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient
to recover the recorded asset values, the assets are written down to their estimated fair value. Property and equipment to be disposed
are reported at the lower of carrying amount or fair value of the asset less cost to sell. Goodwill
and Other Intangible Assets Goodwill
is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for under
the acquisition method of accounting. The Company tests its goodwill annually as of December 31, or more often if events and circumstances
indicate that those assets might not be recoverable. As of September 30, 2023 and December 31, 2022, the Company reported $ 737,869 Impairment
testing of goodwill is required at the reporting-unit level (operating segment or one level below operating segment). The impairment
test involves calculating the impairment of goodwill based solely on the excess of the carrying value of the reporting unit over the
fair value of the reporting unit. Prior to performing the impairment test, the Company may make a qualitative assessment of the likelihood
of goodwill impairment to determine whether a detailed quantitative analysis is required. The Company estimates the fair value of its
reporting units using discounted expected future cash flows. Intangible
assets (other than goodwill) consist of customer relationships, trade names, investment management agreements, a non-compete, and domain
names held amongst the CrossingBridge, Willow Oak and internet operations segments. When management determines that material intangible
assets are acquired in conjunction with the purchase of a business or asset, the Company determines the fair values of the identifiable
intangible assets by taking into account internal and external appraisals. Intangible assets determined to have definite lives are amortized
over their estimated useful lives. The Company evaluates at each balance sheet date whether events and circumstances have occurred that
indicate possible impairment. If there are indications of impairment, then the Company uses estimated future undiscounted cash flows
of the related intangible asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event
such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated
fair value. As of the periods ended September 30, 2023 and December 31, 2022, the Company reported the following intangible assets, net
of amortization and excluding goodwill, under the respective operating segment. SCHEDULE
OF INTANGIBLE ASSETS,NET OF AMORTIZATION AND EXCLUDING GOODWILL
September
30, 2023 December
31, 2022
CrossingBridge $ 2,161,478 $ -
Willow
Oak 502,587 534,195
Internet 659,194 689,731
Intangible
assets, net $ 3,323,259 $ 1,223,926 As
of September 30, 2023, the Company owned 240 As
a result of the Company’s impairment testing of goodwill and other intangible assets on December 31, 2022, the Company determined
that there was no impairment adjustment necessary. Earn-Out
Liability The
Company may enter into contingent payment arrangements in connection with the Company’s business combinations or asset purchases.
In contingent payment arrangements, the Company agrees to pay transaction consideration to the seller based on future performance. The
Company estimates the value of future payments of these potential future obligations at the time the business combination or asset purchase
is consummated. The liabilities related to contingent payment arrangements are recorded under the earn-out liability line on the condensed
consolidated balance sheets. Contingent
payment obligations related to asset purchases, if estimable and probable of payment, are initially recorded at their estimated value.
When the contingency is ultimately resolved, any additional contingent consideration issued or issuable over the amount that was initially
recognized as a liability is considered an additional cost of the acquisition. These additional costs would then be allocated to the
qualifying assets on a relative fair value basis. See Note 5 for more information on the Company’s asset acquisition of the RiverPark
Strategic Income Fund. W-1
Warrant and Redeemable Class B Common Stock Pursuant
to the Merger Agreement, the Company issued 1,800,000 1,800,000 Accrued
Compensation Accrued
compensation represents performance-based bonuses that have not yet been paid. Bonuses are subjective and are based on numerous factors
including, but not limited to, individual performance, the underlying funds’ performance, and profitability of the firm, as well
as the consideration of future outlook. Accrued bonus amounts can fluctuate due to a future perceived change in any one or more of these
factors. Additionally, differences between historical, current, and future personnel allocations could significantly impact the comparability
of bonus expenses period over period. Other
Accrued Expenses Other
accrued expenses represent incurred but not-yet-paid expenses from payroll accruals, professional fees, and other accrued taxes. Stock
Compensation Expense The
board of directors of the Company adopted the ENDI Corp. 2022 Omnibus Equity Incentive Plan, dated December 19, 2022 (the
“2022 Plan”), which was subsequently approved by the Company’s stockholders at the 2023 annual meeting of
stockholders held on May 22, 2023 (“2023 Annual Meeting”) and became effective on that date. On February 28, 2023,
subject to the approval of the 2022 Plan by our stockholders, the Company granted (i) restricted stock units, and (ii) restricted
Class A Common Stock. If the 2022 Plan had not been approved by the Company’s stockholders at the 2023 Annual Meeting, then
the awards granted on February 28, 2023 would have been forfeited. Vested restricted stock unit awards will be settled by the
Company in the form of cash or the issuance and delivery of shares of Company Class A Common Stock in the year following the year
the awards have become vested, but no later than March 15 of the following year. The Company has elected to ratably recognize the
stock compensation expense associated with its outstanding equity awards over each award’s respective vesting period. Equity
awards are valued on their respective grant date at fair market value, the then current trading value of the Company’s Class A
Common Stock, and are not subject to future revaluation. On February 28, 2023, the closing stock price of the Company’s Class
A Common Stock was $ 4.35 The
table below further details the awards granted on February 28, 2023, and represents the number of outstanding awards and the relevant
income statement impact as of and during the three- and nine-month periods ended September 30, 2023. There were no comparable equity
awards or income statement impacts as of and during the three- and nine-month periods ended September 30, 2022. SUMMARY
OF AWARDS GRANTED AND NUMBER OF OUTSTANDING AWARDS
Income
Statement Impact for the
Award
Type Number
of Awards Outstanding Vesting
Schedule Three
Months Ended September 30, 2023 Nine
Months Ended September 30, 2023
Restricted
stock units 99,766 25%
on the second anniversary of January 1, 2023, and thereafter in three equal installments on the subsequent three anniversaries of
the initial vesting date, with 100% of the restricted stock vested on the fifth anniversary of the initial vesting, subject to the
recipient’s continuous employment. $ 21,699 $ 50,632
Restricted
stock units 15,750 Fully
vested on the date of grant. - 68,513
Restricted
stock 82,761 25%
on the second anniversary of January 1, 2023, and thereafter in three equal installments on the subsequent three anniversaries of
the initial vesting date, with 100% of the restricted stock vested on the fifth anniversary of the initial vesting, subject to the
recipient’s continuous employment. 18,001 42,001
Total
outstanding awards 198,277 $ 39,700 $ 161,146 Leases The
Company records right-of-use assets and lease liabilities arising from both financing and operating leases that contain terms extending
longer than one year. The Company does not recognize right-of-use assets or lease liabilities for short-term leases (those with original
terms of 12 months or less). In making its determinations, the Company combines lease and non-lease elements of its leases. Concentration
of Revenue CBA
is the adviser to five registered investment companies under the CrossingBridge Family of Funds. The advised funds are the CrossingBridge
Low Duration High Yield Fund, CrossingBridge Ultra-Short Duration Fund, RiverPark Strategic Income Fund, CrossingBridge Responsible Credit
Fund, and the CrossingBridge Pre-Merger SPAC ETF. The combined AUM for these advised funds was approximately $ 1.17 697 605 779 CBA
fee revenues earned from advised funds, sub-advised funds, and services agreement for the three- and nine-month periods ended September
30, 2023 and 2022 included in the accompanying unaudited condensed consolidated statements of operations are detailed below. SCHEDULE
OF REVENUES
Three-Month
Period Ended September 30, Nine-Month
Period Ended September 30,
CrossingBridge
Operations Revenue 2023 2022 2023 2022
Advised
fund fee revenue $ 1,706,102 $ 1,092,079 $ 4,107,804 $ 3,251,263
Sub-advised
fund fee revenue 526,948 815,269 1,611,378 2,125,566
Service
fee revenue 110,197 86,424 393,797 86,424
Total
fee revenue $ 2,343,247 $ 1,993,772 $ 6,112,979 $ 5,463,253 Total
revenue from the CrossingBridge operations was approximately 91.4 %
and 90.0 %
of the Company’s total revenue for the three- and nine-month periods ended September 30, 2023, respectively. If CBA were to lose a significant
amount of AUM, the Company’s revenue would also decrease. Revenue
Recognition CrossingBridge
Operations Revenue Management
fee shares earned through the CrossingBridge operations segment are recorded on a monthly basis and are included in revenue on the accompanying
unaudited condensed consolidated statements of operations. The Company has performed an assessment of its revenue contracts under the
CrossingBridge operations segment and has not identified any contract assets or liabilities. Willow
Oak Operations Revenue Management
fee shares and fund management services fees earned through the Willow Oak operations segment are recorded on a monthly basis and are
included in revenue on the accompanying unaudited condensed consolidated statements of operations. Performance fee shares are dependent
upon exceeding specified relative or absolute investment return thresholds, which vary by affiliate relationship, and typically include
annual measurement periods. Performance fee shares are recognized only when it is determined that there is no longer potential for significant
reversal, such as when a fund’s performance exceeds a contractual threshold at the end of a specified measurement period. Consequently,
a portion of the performance fee shares recognized may be partially or wholly related to services performed in prior periods. Fund
management services revenue earned through the Willow Oak operations segment is also generally recorded on a monthly basis, which is
in line with the timing of when services are provided. Occasionally, fund management services revenue is earned through bespoke consulting
contracts performed over the course of multiple periods. In this instance, Willow Oak will only record and collect revenue for services
received through the end of each monthly or quarterly period, as appropriate. The
Company has performed an assessment of its revenue contracts under the Willow Oak operations segment and has not identified any contract
assets or liabilities. A
summary of revenue earned through Willow Oak operations during the three- and nine-month periods ended September 30, 2023 and included
in the accompanying unaudited condensed consolidated statements of operations is detailed below:
Three-Month
Period Ended September 30, Nine-Month
Period Ended September 30,
Willow
Oak Operations Revenue 2023 2022 2023 2022
Management
fee revenue $ 16,697 $ 8,206 $ 47,400 $ 8,206
Fund
management services revenue 19,299 13,769 85,349 13,769
Total
revenue $ 35,996 $ 21,975 $ 132,749 $ 21,975 Internet
Operations Revenue The
Company generates revenue through its internet operations segment from consumer and business-grade internet access, e-mail hosting and
storage, wholesale managed modem services, e-mail and web hosting, third-party software as a reseller, and various ancillary services
in the United States and Canada. Services include narrow-band (dial-up and ISDN) and broadband services (DSL, fiber-optic, and wireless),
web hosting, and additional related services to consumers and businesses. Customers may also subscribe to web hosting plans to include
email access and storage. Customer contracts through the internet operations segment can be structured as monthly or annual contracts.
Under annual contracts, the subscriber pays a one-time annual fee, which is recognized as revenue ratably over the life of the contract.
Under monthly contracts, the subscriber is billed monthly and revenue is recognized for the period to which the service relates. Domain
name registration revenue is recognized at the point of registration. Sales of hardware are recognized as revenue upon delivery and acceptance
of the product by the customer. Sales are adjusted for any returns or allowances. Management has concluded that the nature of the performance
obligation is cyclical with a very low possibility for nonperformance. Contract liabilities (deferred revenue) are recognized in the
amount of collections received in advance of services to be performed. No contract assets are recognized or incurred. Deferred
Revenue Deferred
revenue represents collections from customers in advance of internet services to be performed. Revenue is recognized in the period service
is provided. Total deferred revenue recorded under the internet operations segment as of September 30, 2023 and December 31, 2022 was
$ 164,499 156,859 14,222 113,026 no Income
Taxes Income
taxes for ENDI Corp. are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax benefits or consequences of events that have been included in the condensed consolidated financial
statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial
statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected
to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment, inclusive of the recent tax reform act. ENDI Corp. filed its first tax return
for the year ended December 31, 2021, which is open to potential examination by the Internal Revenue Service for three years. As
of September 30, 2023, the Company reported $ 1,289,582
of net deferred tax assets on the condensed consolidated
balance sheets. These net deferred tax assets consist primarily of historic net operating losses that were acquired by the Company as
part of the Business Combination, as well as post-closing activity which includes certain deferred tax assets and liabilities that were
not previously recognized when CrossingBridge was a nontaxable entity. In accordance with Section 382 of the Internal Revenue Code of
1986, as amended (“Section 382”), the Company has performed an analysis to determine if a change of control occurred as a
result of the Business Combination and has determined that a change of control is more likely than not to have occurred on August 11,
2022. Under Section 382, net operating loss carryforwards that arose prior to the ownership change will have limited availability to
offset taxable income arising in future periods following the ownership change. Section 382 imposes multiple separate and distinct limits
on the utilization of pre-change of control net operating losses based on the fair market value of the Company immediately prior to the
change of control, as well as certain activities that may or may not occur during the 60 months immediately following the change of control.
While the majority of the Company’s historic net operating losses will be limited to an annual threshold, the majority of historic
net operating losses also will not be subject to future expiration. As of the period ended September 30, 2023, the Company has not provided
a valuation allowance against its net operating losses as the Company expects to be able to use its net operating losses in full to offset
future taxable income generated by the Company. In
as much as CBA had a single member prior to the Closing Date, it had historically been treated as a disregarded entity for income
tax purposes. Consequently, Federal and state income taxes have not been provided for periods ended prior to the Closing Date, as
its single member was taxed directly on CBA’s earnings. CBA activity subsequent to the Closing Date was consolidated within
ENDI Corp.’s tax return that was filed for the year ended December 31, 2022 and was included in the income tax provision for
the year ended December 31, 2022. During
the three- and nine-month periods ended September 30, 2023, the Company reported $ 165,458
and $ 406,568
of income tax expenses, respectively. Comparably, during the three- and nine-month periods ended September 30, 2022, the Company reported
$ 400,283 of
income tax benefits. Income
(Loss) Per Share Basic
income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of
shares of common stock outstanding during the period. Included in the basic income (loss) per share for the three- and nine-month
periods ended September 30, 2023, in addition to the number of shares of common stock outstanding, are 15,750 In
periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potentially
dilutive common shares is anti-dilutive. In periods of net income, diluted earnings per share is computed using the more dilutive of
the “two-class method” or the “treasury method.” Dilutive earnings per share under the “two-class
method” is calculated by dividing net income available to common stockholders as adjusted for the participating securities, by
the weighted-average number of shares outstanding plus the dilutive impact of all other potentially dilutive common shares,
consisting primarily of common shares underlying the Class W-1 and W-2 Warrants (as defined in Note 4) issued pursuant to the Merger
Agreement. Dilutive earnings per share under the “treasury method” is calculated by dividing net income available to
common stockholders by the weighted-average number of shares outstanding plus the dilutive impact of all potentially dilutive common
shares, consisting primarily of common shares underlying the Class W-1 and W-2 Warrants issued pursuant to the Merger
Agreement. The
number of potentially dilutive shares for the period ended September 30, 2023 and 2022, consisting of the Class W-1 and W-2 Warrants
issued pursuant to the Merger Agreement, was 2,050,000 None Recently
Issued Accounting Pronouncements In
June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13,
“Financial Instruments - Credit Losses” (Topic 326). The guidance eliminates the probable initial recognition threshold that
was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate should now reflect an entity’s
current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current
conditions. In April 2019, the FASB further clarified the scope of the credit losses standard and addressed issues related to accrued
interest receivable balances, recoveries, variable interest rates, and prepayments. In May 2019, the FASB issued further guidance to
provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible
financial instruments. In November 2019, the FASB issued further guidance on expected recoveries for purchased financial assets with
credit deterioration, and transition refiled for troubled debt restructurings, disclosures related to accrued interest receivables, and
financial assets secured by collateral maintenance provisions. The guidance is effective for fiscal years beginning after December 15,
2022, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15,
2018, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified
retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. The Company currently expects
that the adoption of this guidance may change the way it assesses the collectability of its receivables and recoverability of other financial
instruments. The Company adopted this guidance as of January 1, 2023. The adoption of this guidance did not have a material impact on
the Company’s condensed consolidated financial statements. In
August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and
Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)”. This update simplifies the accounting for convertible debt
and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition,
the amendments in the ASU also simplify the guidance in ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity,
by removing certain criteria that must be satisfied in order to classify a contract as equity. Finally, the amendments revise the guidance
on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s
ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. This new guidance is
required to be adopted by pub |
