Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

Handbook: Debt and equity financing

Handbooks | August 2023

Latest edition: Our in-depth guide to debt and equity financing, with our latest interpretations.

Using Q&As and examples, we provide interpretive guidance on debt and equity financings.  This August 2023 edition incorporates our latest interpretations based on frequent questions we experience in practice.


  • All entities

Relevant dates

  • Effective immediately

Complex instruments, complex literature

The array of accounting literature on financial instruments can be bewildering, and the varieties and complexities of modern financial instruments are sometimes staggering. Taken together, it’s not an exaggeration to say that accounting for debt and equity financing transactions can seem daunting.

To simplify some of these complexities, the FASB issued ASU 2020-06 in August 2020, which made the most substantial changes to accounting for convertible financial instruments and contracts in an entity’s own equity in many years. This was followed in May 2021 by guidance in ASU 2021-04 on certain modifications or exchanges of freestanding equity-classified written call options.

Determining the right accounting can require you to maneuver through multiple standards and models just to arrive at the starting point.

This Handbook uses roadmaps to navigate the different standards, explaining what guidance applies to what types of instruments. It provides an in-depth look at the broad and often complex issues related to the classification, measurement, presentation and disclosure of financing instruments. And it includes examples demonstrating how to apply the standards to some common financing transactions.

We hope you find this Handbook useful in understanding how the guidance fits together and applies to financial instruments – from the simple to the most complex.

Report contents

  • Roadmap to the guidance
  • Debt
  • TDRs, debt modifications and extinguishments
  • Equity
  • Distinguishing liabilities from equity
  • SEC guidance on redeemable equity-classified instruments
  • Contracts in an entity’s own equity (before adoption of ASU 2020-06)
  • Contracts in an entity’s own equity (after adoption of ASU 2020-06)
  • Hybrid instruments with embedded features
  • Convertible instruments (before adoption of ASU 2020-06)
  • Convertible instruments (after adoption of ASU 2020-06)
  • Comprehensive examples
  • Effective dates and transition

Download the document:

Debt and equity financing

Download PDF

Explore more

Meet our team

Image of Lisa Blackburn
Lisa Blackburn
Partner, Dept. of Professional Practice, KPMG US
Image of Mahesh Narayanasami
Mahesh Narayanasami
Partner, Dept. of Professional Practice, KPMG US

Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.