HEARTS R US

1464 words 6 pages
Case 13-3:
Summary:
This case is about a company named Hearts ‘R Us. This company provides research and development for medical devices. According to the information provided the company is in its early stage and has no products in the market. They have developed a Heart Valve System that would be revolutionary in the market if is approved. Also there’s another company called Bionic Body that is a biological medical device company, they have another product that would work well with this new Heart Valve System. Therefore both companies decided to fuse by agreement.
The agreement is as follows: $3.5 million preferred stock shares of Series A from Heart Company are sold to Bionics with a par value of $1 each. This transaction was
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That disclosure shall be made in the equity section of the statement of financial position in the aggregate, either parenthetically or in short, rather than on a per-share basis or through disclosure in the notes.
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FASB: ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY (ISSUED 5/03)
“This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. Some of the provisions of this Statement are consistent with the current definition of liabilities in FASB Concepts Statement No. 6, Elements of Financial Statements…”
Accounting for Financial Instruments with Characteristics of Liabilities, Equity, or Both:
This Statement requires an issuer to classify the following instruments as liabilities (or

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