EquipmentShare.com IncEQPT
EquipmentShare.com Inc New Standards Disclosure
Recently Adopted Accounting Pronouncements
Improvements to Income Tax Disclosure: In December 2023, the FASB issued ASU 2023-09, which requires
entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations
before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or
benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to
disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The
Company adopted this guidance on January 1, 2025, and was applied on a prospective basis to all periods presented.
The adoption of this guidance resulted in expanded disclosures and are included in Note 19 - Income Taxes.
Accounting for Convertible Instruments: In August 2020, the FASB issued ASU 2020-06, which simplifies the
accounting for convertible instruments primarily by eliminating the cash conversion and beneficial conversion
models in previous guidance. The Company adopted this guidance on January 1, 2024, using the modified
retrospective approach. The adoption of ASU 2020-06 resulted in the elimination of the beneficial conversion
feature of $2 million related to the Company’s Series A-2 convertible preferred stock, increasing convertible
preferred stock by $2 million with a corresponding decrease to additional paid-in capital.
Accounting Pronouncements Not Yet Adopted:
Disaggregation of Income Statement Expenses: In November 2024, the FASB issued ASU 2024-03, which is
intended to improve the disclosures about a public entity's expenses and address requests from investors for more
detailed information about the types of expenses in commonly presented expense captions. The guidance is effective
for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after
December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued or
made available for issuance. ASU 2024-03 should be applied on a prospective basis, but retrospective application is
permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its
consolidated financial statements and related disclosures.
Measurement of Credit Losses for Accounts Receivable and Contract Assets: In July 2025, the FASB issued
ASU 2025-05, which provides optional guidance relating to the estimation of expected credit losses on current
accounts receivable and current contract assets. This guidance permits entities to apply a practical expedient when
estimating credit losses that assumes that current conditions as of the balance sheet date do not change for the
remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15,
2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should
be applied prospectively. The Company is currently assessing the impact this guidance will have on our financial
statements.
Improvements to the Accounting for Internal-Use Software: In September 2025, the FASB issued ASU
2025-06, which amends the guidance in ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software. The
amendments modernize the recognition and disclosure framework for internal-use software costs, removing the
previous “development stage” model and introducing a more judgment-based approach. ASU 2025-06 is effective
for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently
evaluating the potential impact of ASU 2025-06 on its consolidated financial statements and related disclosures.
Interim Reporting - Narrow Scope Improvements: In December 2025, the FASB issued ASU 2025-11, which
clarifies interim disclosure requirements and the applicability of ASC 270, Interim Reporting. The objective of the
amendment is to provide further clarity about the current interim disclosure requirements. ASU 2025-11 is effective
for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early
adoption permitted. The Company is currently evaluating the potential impact of ASU 2025-11 on its consolidated
financial statements and related disclosures.
Codification Improvements: In December 2025, the FASB issued ASU 2025-12, which updates U.S. GAAP for
a broad range of topics arising from technical corrections, unintended application of the codification, clarifications,
and other minor improvements. The guidance is effective for fiscal years beginning after December 15, 2026, and
interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is
currently evaluating the potential impact, if any, on the consolidated financial statements.
About New Standards Disclosures
New accounting standards disclosures describe recently adopted pronouncements and those not yet effective, along with management's assessment of their expected impact. This section provides an early warning system for upcoming changes to how a company reports its financial results, often years before the new rules take effect.
Key signals: when management describes a not-yet-adopted standard's impact as "material" or "still being evaluated," it signals potential significant changes to reported metrics upon adoption. Watch for standards that affect a company's core operations — for example, revenue recognition changes for software companies or lease accounting changes for retailers with large store footprints. The transition method chosen (full retrospective versus modified retrospective) affects comparability with prior periods. Companies that delay adoption to the latest permitted date may be struggling with implementation complexity. Compare the disclosed impact assessments against peers in the same industry to gauge whether management's expectations are reasonable.