What it is
Equity disclosures describe the rights of each class of security and explain changes in equity. For private companies they also pick up share-based compensation, redeemable interests and distributions that depend on loan covenants or tax rules.
This checklist covers capital structure, changes in equity, share-based compensation under ASC 718 with private company elections, and other items such as noncontrolling interests, ESOP shares and redeemable stock.
When to use it
- When preparing the equity note for a corporation, LLC or partnership.
- When the entity issues options, profits interests or redeemable units.
- When agreements limit distributions.
What’s inside
- Capital structure and rights
- Changes in equity
- Equity compensation (ASC 718)
- Noncontrolling interests, ESOP and other items
Standard cited
This template follows ASC 505 / ASC 718. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
What must be disclosed about each class of stock?
A summary of the pertinent rights and privileges of each security outstanding, such as dividend and liquidation preferences, participation rights, call prices and dates, conversion or exercise prices, sinking fund requirements and unusual voting rights (ASC 505-10-50-3).
Does an LLC need an equity note?
Yes. The same ideas apply to member units: classes, preferences, distributions and changes in members’ capital.
Is this checklist complete?
No. It is a prompt list paraphrased from the standard, not a substitute for the Codification or a full commercial disclosure checklist. Check each item against the current ASC text and any ASUs issued since the date you last checked, and add industry-specific requirements.
Related templates
- Audit Program: Debt and Equity
- GAAP Disclosure Checklist (Private Company, Short Form)
- Disclosure Checklist: Related Parties (ASC 850)
Last updated 11/05/2026. All free templates.