diff --git a/doc/api/esm.md b/doc/api/esm.md
index 56691d0622ed3a..44f0d155bc3493 100644
--- a/doc/api/esm.md
+++ b/doc/api/esm.md
@@ -960,17 +960,33 @@ export function getFormat(url, context, defaultGetFormat) {
   return defaultGetFormat(url, context, defaultGetFormat);
 }
 
-export function transformSource(source, context, defaultTransformSource) {
-  const { url, format } = context;
-
-  if (extensionsRegex.test(url)) {
-    return {
-      source: CoffeeScript.compile(source, { bare: true })
-    };
-  }
-
-  // Let Node.js handle all other sources.
-  return defaultTransformSource(source, context, defaultTransformSource);
+async function getPackageType(url) {
+  // `url` is only a file path during the first iteration when passed the
+  // resolved url from the load() hook
+  // an actual file path from load() will contain a file extension as it's
+  // required by the spec
+  // this simple truthy check for whether `url` contains a file extension will
+  // work for most projects but does not cover some edge-cases (such as
+  // extension-less files or a url ending in a trailing space)
+  const isFilePath = !!extname(url);
+  // If it is a file path, get the directory it's in
+  const dir = isFilePath ?
+    dirname(fileURLToPath(url)) :
+    url;
+  // Compose a file path to a package.json in the same directory,
+  // which may or may not exist
+  const packagePath = resolvePath(dir, 'package.json');
+  // Try to read the possibly nonexistent package.json
+  const type = await readFile(packagePath, { encoding: 'utf8' })
+    .then((filestring) => JSON.parse(filestring).type)
+    .catch((err) => {
+      if (err?.code !== 'ENOENT') console.error(err);
+    });
+  // Ff package.json existed and contained a `type` field with a value, voila
+  if (type) return type;
+  // Otherwise, (if not at the root) continue checking the next directory up
+  // If at the root, stop and return false
+  return dir.length > 1 && getPackageType(resolvePath(dir, '..'));
 }
 ```