{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/274/10/#55-implementation-guidance-and-illustrations","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"274","topic_title":"Personal Financial Statements","subtopic":"274-10","subtopic_title":"Overall","section":{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"274-10-55-1","para":"55-1","html":"
This implementation guidance addresses estimating current value. Recent transactions involving similar assets and liabilities in similar circumstances ordinarily provide a satisfactory basis for determining the estimated current value of an asset and the estimated current amount of a liability. If recent sales information is unavailable, other methods that may be used include any of the following:
  1. a
    The capitalization of past or prospective earnings
  2. b
    The use of liquidation values
  3. c
    The adjustment of historical cost based on changes in a specific price index
  4. d
    The use of appraisals
  5. e
    The use of the discounted amounts of projected cash receipts and payments.
","snippet":"This implementation guidance addresses estimating current value. Recent transactions involving similar assets and liabilities in similar circumstances ordinarily provide a satisfactory basis for determining the estimated…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:624e971a3d2975cb0c901d611d1eae33c977d67ec1e787d1e7ec8cfd2f369e98","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-2","para":"55-2","html":"
Costs of disposal, such as commissions, shall be considered in determining the estimated current value of an asset. The book value or cost of a person's share of the equity of a business adjusted for appraisals of specific assets, such as real estate or equipment, is sometimes used as the estimated current value.
","snippet":"Costs of disposal, such as commissions, shall be considered in determining the estimated current value of an asset. The book value or cost of a person's share of the equity of a business adjusted for appraisals of specif…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b9bc63eb186a122e1b67783d4bbb976ed393929d21416638d97ff776362f6aca","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-3","para":"55-3","html":"
In determining the estimated current values of some assets (for example, works of art, jewelry, restricted securities, investments in closely held businesses, and real estate), the person may need to consult a specialist.
","snippet":"In determining the estimated current values of some assets (for example, works of art, jewelry, restricted securities, investments in closely held businesses, and real estate), the person may need to consult a specialist…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:66fed04b42f8a6906dda7050ad16fc543e7d7b080a0f9ba4b9b479442fc15528","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-4","para":"55-4","html":"
There is no one generally accepted procedure for determining the estimated current value of an investment in a closely held business. Several procedures or combinations of procedures may be used to determine the estimated current value of a closely held business, including any of the following:
  1. a
    A multiple of earnings
  2. b
    Liquidation value
  3. c
    Reproduction value
  4. d
    Appraisals
  5. e
    Discounted amounts of projected cash receipts and payments
  6. f
    Adjustments of book value or cost of the person's share of the equity of the business.
The book value or cost of a person's share of the equity of a business adjusted for appraisals of specific assets, such as real estate or equipment, is sometimes used as the estimated current value.
","snippet":"There is no one generally accepted procedure for determining the estimated current value of an investment in a closely held business. Several procedures or combinations of procedures may be used to determine the estimate…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0f5f45bf5f7faa9acaa97faa46f78b85f6766eb367a677dbb32c82e7b39c6ae0","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-5","para":"55-5","html":"
The owner of an interest in a closely held business may have entered into a buy-sell agreement that specifies the amount (or the basis of determining the amount) to be received in the event of withdrawal, retirement, or sale. If such an agreement exists, it shall be considered, but it does not necessarily determine estimated current value. Whatever procedure is used, the objective shall be to approximate the estimated current value.
","snippet":"The owner of an interest in a closely held business may have entered into a buy-sell agreement that specifies the amount (or the basis of determining the amount) to be received in the event of withdrawal, retirement, or …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3c3c867e4ca836b697075e3d6ff2d4bbe935ce89ce2e5bb7580870bceec2f36","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-6","para":"55-6","html":"
Information that may be used in determining the estimated current values of investments in real estate (including leaseholds) includes any of the following:
  1. a
    Sales of similar property in similar circumstances
  2. b
    The discounted amounts of projected cash receipts and payments relating to the property or the net realizable value of the property, based on planned courses of action, including leaseholds whose current rental value exceeds the rent in the lease
  3. c
    Appraisals based on estimates of selling prices and selling costs obtained from independent real estate agents or brokers familiar with similar properties in similar locations
  4. d
    Appraisals used to obtain financing
  5. e
    Assessed value for property taxes, including consideration of the basis for such assessments and their relationship to market values in the area.
","snippet":"Information that may be used in determining the estimated current values of investments in real estate (including leaseholds) includes any of the following:\n(a) Sales of similar property in similar circumstances\n(b) The …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eb139c6c3e0772fa4596ba753b42dbb48175a19bb23c7fa87772c61ba65d418f","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-7","para":"55-7","html":"
This paragraph provides implementation guidance on the application of paragraph 274-10-35-11. Nonforfeitable rights that may have those characteristics include all of the following:
  1. a
    Guaranteed minimum portions of pensions
  2. b
    Vested interests in pension or profit sharing plans
  3. c
    Deferred compensation contracts
  4. d
    Beneficial interests in trusts
  5. e
    Remainder interests in property subject to life estates
  6. f
    Annuities
  7. g
    Fixed amounts of alimony for a definite future period.
","snippet":"This paragraph provides implementation guidance on the application of paragraph 274-10-35-11. Nonforfeitable rights that may have those characteristics include all of the following:\n(a) Guaranteed minimum portions of pen…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0a3dcd5a31e0eafeb1509cc5673f1be51b21067ba08e845aae4fb8d0092cc39f","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc8cca47702085482be7e2cb470aa4b53f0f89101a33004ee1659bb9df8606f3","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"274-10-55-8","para":"55-8","html":"
This Example illustrates financial statements prepared following the guidance in this Subtopic.
","snippet":"This Example illustrates financial statements prepared following the guidance in this Subtopic.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0d62899a7d2e389127501b3383f118b2c5ad7948a97cc48762f6579a9149f11f","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-9","para":"55-9","html":"
Illustrative statements of financial condition follow.The accompanying notes to financial statements (see paragraph 274-10-55-11) are an integral part of these financial statements.
","snippet":"Illustrative statements of financial condition follow.\nThe accompanying notes to financial statements (see paragraph 274-10-55-11) are an integral part of these financial statements.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:70a44fe258ac43570b23b66a4b4b4e08911e7a9d079e651f7d87c2e28d0b3b31","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-10","para":"55-10","html":"
Illustrative statements of changes in net worth follow.The accompanying notes to financial statements (see paragraph 274-10-55-11) are an integral part of these financial statements.
","snippet":"Illustrative statements of changes in net worth follow.\nThe accompanying notes to financial statements (see paragraph 274-10-55-11) are an integral part of these financial statements.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c9c98cb5914319c6c45e7fa71fd218d32e60900d21f455215a69582cb2238cad","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-11","para":"55-11","html":"
Illustrative notes to financial statements follow.
","snippet":"Illustrative notes to financial statements follow.\nJames and Jane Person—Notes to Financial Statements\nNOTE 1. The accompanying financial statements include the assets and liabilities of James and Jane Person. Assets are…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0b1beeb78e585f81fd74007eac62ff5034aec932c73cbec301a5012970221d8f","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-12","para":"55-12","html":"
This Example illustrates how to compute the excess of the estimated current values of assets over their tax bases and the provision for estimated income taxes on the excess. This Example uses the same information as in the illustrative financial statements in Example 1 (see paragraph 274-10-55-8). The provision for estimated income taxes should also reflect tax consequences that result from differences between the estimated current amounts of liabilities and their tax base.
","snippet":"This Example illustrates how to compute the excess of the estimated current values of assets over their tax bases and the provision for estimated income taxes on the excess. This Example uses the same information as in t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6f5dc9a6023916a795d809eda2653437d2e0da7f3c20b9902a1a3ac31c52626a","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-13","para":"55-13","html":"
Paragraph 274-10-50-2(k)(6) requires that the excess or deficit of the estimated current values of major assets or categories of assets over their tax bases be disclosed. That paragraph also requires that differences between the estimated current amounts of major liabilities or categories of liabilities and their tax bases also be disclosed. Paragraph 274-10-45-12 requires that the amount of estimated income taxes be presented in the statement of financial condition between liabilities and net worth.
","snippet":"Paragraph 274-10-50-2(k)(6) requires that the excess or deficit of the estimated current values of major assets or categories of assets over their tax bases be disclosed. That paragraph also requires that differences bet…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e2c66c63f83316ed3575a0b005be5cd089fa951f06715e16ddff162816dd300f","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},{"citation":"274-10-55-14","para":"55-14","html":"
The assumptions and the tax basis information used in computing the excess of the estimated current values of assets over their tax bases and the estimated income taxes on the excess depend on the facts, circumstances, tax laws and regulations, and assumptions that apply to the individual or individuals for whom the financial statements are prepared. The facts, circumstances, tax laws and regulations, and assumptions used in the following are illustrative only.
","snippet":"The assumptions and the tax basis information used in computing the excess of the estimated current values of assets over their tax bases and the estimated income taxes on the excess depend on the facts, circumstances, t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3437ed3382848a4b07fe1f11ca9817539a27d11b8478a0e5ae7e3d4252d3189","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:15ff41d94f89cdc1e9a321b444c311b7544a36ef5447f1af74fd53f8bc9239e2","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b89d8bf861a9557dfff9d1f89a4be318bbf7e485b8aa02c61b21d34994fdb553","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b89d8bf861a9557dfff9d1f89a4be318bbf7e485b8aa02c61b21d34994fdb553","downloaded_from":"2026-09-09T23:21:49.350Z","last_downloaded_at":"2026-09-09T23:21:49.350Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479592","source_sha256":"38983f9b7c1fcd08abe13ff3788aa644c242c9e6c4bf3d8520b12b76d8ba80fa"}}