{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/310/10/#05-overview-and-background","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":"310","topic_title":"Receivables","subtopic":"310-10","subtopic_title":"Overall","section":{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"310-10-05-1","para":"05-1","html":"
The Receivables Topic includes the following Subtopics:
  1. a
    Overall
  2. b
    Nonrefundable Fees and Other Costs
  3. c
    Subparagraph superseded by Accounting Standards Update No. 2016-13.
  4. d
    Subparagraph superseded by Accounting Standards Update No. 2022-02.
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The Overall Subtopic establishes general guidance for receivables. The guidance is presented in the following two Subsections:
  1. a
    General
  2. b
    Acquisition, Development, and Construction Arrangements.
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The General Subsections provide guidance on a variety of accounting issues related to receivables. The following paragraphs provide background information on types of receivables addressed in the General Subsections.
","snippet":"The General Subsections provide guidance on a variety of accounting issues related to receivables. The following paragraphs provide background information on types of receivables addressed in the General Subsections.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aae9dadb1eff6ee33b686d215ba1361ce7cdc823cd48d2c636d75f2d8109faad","downloaded_from":"2026-09-09T23:24:46.214Z","last_downloaded_at":"2026-09-09T23:24:46.214Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481738","source_sha256":"53456975fa1f4197aae7e3236d8705c5e6b4623b74576f173f24513590e4ed4b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ec28d78eb270b635200fe59e37b39be05533b478bc6e1e90affabab95de6ac64","downloaded_from":"2026-09-09T23:24:46.214Z","last_downloaded_at":"2026-09-09T23:24:46.214Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481738","source_sha256":"53456975fa1f4197aae7e3236d8705c5e6b4623b74576f173f24513590e4ed4b"}},{"block":null,"heading":"Receivables in General","paragraphs":[{"citation":"310-10-05-4","para":"05-4","html":"
Receivables may arise from credit sales, loans, or other transactions. Receivables may be in the form of loans, notes, and other types of financial instruments and may be originated by an entity or purchased from another entity.
","snippet":"Receivables may arise from credit sales, loans, or other transactions. Receivables may be in the form of loans, notes, and other types of financial instruments and may be originated by an entity or purchased from another…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:323d551ae193820b9c65db3b670a30955cd5712af66a64bc587a61fda645f3be","downloaded_from":"2026-09-09T23:24:46.214Z","last_downloaded_at":"2026-09-09T23:24:46.214Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481738","source_sha256":"53456975fa1f4197aae7e3236d8705c5e6b4623b74576f173f24513590e4ed4b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b187dacba4353655b1b57b0147f5a129d34e361d434e6c4667c1bd01e0d116c8","downloaded_from":"2026-09-09T23:24:46.214Z","last_downloaded_at":"2026-09-09T23:24:46.214Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481738","source_sha256":"53456975fa1f4197aae7e3236d8705c5e6b4623b74576f173f24513590e4ed4b"}},{"block":null,"heading":"Standby Commitments to Purchase Loans","paragraphs":[{"citation":"310-10-05-5","para":"05-5","html":"
Entities sometimes enter into forward standby commitments to purchase loans at a stated price in return for a standby commitment fee. In such an arrangement, settlement of the standby commitment is at the option of the seller of the loans and would result in delivery to the entity only if the contract price equals or exceeds the market price of the underlying loan or security on the settlement date. A standby commitment differs from a mandatory commitment in that the entity assumes all the market risks of ownership but shares in none of the rewards. A standby commitment is, in substance, a written put option that will be exercised only if the value of the loans is less than or equal to the strike price.
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Factoring arrangements are a means of discounting accounts receivable on a nonrecourse, notification basis. Accounts receivable are sold outright, usually to a transferee (the factor) that assumes the full risk of collection, without recourse to the transferor in the event of a loss. Debtors are directed to send payments to the transferee.
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Rebates represent refunds of portions of the precomputed finance charges on installment loans or trade receivables, if applicable, that occur when payments are made ahead of schedule. Rebate calculations generally are governed by state laws and may differ from unamortized finance charges on installment loans or trade receivables because many states require rebate calculations to be based on the Rule of 78s or other methods instead of the interest method.
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The Acquisition, Development, and Construction Arrangements Subsections provide guidance for determining whether a lender should account for an acquisition, development, and construction arrangement as a loan or as an investment in real estate or a joint venture.
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Lenders may enter into acquisition, development, and construction arrangements in which they have virtually the same risks and potential rewards as those of owners or joint venturers. Loans granted to acquire operating properties sometimes grant the lender a right to participate in expected residual profit from the sale or refinancing of the property. The expected residual profit may take the form of a percentage of the appreciation of the property determined at the maturity of the loan.
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