# ASC 310-20-25: Receivables — Nonrefundable Fees and Other Costs — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/310/20/#25-recognition) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:81848d29a765817b3d55f96d7b0080587a6a774444696c80b83d2075c9f5d6e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 310-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/310/20/#25-recognition) SEC content: no ##### [310-20-25-1](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:f9bed3fb1a53277ca3979e43034168677704f5ed5d4a8d0b255dd8d1a61e5ceb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section addresses the recognition of certain lending fees and costs, specifically: 1. a [Loan origination fees](https://asc.understandingaccounting.org/glossary/l/#loan-origination-fees "Origination fees consist of all of the following: Fees that are being charged to the borrower as prepaid interest or to reduce the loan's nominal interest rate, such as interest buy-downs (explicit yield adjustments) Fees to reimburse the lender for origination activities Other fees charged to the borrower that relate directly to making the loan (for example, fees that are paid to the lender as compensation for granting a complex loan or agreeing to lend quickly) Fees that are not conditional on a loan being granted by the lender that receives the fee but are, in substance, implicit yield adjustments because a loan is granted at rates or terms that would not have otherwise been considered absent the fee (for example, certain syndication fees addressed in paragraph 310-20-25-19) Fees charged to the borrower in connection with the process of originating, refinancing, or restructuring a loan. This term includes, but is not limited to, points, management, arrangement, placement, application, underwriting, and other fees pursuant to a lending or leasing transaction and also includes syndication and participation fees to the extent they are associated with the portion of the loan retained by the lender.") and [direct loan origination costs](https://asc.understandingaccounting.org/glossary/d/#direct-loan-origination-costs "Direct loan origination costs represent costs associated with originating a loan. Direct loan origination costs of a completed loan shall include only the following: Incremental direct costs of loan origination incurred in transactions with independent third parties for that loan Certain costs directly related to specified activities performed by the lender for that loan. Those activities include all of the following: Evaluating the prospective borrower's financial condition Evaluating and recording guarantees, collateral, and other security arrangements Negotiating loan terms Preparing and processing loan documents Closing the transaction. The costs directly related to those activities shall include only that portion of the employees' total compensation and payroll-related fringe benefits directly related to time spent performing those activities for that loan and other costs related to those activities that would not have been incurred but for that loan. See Section 310-20-55 for examples of items.") 2. b Other lending-related costs 3. c Cost determination 4. d [Commitment fees](https://asc.understandingaccounting.org/glossary/c/#commitment-fees "Fees charged for entering into an agreement that obligates the entity to make or acquire a loan or to satisfy an obligation of the other party under a specified condition. Commitment fees include fees for letters of credit and obligations to purchase a loan or group of loans and pass-through certificates.") 5. e [Credit card fees](https://asc.understandingaccounting.org/glossary/c/#credit-card-fees "The periodic uniform fees that entitle cardholders to use credit cards. The amount of such fees generally is not dependent upon the level of credit available or frequency of usage. Typically the use of credit cards facilitates the cardholder's payment for the purchase of goods and services on a periodic, as-billed basis (usually monthly), involves the extension of credit, and, if payment is not made when billed, involves imposition of interest or finance charges. Credit card fees include fees received in similar arrangements, such as charge card and cash card fees.") and costs 6. f [Loan syndication](https://asc.understandingaccounting.org/glossary/l/#loan-syndication "A transaction in which several lenders share in lending to a single borrower. Each lender loans a specific amount to the borrower and has the right to repayment from the borrower. It is common for groups of lenders to jointly fund those loans when the amount borrowed is greater than any one lender is willing to lend.") fees 7. g Purchase of a [loan](https://asc.understandingaccounting.org/glossary/l/#loan "A contractual right to receive money on demand or on fixed or determinable dates that is recognized as an asset in the creditor's statement of financial position. Examples include but are not limited to accounts receivable (with terms exceeding one year) and notes receivable. This definition encompasses loans accounted for as debt securities.") or group of loans 8. h Independent third parties. #### Loan Origination Fees and Direct Loan Origination Costs ##### [310-20-25-2](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:25084c4d242444aaae990044062ba6629e4b373fc7d711053524d718d95f4a27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Loan origination fees shall be deferred. Likewise, direct loan origination costs shall be deferred. #### Other Lending-Related Costs ##### [310-20-25-3](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:17b5d6788081cd58adf8db1e0a734af58307e6601b748712b200279e9e2d2896 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All other lending-related costs, including costs related to activities performed by the lender for advertising, soliciting potential borrowers, servicing existing loans, and other ancillary activities related to establishing and monitoring credit policies, supervision, and administration, shall be charged to expense as incurred. Employees' compensation and fringe benefits related to those activities, unsuccessful loan origination efforts, and [idle time](https://asc.understandingaccounting.org/glossary/i/#idle-time "Idle time represents the time that a lender's employees are not actively involved in performing origination activities for specific loans. Idle time can be caused by many factors, including lack of work, delays in work flow, and equipment failure. Idle time can be measured through the establishment of standard costs, time studies, ratios of productive and nonproductive time, and other methods.") shall be charged to expense as incurred. Administrative costs, rent, depreciation, and all other occupancy and equipment costs are considered indirect costs and shall be charged to expense as incurred. ##### [310-20-25-4](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:e1608437ee7a86edc07f50b703635ed11ee8dcb2adac717fa446a32d173f4371 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs for software dedicated to loan processing and origination are not eligible for deferral as direct loan origination costs under the definition of that term. Such costs are not other costs related to those activities that would not have been incurred but for that loan as contemplated in the definition of the term. ##### [310-20-25-5](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:4f5cfd5deba471075bc81ce3380f93f21a7deb91162492fedad8978d0552ef28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fees paid to a service bureau for loan processing are not eligible for deferral as direct loan origination costs under the definition of that term because the services were performed after the loan has already been made; the costs are not origination costs. ##### [310-20-25-6](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:55cfa30bbba0861d892ab82400c3c328432fa228aed642e2f2d07be67acdfb7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Bonuses based on successful production of loans that are paid to employees involved in loan origination activities are partially deferrable as direct loan origination costs under the definition of that term. Bonuses are part of an employee's total compensation. The portion of the employee's total compensation that may be deferred as direct loan origination costs is the portion that is directly related to time spent on the activities contemplated in the definition of that term and results in the origination of a loan. ##### [310-20-25-7](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:fe8704c9daa7c51f6ff552e89f19c9ff13471c1e17314aec9fa578c605ced137 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If compensation for an employee traditionally paid by salary or hourly wage is switched wholly or partially to commissions on successful loan production, such costs would be partially deferrable as direct loan origination costs under the definition of that term. As specified in the preceding paragraph, only the portion of the employee's total compensation directly related to time spent on activities contemplated in the definition of that term for completed loans would be deferred. Commission-based compensation arrangements between a lender and its employees may be similar to arrangements a lender may have with independent third parties such as loan brokers. However, when origination activities are performed by the lender's employees, the lender must allocate compensation costs applicable to the activities contemplated in the definition of direct loan acquisition costs based on the portion of time spent by employees. An allocation of the employees' total compensation between origination and other activities is made so that only those costs associated with those [lending activities](https://asc.understandingaccounting.org/glossary/l/#lending-activities "Lending, committing to lend, refinancing or restructuring loans, arranging standby letters of credit, syndicating loans, and leasing activities are lending activities.") contemplated in the definition of that term are deferred for completed loans, even if commissions are 100 percent of such compensation and are based solely on completed loan transactions. #### Cost Determination ##### [310-20-25-8](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:da75c4be7e9037104b92277ff17ac2e257b5580a05e00bc6fa67176127e3ebdc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic does not specify how costs are to be determined but rather what costs must be deferred. In many instances, standard costing may be used to estimate the costs to be deferred in accordance with the provisions of this Subtopic. For certain loans, the cost of origination may be similar and standard costing may be appropriate for those loans, while other loans may be of such a nature that costs must be identified separately. Lenders may use any one or a combination of methods that will provide adequate information to report financial results in accordance with this Subtopic. Development of a standard costing system will require periodic analysis of variances and, if necessary, adjustment of standard costing estimates. Possible standard cost methods that may be used to measure costs applicable to transactions that have occurred include standard costs, actual costs, job process (for example, homogeneous loans), or job order (for example, specific loans). ##### [310-20-25-9](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:924f47271df2cf81ba1a0cf0aaf5b564f74b53056a148fde71c8abad334afc1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The successful-efforts accounting notion utilized at an entity-wide level may result in a standard cost system that does not accurately reflect the amount of costs that may be deferred and amortized under the provisions of this Subtopic. Successful loan efforts can be determined as a percentage of each function (for example, application, verification, underwriting, appraisal, closing) and may be based on the percentage, adjusted for idle time and time spent on activities for which the related costs cannot be deferred, of successful and unsuccessful efforts determined for each function. ##### [310-20-25-10](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:44f9086703957e20924c71629ae9ee648f54f15f078c513b5ec63de6f53c14eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accounting for costs associated with loan originations on loans that have not yet been closed, judgment is required to estimate the number of loans in process that will result in a successful loan origination. Origination costs on a loan in process may be deferred until the loan is either closed or considered an unsuccessful effort. If a loan in process is determined to be unsuccessful after the balance sheet date but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), costs that have been deferred through the balance sheet date shall be charged to expense in the period ending with the balance sheet date. #### Commitment Fees ##### [310-20-25-11](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:c188977099c38c31ba93e0d5731c47098946e27f1c19561ba7315b251155d0cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except as set forth in paragraph [310-20-35-3](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-3), fees received for a commitment to originate or purchase a loan or group of loans shall be deferred. ##### [310-20-25-12](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:3da40cdef9ffced06bee5b21365db576f14bd34fdc3cf1c4009126cf6fbbcf5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Direct loan origination costs incurred to make a commitment to originate a loan shall be offset against any related commitment fee and the net amount recognized as set forth in paragraph [310-20-35-3](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-3). ##### [310-20-25-13](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:02a2a73df03198efb22cbbed87ca5509c565973579f9d19fa97b9aec705079fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If qualifying costs associated with commitments exceed commitment fees received (or if no fee is charged), whether or not the resulting net cost may be deferred depends on the likelihood of the commitment being exercised. This Subtopic applies to both nonrefundable fees and costs, and paragraphs [310-20-35-3](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-3) and [310-20-25-1](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-1) may require that the net of such items be deferred. However, if the likelihood that the commitment will be exercised is remote, any net costs shall be charged to expense immediately rather than deferred and amortized on a straight-line basis over the commitment period. ##### [310-20-25-14](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:1638e48b2691b15e16750d00c4d323c7bc71d4c2e7faf40a04e4ea4e357df41f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fees received for providing commercial letters of credit are covered by this Subtopic. Such fees are considered commitment fees, and the accounting is specified in paragraph [310-20-35-3](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-3). #### Credit Card Fees and Costs ##### [310-20-25-15](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:34ead07363426c550f7212790af1301e724f61bf37af813c96f7d93f4af46825 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Credit card fees generally cover many services to cardholders. Accordingly, fees that are periodically charged to cardholders shall be deferred. This accounting shall also apply to other similar card arrangements that involve an extension of credit by the card issuer. ##### [310-20-25-16](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:ee4a2ac3b445ba0c9c5070c0e31a82fa4c334a3ab786971a0f6980415cd941b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Only the costs of origination that qualify as direct loan origination costs under the definition of that term are eligible for deferral. All other costs shall be charged to expense as incurred. Therefore, costs eligible for deferral would likely exceed fees only when a credit card is first issued. ##### [310-20-25-17](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:303d6e835348e6586590fa7e3aeeae29d46702bb380088ab80301a1741bfa009 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Credit card origination costs shall be netted against the related credit card fee, if any. In situations where a significant fee is charged, the privilege period is the period that the fee entitles the cardholder to use the credit card. If there is no significant fee, the privilege period shall be one year. Significance for this purpose shall be evaluated based on the amount of the fee relative to the related costs. ##### [310-20-25-18](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-18) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:b64aaf9f0a532ee719568da70aa559e0b9d1a7a8ec0224b469ee292628fbc204 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Credit card accounts acquired individually shall be accounted for as originations under this Subtopic. Amounts paid to a third party to acquire individual credit card accounts shall be deferred and netted against the related credit card fee, if any. #### Loan Syndication Fees ##### [310-20-25-19](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-19) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:4e7b31c5293750e79481fd8f92d9987aeff054c4aa71f9160c700f169d35e6fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity managing a loan syndication (the syndicator) shall recognize loan syndication fees when the syndication is complete unless a portion of the syndication loan is retained. If the yield on the portion of the loan retained by the syndicator is less than the average yield to the other syndication participants after considering the fees passed through by the syndicator, the syndicator shall defer a portion of the syndication fee to produce a yield on the portion of the loan retained that is not less than the average yield on the loans held by the other syndication participants. ##### [310-20-25-20](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-20) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:e33e9b3a70f182b792cb6dd9dfc1cab65ba3643002e6a88f9e5885b1f0ed60bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All transactions that are structured legally as loan syndications shall be accounted for as loan syndications in accordance with the provisions of this Subtopic. ##### [310-20-25-21](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-21) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:04e05a266a3964861a3d3918cd8239798ac794a5c405569f6418b506a7ad3f2b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Purchase of a Loan or Group of Loans ##### [310-20-25-22](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-22) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:05767b0ad7c6484621b2e9b127bc3555e207d8aa0b6e4ff4b9728d2986cc8d95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [310-20-30-5](https://asc.understandingaccounting.org/asc/310/20/#310-20-30-5) explains that the initial investment in a purchased loan or group of loans shall include the amount paid to the seller plus any fees paid or less any fees received. The initial investment frequently differs from the related loan's principal amount at the date of purchase. All other costs incurred in connection with acquiring purchased loans or committing to purchase loans shall be charged to expense as incurred. ##### [310-20-25-23](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-23) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:c5fd6f9d1d8311144b0c07641fa21e6336d0f3be6049ed09f279329725e65fb0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Designation of a fee or cost as an origination fee or cost for a loan that is purchased is inappropriate because a purchased loan has already been originated by another party. Costs incurred in connection with acquiring loans or committing to purchase loans, including a participation, shall be charged to expense in accordance with paragraph [310-20-35-15](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-15). ##### [310-20-25-24](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-24) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:9240e38ab6fa0bce6139bcf0c62ab1dc6dfc10452dd0722fd1c407e345740327 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the originating lender, net fees and costs associated with a [loan participation](https://asc.understandingaccounting.org/glossary/l/#loan-participation "A transaction in which a single lender makes a large loan to a borrower and subsequently transfers undivided interests in the loan to groups of banks or other entities.") would become a component of the net loan investment balance to be used in calculating the gain or loss on a subsequent sale as described in paragraph [310-20-35-16](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-16). #### Independent Third Parties ##### [310-20-25-25](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-25) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:af7a0bfb10855f6b0ef4ea4024bd5451e1abb2de05213351df22be7836e0ed28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity utilizes a third party for loan originations and the third party is not considered an independent third party for several reasons but also is not an employee of the entity, the entity shall defer those costs directly related to specified activities that can be determined to meet the criteria for direct loan origination costs under the definition of that term as long as those costs would not have been incurred but for that loan. ##### [310-20-25-26](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-26) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:10d7da744ac63e8740471e7cfa052f1ff190f4c859a664c3960975b9baafe988 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fees paid to independent third parties for advisory services regarding loan origination activities, even if those same activities are performed internally, are not considered to be incurred for the specified activities set forth in the definition of the direct loan acquisition costs term and shall be charged to expense as incurred whether paid to independent third parties or performed internally. ##### [310-20-25-27](https://asc.understandingaccounting.org/asc/310/20/#310-20-25-27) Pending content: no Source downloaded (UTC): 2026-09-09T23:25:55.932Z to 2026-09-09T23:25:55.932Z Record version: sha256:1c971a8c1370c04cc987b0e22caec52911381b0478ca8086a698947a8e7037dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fees paid to an independent third party, or incurred internally, for portfolio management or investment consultation are considered other costs incurred in connection with acquiring purchased loans or committing to purchase loans because they constitute investment advisory costs, not loan origination costs. Therefore, such costs shall be charged to expense in accordance with paragraph [310-20-35-15](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-15) whether the costs are paid to independent third parties or incurred internally. In some circumstances judgment may be necessary to determine if a third party is independent.