# ASC 310-948-35: Receivables — Financial Services—Mortgage Banking — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/310/948/#35-subsequent-measurement) 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): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:389841f4ad341f843d58dba0af7060dba4b3096831c5105ce113c7e4587f80f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 310-948-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/310/948/#35-subsequent-measurement) SEC content: no #### Loans Held for Sale ##### [310-948-35-1](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:7ba54515b2e869c23fed2a61b177fcebf7764c52e53b264b0939dbac1766bf33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Mortgage loans held for sale shall be reported at the lower of amortized cost basis or fair value, determined as of the balance sheet date. If a mortgage loan has been the hedged item in a fair value hedge that is not a portfolio layer method hedge (as addressed in Topic 815), the loan's amortized cost basis used in lower-of-amortized-cost-basis-or-fair-value accounting shall reflect the effect of the adjustments of its carrying amount made pursuant to paragraph [815-25-35-1(b)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1). ##### [310-948-35-1A](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-1A) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:6c451137ba99c8b5f317de7c57d0815940a0e3e5b3eb4820a479a878bed57948 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a mortgage loan that is held for sale is included in a closed portfolio hedged in an existing portfolio layer method hedge, the loan’s amortized cost basis used in lower-of-amortized-cost-basis-or-fair-value accounting shall not reflect the effect of the adjustments made pursuant to paragraph [815-25-35-1(c)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1). If that portfolio layer method hedge is discontinued pursuant to paragraphs [815-25-40-7A through 40-8](https://asc.understandingaccounting.org/asc/815/25/#815-25-40-7A) , the loan’s amortized cost basis used in lower-of-amortized-cost-basis-or-fair-value accounting shall reflect the effect of the adjustments of its carrying amount made pursuant to paragraphs [815-25-35-1(b)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) and [815-25-40-9 through 40-9A](https://asc.understandingaccounting.org/asc/815/25/#815-25-40-9). ##### [310-948-35-2](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:e8a708c9748b2be3baa943792f83f90c1fc83cee8c8b394212ca417f462e7a08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount by which amortized cost basis exceeds fair value shall be accounted for as a valuation allowance. Changes in the valuation allowances shall be included in the determination of net income of the period in which the change occurs. Purchase discounts on mortgage loans shall not be amortized as interest revenue during the period the loans or securities are held for sale. ##### [310-948-35-2A](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-2A) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:e42c8e5bcc004ad713a90689ab667e067cffaec5f2233ad28718bd1781ed7204 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a mortgage loan that is transferred into the held-for-sale classification from the held-for-long-term-investment classification, an entity shall reverse in earnings any allowance for credit losses previously recorded on the mortgage loan held-for-long-term-investment at the transfer date. An entity shall then reclassify and transfer the mortgage loan into the held-for-sale classification at its amortized cost basis (which is reduced by any previous writeoffs but excludes any allowance for credit losses). An entity shall then determine if a valuation allowance is necessary by following the applicable guidance in this Subtopic. ##### [310-948-35-3](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:9eccb10ae8d750affb4f43b6b00f58c9970694711232932a3f027a486b98e397 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of mortgage loans and [mortgage-backed securities](https://asc.understandingaccounting.org/glossary/m/#mortgage-backed-securities "Securities issued by a governmental agency or corporation (for example, Government National Mortgage Association [GNMA] or Federal Home Loan Mortgage Corporation [FHLMC]) or by private issuers (for example, Federal National Mortgage Association [FNMA], banks, and mortgage banking entities). Mortgage-backed securities generally are referred to as mortgage participation certificates or pass-through certificates. A participation certificate represents an undivided interest in a pool of specific mortgage loans. Periodic payments on GNMA participation certificates are backed by the U.S. government. Periodic payments on FHLMC and FNMA certificates are guaranteed by those corporations, but are not backed by the U.S. government.") held for sale shall be measured by type of loan. At a minimum, the fair value of residential (one- to four-family dwellings) and commercial mortgage loans shall be measured separately. Either the aggregate or individual loan basis may be used in determining the lower of amortized cost basis or fair value for each type of loan. Fair value for loans subject to investor purchase commitments (committed loans) and loans held on a speculative basis (uncommitted loans) shall be measured separately as follows: 1. a Committed loans. Mortgage loans covered by investor commitments shall be based on the fair values of the loans. 2. b [Uncommitted loans](https://asc.understandingaccounting.org/glossary/u/#uncommitted-loans "A mortgage loan that does not meet the specific terms of a commitment or for which a reasonable doubt exists about the acceptance of the loan under a commitment."). Fair value for uncommitted loans shall be based on [principal market](https://asc.understandingaccounting.org/glossary/p/#principal-market "The market with the greatest volume and level of activity for the asset or liability.") or, in the absence of a principal market, in the [most advantageous market](https://asc.understandingaccounting.org/glossary/m/#most-advantageous-market "The market that maximizes the amount that would be received to sell the asset or minimizes the amount that would be paid to transfer the liability, after taking into account transaction costs and transportation costs.") (see paragraphs [820-10-35-5 through 35-6C](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-5)). That determination relies on the principles in Topic 820 and would include consideration of the following: 1. 1 Market prices and yields sought by market participants in the principal or most advantageous market 2. 2 Quoted [Government National Mortgage Association](https://asc.understandingaccounting.org/glossary/g/#government-national-mortgage-association "Often referred to as Ginnie Mae, GNMA is a U.S. governmental agency that guarantees certain types of mortgage-backed securities and provides funds for and administers certain types of low-income housing assistance programs.") (GNMA) security prices or other public market quotations for long-term mortgage loan rates 3. 3 [Federal Home Loan Mortgage Corporation](https://asc.understandingaccounting.org/glossary/f/#federal-home-loan-mortgage-corporation "Often referred to as Freddie Mac, FHLMC is a private corporation authorized by Congress to assist in the development and maintenance of a secondary market in conventional residential mortgages. FHLMC purchases mortgage loans and sells mortgages principally through mortgage participation certificates representing an undivided interest in a group of conventional mortgages. FHLMC guarantees the timely payment of interest and the collection of principal on the participation certificates.") (FHLMC) and [Federal National Mortgage Association](https://asc.understandingaccounting.org/glossary/f/#federal-national-mortgage-association "Often referred to as Fannie Mae, FNMA is an investor-owned corporation established by Congress to support the secondary mortgage loan market by purchasing mortgage loans when other investor funds are limited and selling mortgage loans when other investor funds are available.") (FNMA) current delivery prices. 3. c [Subparagraph superseded by Accounting Standards Update No. 2012-04](https://asc.understandingaccounting.org/updates/asu-2012-04/). ##### [310-948-35-3A](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-3A) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:6d90928d144cdb0d4b753cad56b9589185197434efb18628b113bccaa014d24e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [948-310-40-1](https://asc.understandingaccounting.org/asc/310/948/#310-948-40-1) states that, after the securitization of a mortgage loan held for sale that meets paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)'s conditions for a sale, any mortgage-backed securities received by the transferor as proceeds shall be classified in accordance with the provisions of Topic 320. However, a [mortgage banking entity](https://asc.understandingaccounting.org/glossary/m/#mortgage-banking-entity "An entity that is engaged primarily in originating, marketing, and servicing real estate mortgage loans for other than its own account. Mortgage banking entities, as local representatives of institutional lenders, act as correspondents between lenders and borrowers.") shall classify as trading any retained mortgage-backed securities that it commits to sell before or during the securitization process. Paragraph [948-310-40-1](https://asc.understandingaccounting.org/asc/310/948/#310-948-40-1) states that an entity is prohibited from reclassifying loans as investment securities unless the transfer of those loans meets paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)'s conditions for sale accounting. #### Loans Held as Long-Term Investments ##### [310-948-35-4](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:e93412c5dd486b37099b47c7462d0db7685eba75de82ec415234f47a219d2960 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any difference between the carrying amount of the loan and its outstanding principal balance shall be recognized as an adjustment to yield by the interest method. The interest method shall be applied as set forth in paragraphs [310-20-35-18](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-18), [310-20-35-26](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-26), and [310-20-50-2](https://asc.understandingaccounting.org/asc/310/20/#310-20-50-2). ##### [310-948-35-5](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:757975608616548697d4608f1d8e7e315f2a12a740f8b5e57f20d0f461620741 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [310-948-35-5A](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-5A) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:c4d84d1e7f1dbbe4b2927811cb5d50c6fa68b32039d24bb605b4db6d297cd9e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a mortgage loan that is transferred into the held-for-long-term-investment classification from the mortgage loans held-for-sale classification, an entity shall reverse in earnings any valuation allowance previously recorded on the mortgage loan held for sale at the transfer date. An entity shall then reclassify and transfer the mortgage loan into the held-for-long-term-investment classification at its amortized cost basis (which is reduced by any previous writeoffs but excludes any valuation allowance). An entity shall then determine if an allowance for credit losses is necessary by following the guidance in Subtopic 326-20. #### Other Considerations ##### [310-948-35-6](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:b41b940fadcb8d9f69fcbbc3ed2a48ffe13b1963745465970d109174f947cedc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Capitalized costs of acquiring rights to service mortgage loans, associated with the purchase or origination of mortgage loans (see paragraph [860-50-25-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-1)), shall be excluded from the cost of mortgage loans for the purpose of determining the lower of cost or fair value. ##### [310-948-35-7](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:31:00.735Z to 2026-09-09T23:31:00.735Z Record version: sha256:22dd2e4be6c16c5ae336323814c496947f5f6f23cd009042261f66d28ee028eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a loan commitment expires without the loan being made or if a loan is repaid before the estimated repayment date, any related unrecognized fees shall be recognized as revenue or expense at that time.