# ASC 310-948-40: Receivables — Financial Services—Mortgage Banking — 40 Derecognition

Source: FASB Accounting Standards Codification, Basic View

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## ASC 310-948-40: 40 Derecognition

[Read section](https://asc.understandingaccounting.org/asc/310/948/#40-derecognition)

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#### Securitization of a Mortgage Loan Held for Sale

##### [310-948-40-1](https://asc.understandingaccounting.org/asc/310/948/#310-948-40-1)

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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, paragraph [948-310-35-3A](https://asc.understandingaccounting.org/asc/310/948/#310-948-35-3A) states that a mortgage banking entity must classify as trading any mortgage-backed securities received as proceeds that it commits to sell before or during the securitization process. 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.