# ASC 320-10-35: Investments—Debt Securities — Overall — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/320/10/#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): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:2420452aa1fac6e40d7fcf6a9175cd1c6c479815eb39dc9ffa843d45f924f711 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 320-10-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/320/10/#35-subsequent-measurement) SEC content: no ##### [320-10-35-1](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:0ad7072741853dbe589be11e0074e55db6d42c4a558a87d5cbd9479038b7ecf5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investments in [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") shall be measured subsequently as follows: 1. a [Trading securities](https://asc.understandingaccounting.org/glossary/t/#trading-securities "Securities that are bought and held principally for the purpose of selling them in the near term and therefore held for only a short period of time. Trading generally reflects active and frequent buying and selling, and trading securities are generally used with the objective of generating profits on short-term differences in price."). Investments in debt securities that are classified as [trading](https://asc.understandingaccounting.org/glossary/t/#trading "An activity involving securities sold in the near term and held for only a short period of time. The term trading contemplates a holding period generally measured in hours and days rather than months or years. See paragraph 948-310-40-1 for clarification of the term trading for a mortgage banking entity.") shall be measured subsequently at [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.") in the statement of financial position. Unrealized [holding gains and losses](https://asc.understandingaccounting.org/glossary/h/#holding-gain-or-loss "The net change in fair value of a security. The holding gain or loss does not include dividend or interest income recognized but not yet received, writeoffs, or the allowance for credit losses.") for trading securities shall be included in earnings. 2. b [Available-for-sale securities](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities."). Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized except as indicated in the following sentences.All or a portion of the unrealized holding gain and loss of an available-for-sale security that is designated as being hedged in a fair value hedge that is not a portfolio layer method hedge shall be recognized in earnings during the period of the hedge, pursuant to paragraphs [815-25-35-1(b)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1), [815-25-35-4](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-4), and [815-25-35-6](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-6). The portion of the unrealized holding gain and loss of a closed portfolio that includes an available-for-sale security or securities that is designated as being hedged in a portfolio layer method hedge pursuant to paragraph [815-20-25-12A](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12A) shall be recognized in earnings during the period of the hedge pursuant to paragraphs [815-25-35-1(c)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1), [815-25-35-4](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-4), and [815-25-35-6](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-6). 3. c Held-to-maturity securities. Investments in debt securities classified as held to maturity shall be measured subsequently at amortized cost in the statement of financial position. A transaction gain or loss on a held-to-maturity foreign-currency-denominated debt security shall be accounted for pursuant to Subtopic 830-20. ##### [320-10-35-2](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:9fcb820f20b18115227a9644fff5f667e8a7f237d46488e9fa907e34f4a79b4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-3](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:92c73b7f16bfcf5f978bf620d55aed93ee996ee54f291987f137b6eaa3a7b639 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [323-10-35-23 through 35-26](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-23) identify circumstances in which an entity must adjust the basis of its investment in debt securities of an equity method investee for the amount of an equity method loss based on the investment's seniority. For investments accounted for in accordance with this Subtopic, the adjusted basis resulting from the application of paragraphs [323-10-35-23 through 35-26](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-23) becomes the debt security's basis from which subsequent changes in fair value are measured. ##### [320-10-35-4](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:df074a10f170be0e70ffa5259adb6342d25538b12279fe07fc2410af756b1f8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Dividend and interest income, including amortization of the premium and discount arising at acquisition, for all three categories of investments in debt securities shall be included in earnings. #### Reassessment of Classification ##### [320-10-35-5](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:b73d1e2b08fd62f495bdaec8c5079ac1104e1b770c90c9a81862c05bde0d2cf1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At each reporting date, the appropriateness of the classification of an entity's investments in debt securities shall be reassessed. For example, if an entity no longer has the ability to hold debt securities to maturity, their continued classification as held-to-maturity would not be appropriate. ##### [320-10-35-6](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:31b5d8a77b1f75e7b7151d153b59f580036b5571211bb8143fa370bcdefb3bb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because an entity is expected not to change its intent about a held-to-maturity security, the requirement to reassess the appropriateness of a security's classification focuses on the entity's ability to hold a security to maturity. The preceding paragraph acknowledges that facts and circumstances can change; for example, an entity can lose the ability to hold a debt security to maturity. However, that acknowledgment in no way diminishes the restrictive nature of the held-to-maturity category. ##### [320-10-35-7](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:7f1f2fef33b27d100b17de6dd0457408e065ae187ee1582bd755dda306040494 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. After securities are reclassified to available-for-sale in response to a taint, judgment is required in determining when circumstances have changed such that management can assert with a greater degree of credibility that it now has the intent and ability to hold debt securities to maturity. ##### [320-10-35-8](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:bc900bcffe68a240ae8052dc56bad41a16449120062968e7aff03b6217d3b950 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A sale or transfer of a security classified as held-to-maturity that occurs for a reason other than those specified in paragraphs [320-10-25-6](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-6), [320-10-25-9](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-9), and [320-10-25-14](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-14), calls into question (taints) the entity's intent about all securities that remain in the held-to-maturity category. The entity makes the same assertion about all debt securities in the held-to-maturity category—namely, that it has the positive intent and ability to hold each security to maturity. Only a sale or transfer in response to certain changes in conditions will not call into question an entity's intent to hold other debt securities to maturity in the future. ##### [320-10-35-9](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:8c39941011f4e9d980cba7095fb86ab75203c0b56d77080071bfd3c798a57f5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a sale or transfer of held-to-maturity securities represents a material contradiction with the entity's stated intent to hold those securities to maturity or when a pattern of such sales has occurred, any remaining held-to-maturity securities shall be reclassified to available-for-sale. The reclassification shall be recorded in the reporting period in which the sale or transfer occurred and accounted for as a transfer under the following paragraph. ##### [320-10-35-10](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:29ef38c18f8fd95c585efcc7509fed1ee721e65edecd38c8d48186929ed1e298 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transfers of a debt security from or into the trading category shall be accounted for at fair value. At the date of the transfer, the security's unrealized [holding gain or loss](https://asc.understandingaccounting.org/glossary/h/#holding-gain-or-loss "The net change in fair value of a security. The holding gain or loss does not include dividend or interest income recognized but not yet received, writeoffs, or the allowance for credit losses.") shall be accounted for as follows: 1. a For a security transferred from the trading category, the unrealized holding gain or loss at the date of the transfer will have already been recognized in earnings and shall not be reversed. 2. b For a security transferred into the trading category, the portion of the unrealized holding gain or loss at the date of the transfer that has not been previously recognized in earnings shall be recognized in earnings immediately. 3. c [Subparagraph superseded by Accounting Standards Update No. 2019-04](https://asc.understandingaccounting.org/updates/asu-2019-04/). 4. d [Subparagraph superseded by Accounting Standards Update No. 2019-04](https://asc.understandingaccounting.org/updates/asu-2019-04/). ##### [320-10-35-10A](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-10A) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:116ac4b9c9b72ec236419f36b31b8839bed4e58f729b24e99910853c9d9776ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a debt security that is transferred into the available-for-sale category from the held-to-maturity category, an entity shall: 1. a Reverse in earnings any allowance for credit losses previously recorded on the held-to-maturity debt security at the transfer date 2. b Reclassify and transfer the debt security to the available-for-sale category at its [amortized cost basis](https://asc.understandingaccounting.org/glossary/a/#amortized-cost-basis "The amortized cost basis is the amount at which a financing receivable or investment is originated or acquired, adjusted for applicable accrued interest, accretion, or amortization of premium, discount, and net deferred fees or costs, collection of cash, writeoffs, foreign exchange, and fair value hedge accounting adjustments.") (which is reduced by any previous writeoffs but excludes any allowance for credit losses) 3. c Determine if an allowance for credit losses is necessary by following the guidance in Subtopic 326-30 4. d Report in other comprehensive income any unrealized gain or loss on the available-for-sale debt security at the date of transfer, excluding the amount recorded in the allowance for credit losses in accordance with paragraph (c) 5. e Consider whether the transfer of a debt security from the held-to-maturity category to the available-for-sale category calls into question the entity's intent and ability to hold securities that remain in the held-to-maturity category to maturity in accordance with paragraphs [320-10-35-8 through 35-9](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-8) . ##### [320-10-35-10B](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-10B) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:6cb6b2c3df59fbcf4cf72d8e1fd60c19b3caaeb5b5010429648bf1b3cfc1e7ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a debt security that is transferred into the held-to-maturity category from the available-for-sale category, an entity shall: 1. a Reverse in earnings any allowance for credit losses previously recorded on the available-for-sale debt security at the transfer date 2. b Reclassify and transfer the debt security to the held-to-maturity category at its amortized cost basis (which is reduced by any previous writeoffs but excludes any allowance for credit losses) plus or minus the amount of any remaining unrealized holding gain or loss reported in accumulated other comprehensive income 3. c Evaluate the debt security for an allowance for credit losses by following the guidance in Subtopic 326-20 4. d Continue to report the unrealized holding gain or loss at the date of the transfer in a separate component of shareholders' equity, such as accumulated other comprehensive income, but that gain or loss shall be amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of any premium or discount. The amortization of an unrealized holding gain or loss reported in equity will offset or mitigate the effect on interest income of the amortization of the premium or discount (discussed in the following sentence) for that held-to-maturity security. For a debt security transferred into the held-to-maturity category, the transfer may create a premium or discount that, under amortized cost accounting, shall be amortized thereafter as an adjustment of yield in accordance with Subtopic 310-20 on receivables—nonrefundable fees and other costs. ##### [320-10-35-11](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:9250a7e265c90929a0cc491a9a501cfbb6d374c354bf2cec673c49dcad6d0d97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transfers from the held-to-maturity category should be rare, except for transfers due to the changes in circumstances identified in paragraph [320-10-25-6(a) through (f)](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-6). ##### [320-10-35-12](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:212d7a00bb2fae246b7586adc18786cd827fd79ee84e79e0e8762ee82a8b9fb7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition, given the nature of a trading security, transfers into or from the trading category also should be rare. ##### [320-10-35-13](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:f409912af2c88e81fb6f2a70066061a5bd9c645a8585fb160b5eaf1c6d106e1a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Available-for-sale securities shall not be automatically transferred to the trading category because the passage of time has caused the maturity date to be within one year or because management intends to sell the security within one year. Similarly, if an entity plans to sell a security from the held-to-maturity category in response to one of the conditions in paragraphs [320-10-25-6](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-6) and [320-10-25-9](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-9), the security shall not be automatically reclassified to available-for-sale or trading before the sale. ##### [320-10-35-14](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:8cad66ba0f793e2e6a24944bd2121cc5e305bee7f48cd3f92ca242183bd21568 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-55-75](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-75) gives an Example addressing whether a transferor has the option to classify debt securities as trading at the time of a transfer. ##### [320-10-35-15](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:e519156b3321f318f121b87470a5a48bb100bd48c75b044a0eb0e6cd5e0eec80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a security is transferred from held-to-maturity to available-for-sale, the security's [amortized cost basis](https://asc.understandingaccounting.org/glossary/a/#amortized-cost-basis "The amortized cost basis is the amount at which a financing receivable or investment is originated or acquired, adjusted for applicable accrued interest, accretion, or amortization of premium, discount, and net deferred fees or costs, collection of cash, writeoffs, foreign exchange, and fair value hedge accounting adjustments.") carries over to the available-for-sale category for all of the following purposes: 1. a The subsequent amortization of the historical premium or discount 2. b The comparisons of fair value and amortized cost for the purpose of determining unrealized holding gains and losses under paragraph [320-10-35-1](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-1) 3. c The required disclosures of amortized cost. ##### [320-10-35-16](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:d00e25daa40e0f197d0cc4b67343c53b545f9101b75e8c8431567629d5cab9ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a security is transferred from available-for-sale to held-to-maturity, the transfer may create a premium or discount that, under amortized cost accounting, shall be amortized as a yield adjustment in accordance with Subtopic 310-20. The security's amortized cost basis is determined as the amortized cost basis at the transfer date (which is reduced by any previous writeoffs but excludes any allowance for credit losses) plus or minus the amount of any remaining unrealized holding gain or loss reported in accumulated other comprehensive income. #### Impairment of Individual Available-for-Sale and Held-to-Maturity Debt Securities ##### [320-10-35-17](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:23824cc79b92c6ce888dd38e78395be62b47db87e2b2dcb0422bb8ffbb9a1c27 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/). ##### [320-10-35-18](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-18) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:1d005e554ff95f0fd1543a77e82fe10e58fa2be14f3d8da2e96a307fd1eed11a 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/). ##### [320-10-35-18A](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-18A) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:0ba676344cbc15ce8713cba9de4f01e55d2c9c7ffcb530b871e6dda39d1fc128 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall not consider a basis adjustment related to an existing portfolio layer method hedge designated in accordance with paragraph [815-20-25-12A](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12A) in either of the following situations: 1. a When determining whether a decline in fair value below the amortized cost basis of a security is other than temporary 2. b If measuring impairment of the individual investments or individual beneficial interest included in a closed portfolio hedged using the portfolio layer method. ##### [320-10-35-19](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-19) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:faca67a9751fa3224bd94fc8a89f4ec7fb3085bc26c6a94a97a5d0b05cddac04 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/). ##### [320-10-35-20](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-20) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:e7634d1a5feb303d5b980145709bf692485c2e1edafcab3e11992f2dfc4e7d86 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/). ##### [320-10-35-20A](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-20A) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:8680c2c67131f897f5ad28facc2108fdab0c15cf65bdd4af4bb92a40ef04b43f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the individual securities or individual beneficial interest in a closed portfolio hedged using the portfolio layer method, the impairment assessment performed at the individual security level shall not consider the basis adjustment related to an existing portfolio layer method hedge. ##### [320-10-35-21](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-21) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:ba6666d12e3de87230dcca46b779c48fb166d5342cfe53de440f3cd95c5adbb9 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/). ##### [320-10-35-22](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-22) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:878a22d6a4fa25abbf01d03d3bf4da9f1d9c5f61c2eb7440cdbc5e8b683c6e13 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/). ##### [320-10-35-23](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-23) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:6e9d858bdb0fb06ce3137cca458daf85e019e505e50ce6a0060594e5e4efd0e4 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/). ##### [320-10-35-24](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-24) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:eee20847ab3e265b0181e56ae4048dd3ee90813ff723ca7847b1dc5497829d03 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/). ##### [320-10-35-25](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-25) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:42afe355ff4064c3bbdb77b34a74117eab5738017d45be087c191aa108d850ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-26](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-26) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:5cf873aa0d39958d72221a07fbd3199fb702725602c159ca7bc980cdd395e286 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-27](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-27) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:04c7936e89e28585da3c15612dbc351a2afe021e11fde44678b100b7a4a1656f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-28](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-28) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:18cded89282525af2ac999b62166be20492e96d7b5e280966843034b002b4e1a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-29](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-29) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:8dd899f5a4f5233553211ef1539d3cc668e64c15cd99ca07f16cb64b15e91863 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-30](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-30) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:7f3cc9df224a4552142f8b4f41f6bf022d0321dfbb6ddb84084c21a7f153370f 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/). ##### [320-10-35-31](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-31) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:40a7477e0d641a3ef007e4eef9200bd107fdfa0cdac886b231ab645ad3c8c72f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [320-10-35-32](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-32) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:e64fd42d70be704717336ec84ed4385fe261eb77931096c0e1b88423bef3522c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [320-10-35-32A](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-32A) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:1803105d11bc232a3a57b73c7c690c6de879d2b1bd144572d140f656520f58b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-33](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:15484dadace92187bc77b9049a7165ab15513086084a2d1b9c3b1695ef11978e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-33A](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33A) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:f4b727ab8ee7bd30d12c2826959b186c88a84d57d94f2376ffd6fb8d3d4d1c5e 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/). ##### [320-10-35-33B](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33B) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:808e869b6fe613bca3e839854a5cdee8f665de4f10da40887cd040a8138e3347 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/). ##### [320-10-35-33C](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33C) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:c6cc21a33aef3bb1b4a23b8abd41c6e62ad1e4c703a849e6ad0cb2a578aab36f 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/). ##### [320-10-35-33D](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33D) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:5539127734ac99675902c8304e7f51c28f0994448bf2b2dd487daec6d3a06e6f 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/). ##### [320-10-35-33E](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33E) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:3a4c25e40590766f773cab234e9d6fb21145be3413f46d476e7e35150d8c3bff 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/). ##### [320-10-35-33F](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33F) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:e2994e6fbc2b648d981ae2220a39f503632a64a095b769617abedae79b96be32 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/). ##### [320-10-35-33G](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33G) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:8abadc9b0f837e43c1122d644827b1143d7ebb4fa7212650dc3aa7693b2b736f 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/). ##### [320-10-35-33H](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33H) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:fb83a41f16786d96f996283e6f9e783b6ff856c40ad69784f8c6975e80b09079 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/). ##### [320-10-35-33I](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-33I) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:fff318a0433fdc857dd285c02e3019802399567a319497be4adbcd69f24026c6 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/). ##### [320-10-35-34](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-34) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:1cb1ff61b89f56329990bda3e07af525390f78722c824ad01d283756efdf74ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). ##### [320-10-35-34A](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-34A) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:5b860b81c3d5357fb44dd8725637a4e7be1867ae7fcb165df34e4bfcb78f05d0 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/). ##### [320-10-35-34B](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-34B) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:fe1976e3931dde2f9dfb53a747accc752a4bff1077ae06e35291d5ebb127b01d 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/). ##### [320-10-35-34C](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-34C) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:e8b798d70b6291c5d7fc19a847115583a69e258bcbdd4309a948ee21b08f3b24 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/). ##### [320-10-35-34D](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-34D) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:0cbc8515814d577ac97d8d1179c8aa7a33ca8d93864ff749ad13d31d19bb4b7a 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/). ##### [320-10-35-34E](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-34E) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:12ea2998730434a740c1d6523c63eab7d9a09b3f62bf572e7846eaeeec0d07e8 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/). ##### [320-10-35-35](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-35) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:84833cb634fc36242e52001db89be1f53e30b473bd49c48ebb92c334e27c1d25 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/). ##### [320-10-35-35A](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-35A) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:672951f1749526acdbae29455ce04f86a8491d186434d66e2ab67864953db0e1 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/). #### Fair Value Changes of Foreign-Currency-Denominated Available-for-Sale Debt Securities ##### [320-10-35-36](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-36) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:6dc7fd28b5e8b25b71ccbd52071f7790c1c3277d0a5350b7d0fc8d484854714d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The change in the fair value of foreign-currency-denominated available-for-sale debt securities, excluding the amount recorded in the allowance for credit losses, shall be reported in other comprehensive income. See Subtopic 326-30 for measuring credit losses on available-for-sale debt securities. In accordance with the guidance in Subtopic 326-30, an entity shall report credit losses on available-for-sale debt securities in the statement of financial performance as credit loss expense. ##### [320-10-35-37](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-37) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:fb66108eadab1213b005a7701ace00265682fc27ab35c4bd128cbda8033ef549 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/). #### Income Recognition for Certain Structured Notes ##### [320-10-35-38](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-38) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:7b6791ae3ebb01db86bb47766d8e87133f5696c58528764d7f5d4e1430de13e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses the accounting for certain structured notes that are in the form of debt securities, but does not apply to any of the following: 1. a Mortgage loans or other similar debt instruments that do not meet the definition of a security under this Subtopic 2. b Traditional convertible bonds that are convertible into the stock of the issuer 3. c Multicurrency debt securities 4. d Debt securities classified as trading 5. e [Subparagraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). 6. f Debt securities participating directly in the results of an issuer's operations (for example, participating mortgages or similar instruments) 7. g Reverse mortgages 8. h [Structured note](https://asc.understandingaccounting.org/glossary/s/#structured-note "A debt instrument whose cash flows are linked to the movement in one or more indexes, interest rates, foreign exchange rates, commodities prices, prepayment rates, or other market variables. Structured notes are issued by U.S. government-sponsored enterprises, multilateral development banks, municipalities, and private entities. The notes typically contain embedded (but not separable or detachable) forward components or option components such as caps, calls, and floors. Contractual cash flows for principal, interest, or both can vary in amount and timing throughout the life of the note based on nontraditional indexes or nontraditional uses of traditional interest rates or indexes.") securities that, by their terms, suggest that it is reasonably possible that the entity could lose all or substantially all of its original investment amount (for other than failure of the borrower to pay the contractual amounts due). (Such securities shall be subsequently measured at fair value with all changes in fair value reported in earnings.) Also, this guidance shall be applied to those beneficial interests involving securitized financial assets that do not involve contractual cash flows. ##### [320-10-35-39](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-39) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:eafeebc17dc3dd0e48e213214498784c3e75f7f4a1aae973877f44e71bbb2750 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance does not address the issuer's accounting for structured note securities. ##### [320-10-35-40](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-40) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:4fee889ffeb68807dc40deb8bf861825c8b41f90c911f3d3eaad6bbd94bed5b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities shall use the [retrospective interest method](https://asc.understandingaccounting.org/glossary/r/#retrospective-interest-method "A method of interest income recognition under which income for the current period is measured as the difference between the amortized cost at the end of the period and the amortized cost at the beginning of the period, plus any cash received during the period.") for recognizing income on structured note securities that are classified as available-for-sale or held-to-maturity debt securities and that meet any of the following conditions: 1. a Either the contractual principal amount of the note to be paid at maturity or the original investment amount is at risk (for other than failure of the borrower to pay the contractual amounts due). Examples include principal-indexed notes that base principal repayment on movements in the Standard & Poor's S&P 500 Index or notes that base principal repayment on the occurrence of certain events or circumstances. 2. b The note's return on investment is subject to variability (other than due to credit rating changes of the borrower) because of either of the following: 1. 1 There is no stated coupon rate or the stated coupon is not fixed or prespecified, and the variation in the return on investment or coupon rate is not a constant percentage of, or in the same direction as, changes in market-based interest rates or interest rate index, for example, the London Interbank Offered Rate (LIBOR) or the U.S. Treasury Bill Index. 2. 2 The variable or fixed coupon rate is below market rates of interest for traditional notes of comparable maturity and a portion of the potential yield (for example, upside potential for principal) is based on the occurrence of future events or circumstances. (Examples of instruments that meet this condition include inverse floating-rate notes, dual-index floating notes, and equity-linked bear notes.) 3. c The contractual maturity of the bond is based on a specific index or on the occurrence of specific events or circumstances outside the control of the parties to the transaction, excluding the passage of time or events that result in normal covenant violations. Examples of instruments that meet this condition include index amortizing notes and notes that base contractual maturity on the price of oil. ##### [320-10-35-41](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-41) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:fb36d417fd1a5737a1d8009742353cb6dd6a0148795bf21f100e5d62173ef526 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the retrospective interest method, the income recognized for a reporting period would be measured as the difference between the amortized cost of the security at the end of the period and the amortized cost at the beginning of the period, plus any cash received during the period. The amortized cost would be calculated as the present value of estimated future cash flows using an effective yield, which is the yield that equates all past actual and current estimated future cash flow streams to the initial investment. If the effective yield is negative (that is, the sum of the newly estimated undiscounted cash flows is less than the security's amortized cost), the amortized cost would be calculated using a zero percent effective yield. Example 1 (see paragraph [320-10-55-16](https://asc.understandingaccounting.org/asc/320/10/#320-10-55-16)) illustrates the application of the retrospective interest method. ##### [320-10-35-42](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-42) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:b22ee95ede7e50135a8e96f4343b38d33532b0b4216951013f1c2d5030c4a526 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of determining the effective yield at which income will be recognized, all estimates of future cash flows shall be based on quoted forward market rates or prices in active markets, when available; otherwise, they shall be based on current spot rates or prices as of the reporting date. ##### [320-10-35-43](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-43) Pending content: no Source downloaded (UTC): 2026-09-09T23:34:52.952Z to 2026-09-09T23:34:52.952Z Record version: sha256:bb9222d22b4e2086c5933d2c93c469c0049269b02f21ec516d7fac662e6002ce 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/).