{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/320/940/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"320","topic_title":"Investments—Debt Securities","subtopic":"320-940","subtopic_title":"Financial Services—Brokers and Dealers","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":"Proprietary Trading Securities","heading":null,"paragraphs":[{"citation":"320-940-25-1","para":"25-1","html":"The statement of financial condition shall reflect all regular-way trades on an accrual or trade-date basis. Risk, benefits, and economic potentials are created and conveyed at the trade date (that is, the inception of the contract), which is when the major terms have been agreed to by the parties. To properly reflect the economic effects of purchase and sale transactions for financial instruments (that is, to reflect the assumption of the risks and rewards resulting from changes in the value of financial instruments), broker-dealers shall account for the changes in value relating to all proprietary or principal transactions on a trade-date basis. For example, if the broker-dealer purchased financial instruments for its own account on the date of the statement of financial condition, the transaction shall be reflected in the broker-dealer's inventory with a corresponding credit to net receivable or payable for unsettled regular-way trades. If the exchange does not occur on the contracted settlement date (referred to as a fail-to-deliver or fail-to-receive), these transactions shall be recognized on the statement of financial condition as fails-to-receive or fails-to-deliver.