# ASC 320-965-40: Investments—Debt Securities — Plan Accounting—Health and Welfare Benefit Plans — 40 Derecognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/320/965/#40-derecognition)

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## ASC 320-965-40: 40 Derecognition

[Read section](https://asc.understandingaccounting.org/asc/320/965/#40-derecognition)

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##### [320-965-40-1](https://asc.understandingaccounting.org/asc/320/965/#320-965-40-1)

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The accrual basis of accounting requires that sales of securities be recorded on a trade-date basis. However, if the settlement date is later than the financial statement date, accounting on a settlement-date basis for such purchases is acceptable if both of the following conditions exist:

1.  a
    
    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.") less costs to sell, if significant, of the securities sold just before the financial statement date does not change significantly from the trade date to the financial statement date.
    
2.  b
    
    The sales do not significantly affect the composition of the plan's assets available for benefits.