# ASC 325-30-15: Investments—Other — Investments in Insurance Contracts — 15 Scope and Scope Exceptions

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/325/30/#15-scope-and-scope-exceptions)

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## ASC 325-30-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/325/30/#15-scope-and-scope-exceptions)

SEC content: no

#### Entities

##### [325-30-15-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-15-1)

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The guidance in this Subtopic applies to all entities.

#### Transactions

##### [325-30-15-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-15-2)

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The guidance in this Subtopic applies to all transactions for entities purchasing life insurance in which the entity is either the owner or beneficiary of the contract, without regard to the funding objective of the purchase (other than [life settlement contracts](https://asc.understandingaccounting.org/glossary/l/#life-settlement-contract "A life settlement contract is a contract between the owner of a life insurance policy (the policy owner) and a third-party investor (investor), and has all of the following characteristics: The investor does not have an insurable interest (an interest in the survival of the insured, which is required to support the issuance of an insurance policy). The investor provides consideration to the policy owner of an amount in excess of the current cash surrender value of the life insurance policy. The contract pays the face value of the life insurance policy to an investor when the insured dies.")). Such purchases would typically include those intended to meet loan covenants or to fund deferred compensation agreements, buy-sell agreements, or postemployment death benefits.

##### [325-30-15-3](https://asc.understandingaccounting.org/asc/325/30/#325-30-15-3)

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Purchases of life insurance by retirement plans that are subject to Topic 960 are not within the scope of this Subtopic.

##### [325-30-15-4](https://asc.understandingaccounting.org/asc/325/30/#325-30-15-4)

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Internal Revenue Code Section 1035 exchanges do not constitute a cash surrender.

### Life Settlement Contracts

#### Entities

##### [325-30-15-5](https://asc.understandingaccounting.org/asc/325/30/#325-30-15-5)

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The guidance in the Life Settlement Contracts Subsections applies to all entities.

#### Transactions

##### [325-30-15-6](https://asc.understandingaccounting.org/asc/325/30/#325-30-15-6)

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The guidance in the Life Settlement Contracts Subsections applies to both transactions in which a broker facilitates settlement transactions between the policy owner and the investor, and transactions that do not involve a broker.