# ASC 325-30-35: Investments—Other — Investments in Insurance Contracts — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/325/30/#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): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:c299e3f6626ae35a1254d6516e59e7a4146b0c35bcd95bbf099c3399ca5282a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/325/30/#35-subsequent-measurement) SEC content: no ##### [325-30-35-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:386ec48cdd012f4c22bf27b2dab9a8ab09954a3397d28ee83aea78167393da55 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An asset representing an investment in a life insurance contract shall be measured subsequently at the amount that could be realized under the insurance contract as of the date of the statement of financial position. It is not appropriate for the purchaser of life insurance to recognize income from death benefits on an actuarially expected basis. The death benefit shall not be realized before the actual death of the insured, and recognizing death benefits on a projected basis is not an appropriate measure of the asset. ##### [325-30-35-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:b652d75fbd13fb5905abbbf4841c2dd333d39ea6254f1c3386495113d15ea46e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The change in cash surrender or contract value during the period is an adjustment of premiums paid in determining the expense or income to be recognized under the contract for the period. ##### [325-30-35-3](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:c66054bf8ef291288d6573e50f165dc85ed6519efbcb57113472631863ec091f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [325-30-30-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1) states that a policyholder shall consider any additional amounts included in the contractual terms of the policy in determining the amount that could be realized under the life insurance contract. When it is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that contractual terms would limit the amount that could be realized under the life insurance contract, these contractual limitations shall be considered when determining the realizable amounts. Those amounts that are recoverable by the policyholder at the discretion of the insurance entity shall be excluded from the amount that could be realized under the life insurance contract. ##### [325-30-35-4](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:a7d7463bf5783c934166a7bba91765d0f04c3b3cbdbc8138ce7a7bf4c63060f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Amounts that are recoverable by the policyholder in periods beyond one year from the surrender of the policy shall be discounted in accordance with Topic 835. ##### [325-30-35-5](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:b11c9d142deebb847f0109be2245b3826079bc120699c6671ea9ae373d8ed603 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A policyholder shall determine the amount that could be realized under the life insurance contract assuming the surrender of an individual-life by individual-life policy (or certificate by certificate in a group policy). Any amount that ultimately would be realized by the policyholder upon the assumed surrender of the final policy (or final certificate in a group policy) shall be included in the amount that could be realized under the insurance contract. See Example 1 (paragraph [325-30-55-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-55-1)) for an illustration of this guidance. ##### [325-30-35-6](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:809b430eef740c7b8fc9e3a444fd4ac7c4b3631e6c6e96cf68e0754f212de027 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A policyholder shall not discount the [cash surrender value](https://asc.understandingaccounting.org/glossary/c/#cash-surrender-value "The amount of cash that may be realized by the owner of a life insurance contract or annuity contract upon discontinuance and surrender of the contract before its maturity. The cash surrender value may be different from the policy account balance due to outstanding loans (including accrued interest) and surrender charges. (Note: The use of this glossary term is not consistent among legal contracts. When determining the applicability of this term, the economic substance of the item shall be taken into consideration.)") component of the amount that could be realized under the insurance contract when contractual restrictions on the ability to surrender a policy exist, as long as the holder of the policy continues to participate in the changes in the cash surrender value as it had done before the surrender request. If, however, the contractual restrictions prevent the policyholder from participating in changes to the cash surrender value component, then the amount that could be realized under the insurance contract at a future date shall be discounted in accordance with Topic 835. ##### [325-30-35-6A](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-6A) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:a9f652eb107dd64545b4fd76a4f00b37f57cbe13768c686b43d95b5cb2601545 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [325-30-30-1A](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1A) states that an entity also shall apply the measurement guidance in paragraphs [325-30-35-5 through 35-7](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-5) at initial measurement. ##### [325-30-35-7](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:91991613c19bb473fcb4cdb17aaad3bcc06d21009df1a628c1b479b56ffdde35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a group of individual-life policies or a group policy only allows for the surrender of all of the individual-life policies or [certificates](https://asc.understandingaccounting.org/glossary/c/#certificates "An insurance entity issues to each individual in a group contract a certificate of insurance for each person insured under the group contract. The certificate is merely a summary of the rights, duties, and benefits available under a group policy. If there is any conflict between the certificate and a group policy, the group policy is the controlling document. (Note: The use of this glossary term is not consistent among legal contracts. When determining the applicability of this term, the economic substance of the item shall be taken into consideration.)") as a group, then the policyholder shall determine the amount that could be realized under the insurance contract on a group basis. ### Life Settlement Contracts #### Investment Method ##### [325-30-35-8](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:473bc345260a5ab7c0d3ae23707c7e87020b76f030c36c165cdae28c8cf5de7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Continuing costs (policy premiums and direct external costs, if any) to keep the policy in force shall be capitalized. ##### [325-30-35-9](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:eea3927c762fb03d43fedeb9203d454290300733f1a8cddfa4f879a0114a8035 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The investor shall not recognize a gain until the insured dies (see paragraph [325-30-40-1A](https://asc.understandingaccounting.org/asc/325/30/#325-30-40-1A)). ##### [325-30-35-10](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:c2e50e1b61453544bc2a5e1a293e057a7221ec58d837789f7c0a2106f47345d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall test an investment in a [life settlement contract](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.") for impairment if the investor becomes aware of new or updated information that indicates that the expected proceeds from the [insurance policy](https://asc.understandingaccounting.org/glossary/i/#insurance-policy "The legal agreement between the policyholder and the insurance entity that states the terms of the arrangement. The term insurance policy includes all riders, attachments, side agreements, and other related documents that are either directly or indirectly part of the contractual arrangement. (Note: The use of this glossary term is not consistent among legal contracts. When determining the applicability of this term, the economic substance of the item shall be taken into consideration.)") will not be sufficient to recover the carrying amount of the investment plus anticipated undiscounted future premiums and capitalizable direct external costs, if any, when the insured dies. Factors include, but are not limited to, a change in expected mortality and a change in the creditworthiness of the issuer of the underlying insurance policy. A change in interest rates would not of itself require an investment in a life settlement contract to be tested for impairment. ##### [325-30-35-11](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:c81d5202bb897edd792ded4d5dda208bfd6792f7837a838cbd9bdf54e1df5072 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall recognize an impairment loss if the expected undiscounted cash inflows (typically, the insurance proceeds) are less than the carrying amount of the investment plus anticipated undiscounted future premiums and capitalizable direct external costs, if any. If an impairment loss is recognized, the investment shall be written down to fair value. The fair value measurement shall consider current interest rates. #### Fair Value Method ##### [325-30-35-12](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:12.079Z to 2026-09-09T23:44:12.079Z Record version: sha256:48973fe2a39b102c51d6167c27fd7e69de6eae92bd5e1297431d0480994a8a80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In subsequent periods, the investor shall remeasure the investment in a life settlement contract at fair value in its entirety at each reporting period and shall recognize changes in fair value in earnings (or other performance indicators for entities that do not report earnings) in the period in which the changes occur.