# ASC 325-30: Investments—Other — Investments in Insurance Contracts Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/325/30/) 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): 2026-09-09T23:43:55.828Z to 2026-09-09T23:44:24.209Z Record version: sha256:7c673152787046644cb5f885031f7301aafba1e1ee0124fe01ac426879e651f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30: Investments—Other — Investments in Insurance Contracts ### Machine-generated study aids ```json { "summary": "ASC 325-30 governs investments in life insurance contracts held by entities that are the owner or beneficiary (e.g., corporate-owned or bank-owned life insurance), and, in separate Subsections, investments in life settlement contracts purchased from policy owners. The general rule is that a life insurance policy is reported as an asset measured at \"the amount that could be realized under the insurance contract\" at the balance sheet date, determined policy-by-policy (or certificate-by-certificate) and reflecting probable contractual limitations. For life settlement contracts, an investor makes an irrevocable, instrument-by-instrument election between the investment method (cost plus capitalized premiums and direct external costs, subject to impairment) and the fair value method (remeasured each period through earnings).", "key_points": [ "An investment in a life insurance contract is reported as an asset (325-30-25-1) and measured subsequently at the amount that could be realized under the contract at the balance sheet date; death benefits may not be accrued on an actuarially expected or projected basis and are realized only on actual death (325-30-35-1).", "The realizable amount is determined assuming surrender of each individual-life policy or certificate separately, including any amount realized on surrender of the final policy/certificate (325-30-35-5); if only group surrender is permitted, the amount is determined on a group basis (325-30-35-7).", "Probable contractual limitations reduce the realizable amount, and amounts recoverable only at the insurer's discretion are excluded (325-30-35-3); amounts recoverable more than one year after surrender are discounted under Topic 835 (325-30-35-4), and the cash surrender value component is not discounted for surrender restrictions so long as the holder still participates in cash surrender value changes (325-30-35-6).", "The change in cash surrender or contract value during the period is an adjustment of premiums paid in determining expense or income for the period (325-30-35-2), and contractual restrictions on the ability to surrender must be disclosed (325-30-50-1).", "For life settlement contracts, the investor makes an irrevocable, instrument-by-instrument election of the investment method or the fair value method, supported by concurrent documentation or a preexisting automatic-election policy (325-30-25-2).", "Investment method: initial measurement at transaction price plus initial direct external costs (325-30-30-1C), continuing premiums and direct external costs are capitalized (325-30-35-8), no gain is recognized until the insured dies (325-30-35-9), and impairment is tested when new information indicates expected undiscounted proceeds are less than carrying amount plus anticipated undiscounted future premiums and costs, with write-down to fair value (325-30-35-10 through 35-11).", "Fair value method: initial measurement at transaction price (325-30-30-2) with remeasurement to fair value each reporting period and changes recognized in earnings (325-30-35-12); on death, the difference between carrying amount and insurance proceeds is recognized in earnings (325-30-40-1A), and fair value method amounts must be presented separately on the face of the balance sheet and income statement (325-30-45-1, 45-3)." ], "categories": [ "Subsequent measurement", "Initial measurement", "Impairment", "Disclosure" ], "audience_level": "intermediate", "student_note": "Exam traps: the asset is the amount realizable on assumed surrender policy-by-policy (so a surrender charge waived only on a full group surrender is NOT added back — see Example 1 at 325-30-55-4), and death benefits can never be accrued before death. Also remember the life settlement election is irrevocable and made instrument-by-instrument, which drives very different measurement, presentation, and disclosure outcomes.", "related_topics": [ "320-10", "323-10", "835", "230", "960", "820" ], "key_concepts": [ "amount that could be realized", "cash surrender value", "corporate-owned life insurance", "life settlement contract", "investment method", "fair value method", "surrender charge", "demutualization" ] } ``` Source downloaded (UTC): 2026-09-09T23:43:55.828Z to 2026-09-09T23:43:55.828Z Record version: sha256:b3fd06769f14ac79f74161883e83c03d2a190169db936258054c48cb9e9dcbef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/325/30/#00-status) SEC content: no ##### [325-30-00-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:55.828Z to 2026-09-09T23:43:55.828Z Record version: sha256:5c45b89b661bae0b66458767fe9b3a5b2fc2ef95adeffbc34037080ac24f3919 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
325-30-30-1AAAddedMaintenance Update 2018-02 (PDF)02/02/2018
325-30-30-1BSupersededMaintenance Update 2018-02 (PDF)02/02/2018
325-30-50-3AmendedMaintenance Update 2014-07 (PDF)03/17/2014
Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:c3a3a50f8446bfb1ba9f73cef195b98a2d1bced2d454d7eb6b2ffc7a24eff651 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/325/30/#05-overview-and-background) SEC content: no ##### [325-30-05-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:4ad7984474e37d0f0395d7dfcf9f0aa4ebcf835f5ded1535b497b93a0892e5e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic presents guidance in the following Subsections: 1. a General 2. b Life Settlement Contracts. ##### [325-30-05-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:a47e3dfa4694821a26fb18082e9c9ceb2d2baeff2fabddbddca2f1ea7201e424 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance on accounting for investments in life insurance contracts generally, including the calculation of the amount that could be realized under the life insurance contract. ##### [325-30-05-3](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:66121326460ba54c0171a10897bef61d623a9fdb25cb8f6c57fa5be45b6296fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A premium paid by a purchaser of life insurance serves a variety of purposes. A portion of the premium pays the insurer for assumption of mortality risk and provides for recovery of the insurer's contract acquisition, initiation, and maintenance costs. Another portion of the premium contributes to the accumulation of contract values. The relative amounts of premium payment credited to various contract attributes change over time as the age of the insured party increases and as earnings are credited to previously established contract values. ##### [325-30-05-4](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:cade0ca69ee03c06e09ee58492df41da439cbe24fd64821da445f4d07165b2b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A life insurance contract is significantly different from most investment agreements. The various attributes of the policy could be obtained separately through term insurance and purchase of investment. The combination of benefits and contract values could not, however, typically be acquired absent the insurance contract. Continued protection from mortality risk and realization of scheduled increases in contract accumulation usually requires payment of future premiums. ##### [325-30-05-5](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:9627aa174e1f5a2344d261d87887f4a0aee98a80ea083cc175e1551384a133a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The payment of insurance premiums may take a number of different forms. The insurance contract may be purchased through payment of a single premium, as opposed to the typical series of future premiums. Alternatively, the premium payments may be made through loans from the insurance entity that are secured by policy cash surrender values. The pattern of premium payments is a decision that does not alter the underlying nature of the insurance contract. ##### [325-30-05-6](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:e916e4413e61a5a1bb5846c30e0f8f193155b067f3362246dc5369d409d7167d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Life insurance policies are purchased by entities for a variety of purposes, including funding the cost of providing employee benefits and protecting against the loss of key persons. These types of policies have generally been known as corporate-owned life insurance or bank-owned life insurance. One of the primary benefits to using an [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.)") as a funding mechanism is the ability for an entity to receive the death benefits tax-free. Investment income is accumulated tax-free through the internal build-up of 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.)"). In the event that a policy is surrendered early, the policyholder will be responsible for paying the tax on the previously unrecognized investment income. The tax on the cash surrender value can be significant if the policies have been held for a number of years. Corporate-owned and bank-owned life insurance arrangements are established using several different insurance products, including all of the following: 1. a Universal-life policies 2. b Variable-life policies 3. c Whole-life policies. ##### [325-30-05-7](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:0ed7a932425c9117863244ac119948961d13bfa12be5db54fea7bd56e6e700d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There are a few basic structures currently used as a framework for most policies in the marketplace. However, these structures can be combined and modified in many different ways and, therefore, can be quite complex. All of the following life insurance policy structures are considered in this guidance: 1. a Individual-life policy. The individual-life policy generally has one contract value component and, in some cases, a [surrender charge](https://asc.understandingaccounting.org/glossary/s/#surrender-charge "A contractual fee imposed by the insurance entity when a policyholder surrenders the insurance policy that typically decreases over the life of the policy. The surrender charge represents a recovery of costs incurred by the insurance entity in originating the policy. It may or may not be explicitly called a surrender charge and can be embedded in other agreements besides the insurance contract. (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.)"). The amount that could be realized for this policy upon surrender is the amount reported by the insurance entity to the policyholder as the cash surrender value. 2. b Multiple individual-life policies. Many entities purchase separate individual-life policies for each employee. Similar to the individual-life policy, each policy has only one contract value component and in some cases a surrender charge. If one or more, but not all, policies are surrendered, the policyholder will incur the surrender charges on those policies surrendered. This will result in a permanent loss of asset value to the extent of the surrender charge. However, a rider (or a contractual stipulation) can be obtained for the insurance policy that will waive the surrender charges on each individual policy if all of the policies are surrendered at the same time. The cost of the rider will vary depending on the individual facts and circumstances. 3. c Group-life policy. The group-life policy constitutes the legal contract with the insurance entity that covers individual-life insurance for multiple employees. Each individual in the group policy is issued a certificate. If the group policy is cancelled, each of the individual [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.)") is terminated. While certificates are issued pursuant to the policy and form part of the policy, the group-life policy contract is the controlling document. Under the group-life policy, individual-life insurance certificates can be surrendered separately and the cash surrender value for the certificate is received by the policyholder for the full surrender amount of that certificate. ##### [325-30-05-8](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:755fa51c90c5d140917256abe1fd07efbaa81dd0c7a9a72083bc742759c304a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additionally, a number of policies include certain provisions that can make them more attractive to the policyholder (for example, a provision allowing for the recovery of certain costs). However, many provisions limit the amount that is realized and may necessitate the meeting of certain criteria to recover any of those amounts. Some of the more typical examples of limitations that exist include all of the following: 1. a The prohibition against having a change of control or a restructuring occurring within the last 24 months 2. b A planned restructuring within the next 12 months 3. c The extent to which the policyholder is in a net operating loss carryforward position. The amount associated with the termination of the policy may be received over an extended period of time after the surrender of the life insurance policy or certificate. ##### [325-30-05-9](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:ab3ed9855634d0b4985ae68bd141d786c8b8458c0652d79ce5dfe3fd4450091f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other attributes include any of the following: 1. a Multiple individual policies with a separate, group-level rider agreement 2. b Multiple individual policies with a contractual stipulation in each individual policy referencing the other policies as a group 3. c A group-life policy that has multiple certificates (individual life insurance for multiple employees). These contracts may provide the policyholder with an amount that upon surrender is greater if all individual policies are surrendered at the same time rather than if the individual policies are surrendered over a period of time. The amount that can be realized under the insurance contract (that is, converted into cash) is dependent on how the contract is assumed to be hypothetically settled and, if surrendered, whether the insurance policies are surrendered at the individual or group level. #### Exchange of Mutual Membership Interests for Stock in a Demutualization ##### [325-30-05-9A](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-9A) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:6f2cb03955e81ba68a200dfe606725d161f96ef60fb732dcff363dac01a96802 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To effect a demutualization, an entity may be required to issue consideration, often in the form of stock, to existing participating policyholders in exchange for their current membership interests. The receipt of such stock has no direct effect on the policyholders' contractual interests of their insurance policies (for example, it does not alter 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.)") of their life insurance policies). However, the governance of the mutual insurance entity and, in particular, the participating policyholders' interest in that governance are modified. ### Life Settlement Contracts ##### [325-30-05-10](https://asc.understandingaccounting.org/asc/325/30/#325-30-05-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:57.769Z to 2026-09-09T23:43:57.769Z Record version: sha256:cfadaae04c28f634ce069ba4021ae7a32984ef6d66b0445edaddfe034d6bb642 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Life Settlement Contracts Subsections provide guidance on accounting for 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."). Source downloaded (UTC): 2026-09-09T23:43:59.679Z to 2026-09-09T23:43:59.679Z Record version: sha256:3d083d342aff3ab6aa62499f251bd5b8233ebd32096913f279f0c7dcfb64ecfc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## 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) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:59.679Z to 2026-09-09T23:43:59.679Z Record version: sha256:0fe6722d24cb50b4be2ce53b1b66713cccf87e31ab60d81041c62bfbeee180e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:59.679Z to 2026-09-09T23:43:59.679Z Record version: sha256:3dc40c48d8b8dd216587145476f260f7235b02eb22190f2e3e5123ff6d6a393f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:59.679Z to 2026-09-09T23:43:59.679Z Record version: sha256:b84d08eaff6a4f96075449ea8e54ed097577bcdeff3a95dedce45f9ccd0e3282 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:59.679Z to 2026-09-09T23:43:59.679Z Record version: sha256:5ba21c76b39027da246330e8d82b684f69ca908ccee633bc6eae8e9fe859771d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:59.679Z to 2026-09-09T23:43:59.679Z Record version: sha256:4f8b2d890efd9802d0accc7fa5f86f2245d65fe88c82cee171b00c8d6401aad2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-09T23:43:59.679Z to 2026-09-09T23:43:59.679Z Record version: sha256:5e41b013b812af15e4343b8f67f88d580c116cf0da34b1b2c5eeb85bc4b3f782 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-09T23:44:05.761Z to 2026-09-09T23:44:05.761Z Record version: sha256:7a539a02489d019e37006b5b0342794881d0f0ba6dd70e817f5660a44b613d01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/325/30/#25-recognition) SEC content: no ##### [325-30-25-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:05.761Z to 2026-09-09T23:44:05.761Z Record version: sha256:4426027ab5eabe57c78e81967fcc5d5f63264fc0e720fe2ea1932ac8c8475be8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment in a life insurance contract shall be reported as an asset. #### Exchange of Mutual Membership Interests for Stock in a Demutualization ##### [325-30-25-1A](https://asc.understandingaccounting.org/asc/325/30/#325-30-25-1A) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:05.761Z to 2026-09-09T23:44:05.761Z Record version: sha256:ed51bb7abc1d8a9f1d54b678df46d0b5385bc47990dec4b1af0e89c43f4d841d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall recognize stock received from a demutualization and subsequently follow the guidance in Subtopics 320-10 or 323-10 as applicable. ### Life Settlement Contracts ##### [325-30-25-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:05.761Z to 2026-09-09T23:44:05.761Z Record version: sha256:feeaafd9fe39d4d93b88e85645ac28ce2824eee16432866471dd5242e60ce3b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall elect to account for its investments in [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.") using either the investment method or the fair value method. The election shall be made on an instrument-by-instrument basis and is irrevocable. The election shall be supported by concurrent documentation or a preexisting documented policy for automatic election. Source downloaded (UTC): 2026-09-09T23:44:09.665Z to 2026-09-09T23:44:09.665Z Record version: sha256:dc2c07c6cb51aecfd4a1b022fc907d9b3660f05b3e11d4ebd927621146f5c93c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/325/30/#30-initial-measurement) SEC content: no ##### [325-30-30-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:09.665Z to 2026-09-09T23:44:09.665Z Record version: sha256:cbca5daff716d7917767d7de025fccb1e62d53868b236aad6a4d699dcc22c744 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [325-30-30-1A](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1A) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:09.665Z to 2026-09-09T23:44:09.665Z Record version: sha256:b88f3363d5c4c8ca34036768bbcefac366decd064ecf592877ba77d43369c7fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Exchange of Mutual Membership Interests for Stock in a Demutualization ##### [325-30-30-1AA](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1AA) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:09.665Z to 2026-09-09T23:44:09.665Z Record version: sha256:87af7f4f70c21d5f098a0f7e6c38c56db4259978ecf3ef2547f850a9a4ae8a8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Stock received from a demutualization shall be measured initially at fair value. ### Life Settlement Contracts ##### [325-30-30-1B](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1B) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:09.665Z to 2026-09-09T23:44:09.665Z Record version: sha256:4b59a826bb4d6768823f8dc8e80c707897b8d8fadeba3079842a6c5f73756302 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Maintenance Update 2018-02](https://asc.understandingaccounting.org/updates/maintenance-updates-2018/). #### Investment Method ##### [325-30-30-1C](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1C) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:09.665Z to 2026-09-09T23:44:09.665Z Record version: sha256:d3d19b54e8d293a2b9c28ce343fb506e8a5ccf06132ca9bc237439f997f14be2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the investment method, an investor shall measure its 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.") initially at the transaction price plus all initial direct external costs. #### Fair Value Method ##### [325-30-30-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:09.665Z to 2026-09-09T23:44:09.665Z Record version: sha256:63e5b91db731e98a01d50a6afa5071b61c57dab454de82629dcea30230114c04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the fair value method, an investor shall measure its investment in a life settlement contract initially at the transaction price. 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. Source downloaded (UTC): 2026-09-09T23:44:13.955Z to 2026-09-09T23:44:13.955Z Record version: sha256:52b81e59efe8d276419b8b212362789c5ef394f8aa74d80f04fc74539310b581 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/325/30/#40-derecognition) SEC content: no ### Life Settlement Contracts #### Exchange of Mutual Membership Interests for Stock in a Demutualization ##### [325-30-40-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-40-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:13.955Z to 2026-09-09T23:44:13.955Z Record version: sha256:257d4cf69e7628d8c3c9053ea200225881ba0d94663b9290630f69dc0ac55e2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any gain on an exchange of mutual membership interests for stock in a demutualization shall be recognized in income from continuing operations. #### Investment Method ##### [325-30-40-1A](https://asc.understandingaccounting.org/asc/325/30/#325-30-40-1A) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:13.955Z to 2026-09-09T23:44:13.955Z Record version: sha256:e955363ad96abd49deba670ada9f31a478d0facf9c83592d1bc2295cb3506ec8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon the death of the insured, the investor shall recognize in earnings (or other performance indicators for entities that do not report earnings) the difference between the carrying amount of 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.") and the life insurance proceeds of the underlying life [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.)"). Source downloaded (UTC): 2026-09-09T23:44:16.126Z to 2026-09-09T23:44:16.126Z Record version: sha256:4f5e83c7685d57adb59f7c15533d8fb3d20d101cccccb16a2e3c853211df42e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/325/30/#45-other-presentation-matters) SEC content: no ### Life Settlement Contracts #### Statement of Financial Position ##### [325-30-45-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:16.126Z to 2026-09-09T23:44:16.126Z Record version: sha256:69c9a136b4e7c9eb1fbf68d6080e0e094ac94e940b9517fd3e056f4bff584651 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall report its investments that are remeasured at fair value on the face of the statement of financial position separately from those accounted for under the investment method. To accomplish that separate reporting, an investor shall do either of the following: 1. a Display separate line items on the statement of financial position for the fair value method and investment method carrying amounts 2. b Present the aggregate of those fair value method and investment method carrying amounts and parenthetically disclose the amount of those investments accounted for under the fair value method included in the aggregate amount. #### Income Statement ##### [325-30-45-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:16.126Z to 2026-09-09T23:44:16.126Z Record version: sha256:742ef2d2c722fb7d5eec3138df5e21d31d56876ffb262d924470e070fc2b5ef7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The investor shall classify the amount recognized upon the death of the insured in accordance with paragraph [325-30-35-9](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-9) in earnings (or other performance indicators for entities that do not report earnings). ##### [325-30-45-3](https://asc.understandingaccounting.org/asc/325/30/#325-30-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:16.126Z to 2026-09-09T23:44:16.126Z Record version: sha256:1a3ddffbac08e781439faf56b9009c6b14b46977bded3f7cad39fe22c2044ce6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall report the investment income from its investments in life settlement contracts that are remeasured at fair value on the face of the income statement separately from the investment income from those accounted for under the investment method. To accomplish that separate reporting, an investor shall do either of the following: 1. a Display separate line items on the income statement for the investment income from the investments in life settlement contracts that are accounted for under the fair value method and investment method 2. b Present the aggregate of the investment income in life settlement contracts and parenthetically disclose the investment income from those investments accounted for under the fair value method that are included in the aggregate amount. ##### [325-30-45-4](https://asc.understandingaccounting.org/asc/325/30/#325-30-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:16.126Z to 2026-09-09T23:44:16.126Z Record version: sha256:485e475008168e00dacab6b7b1f57c5990344ee00658aec7e2bf2ed927f64a7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor applying the fair value method shall account for premiums paid and life insurance proceeds received on the same financial reporting line as the changes in fair value are reported. #### Statement of Cash Flows ##### [325-30-45-5](https://asc.understandingaccounting.org/asc/325/30/#325-30-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:16.126Z to 2026-09-09T23:44:16.126Z Record version: sha256:a50f568104fc967b09e825554d9f2aa1f2b8272edd988f767f50d0aa8bcf5530 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall classify cash receipts and cash payments related to life settlement contracts in accordance with Topic 230, based on the nature and purpose for which the life settlements were acquired. Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:8179c833ee88977d5b66804cfb962c77b1a08948533f3118053c6ad458344db0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/325/30/#50-disclosure) SEC content: no ##### [325-30-50-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:3c1aaf7b6c9d058efc09addef82400816c9e04ba8889fe564dcbc46ea11deefc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A policyholder shall disclose contractual restrictions on the ability to surrender a policy. ### Life Settlement Contracts ##### [325-30-50-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:a360eb8a7e5ce3c2120a5f60e9c8ee99f340d44c06c9f1beb14af1dd72a2b980 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall disclose its accounting policy for [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."), including the classification of cash receipts and cash disbursements, in the statement of cash flows. ##### [325-30-50-3](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:f2a30aaad22c59e22e9df91053469f3798af684fb68ec32da81109ae95e4bb61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure requirements in this Subsection do not eliminate disclosure requirements included in other Topics, including other disclosure requirements on the use of fair value. #### Investment Method ##### [325-30-50-4](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:6adbce3e1f1e936010360085f4571ec2c5776ffa665c0f2a5cec46e9d3924bff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall disclose all of the following for life settlement contracts accounted for under the investment method based on the remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter, as well as in the aggregate: 1. a The number of life settlement contracts 2. b The carrying value of the life settlement contracts 3. c The face value (death benefits) of the life insurance policies underlying the contracts. ##### [325-30-50-5](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:1a1cbb91f41f4f178ca274c8edc24d89bba68d510f677a95f779e850a72e2d1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall disclose the life insurance premiums anticipated to be paid for each of the five succeeding fiscal years to keep the life settlement contracts in force as of the date of the most recent statement of financial position presented. ##### [325-30-50-6](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:b3aca283e51ce46be96f797927dcd283a3facd8b743eecdf904fd12794440eb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the investor becomes aware of new or updated information that causes it to change its expectations on the timing of the realization of proceeds from the investments in life settlement contracts, the investor shall disclose the nature of the information and the related effect on the timing of the realization of proceeds from the life settlement contracts. This includes disclosing significant changes to the amounts disclosed in accordance with paragraph [325-30-50-4](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-4). However, an investor shall not be required to actively seek out new or updated information to update the assumptions used in determining the remaining life expectancy of the life settlement contracts. #### Fair Value Method ##### [325-30-50-7](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:884d7179e04ac859933b5556abe26c8babcda635f17d80430d4fe9f936cb365d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall disclose the method(s) and significant assumptions used to estimate the fair value of investments in life settlement contracts, including any mortality assumptions. ##### [325-30-50-8](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:6ddd1cf91244f2acdcbcd2c1d0bb7d3d8689794754ddc4985d9e6993d842c4ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall disclose all of the following for life settlement contracts accounted for under the fair value method based on remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter, as well as in the aggregate: 1. a The number of life settlement contracts 2. b The carrying value of the life settlement contracts 3. c The face value (death benefits) of the life insurance policies underlying the contracts. ##### [325-30-50-9](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:f1a9a781cf1a636da548b219779eda9f26f1c8d5c89eb344e433a990beee2436 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The investor shall disclose the reasons for changes in its expectation of the timing of the realization of the investments in life settlement contracts. This includes disclosing significant changes to the amounts disclosed in accordance with paragraph [325-30-50-8](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-8). ##### [325-30-50-10](https://asc.understandingaccounting.org/asc/325/30/#325-30-50-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:17.783Z to 2026-09-09T23:44:17.783Z Record version: sha256:de34aefacd88a572b146498e37245b7b235ba8311c26933eb83c228629e8c082 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investor shall disclose both of the following for each reporting period presented in the income statement: 1. a The gains or losses recognized during the period on investments sold during the period 2. b The unrealized gains or losses recognized during the period on investments that are still held at the date of the statement of financial position. Source downloaded (UTC): 2026-09-09T23:44:21.128Z to 2026-09-09T23:44:21.128Z Record version: sha256:ba5ba9ff4b740228058603445757852112df64447e34dd6b9c5d5d1541692a24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/325/30/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [325-30-55-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:21.128Z to 2026-09-09T23:44:21.128Z Record version: sha256:3f073e99c2547945d342ef64d999d6476f55bab31f906e57a394ab2bc45044f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the guidance in the General Subsections of this Subtopic to life insurance contracts other than life settlement contracts. ##### [325-30-55-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:21.128Z to 2026-09-09T23:44:21.128Z Record version: sha256:4a71a36624c7bb833bb72474ae72549b6b84cc5f5cf06b3f977ac23d8ef86ecf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On January 1, 19X7, Entity TKO purchases a group variable-life policy on 20 executives of Entity TKO. The insurance entity issued an individual certificate for each executive when the policy was purchased. The entire policy was funded with an initial single premium of $10,000,000. Entity TKO will be paid the stated death benefit of the certificate when the insured dies. The policy contains a [surrender charge](https://asc.understandingaccounting.org/glossary/s/#surrender-charge "A contractual fee imposed by the insurance entity when a policyholder surrenders the insurance policy that typically decreases over the life of the policy. The surrender charge represents a recovery of costs incurred by the insurance entity in originating the policy. It may or may not be explicitly called a surrender charge and can be embedded in other agreements besides the insurance contract. (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.)") of $50,000 per certificate if a certificate is surrendered. If all of the [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.)") are surrendered at once (that is, if the group policy is surrendered) the surrender charge is waived. The policy includes a [claims stabilization reserve](https://asc.understandingaccounting.org/glossary/c/#claims-stabilization-reserve "The claims stabilization reserve is established through deductions from the policy account balance through the cost of insurance charge and is sometimes held in a general account (that is, an account that is intermingled with the insurance entity's assets) as opposed to a legally segregated account (sometimes referred to as a separate account). The amounts are accumulated in this account until a death benefit is paid. The death benefit represents a combination of the policy account balance and the claims stabilization reserve based on the contractual terms. The cost of insurance is recalculated periodically based on actual experience of the insured class. Annually, the claims stabilization reserve is reviewed and an experience credit may be issued back to the policyholder if the experience has been favorable. The balance in the claims stabilization reserve will be reviewed annually and to the extent the balance is greater than the forecasted or expected amount, an experience refund would get credited to the entity's policy account balance. An entity's claims stabilization reserve will generally be realized through the collection of death benefits or an experience refund that gets credited to the policyholder's policy account balance or upon surrender of the group policy. A claims stabilization reserve is included in a policy as a mechanism for the policyholder and the insurance entity to share in the mortality risk, which in this case is the risk that the deaths will occur sooner than originally expected. Absent a claims stabilization reserve, the policyholder's net cost of insurance would typically be higher than in a policy without a claims stabilization reserve. The claims stabilization reserve is sometimes referred to as a mortality reserve or a mortality retention reserve. (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.)") account and a provision that allows for the recovery of the upfront [deferred acquisition costs tax](https://asc.understandingaccounting.org/glossary/d/#deferred-acquisition-costs-tax "Section 848 of the Internal Revenue Code requires insurance entities to capitalize certain policy acquisition costs and defer deducting them in determining the insurer's tax liability. These costs are known as the deferred acquisition costs tax and are based on a percentage of the premium received as specified by the Internal Revenue Code. The initial deferred acquisition costs tax is deducted from a policyholder's policy account balance when the premium is paid. The deferred acquisition costs tax is credited back to the policyholder's policy account balance as the tax deduction is recognized in the insurer's tax return. (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.)") over 11 years on a certificate-by-certificate basis even when an individual certificate is surrendered. The remaining balance in the claims stabilization reserve is paid out in cash to Entity TKO upon surrender of the final certificate. At December 31, 20X5, the individual components of Entity TKO's policy have the following values: 1. a [Policy account balance](https://asc.understandingaccounting.org/glossary/p/#policy-account-balance "At any point in time, this is the amount held by the insurance entity on behalf of the policyholder. This balance may be held in a general account, a separate account (a legally segregated account), or a combination of both on the insurance entity's balance sheet. This account includes premiums received from the policyholder, plus any credited income, less any relevant charges (acquisition costs, cost of insurance, and so forth). (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.)") = $9,700,000 2. b [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.)") = $8,700,000 3. c Claims stabilization reserve = $500,000 4. d Deferred acquisition costs tax (on a discounted basis) = $250,000. ##### [325-30-55-3](https://asc.understandingaccounting.org/asc/325/30/#325-30-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:21.128Z to 2026-09-09T23:44:21.128Z Record version: sha256:06b76637b636290957644e0a7f70f150f3195c848231c104e51492ea77e3e2fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is an illustration of the amounts to be included in Entity TKO's financial statements at December 31, 20X5, under this Subtopic. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9894ACEA-6D10-4B86-9A91-F95B987B4F53-low.gif) Cash Surrender Value " $8,700,000 " Claims Stabilization Reserve " 500,000 " Deferred Acquisition Costs tax " 250,000 " " $9,450,000 " ##### [325-30-55-4](https://asc.understandingaccounting.org/asc/325/30/#325-30-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:21.128Z to 2026-09-09T23:44:21.128Z Record version: sha256:7080df09d96176d3f2933b900d2a0914b04f629ac7d6a46b9c15eb5c30d79dd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In evaluating the circumstances to determine the amount that could be realized under the insurance contract, Entity TKO considers the cash surrender value (policy account balance of $9,700,000 less surrender charge of $1,000,000), the claims stabilization reserve, and the deferred acquisition costs tax as each of these amounts is realizable based on the contractual terms and is not dependent on surrendering all of the policies at once. The claims stabilization reserve is included in the amount that could be realized because the claims stabilization reserve will be recovered when the final policy is surrendered and is not dependent on the surrender of all of the policies at once. The surrender charge of $1,000,000 (20 certificates at $50,000 per certificate) is not assumed to be waived because the waiver of those charges requires the surrender of all of the certificates at once.