# ASC 325-40-35: Investments—Other — Beneficial Interests in Securitized Financial Assets — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/325/40/#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): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:ce35ce09cc69867126623c1cc4e8fbeef477adeb5c8544a5a32125e2c291eb11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-40-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/325/40/#35-subsequent-measurement) SEC content: no #### Accretable Yield ##### [325-40-35-1](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-1) Pending content: yes Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:e5ce9ff29d16741f9b2869e21b9ce58127e0624036977b330b605851549280aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The holder shall recognize accretable yield as interest income over the life of the [beneficial interest](https://asc.understandingaccounting.org/glossary/b/#beneficial-interests "Rights to receive all or portions of specified cash inflows received by a trust or other entity, including, but not limited to, all of the following: Senior and subordinated shares of interest, principal, or other cash inflows to be passed-through or paid-through Premiums due to guarantors Commercial paper obligations Residual interests, whether in the form of debt or equity.") using the effective yield method. The holder of a beneficial interest shall continue to update, over the life of the beneficial interest, the expectation of cash flows to be collected. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)The holder shall recognize accretable yield as interest income over the life of the [beneficial interest](https://asc.understandingaccounting.org/glossary/b/#beneficial-interests "Rights to receive all or portions of specified cash inflows received by a trust or other entity, including, but not limited to, all of the following: Senior and subordinated shares of interest, principal, or other cash inflows to be passed-through or paid-through Premiums due to guarantors Commercial paper obligations Residual interests, whether in the form of debt or equity.") using the effective yield method. Under the effective yield method, the current yield is applied to the amount determined as the initial investment (or initial amortized cost basis for beneficial interests that apply the accounting for [purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.")) minus cash received to date minus writeoff of amortized cost basis plus the yield accreted to date. The holder of a beneficial interest shall continue to update, over the life of the beneficial interest, the expectation of cash flows to be collected. ##### [325-40-35-2](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:8c50fcc2607f5d0ff2accf8b5a26b2d4cc56cd0f1679d00efa57017cc02fdd09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [325-40-35-3](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:d9bd270a618de73349858e1f4a445b8d57e05f8af41542a862a3b31a48a3056e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. After the transaction date, cash flows expected to be collected are defined as the holder's estimate of the amount and timing of estimated principal and interest cash flows based on the holder's best estimate of current conditions and reasonable and supportable forecasts. ##### [325-40-35-4](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-4) Pending content: yes Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:c7286eda879804faef795db5f44e502660f24f71b7e556c21bd043ef14c93fdd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If upon evaluation of a held-to-maturity classified beneficial interest there is a favorable (or an adverse) change in cash flows expected to be collected from the cash flows previously projected, the investor shall first apply the guidance in Subtopic 326-20 on financial instruments measured at amortized cost to account for that favorable (or adverse) change. After application of the guidance in Subtopic 326-20, if the amount of the favorable (or adverse) change in cash flows expected to be collected from the cash flows previously projected is not reflected (either as an increase or as a decrease) in the allowance for credit losses in accordance with Subtopic 326-20, the investor shall recalculate the amount of accretable yield for the beneficial interest on the date of evaluation as the excess of cash flows expected to be collected over the beneficial interest's reference amount. 1. a [Subparagraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)If upon evaluation of a held-to-maturity classified beneficial interest there is a favorable (or an adverse) change in cash flows expected to be collected from the cash flows previously projected, the investor shall first apply the guidance in Subtopic 326-20 on financial instruments measured at amortized cost to account for that favorable (or adverse) change. After application of the guidance in Subtopic 326-20, if the amount of the favorable (or adverse) change in cash flows expected to be collected from the cash flows previously projected is not reflected (either as an increase or as a decrease) in the allowance for credit losses in accordance with Subtopic 326-20, the investor shall recalculate the amount of accretable yield for the beneficial interest on the date of evaluation as the excess of cash flows expected to be collected over the beneficial interest's reference amount. The investor shall recalculate the current yield on the date of the evaluation as the rate that equates the cash flows expected to be collected to the beneficial interest’s reference amount. 1. a [Subparagraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [325-40-35-4A](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-4A) Pending content: yes Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:e230f2aff23a8d3d0dfe2e0430f8cdf47abfb960625131780f425ee205ffb1f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If upon evaluation of an available-for-sale classified beneficial interest there is a favorable (or an adverse) change in cash flows expected to be collected from the cash flows previously projected, the investor shall apply the guidance in Subtopic 326-30 on measuring credit losses on available-for-sale debt securities to account for that favorable (or adverse) change. After application of the guidance in Subtopic 326-30, if the amount of the favorable (or adverse) change in cash flows expected to be collected from the cash flows previously projected is not reflected (either as an increase or as a decrease) in the allowance for credit losses in accordance with Subtopic 326-30, the investor shall recalculate the amount of accretable yield for the beneficial interest on the date of evaluation as the excess of cash flows expected to be collected over the beneficial interest's reference amount. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)If upon evaluation of an available-for-sale classified beneficial interest there is a favorable (or an adverse) change in cash flows expected to be collected from the cash flows previously projected, the investor shall apply the guidance in Subtopic 326-30 on measuring credit losses on available-for-sale debt securities to account for that favorable (or adverse) change. After application of the guidance in Subtopic 326-30, if the amount of the favorable (or adverse) change in cash flows expected to be collected from the cash flows previously projected is not reflected (either as an increase or as a decrease) in the allowance for credit losses in accordance with Subtopic 326-30, the investor shall recalculate the amount of accretable yield for the beneficial interest on the date of evaluation as the excess of cash flows expected to be collected over the beneficial interest's reference amount. The investor shall recalculate the current yield on the date of the evaluation as the rate that equates the cash flows expected to be collected to the beneficial interest’s reference amount. ##### [325-40-35-4B](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-4B) Pending content: yes Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:963e7c83b6b4cf48871efa01970b168bf8b9308cae6e1eedbeee9b1f9e4bdc63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The reference amount in paragraphs [325-40-35-4 through 35-4A](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-4) is equal to the initial investment (or initial amortized cost basis for beneficial interests that apply the accounting for purchased financial assets with credit deterioration) minus cash received to date minus writeoff of amortized cost basis plus the yield accreted to date. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)The reference amount in paragraphs [325-40-35-4 through 35-4A](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-4) is equal to the initial investment (or initial amortized cost basis for beneficial interests that apply the accounting for purchased financial assets with credit deterioration) minus cash received to date minus writeoff of amortized cost basis minus the allowance for credit losses plus the yield accreted to date. ##### [325-40-35-4C](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-4C) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:eed5ea726d9b6ab12ba93278ef1dabb6980d0c4892c3b74e24986c7a4f10b6f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Subtopic, a favorable (or an adverse) change in cash flows expected to be collected is considered in the context of both timing and amount of the cash flows expected to be collected. Based on cash flows expected to be collected, interest income may be recognized on a beneficial interest even if the net investment in the beneficial interest is accreted to an amount greater than the amount at which the beneficial interest could be settled if prepaid immediately in its entirety. The adjustment shall be accounted for prospectively as a change in estimate in conformity with Topic 250, with the amount of periodic accretion adjusted over the remaining life of the beneficial interest. ##### [325-40-35-5](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:73c6b25edf7c70e183ca6e28782a09081afae391d0d1a577f7bf996cdee8aaf3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Determining whether there has been a favorable (or an adverse) change in cash flows expected to be collected from the cash flows previously projected (taking into consideration both the timing and amount of the cash flows expected to be collected) involves comparing the present value of the remaining cash flows expected to be collected at the initial transaction date (or at the last date previously revised) against the present value of the cash flows expected to be collected at the current financial reporting date. ##### [325-40-35-6](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:8628df9b7cae274eba1eac3b2643e9bc2f9024a284db3c535e773fbebdd0f0a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cash flows, including the assessment of expected credit losses, shall be discounted at a rate equal to the current yield used to accrete the beneficial interest. #### Credit Losses ##### [325-40-35-6A](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-6A) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:513960943d8aaeddb45d311f474977bdecdde1fc7695862093c9abf8c15d685e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall account for credit losses on beneficial interests classified as held to maturity and available for sale in accordance with Topic 326. ##### [325-40-35-7](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:c772e6daf811d2d321824c3fdac3ebf2ca622b275d90ee60b97fc66bab62cdcc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall use the present value of expected future cash flows technique to measure credit losses on beneficial interests. If the present value of the original estimate at the initial transaction date (or the last date previously revised) of cash flows expected to be collected is less than the present value of the current estimate of cash flows expected to be collected, the change is considered favorable. If the present value of the original estimate at the initial transaction date (or the last date previously revised) of cash flows expected to be collected is greater than the present value of the current estimate of cash flows expected to be collected, the change is considered adverse. ##### [325-40-35-8](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:d3342491c94d51e0e1f484b428920d73161e30a4445695e293e86b0a475e9612 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [325-40-35-9](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:91c8bd3c745290062011b23ca5bed0ee0085a43b4b157454bda91a3d3dad58b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, unless the guidance in Topic 326 indicates that a credit loss has occurred, changes in the interest rate of a plain-vanilla, variable-rate beneficial interest generally should not result in the recognition and measurement of a credit loss (a plain-vanilla, variable-rate beneficial interest does not include those variable-rate beneficial interests with interest rate reset formulas that involve either leverage or an inverse floater). ##### [325-40-35-10](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-10) Pending content: yes Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:2e7c0bd4f61bb4ffe8634e7ba94dd9bcebf55969cfb164d10a1ea672b269bcb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [325-40-55-1](https://asc.understandingaccounting.org/asc/325/40/#325-40-55-1) for implementation guidance. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)[Paragraph superseded by Accounting Standards Update No. 2025-12](https://asc.understandingaccounting.org/updates/asu-2025-12/). ##### [325-40-35-10A](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-10A) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:ba3dc30e9c0feddc550437faf425539750bf2a601289946130e5fb554255818e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It is inappropriate to automatically conclude that no credit loss in a security exists because all of the scheduled payments to date have been received. However, it also is inappropriate to automatically conclude that every decline in fair value represents a credit loss. Further analysis and judgment are required to assess whether a decline in fair value is an indicator that the holder will not collect all of the contractual cash flows or cash flows expected to be collected from the security. The more severe the decline in fair value, the more persuasive the evidence that is needed to overcome the premise that the holder will not collect all of the contractual cash flows or cash flows expected to be collected from the issuer of the security. ##### [325-40-35-10B](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-10B) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:73d4e0573f00b5a46807b80650541ec9c01538d5acf6754a0b4b95b1dbec54c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [325-40-35-10C](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-10C) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:0366e096e86a5819481a6567dd35fd238c583bf89b518223938430dc997cabd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [325-40-35-10D](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-10D) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:b417793e946374913754350f0939e2a9a7d6819ddeb30cafdb7f0b00f0127351 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [325-40-35-11](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:172252ebb56a2442280fa31b85cb9be3c080573b18bc91533d6ef537a3d8a0e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [325-40-35-12](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:576e97f92227dae334138eaf43492fd2e12090a4d847be746dcf710fdc705f17 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [325-40-35-13](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:3cbbedadcf727aa19b520173fd6832aeecec96a457f8817d92510a56e45047ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [325-40-35-14](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:b94d30deaaf397893c8fbeda2ae3b69e5dc3b89e952839997d85183d5b53090a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-13](https://asc.understandingaccounting.org/updates/asu-2016-13/). ##### [325-40-35-15](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:0bb3403d39678f80ad5c0c4b41f5bf806fd00378f76e94064ae8c05cbcec1041 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). #### Nonaccrual Status—Cash Flows Not Reliably Estimable ##### [325-40-35-16](https://asc.understandingaccounting.org/asc/325/40/#325-40-35-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:44:45.377Z to 2026-09-09T23:44:45.377Z Record version: sha256:ca75abb05565597b6408b474e3f8d0f0cf41f043b1e0c17dcc0818fe706058a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic does not address when a holder of a beneficial interest would place that interest on nonaccrual status or when a holder cannot reliably estimate cash flows. However, for beneficial interests placed on nonaccrual status or when a holder cannot reliably estimate cash flows, the cost recovery method shall be used.