# ASC 326-20-45: Financial Instruments—Credit Losses — Measured at Amortized Cost — 45 Other Presentation Matters

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/326/20/#45-other-presentation-matters)

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## ASC 326-20-45: 45 Other Presentation Matters

[Read section](https://asc.understandingaccounting.org/asc/326/20/#45-other-presentation-matters)

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##### [326-20-45-1](https://asc.understandingaccounting.org/asc/326/20/#326-20-45-1)

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For [financial assets](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity.") measured at amortized cost within the scope of this Subtopic, an entity shall separately present on the statement of financial position, the allowance for credit losses that is deducted from the asset's [amortized cost basis](https://asc.understandingaccounting.org/glossary/a/#amortized-cost-basis "The amortized cost basis is the amount at which a financing receivable or investment is originated or acquired, adjusted for applicable accrued interest, accretion, or amortization of premium, discount, and net deferred fees or costs, collection of cash, writeoffs, foreign exchange, and fair value hedge accounting adjustments.").

##### [326-20-45-2](https://asc.understandingaccounting.org/asc/326/20/#326-20-45-2)

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For off-balance-sheet credit exposures within the scope of this Subtopic, an entity shall present the estimate of expected credit losses on the statement of financial position as a liability. The liability for credit losses for off-balance-sheet financial instruments shall be reduced in the period in which the off-balance-sheet financial instruments expire, result in the recognition of a financial asset, or are otherwise settled. An estimate of expected credit losses on a financial instrument with off-balance-sheet risk shall be recorded separate from the allowance for credit losses related to a recognized financial instrument.

##### [326-20-45-3](https://asc.understandingaccounting.org/asc/326/20/#326-20-45-3)

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When a discounted cash flow approach is used to estimate expected credit losses, the change in present value from one reporting period to the next may result not only from the passage of time but also from changes in estimates of the timing or amount of expected future cash flows. An entity that measures credit losses based on a discounted cash flow approach is permitted to report the entire change in present value as credit loss expense (or reversal of credit loss expense). Alternatively, an entity may report the change in present value attributable to the passage of time as interest income. See paragraph [326-20-50-12](https://asc.understandingaccounting.org/asc/326/20/#326-20-50-12) for a disclosure requirement applicable to entities that choose the latter alternative and report changes in present value attributable to the passage of time as interest income.

##### [326-20-45-4](https://asc.understandingaccounting.org/asc/326/20/#326-20-45-4)

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The [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of the collateral of a collateral-dependent financial asset may change from one reporting period to the next. Changes in the fair value of the collateral shall be reported as credit loss expense or a reversal of credit loss expense when the guidance in paragraphs

[326-20-35-4 through 35-6](https://asc.understandingaccounting.org/asc/326/20/#326-20-35-4)

is applied.

##### [326-20-45-5](https://asc.understandingaccounting.org/asc/326/20/#326-20-45-5)

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An entity may make an accounting policy election, at the class of financing receivable or major security-type level, to present separately on the statement of financial position or within another statement of financial position line item the accrued interest receivable balance, net of the allowance for credit losses (if any). An entity that presents the accrued interest receivable balance, net of the allowance for credit losses (if any), within another statement of financial position line item shall apply the disclosure requirements in paragraph [326-20-50-3A](https://asc.understandingaccounting.org/asc/326/20/#326-20-50-3A).

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)An entity may make an accounting policy election, at the [class of financing receivable](https://asc.understandingaccounting.org/glossary/c/#class-of-financing-receivable "A group of financing receivables determined on the basis of both of the following:Risk characteristics of the financing receivableAn entity's method for monitoring and assessing credit risk.See paragraphs 326-20-55-11326-20-55-12326-20-55-13326-20-55-14 and 326-20-50-3.") or major security-type level, to present separately on the statement of financial position or within another statement of financial position line item the accrued interest receivable balance, net of the allowance for credit losses (if any). An entity that presents the accrued interest receivable balance, net of the allowance for credit losses (if any), within another statement of financial position line item shall apply the disclosure requirements in paragraph [326-20-50-3A](https://asc.understandingaccounting.org/asc/326/20/#326-20-50-3A).