# ASC 326-30: Financial Instruments—Credit Losses — Available-for-Sale Debt Securities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/326/30/) 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): 2026-09-09T23:49:57.453Z to 2026-09-09T23:50:26.688Z Record version: sha256:bc187479097e8fcb24104934b2d1d93f06ebdc1339e0a46db0dde195027b9807 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30: Financial Instruments—Credit Losses — Available-for-Sale Debt Securities ### Machine-generated study aids ```json { "summary": "ASC 326-30 governs measurement of credit losses on debt securities classified as available-for-sale (AFS), including loans meeting the definition of debt securities classified as AFS. Unlike the pooled CECL model in 326-20, impairment is assessed at the individual security level: when fair value is below amortized cost, the entity determines how much of the decline is credit-related by comparing the present value of expected cash flows with amortized cost, records that amount as an allowance for credit losses (capped at the amount fair value is below amortized cost), and puts the remaining decline in other comprehensive income. If the entity intends to sell or more likely than not must sell before recovery, the allowance is written off and the security is written down to fair value through earnings.", "key_points": [ "An AFS debt security is impaired when fair value is less than amortized cost basis; the credit-related portion is recorded through an allowance for credit losses limited by the amount fair value is below amortized cost, with the non-credit portion recorded in other comprehensive income net of tax (326-30-35-1; 326-30-35-2).", "A credit loss exists when the present value of cash flows expected to be collected, discounted at the effective interest rate implicit in the security at acquisition, is less than the amortized cost basis (326-30-35-6; 326-30-35-7); an entity may elect by major security type to adjust that rate for expected prepayments (326-30-35-7A).", "Impairment must be assessed at the individual security level; a general allowance for unidentified impairment in a portfolio is not appropriate, and a debt security may not be combined with a separate guarantee or credit enhancement contract (326-30-35-4; 326-30-35-5).", "If the entity intends to sell, or more likely than not will be required to sell, before recovery of amortized cost, any allowance is written off and the security is written down to fair value through earnings, and that new amortized cost basis is not adjusted for later recoveries in fair value (326-30-35-10; 326-30-35-14; 326-30-35-15).", "Credit losses are reassessed each reporting period with changes recorded as credit loss expense or reversal, but the allowance may never be reversed below zero (326-30-35-3; 326-30-35-12).", "Purchased AFS debt securities meeting the credit-deterioration indicators in 326-30-55-1 are purchased financial assets with credit deterioration; amortized cost basis equals purchase price plus the allowance, and estimated credit losses are discounted at the rate equating expected cash flows to the purchase price (326-30-30-2; 326-30-30-3).", "AFS debt securities are presented at fair value with amortized cost basis and the allowance shown parenthetically, and disclosures include unrealized losses without an allowance split between less than 12 months and 12 months or longer, methodology and significant inputs, and a tabular allowance rollforward by major security type (326-30-45-1; 326-30-50-4 through 50-6; 326-30-50-7; 326-30-50-9)." ], "categories": [ "Impairment", "Financial instruments", "Subsequent measurement", "Disclosure" ], "audience_level": "intermediate", "student_note": "Exams test the contrast between this AFS model (individual security, allowance capped at the fair value shortfall, non-credit decline to OCI) and the pooled lifetime CECL model in 326-20; a common error is applying a lifetime expected-loss estimate to AFS securities or forgetting the fair value floor on the allowance. Also note that the old permanent \"other-than-temporary impairment\" write-down was replaced by a reversible allowance, except when intent or a required sale forces a write-down to fair value through earnings, and that time in an unrealized loss position alone can never prove no credit loss exists (326-30-55-1).", "related_topics": [ "326-20", "320-10", "325-40", "310-20", "958-320", "815-20" ], "key_concepts": [ "available-for-sale debt securities", "allowance for credit losses", "amortized cost basis", "present value of expected cash flows", "intent or requirement to sell", "purchased financial assets with credit deterioration", "accrued interest receivable policy elections", "unrealized loss disclosures" ] } ``` Source downloaded (UTC): 2026-09-09T23:49:57.453Z to 2026-09-09T23:49:57.453Z Record version: sha256:a9bcf699a8ced0e9e17c8ff3f474bccaeed0306cd0c443b98e1614440b45ac8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/326/30/#00-status) SEC content: no ##### [326-30-00-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:49:57.453Z to 2026-09-09T23:49:57.453Z Record version: sha256:d4208ea24c9d93d9bf37c2d901f9d3271261fcd0ee3131459a6348b22e558f6f 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
Amortized Cost BasisAddedAccounting Standards Update No. 2016-1306/16/2016
Available-for-Sale SecuritiesAddedAccounting Standards Update No. 2016-1306/16/2016
Debt Security (1st def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Debt Security (1st def.)AddedAccounting Standards Update No. 2016-1306/16/2016
Effective Interest RateAmendedAccounting Standards Update No. 2016-1912/14/2016
Effective Interest RateAddedAccounting Standards Update No. 2016-1306/16/2016
Fair Value (2nd def.)AddedAccounting Standards Update No. 2016-1306/16/2016
Financial Asset (1st def.)SupersededAccounting Standards Update No. 2016-1912/14/2016
Financial Asset (1st def.)AddedAccounting Standards Update No. 2016-1306/16/2016
Financial Asset (2nd def.)AddedAccounting Standards Update No. 2016-1912/14/2016
Holding Gain or LossAddedAccounting Standards Update No. 2016-1306/16/2016
Loan (2nd def.)AddedAccounting Standards Update No. 2016-1306/16/2016
Market ParticipantsAddedAccounting Standards Update No. 2016-1306/16/2016
Orderly TransactionAddedAccounting Standards Update No. 2016-1306/16/2016
Purchased Financial Assets with Credit DeteriorationAmendedAccounting Standards Update No. 2016-1912/14/2016
Purchased Financial Assets with Credit DeteriorationAddedAccounting Standards Update No. 2016-1306/16/2016
Related PartiesAddedAccounting Standards Update No. 2016-1306/16/2016
326-30-05-1AddedAccounting Standards Update No. 2016-1306/16/2016
326-30-15-1AddedAccounting Standards Update No. 2016-1306/16/2016
326-30-15-2AddedAccounting Standards Update No. 2016-1306/16/2016
326-30-30-1 through 30-4
AddedAccounting Standards Update No. 2016-1306/16/2016
326-30-30-1AAddedAccounting Standards Update No. 2019-0404/25/2019
326-30-30-1BAddedAccounting Standards Update No. 2019-0404/25/2019
326-30-30-2AmendedAccounting Standards Update No. 2016-1912/14/2016
326-30-35-1 through 35-17
AddedAccounting Standards Update No. 2016-1306/16/2016
326-30-35-1AAddedAccounting Standards Update No. 2022-0103/28/2022
326-30-35-4AmendedAccounting Standards Update No. 2022-0103/28/2022
326-30-35-7AAddedAccounting Standards Update No. 2019-0404/25/2019
326-30-35-11AmendedAccounting Standards Update No. 2019-0404/25/2019
326-30-35-13AmendedAccounting Standards Update No. 2019-0404/25/2019
326-30-35-13AAmendedMaintenance Update 2020-18 (PDF)11/25/2020
326-30-35-13AAddedAccounting Standards Update No. 2019-0404/25/2019
326-30-45-1AmendedAccounting Standards Update No. 2019-0404/25/2019
326-30-45-1 through 45-3
AddedAccounting Standards Update No. 2016-1306/16/2016
326-30-50-1 through 50-10
AddedAccounting Standards Update No. 2016-1306/16/2016
326-30-50-3AmendedAccounting Standards Update No. 2016-1912/14/2016
326-30-50-3A through 50-3D
AddedAccounting Standards Update No. 2019-0404/25/2019
326-30-50-4AmendedAccounting Standards Update No. 2019-0404/25/2019
326-30-50-5AmendedAccounting Standards Update No. 2025-1112/08/2025
326-30-50-6AmendedAccounting Standards Update No. 2025-1112/08/2025
326-30-50-8AmendedAccounting Standards Update No. 2025-1112/08/2025
326-30-50-9AmendedAccounting Standards Update No. 2024-0311/04/2024
326-30-55-1 through 55-9
AddedAccounting Standards Update No. 2016-1306/16/2016
Source downloaded (UTC): 2026-09-09T23:50:00.260Z to 2026-09-09T23:50:00.260Z Record version: sha256:c1227973880d4c93f08a6acb4326ac401e939617f8086557173135f82f340850 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-05: 05 Background [Read section](https://asc.understandingaccounting.org/asc/326/30/#05-background) SEC content: no ##### [326-30-05-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:00.260Z to 2026-09-09T23:50:00.260Z Record version: sha256:705b5d6d4a12b3c31a2b273dd6e7489651e1875f7e15a93588e041dd327052a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on how an entity should measure credit losses on available-for-sale debt securities. Source downloaded (UTC): 2026-09-09T23:50:03.959Z to 2026-09-09T23:50:03.959Z Record version: sha256:31a125c74910e089e3c20fc41e2675c0bfd0b6a536ef596dd303e1e905f309d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-15: 15 Scope [Read section](https://asc.understandingaccounting.org/asc/326/30/#15-scope) SEC content: no #### Entities ##### [326-30-15-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:03.959Z to 2026-09-09T23:50:03.959Z Record version: sha256:ce54843677e827295f6e7a711d0416a766fdcc5f72e1d7843f1b5af3673441e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities. #### Instruments ##### [326-30-15-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:03.959Z to 2026-09-09T23:50:03.959Z Record version: sha256:c42115031c6173fa63b2184c3eb0bd2e2bd92c3685758416cf49f31aa19ac694 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") classified as [available-for-sale securities](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities."), including [loans](https://asc.understandingaccounting.org/glossary/l/#loan "A contractual right to receive money on demand or on fixed or determinable dates that is recognized as an asset in the creditor's statement of financial position. Examples include but are not limited to accounts receivable (with terms exceeding one year) and notes receivable.") that meet the definition of _debt securities_ and are classified as available-for-sale securities. Source downloaded (UTC): 2026-09-09T23:50:10.971Z to 2026-09-09T23:50:10.971Z Record version: sha256:515a5845f2fc1cc9f2ee99fc44b6c87b637f41f8a214190f34050303ae109f34 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/326/30/#30-initial-measurement) SEC content: no ##### [326-30-30-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:10.971Z to 2026-09-09T23:50:10.971Z Record version: sha256:73a300602dc17ffb47315834b9699baddd76a32b8e2cc517f3cce0b5b2b825e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Throughout this Subtopic, the term _earnings_ shall be read as _performance indicator_, and _other comprehensive income_ shall be read as _outside the performance indicator_ for [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") that are within the scope of Subtopic 958-320 on debt securities of not-for-profit entities. ##### [326-30-30-1A](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-1A) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:10.971Z to 2026-09-09T23:50:10.971Z Record version: sha256:9a4997e194d6b33a2a42fcf819febb1bcb6b30867f52047f8a65f8bd2dd76948 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If for the purposes of identifying and measuring an impairment the applicable accrued interest is excluded from both 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.") and the [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.") of the available-for-sale debt security, an entity may develop its estimate of expected credit losses by measuring components of the amortized cost basis on a combined basis or by separately measuring the applicable accrued interest component from the other components of amortized cost basis. ##### [326-30-30-1B](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-1B) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:10.971Z to 2026-09-09T23:50:10.971Z Record version: sha256:d15f4232df702c24d61561752a9a23d7979ad13992f4712d2ee8c577d9447964 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity excludes applicable accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt security, the entity may make an accounting policy election, at the major security-type level, not to measure an allowance for credit losses for accrued interest receivables if it writes off the uncollectible accrued interest receivable balance in a timely manner. An entity that elects the accounting policy in this paragraph shall meet the disclosure requirements in paragraph [326-30-50-3C](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3C). This accounting policy election shall be considered separately from the accounting policy election in paragraph [326-30-35-13A](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-13A). An entity may not analogize this guidance to components of amortized cost basis other than accrued interest. #### Purchased Financial Assets with Credit Deterioration ##### [326-30-30-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:10.971Z to 2026-09-09T23:50:10.971Z Record version: sha256:9a9e5e9869d142f2e07485ce156ed341903d39cc260c2550f90feec6eb9a1d1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A purchased [debt security](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") classified as available-for-sale shall be considered to be a [purchased financial asset 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.") when the indicators of a credit loss in paragraph [326-30-55-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-1) have been met. The allowance for credit losses for purchased [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.") with credit deterioration shall be measured at the individual security level in accordance with paragraphs [326-30-35-3 through 35-10](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-3) . The [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.") for purchased financial assets with credit deterioration shall be considered to be the purchase price plus any allowance for credit losses. See paragraphs [326-30-55-1 through 55-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-1) for implementation guidance. ##### [326-30-30-3](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:10.971Z to 2026-09-09T23:50:10.971Z Record version: sha256:5f291e55e0a81881f643992abea60e5f0fd8f10d5159846067c1b04d6615e3fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimated credit losses shall be discounted at the rate that equates the present value of the purchaser's estimate of the security's future cash flows with the purchase price of the asset. ##### [326-30-30-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:10.971Z to 2026-09-09T23:50:10.971Z Record version: sha256:2661fddcaf9e737e36deb4261ba1180590637e113115469aba0fe3463659bedd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall record the [holding gain or loss](https://asc.understandingaccounting.org/glossary/h/#holding-gain-or-loss "The net change in fair value of a security. The holding gain or loss does not include dividend or interest income recognized but not yet received, writeoffs, or the allowance for credit losses.") through other comprehensive income, net of applicable taxes. Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:93dbcca7268f067b7d835820dbeb7f3f79e57df6b2427b0a1b5dcf72d696f84a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/326/30/#35-subsequent-measurement) SEC content: no #### Impairment of Individual Available-for-Sale Securities ##### [326-30-35-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:e3728297512234a01c29653af11eeba71d682f8b47e384da9b9ed826f9d9d502 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment is impaired if 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 investment is less than its [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."). ##### [326-30-35-1A](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-1A) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:22e8bab9acb2c3d3e8154b98c115856a329c291a681f66dfd9253e9f98fd279d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall not consider a basis adjustment related to an existing portfolio layer method hedge designated in accordance with paragraph [815-20-25-12A](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12A) when measuring impairment of the individual investments or individual beneficial interest included in a closed portfolio hedged using the portfolio layer method. ##### [326-30-35-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:fed680689407207e794727710ed25f0d98f5a003defa1f5f349fe2c5c76f30be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For individual [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") classified as [available-for-sale securities](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities."), an entity shall determine whether a decline in fair value below the amortized cost basis has resulted from a credit loss or other factors. An entity shall record impairment relating to credit losses through an allowance for credit losses. However, the allowance shall be limited by the amount that the fair value is less than the amortized cost basis. Impairment that has not been recorded through an allowance for credit losses shall be recorded through other comprehensive income, net of applicable taxes. An entity shall consider the guidance in paragraphs [326-30-35-6](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-6) and [326-30-55-1 through 55-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-1) when determining whether a credit loss exists. ##### [326-30-35-3](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:57d1d24841bd098b4abf7ffc41632847cb923213823e429de9c20fe9b3ab64eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At each reporting date, an entity shall record an allowance for credit losses that reflects the amount of the impairment related to credit losses, limited by the amount that fair value is less than the amortized cost basis. Changes in the allowance shall be recorded in the period of the change as credit loss expense (or reversal of credit loss expense). ##### [326-30-35-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:a57da4ea2e59aadef57c9520aaeb7fdde4e3208bcdccc8ea11c4331ff5741647 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Impairment shall be assessed at the individual security level (referred to as an investment). The impairment assessment of the individual securities or individual beneficial interest in a closed portfolio hedged using the portfolio layer method shall not consider the basis adjustment related to an existing portfolio layer method hedge. Individual security level means the level and method of aggregation used by the reporting entity to measure realized and unrealized gains and losses on its debt securities. (For example, debt securities bearing the same Committee on Uniform Security Identification Procedures \[CUSIP\] number that were purchased in separate trade lots may be aggregated by a reporting entity on an average cost basis if that corresponds to the basis used to measure realized and unrealized gains and losses for the debt securities.) Providing a general allowance for an unidentified impairment in a portfolio of debt securities is not appropriate. ##### [326-30-35-5](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:08d3134fe0f621b24e1dc3afcd297c58c5170a75accf49a5de507a6db53c2986 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall not combine separate contracts (a debt security and a guarantee or other credit enhancement) for purposes of determining whether a debt security is impaired or can contractually be prepaid or otherwise settled in such a way that the entity would not recover substantially all of its cost. ##### [326-30-35-6](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:32a87152fba0ada84958264d1c1f4bfe225bf6aaf2d0dbcf5e3906878aee0e60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In assessing whether a credit loss exists, an entity shall compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses shall be recorded for the credit loss, limited by the amount that 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.") is less than amortized cost basis. Credit losses on an impaired security shall continue to be measured using the present value of expected future cash flows. ##### [326-30-35-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:51cdcb6436700cef8cbc0d8b00b402dbd0bc30a4a881280c2b4079fab9b09648 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining whether a credit loss exists, an entity shall consider the factors in paragraphs [326-30-55-1 through 55-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-1) and use its best estimate of the present value of cash flows expected to be collected from the [debt security](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions."). One way of estimating that amount would be to consider the methodology described in paragraphs [326-30-35-8 through 35-10](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-8) . Briefly, the entity would discount the expected cash flows at the [effective interest rate](https://asc.understandingaccounting.org/glossary/e/#effective-interest-rate "The rate of return implicit in the financial asset, that is, the contractual interest rate adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition of the financial asset. For purchased financial assets with credit deterioration, however, to decouple interest income from credit loss recognition, the premium or discount at acquisition excludes the discount embedded in the purchase price that is attributable to the acquirer's assessment of credit losses at the date of acquisition.") implicit in the security at the date of acquisition. ##### [326-30-35-7A](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-7A) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:877fdddfb24f47f972ab7be0dae655fd95cba6de1fe33c8db0f6353a6eb6d40a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As an accounting policy election for each major security type of debt securities classified as available-for-sale securities, an entity may adjust the effective interest rate used to discount expected cash flows to consider the timing (and changes in the timing) of expected cash flows resulting from expected prepayments. ##### [326-30-35-8](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:503133715e4fd97e7d4a110622a6e08168fdf342356780d59019a83df583da6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The estimates of expected future cash flows shall be the entity's best estimate based on past events, current conditions, and on reasonable and supportable forecasts. Available evidence shall be considered in developing the estimate of expected future cash flows. The weight given to the information used in the assessment shall be commensurate with the extent to which the evidence can be verified objectively. If an entity estimates a range for either the amount or timing of possible cash flows, the likelihood of the possible outcomes shall be considered in determining the best estimate of expected future cash flows. ##### [326-30-35-9](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:797c3794998dfd9c96dfd866eb24e624dc536f7cde664a36a827552e4fd6a8ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Available information would include existing environmental factors, for example, existing industry, geographical, economic, and political factors that are relevant to the collectibility of that debt security. ##### [326-30-35-10](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:b749e8003238b96e755fee91a1f354032d3578520df32ceeff3a6940df460636 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity intends to sell the debt security (that is, it has decided to sell the security), or more likely than not will be required to sell the security before recovery of its amortized cost basis, any allowance for credit losses shall be written off and the amortized cost basis shall be written down to the debt security's fair value at the reporting date with any incremental impairment reported in earnings. If an entity does not intend to sell the debt security, the entity shall consider available evidence to assess whether it more likely than not will be required to sell the security before the recovery of its amortized cost basis (for example, whether its cash or working capital requirements or contractual or regulatory obligations indicate that the security will be required to be sold before the forecasted recovery occurs). In assessing whether the entity more likely than not will be required to sell the security before recovery of its amortized cost basis, the entity shall consider the factors in paragraphs [326-30-55-1 through 55-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-1) . ##### [326-30-35-11](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:b13e439662d5da3809de403f4f5154cc1e6e9938605ce91291085d096e557134 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the security's contractual interest rate varies based on subsequent changes in an independent factor, such as an index or rate, for example, the prime rate, the London Interbank Offered Rate (LIBOR), or the U.S. Treasury bill weekly average, that security's effective interest rate (used to discount expected cash flows as described in paragraph [326-30-35-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-7)) may be calculated based on the factor as it changes over the life of the security or is projected to change over the life of the security, or may be fixed at the rate in effect at the date an entity determines that the security has a credit loss as determined in accordance with paragraphs [326-30-35-1 through 35-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-1) . The entity's choice shall be applied consistently for all securities whose contractual interest rate varies based on subsequent changes in an independent factor. An entity is not required to project changes in the factor for purposes of estimating expected future cash flows. If the entity projects changes in the factor for the purposes of estimating expected future cash flows, it shall use the same projections in determining the effective interest rate used to discount those cash flows. In addition, if the entity projects changes in the factor for the purposes of estimating expected future cash flows, it shall adjust the effective interest rate used to discount expected cash flows to consider the timing (and changes in the timing) of expected cash flows resulting from expected prepayments in accordance with paragraph [326-30-35-7A](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-7A). Subtopic 310-20 on receivables—nonrefundable fees and other costs provides guidance on the calculation of interest income for variable rate instruments. #### Accounting for Debt Securities after a Credit Impairment ##### [326-30-35-12](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:2e499003db0ea5dfd8a9a991c5d9583755f9f699e07f2fc5947637a449572aa5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall reassess the credit losses each reporting period when there is an allowance for credit losses. An entity shall record subsequent changes in the allowance for credit losses on available-for-sale debt securities with a corresponding adjustment recorded in the credit loss expense on [available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.")[debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions."). An entity shall not reverse a previously recorded allowance for credit losses to an amount below zero. ##### [326-30-35-13](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:7d46ed8583deebca6e77bc634de2d45117b20380cee4bdfe097dad9785d585f8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall recognize writeoffs of available-for-sale debt securities in accordance with paragraph [326-20-35-8](https://asc.understandingaccounting.org/asc/326/20/#326-20-35-8). ##### [326-30-35-13A](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-13A) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:5e3881699ebda276da044f7ed6969311dc1173c7420317b12e855c46f7977ea0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If for the purposes of identifying and measuring an impairment the applicable accrued interest is excluded from both 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.") and the [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.") of the available-for-sale debt security, an entity may make an accounting policy election, at the major security-type level, to write off accrued interest receivables by reversing interest income or recognizing credit loss expense, or a combination of both. This accounting policy election shall be considered separately from the accounting policy election in paragraph [326-30-30-1B](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-1B). An entity that elects this accounting policy shall meet the disclosure requirements in paragraph [326-30-50-3D](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3D). An entity may not analogize this guidance to components of amortized cost basis other than accrued interest. #### Accounting after a Write-Down Resulting from an Intent to Sell or a More-Likely-Than-Not Requirement to Sell ##### [326-30-35-14](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:b943b258a4b0a1f064ae6e79636dc597e5cf946385d1be826a447a49759b6f95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once an individual [debt security](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") has been written down in accordance with paragraph [326-30-35-10](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-10), the previous [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.") less writeoffs, including non-credit-related impairment reported in earnings, shall become the new amortized cost basis of the investment. That new amortized cost basis shall not be adjusted for subsequent recoveries in [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."). ##### [326-30-35-15](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:6e099457bb967f2efbf268b904a5e8ffdae76f033308f5e736aa05cbd2903620 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For debt securities for which impairments were reported in earnings as a writeoff because of an intent to sell or a more-likely-than-not requirement to sell, the difference between the new amortized cost basis and the cash flows expected to be collected shall be accreted in accordance with existing applicable guidance as interest income. An entity shall continue to estimate the present value of cash flows expected to be collected over the life of the debt security. For debt securities accounted for in accordance with Subtopic 325-40, an entity should look to that Subtopic to account for changes in cash flows expected to be collected. For all other debt securities, if upon subsequent evaluation, there is a significant increase in the cash flows expected to be collected or if actual cash flows are significantly greater than cash flows previously expected, those changes shall be accounted for as a prospective adjustment to the yield. Subsequent increases in the fair value of available-for-sale securities after the write-down shall be included in other comprehensive income. (This Section does not address when a holder of a debt security would place a debt security on nonaccrual status or how to subsequently report income on a nonaccrual debt security.) #### Purchased Financial Assets with Credit Deterioration ##### [326-30-35-16](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:175978f897774d806b53b28b26f9c9f8ab6d8b79dc56a58aa8fa25b919acfd79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall measure changes in the allowance for credit losses on a [purchased financial asset 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.") in accordance with paragraph [326-30-35-6](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-6). The entity shall report changes in the allowance for credit losses in net income as credit loss expense (or reversal of credit loss expense) in each reporting period. ##### [326-30-35-17](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:14.904Z to 2026-09-09T23:50:14.904Z Record version: sha256:681cf01c8218a10921830e18cb41c00fdd97d8980bbf9e487d9a602985857053 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic does not address how an entity shall recognize interest income. See paragraphs [310-10-35-53A through 35-53C](https://asc.understandingaccounting.org/asc/310/10/#310-10-35-53A) for guidance on recognition of interest income on purchased financial assets with credit deterioration. Source downloaded (UTC): 2026-09-09T23:50:17.868Z to 2026-09-09T23:50:17.868Z Record version: sha256:c7db270fbdcaddfe24aff7fc5223b57fca57487375a616f0e85c6ef0de9e03d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/326/30/#45-other-presentation-matters) SEC content: no ##### [326-30-45-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:17.868Z to 2026-09-09T23:50:17.868Z Record version: sha256:7ef46ef37ba5b407b7629d5f876d487b094c4ff563e9720cd4b976fb8fd20039 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall present [available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.")[debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") on the statement of financial position at [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."). In addition, an entity shall present parenthetically the [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.") and the allowance for credit losses. If for the purposes of identifying and measuring an impairment the applicable accrued interest is excluded from both the fair value and the amortized cost basis of the available-for-sale debt security, an entity may 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 [326-30-50-3A](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3A). ##### [326-30-45-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:17.868Z to 2026-09-09T23:50:17.868Z Record version: sha256:4edd4cf567b4378baef6f7f6a386b19ce80425e739a723e8a5b695a42f8d88cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall separately present, in the financial statement in which the components of accumulated other comprehensive income are reported, amounts reported therein related to available-for-sale debt securities for which an allowance for credit losses has been recorded. ##### [326-30-45-3](https://asc.understandingaccounting.org/asc/326/30/#326-30-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:17.868Z to 2026-09-09T23:50:17.868Z Record version: sha256:90a536c2f73ae472cac7a760c00033c99e603d2663acfc19c06ded9c123e31ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an entity applies the guidance in paragraph [326-30-35-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-7), the change in present value of cash flows expected to be collected 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 is permitted to report the entire change in present value as a credit loss expense (or a 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 [326-30-50-8](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-8) for a disclosure requirement applicable to creditors that choose the latter alternative and report changes in present value attributable to the passage of time as interest income. Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:7e63296b8ec08f140a1b6d8b798491785f6cbdd5fc975ebd4a7054bb7b632c14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/326/30/#50-disclosure) SEC content: no ##### [326-30-50-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:fbdeefe537b3b8af2a5794450cbacb9f682c9f0ad1a7a7c20f413e66d631f5bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For instruments within the scope of this Subtopic, this Section provides the following disclosure guidance related to credit risk and the measurement of credit losses: 1. a [Available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.") [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") in unrealized loss positions without an allowance for credit losses 2. b Allowance for credit losses 3. c [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."). ##### [326-30-50-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:dd06c07eec3ee1b969ea3751120dc6671f2275d3826b50d34d7287f62c8fe838 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure guidance in this Section should enable a user of the financial statements to understand the following: 1. a The credit risk inherent in available-for-sale debt securities 2. b Management's estimate of credit losses 3. c Changes in the estimate of credit losses that have taken place during the period. ##### [326-30-50-3](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:6647c715f05ce9d87fe4f7ccb02fbe7a06f4afac592df6c25f1a04522045b598 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall determine, in light of the facts and circumstances, how much detail it must provide to satisfy the disclosure requirements in this Section and how it disaggregates information into major security types. An entity must strike a balance between obscuring important information as a result of too much aggregation and overburdening financial statements with excessive detail that may not assist a financial statement user to understand an entity's securities and allowance for credit losses. For example, an entity should not obscure important information by including it with a large amount of insignificant detail. Similarly, an entity should not disclose information that is so aggregated that it obscures important differences between the different types of [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.") and associated risks. ##### [326-30-50-3A](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3A) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:8b2c1e78175856ea9e6b4febf306dbb2562107e20433d8e231ee5ef0bdf7b79f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that makes the accounting policy election to present separately the accrued interest receivable balance within another statement of financial position line item as described in paragraph [326-30-45-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-45-1) shall disclose the amount of applicable accrued interest, net of the allowance for credit losses (if any), and shall disclose in which line item on the statement of financial position that amount is presented. ##### [326-30-50-3B](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3B) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:8df6c41c14ea0bdcef91a3f3fcea7bbf0f37fb181400c5245c9bb1e489d0b4c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If for the purposes of identifying and measuring an impairment the applicable accrued interest is excluded from both 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.") and the [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.") of the available-for-sale debt security, an entity may, as a practical expedient, exclude the applicable accrued interest that is included in the amortized cost basis for the purposes of the disclosure requirements in paragraphs [326-30-50-4 through 50-10](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-4) . If an entity elects this practical expedient, it shall disclose the total amount of accrued interest, net of the allowance for credit losses (if any), excluded from the disclosed amortized cost basis. ##### [326-30-50-3C](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3C) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:ba8671536ab22da4567b2186d64f33b18cfe188e6e1c95e23b4caf5d744a88e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that makes the accounting policy election in paragraph [326-30-30-1B](https://asc.understandingaccounting.org/asc/326/30/#326-30-30-1B) shall disclose its accounting policy not to measure an allowance for credit losses for accrued interest receivables. The accounting policy shall include information about what time period or periods, at the major security-type level, are considered timely. ##### [326-30-50-3D](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-3D) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:81b2afc55397dbf62efe14f73674237edcbd7c199767343288ed8dd987bcba79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that makes the accounting policy election in paragraph [326-30-35-13A](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-13A) shall disclose its accounting policy to write off accrued interest receivables by reversing interest income or recognizing credit loss expense or a combination of both. The entity also shall disclose the amount of accrued interest receivables written off by reversing interest income by major security type. #### Available-for-Sale Debt Securities in Unrealized Loss Positions without an Allowance for Credit Losses ##### [326-30-50-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:62cf64e6977462aad5b97ba29c3581e92617cb14fa73c3bebf3f52c4cf06038f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For [available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.") [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions."), including those that fall within the scope of Subtopic 325-40 on beneficial interests in securitized financial assets, in an unrealized loss position for which an allowance for credit losses has not been recorded, an entity shall disclose all of the following in its interim and annual financial statements: 1. a As of each date for which a statement of financial position is presented, quantitative information, aggregated by category of investment—each major security type that the entity discloses in accordance with this Subtopic—in tabular form: 1. 1 The aggregate related fair value of investments with unrealized losses 2. 2 The aggregate amount of unrealized losses (that is, the amount by which amortized cost basis exceeds fair value). 2. b As of the date of the most recent statement of financial position, additional information (in narrative form) that provides sufficient information to allow a financial statement user to understand the quantitative disclosures and the information that the entity considered (both positive and negative) in reaching the conclusion that an allowance for credit losses is unnecessary. The disclosures required may be aggregated by investment categories, but individually significant unrealized losses generally shall not be aggregated. This disclosure could include all of the following: 1. 1 The nature of the investment(s) 2. 2 The cause(s) of the impairment(s) 3. 3 The number of investment positions that are in an unrealized loss position 4. 4 The severity of the impairment(s) 5. 5 Other evidence considered by the investor in reaching its conclusion that an allowance for credit losses is not necessary, including, for example, any of the following: 1. i Performance indicators of the underlying assets in the security, including any of the following: 1. 01 Default rates 2. 02 Delinquency rates 3. 03 Percentage of nonperforming assets. 2. ii Debt-to-collateral-value ratios 3. iii Third-party guarantees 4. iv Current levels of subordination 5. v Vintage 6. vi Geographic concentration 7. vii Industry analyst reports 8. viii Credit ratings 9. ix Volatility of the security's fair value 10. x Interest rate changes since purchase 11. xi Any other information that the investor considers relevant. ##### [326-30-50-5](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-5) Pending content: yes Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:b20e59d1d535ca122513aff78f1c2806dbcb709ba2d7331dd3465fea2460f755 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosures in (a)(1) through (a)(2) in paragraph [326-30-50-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-4) shall be disaggregated by those investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or longer. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For interim and annual reporting periods, the disclosures in (a)(1) through (a)(2) in paragraph [326-30-50-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-4) shall be disaggregated by those investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or longer. ##### [326-30-50-6](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-6) Pending content: yes Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:fe5c873b4f9a76fbf548aa360c8f5c8e376448e5a189b55fe96d98d32d7ef6ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The reference point for determining how long an investment has been in a continuous unrealized loss position is the balance sheet date of the reporting period in which the impairment is identified. For entities that do not prepare interim financial information, the reference point is the annual balance sheet date of the period during which the impairment was identified. The continuous unrealized loss position ceases upon the investor becoming aware of a recovery of fair value up to (or beyond) the amortized cost basis of the investment during the period. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)The reference point for determining how long an investment has been in a continuous unrealized loss position is the balance sheet date of the reporting period in which the impairment is identified. For entities that do not prepare interim financial statements and notes in accordance with generally accepted accounting principles, the reference point is the annual balance sheet date of the period during which the impairment was identified. The continuous unrealized loss position ceases upon the investor becoming aware of a recovery of fair value up to (or beyond) the amortized cost basis of the investment during the period. #### Allowance for Credit Losses ##### [326-30-50-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:e3a15a95fd7aa5dc77bceb196d06419a6ac8ac7c9513733a92d003897a5fca09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For interim and annual periods in which an allowance for credit losses of an [available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.") [debt security](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") is recorded, an entity shall disclose by major security type, the methodology and significant inputs used to measure the amount related to credit loss, including its accounting policy for recognizing writeoffs of uncollectible available-for-sale debt securities. Examples of significant inputs include, but are not limited to, all of the following: 1. a Performance indicators of the underlying assets in the security, including all of the following: 1. 1 Default rates 2. 2 Delinquency rates 3. 3 Percentage of nonperforming assets 2. b Debt-to-collateral-value ratios 3. c Third-party guarantees 4. d Current levels of subordination 5. e Vintage 6. f Geographic concentration 7. g Industry analyst reports and forecasts 8. h Credit ratings 9. i Other market data that are relevant to the collectibility of the security. ##### [326-30-50-8](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-8) Pending content: yes Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:9efa33e6ff8d492bc12d8accf2268d925e1c28a6f8c0b56042537ed3ec5b0120 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [326-30-45-3](https://asc.understandingaccounting.org/asc/326/30/#326-30-45-3) explains that an entity may report the change in the allowance for credit losses due to changes in time value as credit loss expense (or reversal of credit loss expense) but also may report the change as interest income. An entity that chooses the latter alternative shall disclose the amount recorded to interest income that represents the change in present value attributable to the passage of time. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)Paragraph [326-30-45-3](https://asc.understandingaccounting.org/asc/326/30/#326-30-45-3) explains that an entity may report the change in the allowance for credit losses due to changes in time value as credit loss expense (or reversal of credit loss expense) but also may report the change as interest income. An entity that chooses the latter alternative shall disclose in interim and annual reporting periods the amount recorded to interest income that represents the change in present value attributable to the passage of time. ##### [326-30-50-9](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-9) Pending content: yes Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:9d6c9ffb45ebecaa8261e1f109a419ad6dcc93c6a084f3ef76294ff5a6b503b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For each interim and annual reporting period presented, an entity shall disclose by major security type, a tabular rollforward of the allowance for credit losses, which shall include, at a minimum, all of the following: 1. a The beginning balance of the allowance for credit losses on [available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.") [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") held by the entity at the beginning of the period 2. b Additions to the allowance for credit losses on securities for which credit losses were not previously recorded 3. c Additions to the allowance for credit losses arising from purchases of available-for-sale debt securities accounted for as purchased financial assets with credit deterioration (including beneficial interests that meet the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)) 4. d Reductions for securities sold during the period (realized) 5. e Reductions in the allowance for credit losses because the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its [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.") 6. f If the entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, additional increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period 7. g Writeoffs charged against the allowance 8. h Recoveries of amounts previously written off 9. i The ending balance of the allowance for credit losses related to debt securities held by the entity at the end of the period. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For each interim and annual reporting period presented, an entity shall disclose by major security type, a tabular rollforward of the allowance for credit losses, which shall include, at a minimum, all of the following: 1. a The beginning balance of the allowance for credit losses on [available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.") [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions.") held by the entity at the beginning of the period 2. b Additions to the allowance for credit losses on securities for which credit losses were not previously recorded 3. c Additions to the allowance for credit losses arising from purchases of available-for-sale debt securities accounted for as purchased financial assets with credit deterioration (including beneficial interests that meet the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)) 4. d Reductions for securities sold during the period (realized) 5. e Reductions in the allowance for credit losses because the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its [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.") 6. f If the entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, additional increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period 7. g Writeoffs charged against the allowance 8. h Recoveries of amounts previously written off 9. i The ending balance of the allowance for credit losses related to debt securities held by the entity at the end of the period. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. #### Purchased Financial Assets with Credit Deterioration ##### [326-30-50-10](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:22.028Z to 2026-09-09T23:50:22.028Z Record version: sha256:9765b4d8cdc2f7786944ccb9c7178f05af2f370cb5463c8ee1873411118514fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To the extent an entity acquired [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.") during the current reporting period, an entity shall provide a reconciliation of the difference between the purchase price of the assets and the par value of the [available-for-sale](https://asc.understandingaccounting.org/glossary/a/#available-for-sale-securities "Investments not classified as either trading securities or as held-to-maturity securities.") [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions."), including: 1. a The purchase price 2. b The allowance for credit losses at the acquisition date based on the acquirer's assessment 3. c The discount (or premium) attributable to other factors 4. d The par value. Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:0d9102574f1bc6eebf34315339e0d8210b1e5b521209ae556d391d3dab126d30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 326-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/326/30/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [326-30-55-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:5ed456e636a65760ecaa8b013cda8684b78585b18ba36331ef28665d5681998c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There are numerous factors to be considered in determining whether a credit loss exists. The length of time a security has been in an unrealized loss position should not be a factor, by itself or in combination with others, that an entity would use to conclude that a credit loss does not exist. The following list is not meant to be all inclusive. All of the following factors should be considered: 1. a The extent to which 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.") is less than the [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.") 2. b Adverse conditions specifically related to the security, an industry, or geographic area; for example, changes in the financial condition of the issuer of the security, or in the case of an asset-backed [debt security](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions."), changes in the financial condition of the underlying [loan](https://asc.understandingaccounting.org/glossary/l/#loan "A contractual right to receive money on demand or on fixed or determinable dates that is recognized as an asset in the creditor's statement of financial position. Examples include but are not limited to accounts receivable (with terms exceeding one year) and notes receivable.") obligors. Examples of those changes include any of the following: 1. 1 Changes in technology 2. 2 The discontinuance of a segment of the business that may affect the future earnings potential of the issuer or underlying loan obligors of the security 3. 3 Changes in the quality of the credit enhancement. 3. c The payment structure of the debt security (for example, nontraditional loan terms as described in paragraphs [825-10-55-1 through 55-2](https://asc.understandingaccounting.org/asc/825/10/#825-10-55-1) ) and the likelihood of the issuer being able to make payments that increase in the future 4. d Failure of the issuer of the security to make scheduled interest or principal payments 5. e Any changes to the rating of the security by a rating agency. ##### [326-30-55-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:e2859b3217c8f3f425d9243b7f922400acae467593069329fbd2143cfe020194 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity should consider available information relevant to the collectibility of the security, including information about past events, current conditions, and reasonable and supportable forecasts, when developing the estimate of cash flows expected to be collected. That information should include all of the following: 1. a The remaining payment terms of the security 2. b Prepayment speeds 3. c The financial condition of the issuer(s) 4. d Expected defaults 5. e The value of any underlying collateral. ##### [326-30-55-3](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:93b66bd5043f26c97fbcbb8aa7ca223394b07e1ad5a57963cc54685adabae59c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To achieve the objective in paragraph [326-30-55-2](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-2), the entity should consider, for example, all of the following to the extent they influence the estimate of expected cash flows on a security: 1. a Industry analyst reports and forecasts 2. b Credit ratings 3. c Other market data that are relevant to the collectibility of the security. ##### [326-30-55-4](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:3a84199edf0a2218c55819a602c1ee4735c7c612f9324413c3b537b67fe56393 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity also should consider how other credit enhancements affect the expected performance of the security, including consideration of the current financial condition of the guarantor of a security (if the guarantee is not a separate contract as discussed in paragraph [326-30-35-5](https://asc.understandingaccounting.org/asc/326/30/#326-30-35-5)), the willingness of the guarantor to pay, and/or whether any subordinated interests are capable of absorbing estimated losses on the loans underlying the security. The remaining payment terms of the security could be significantly different from the payment terms in prior periods (such as for some securities backed by nontraditional loans; see paragraph [825-10-55-1](https://asc.understandingaccounting.org/asc/825/10/#825-10-55-1)). Thus, an entity should consider whether a security backed by currently performing loans will continue to perform when required payments increase in the future (including balloon payments). An entity also should consider how the value of any collateral would affect the expected performance of the security. If the fair value of the collateral has declined, an entity should assess the effect of that decline on its ability to collect the balloon payment. #### Illustrations ##### [326-30-55-5](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:a3812e6dc14b9f57f71a00f8e189b1ed3e0f6420b8e6f4a0b4a41db4e10d157e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates one way an entity may identify purchased financial assets with credit deterioration. ##### [326-30-55-6](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:a0454041c78f46b74217a0ed3c137742233a935a941e14d53092eaca9fe33b32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A purchases a portfolio of debt securities with varying levels of credit quality that it classifies as available for sale. When determining which individual available-for-sale debt securities should be considered to be in the scope of the guidance for purchased financial assets with credit deterioration, Entity A considers the indicators of impairment in paragraph [326-30-55-1](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-1). Entity A also considers its practices for identifying credit losses on available-for-sale debt securities. If Entity A determines that, on an individual basis, the purchased debt securities are purchased financial assets with credit deterioration, it should classify them as such. ##### [326-30-55-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:3019735dbedbb37dfebf3b49dc8a5920726fdeb3ccbd293d04dfa98dbe686fd4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A also considers the securities that are within the scope of Subtopic 325-40 on beneficial interests in securitized financial assets. Entity A purchases a residual tranche and determines that there is a significant difference between contractual cash flows and expected cash flows. In accordance with paragraph [325-40-30-1A(a)](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A), Entity A applies the accounting for purchased financial assets with credit deterioration to the residual tranche. ##### [326-30-55-8](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:fe32fa7587947b068f91481b4ee17255e0b2b3ccf70645134fda959742a94ac3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 326-30-50The table shows the gross unrealized losses and fair value of Entity B's investments with unrealized losses that are not deemed to have credit losses (in millions), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 20X3. This Example illustrates the application of paragraphs [326-30-50-4 through 50-6](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-4) and, in doing so, describes Entity B's rationale for not reporting all or a portion of unrealized losses presented in the table as credit losses. In the application of paragraph [326-30-50-4(b)](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-4), Entity B should provide meaningful disclosure about individually significant unrealized losses. To facilitate the narrative disclosures and for simplicity, this Example presents only the quantitative information as of the date of the latest statement of financial position. However, in accordance with paragraphs [326-30-50-4 through 50-6](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-4) , that information is required as of each date for which a statement of financial position is presented. - ![](https://asc.understandingaccounting.org/asc-img/GUID-910EEF47-496F-4437-AE6F-42F0AD02466C-low.gif) Less Than 12 Months 12 Months or Greater Total Description of Securities Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury obligations and direct obligations of U.S. government agencies $172 $2 $58 $1 $230 $3 Federal agency mortgage-backed securities 367 5 18 1 385 6 Corporate bonds 150 7 - - 150 7 Marketable equity securities 44 8 - - 44 8 Investments in equity securities carried at cost 20 1 - - 20 1 Total $753 $23 $76 $2 $829 $25 ##### [326-30-55-9](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:50:24.829Z to 2026-09-09T23:50:24.829Z Record version: sha256:7deed2111b3065d68e82d3f84cbf392dbf4c0696a80eb6a2843451b36724588a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. - U.S. Treasury obligations. The unrealized losses on Entity B's investments in U.S. Treasury obligations and direct obligations of U.S. government agencies were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Entity B does not intend to sell the investments and it is not more likely than not that Entity B will be required to sell the investments before recovery of their amortized cost bases. Federal agency mortgage-backed securities. The unrealized losses on Entity B's investment in federal agency mortgage-backed securities were caused by interest rate increases. Entity B purchased those investments at a discount relative to their face amount, and the contractual cash flows of those investments are guaranteed by an agency of the U.S. government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of Entity B's investments. Entity B does not intend to sell the investments and it is not more likely than not that Entity B will be required to sell the investments before recovery of their amortized cost bases. Corporate bonds. Entity B's unrealized loss on investments in corporate bonds relates to a $150 investment in Entity C's Series C Debentures. Entity C is a manufacturer. The unrealized loss was primarily caused by a recent decrease in profitability and near-term profit forecasts by industry analysts resulting from intense competitive pricing pressure in the manufacturing industry and a recent sector downgrade by several industry analysts. The contractual terms of those investments do not permit Entity C to settle the security at a price less than the amortized cost basis of the investment. While Entity C's credit rating has decreased from A to BBB (Standard & Poor's), Entity B currently does not expect Entity C to settle the debentures at a price less than the amortized cost basis of the investment (that is, Entity B expects to recover the entire amortized cost basis of the security). Entity B does not intend to sell the investment and it is not more likely than not that Entity B will be required to sell the investment before recovery of its amortized cost basis.