# ASC 340-10: Other Assets and Deferred Costs — Overall Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/340/10/) 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): 2026-09-09T23:54:15.524Z to 2026-09-09T23:55:04.724Z Record version: sha256:55b3ac3afa2aa0d128c321b097396c7061a3c9f0b04fcce9df5782b03085e575 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10: Other Assets and Deferred Costs — Overall ### Machine-generated study aids ```json { "summary": "ASC 340-10 is the Overall subtopic for Other Assets and Deferred Costs, applicable to all entities. Its substantive guidance is limited to (1) describing prepaid expenses — amounts paid in advance (insurance, interest, rents, taxes, unused royalties, prepaid advertising service, operating supplies) that are used up within the normal operating cycle and classified as current assets — and (2) the recognition rules for preproduction design and development costs incurred under long-term supply arrangements. Costs deferred under other regimes (loan origination costs, internal-use software, environmental costs, broker-dealer and industry costs) are addressed by other Topics cross-referenced in Section 60.", "key_points": [ "Design and development costs for the products themselves to be sold under a long-term supply arrangement shall be expensed as incurred (340-10-25-1).", "Design and development costs for molds, dies, and other tools the supplier will own are capitalized as part of those tools, subject to impairment testing under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10, unless the tools involve new technology, in which case the costs are expensed under Subtopic 730-10 (340-10-25-1).", "Design and development costs for molds, dies, and tools the supplier will not own are capitalized only if the supply arrangement gives the supplier a noncancelable right to use them during the arrangement (while performing); otherwise they are expensed as incurred, including costs incurred before that right is obtained (340-10-25-2).", "Costs that would otherwise be expensed are recognized as an asset as incurred if a contractual guarantee for reimbursement exists — a legally enforceable agreement in which the reimbursement amount can be objectively measured and verified (340-10-25-3); Examples 1-4 at 340-10-55-2 through 55-5 illustrate that per-part pricing arrangements without a measurable reimbursement do not qualify.", "Prepaid expenses are paid in advance of use, are typically consumed within the normal operating cycle, and are classified as current assets (340-10-05-4 through 05-5; see 210-10-45-2).", "The accrue-in-advance (accrual) method of accounting for planned major maintenance activities is prohibited in annual and interim periods (340-10-25-5, referencing 360-10-25-5).", "The Topic applies to all entities (340-10-15-2), and long-term prepaid assets are evaluated under the long-lived asset guidance at 360-10-15-4 through 15-5 (340-10-35-1)." ], "categories": [ "Recognition", "Inventory and PP&E", "Subsequent measurement", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "The exam trap is assuming all preproduction costs under a supply contract can be deferred: product design and development costs are expensed unless there is a contractual guarantee whose reimbursement amount is objectively measurable and verifiable, and tooling costs are capitalizable only if the supplier owns the tools (non-new-technology) or holds a noncancelable right to use them. Note also that 340-10 is mostly a signpost — specific deferred costs live in other Topics (310-20, 350-40, 340-40, 985-20).", "related_topics": [ "340-40", "360-10", "730-10", "350-40", "310-20", "210-10" ], "key_concepts": [ "prepaid expenses", "preproduction costs", "long-term supply arrangement", "design and development costs", "molds, dies, and other tools", "contractual guarantee of reimbursement", "noncancelable right to use", "planned major maintenance" ] } ``` Source downloaded (UTC): 2026-09-09T23:54:15.524Z to 2026-09-09T23:54:15.524Z Record version: sha256:e254d50de5685d115c8872121d5d250200162cc780ead8e0c701ef1ba649ec7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/340/10/#00-status) SEC content: no ##### [340-10-00-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:15.524Z to 2026-09-09T23:54:15.524Z Record version: sha256:b93d5213c6af088d1fa588051ce582673e4e1b8ffe70f59e92fb61013d0af46d 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
ContractAddedAccounting Standards Update No. 2014-0905/28/2014
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
340-10-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
340-10-60-1AmendedAccounting Standards Update No. 2016-0202/25/2016
340-10-60-5SupersededAccounting Standards Update No. 2014-0905/28/2014
340-10-60-6SupersededAccounting Standards Update No. 2014-0905/28/2014
340-10-60-8SupersededAccounting Standards Update No. 2014-0905/28/2014
340-10-60-9SupersededAccounting Standards Update No. 2014-1006/10/2014
340-10-60-15AmendedAccounting Standards Update No. 2013-0806/07/2013
Source downloaded (UTC): 2026-09-09T23:54:18.589Z to 2026-09-09T23:54:18.589Z Record version: sha256:2ea6fe95163d7e35f059305f4b7128844f5a9f19109ba498a1206a9ec23e76fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/340/10/#05-overview-and-background) SEC content: no ##### [340-10-05-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:18.589Z to 2026-09-09T23:54:18.589Z Record version: sha256:0e26ad5a1738152e0119cafe1f74f72e9e5e5690b3a67153d9948455be4f3e6a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Other Assets and Deferred Costs Topic includes the following Subtopics: 1. a Overall 2. b [Subparagraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). 3. c Insurance Contracts That Do Not Transfer Insurance Risk. 4. d [Contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with [Customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration.") ##### [340-10-05-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:18.589Z to 2026-09-09T23:54:18.589Z Record version: sha256:a4ff73ea0ef331222637772240bdd399a61106be880c4a92b5c340808816ca0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Overall Subtopic addresses the accounting and reporting for certain deferred costs and prepaid expenses. The guidance in this Subtopic is limited to a discussion of the nature of prepaid expenses and preproduction costs related to long-term supply arrangements. The specific guidance for many other costs that have been deferred is included in various other financial, broad, and industry Topics. References to certain, but not all, of the guidance in other Topics are included in this Subtopic. #### Deferred Costs Addressed in this Subtopic ##### [340-10-05-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:18.589Z to 2026-09-09T23:54:18.589Z Record version: sha256:384b3a6e5ba4ef4e308ace85f73af8b0b3706f52b62055a0d23d5660a8a543ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides background regarding certain items included in this Subtopic. ##### [340-10-05-4](https://asc.understandingaccounting.org/asc/340/10/#340-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:18.589Z to 2026-09-09T23:54:18.589Z Record version: sha256:4e9fda82cc3dd3db1d3032fee0711f47d21640660dba44cbdc25e4653a46ea11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Prepaid expenses are a category of assets that are typically used up or expire within the normal operating cycle of an entity. The term derives from the fact that they are paid in advance of their use or consumption. ##### [340-10-05-5](https://asc.understandingaccounting.org/asc/340/10/#340-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:18.589Z to 2026-09-09T23:54:18.589Z Record version: sha256:b9ab128e22612083a263ffeec4c2e7a53aab21e89998f8af468c7e5cbbd667b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Prepaid expenses include items such as the following: 1. a Insurance 2. b Interest 3. c Rents 4. d Taxes 5. e Unused royalties 6. f Current paid advertising service not yet received 7. g Operating supplies. ##### [340-10-05-6](https://asc.understandingaccounting.org/asc/340/10/#340-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:18.589Z to 2026-09-09T23:54:18.589Z Record version: sha256:e139d3d6a2d763f202631ab1b7059221273e16d386541a141bae2102376e0271 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Manufacturers often incur preproduction costs related to products they will supply to their customers under long-term supply arrangements. For example, the manufacturer may incur costs to perform certain services related to the design and development of the products it will sell under long-term supply arrangements and may incur costs to design and develop molds, dies, and other tools that will be used in producing those products. While practice varies from industry to industry, the supplier may be contractually guaranteed reimbursement of design and development costs, implicitly guaranteed reimbursement of design and development costs through the pricing of the product or other means, or not guaranteed reimbursement of the design and development costs incurred under the long-term supply arrangement. Source downloaded (UTC): 2026-09-09T23:54:21.591Z to 2026-09-09T23:54:21.591Z Record version: sha256:c067ee0f254256a6602efaea48466c6b9fc606c3ac02ec8bc95d8238900a6a11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/340/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [340-10-15-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:21.591Z to 2026-09-09T23:54:21.591Z Record version: sha256:5e4aa9ef36f6e6035b213c6d9884a72fa875df53dd0e08b7b19b6be807350c23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of the Other Assets and Deferred Costs Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Deferred Costs and Other Assets Topic. #### Entities ##### [340-10-15-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:21.591Z to 2026-09-09T23:54:21.591Z Record version: sha256:2916e3e709d9969946c29f5d8c5164c5b74d73315934bd9a34ed3175ae7d09b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Other Assets and Deferred Costs Topic applies to all entities. Source downloaded (UTC): 2026-09-09T23:54:26.698Z to 2026-09-09T23:54:26.698Z Record version: sha256:6906efd262ef7aee64ac270d0f52ddbeac4f4732decc79c96d399e13bb28e46d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/340/10/#25-recognition) SEC content: no #### Preproduction Costs Related to Long-Term Supply Arrangements ##### [340-10-25-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:26.698Z to 2026-09-09T23:54:26.698Z Record version: sha256:ee85a5ecb6b74c2763ef011902f9e34066a3888f95beb135afe6de6ea27feb24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Design and development costs for products to be sold under long-term supply arrangements shall be expensed as incurred. Design and development costs for molds, dies, and other tools that a supplier will own and that will be used in producing the products under a long-term supply arrangement shall be capitalized as part of the molds, dies, and other tools (subject to an impairment assessment under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10) unless the design and development is for molds, dies, and other tools involving new technology, in which case, the costs shall be expensed as incurred in accordance with Subtopic 730-10. ##### [340-10-25-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:26.698Z to 2026-09-09T23:54:26.698Z Record version: sha256:220ab825452b33bc775aec054ddd62a0de97f625a60d365e38bac9b5fd27934c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Design and development costs for molds, dies, and other tools that a supplier will not own and that will be used in producing the products under the long-term supply arrangement shall be capitalized (subject to an impairment assessment under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10) if the supply arrangement provides the supplier the noncancelable right (as long as the supplier is performing under the terms of the supply arrangement) to use the molds, dies, and other tools during the supply arrangement. Otherwise, those design and development costs shall be expensed as incurred, including costs incurred prior to the supplier's receiving the noncancelable right to use the molds, dies, and other tools during the supply arrangement. ##### [340-10-25-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:26.698Z to 2026-09-09T23:54:26.698Z Record version: sha256:a46705b1b5528201cae8edea3669b4a06fb6685adac672070141d43dc3e42a09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a contractual guarantee for reimbursement exists for design and development costs that otherwise would be expensed based on the guidance in this Section, those costs shall be recognized as an asset as incurred. For purposes of this Subtopic, contractual guarantee means a legally enforceable agreement in which the amount of reimbursement can be objectively measured and verified. ##### [340-10-25-4](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:26.698Z to 2026-09-09T23:54:26.698Z Record version: sha256:ce602046578f390700ea45c521e35205f995c5232a06d2e755e314e32c664b8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Examples 1 through 4 (paragraphs [340-10-55-2 through 55-5](https://asc.understandingaccounting.org/asc/340/10/#340-10-55-2) ) for preproduction costs related to long-term supply arrangements. #### Planned Major Maintenance Activities ##### [340-10-25-5](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:26.698Z to 2026-09-09T23:54:26.698Z Record version: sha256:60ffb6e9b2c8a525a5c4af58fd9f1a2d38c64b968b2218b64b5990df291e6919 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [360-10-25-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-5) states that the use of the accrue-in-advance (accrual) method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods. Source downloaded (UTC): 2026-09-09T23:54:30.703Z to 2026-09-09T23:54:30.703Z Record version: sha256:d7f2fe26813ad8da78488a2673bde5c2c8d8a30fc9f1830271e0d73a3de48934 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/340/10/#35-subsequent-measurement) SEC content: no ##### [340-10-35-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:30.703Z to 2026-09-09T23:54:30.703Z Record version: sha256:a9f8b2c54c65e33f98990bf0a65a968d875882244ab5c68ab9a3936a1b5be069 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [360-10-15-4 through 15-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-4) for a discussion of the applicability of the guidance on long-lived assets to be held and used or disposed of to long-term prepaid assets. Source downloaded (UTC): 2026-09-09T23:54:33.465Z to 2026-09-09T23:54:33.465Z Record version: sha256:628ae6a0691a10bf22ddd5295f71ab94ac3917d8d414138156578cfe6d546d1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/340/10/#45-other-presentation-matters) SEC content: no #### Classification of Prepaid Expenses ##### [340-10-45-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:33.465Z to 2026-09-09T23:54:33.465Z Record version: sha256:d394100ae4e6ee1f5f1013853de20eacdd9d732ec52a820f0ed07579124cdeba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [210-10-45-2](https://asc.understandingaccounting.org/asc/210/10/#210-10-45-2) for a discussion of how the nature of prepaid expenses results in their classification as current assets. #### Planned Major Maintenance Activities ##### [340-10-45-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:33.465Z to 2026-09-09T23:54:33.465Z Record version: sha256:78ec70ec7475fa8f94d0dd64adb456c0d11fe750b91e40869ad97c03eaaf18e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [360-10-45-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-1) and [908-360-45-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-45-2) for a discussion of the consistent application of the method of accounting for planned major maintenance activities. Source downloaded (UTC): 2026-09-09T23:54:35.789Z to 2026-09-09T23:54:35.789Z Record version: sha256:074dbcb089d024fd98e446aa003e8ddee81de9822eb2f9b89391cded6a3cc940 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/340/10/#55-implementation-guidance-and-illustrations) SEC content: no ##### [340-10-55-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:35.789Z to 2026-09-09T23:54:35.789Z Record version: sha256:1604c9ab3445bf538c7a03ca48804908658943ca455addeeb0a782033e9d733a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Illustrations ##### [340-10-55-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:35.789Z to 2026-09-09T23:54:35.789Z Record version: sha256:7a2ca96e29141f37075d1c3fa1a35cae09b66ddd29fedb73678f82b5a11f3e4e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the recognition guidance in paragraphs [340-10-25-1 through 25-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-1) . It is assumed that the design and development costs would be expensed under that guidance absent a reimbursement arrangement. It is also assumed that the supply arrangement is legally enforceable. An entity enters into a long-term arrangement with a supplier in which the entity agrees to reimburse the supplier for preproduction design and development costs incurred under the arrangement, up to a maximum reimbursement of $1,000,000. Under this arrangement, the amount of reimbursement for design and development costs can be objectively measured and verified. The supplier shall recognize the design and development costs as an asset as costs are incurred, up to a maximum of $1,000,000. ##### [340-10-55-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:35.789Z to 2026-09-09T23:54:35.789Z Record version: sha256:e492d100ab17b43659ed185afdaf263aab7be511d18f7e3a46cf963f5d549d72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the recognition guidance in paragraphs [340-10-25-1 through 25-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-1) . It is assumed that the design and development costs would be expensed under that guidance absent a reimbursement arrangement. It is also assumed that the supply arrangement is legally enforceable. An entity enters into a long-term arrangement with a supplier in which the entity agrees to pay the supplier $55 per part for the first 200,000 parts produced and $50 for every part thereafter. No agreement exists concerning reimbursement of the supplier's design and development costs if fewer than 200,000 parts are produced under the arrangement. Under this arrangement, the amount of reimbursement for design and development costs cannot be objectively measured and verified. The supplier shall expense the preproduction design and development costs as incurred. ##### [340-10-55-4](https://asc.understandingaccounting.org/asc/340/10/#340-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:35.789Z to 2026-09-09T23:54:35.789Z Record version: sha256:be0030735087fe29b9cf338dc22cba157b8e4822dbf69b470a4b0bfaa6c92839 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the recognition guidance in paragraphs [340-10-25-1 through 25-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-1) . It is assumed that the design and development costs would be expensed under that guidance absent a reimbursement arrangement. It is also assumed that the supply arrangement is legally enforceable. An entity enters into a long-term arrangement with a supplier in which the entity agrees to pay the supplier $55 per part for the first 200,000 parts produced and $50 for every part thereafter. The arrangement provides that if fewer than 200,000 parts are produced, the supplier will be reimbursed for design and development costs incurred under the arrangement, up to a maximum reimbursement of $1,000,000 reduced by $5 per part for each part produced under the supply arrangement. For example, if 190,000 parts are produced under the supply arrangement, in addition to the $55 per part received for the parts produced, the supplier would be reimbursed for design and development costs incurred under the arrangement, up to a maximum of $50,000 \[$1,000,000 - ($5 X 190,000)\]. Under this agreement, the amount of reimbursement for design and development costs can be objectively measured and verified. The supplier shall recognize the design and development costs as an asset as costs are incurred, up to a maximum of $1,000,000. ##### [340-10-55-5](https://asc.understandingaccounting.org/asc/340/10/#340-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:35.789Z to 2026-09-09T23:54:35.789Z Record version: sha256:f25cdc611a3e1804897c606c636f80f0e8850f0a2df65ef550520d2d76b21708 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the recognition guidance in paragraphs [340-10-25-1 through 25-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-1) . It is assumed that the design and development costs would be expensed under that guidance absent a reimbursement arrangement. It is also assumed that the supply arrangement is legally enforceable. An entity enters into a long-term arrangement with a supplier in which the entity agrees to pay the supplier $52.50 per part. The arrangement requires that a minimum of 400,000 parts be produced. If fewer than 400,000 parts are produced under the arrangement, the supplier will receive a payment of $52.50 per part not produced under the arrangement, up to a maximum of 400,000 parts. Under this arrangement, the amount of reimbursement for design and development costs cannot be objectively measured and verified. The supplier shall expense the design and development costs as incurred. Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:6214a7e5cc9a9e26d2be9bbbe4dce485fefd4c14273ebcd874d7e501bb011eea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/340/10/#60-relationships) SEC content: no #### Receivables ##### [340-10-60-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:3cefa1549e14f1a7f0aee8272dcbfe4f4e97efe289f20e6611c1a237ded00b10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting for nonrefundable fees and costs associated with lending, committing to lend, or purchasing a group of loans, see Subtopic 310-20. #### Intangibles—Goodwill and Other ##### [340-10-60-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:1db3fbf1fd1bcd4ba4a600a07c767c362beb9d7d7132c605af38ee3949be97a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For capitalization of internal and external costs incurred to develop internal-use computer software, see Sections 350-40-25 and 350-40-30. #### Asset Retirement and Environmental Obligations ##### [340-10-60-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:dc1f9b86aa01bf591a41f79bc652f36e4e09c7c3be35d706e7ba6d38bc8aab21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For capitalization of costs incurred to treat asbestos, see Section 410-30-45 and paragraphs [410-30-25-17 through 25-18](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-17) . ##### [340-10-60-4](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:c8f2b2bd17951227e88cfc7ab45a5ff79f1c5511de94f752fd56c31df6b8594d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting criteria for environmental contamination treatment costs, see paragraphs [410-30-25-16 through 25-19](https://asc.understandingaccounting.org/asc/410/30/#410-30-25-16) . ##### [340-10-60-5](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:371ad06fa8a33a58e237b00d0ad6677e7a0d2c6dc143fc82cb34d242b3a97543 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [340-10-60-6](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:85b886da58aa74bb7341740d38cd99e4a403461f20e039b4a098a183a488e4d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). #### Other Expenses ##### [340-10-60-7](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:190e458bfe8066d4ff58f8375f494f9e12a7e205fa22b995a4a8c740e3556878 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting for the cost of business process reengineering activities, see Subtopic 720-45. ##### [340-10-60-8](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:0a608d620961c2e48d7ec4beb84e84db8b7950f5fe1a76021ac90be58c4376fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [340-10-60-9](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:d82673a6c51aaf8a281f35b15c721029602bc74a94ab94161699eb5f6ffefb60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). #### Entertainment—Cable Television ##### [340-10-60-10](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:eb7fe691aa80b04d6ab30a3f85262e816a37b8a92784ef80c1b34a1e026b5a32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For capitalization and subsequent measurement of initial subscriber installation costs, see Section 922-360-35. #### Entertainment—Music ##### [340-10-60-11](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:25c2738c503c94aedb05db36170596b30cc81a4a662e9381545f620ef95dab8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For reporting of an advance royalty to an artist as an asset, see paragraph [928-340-25-1](https://asc.understandingaccounting.org/asc/340/928/#340-928-25-1). #### Financial Services—Brokers and Dealers ##### [340-10-60-12](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:580b94d5ff2a958a481086bd4e9ba24a625a58899dc5ba47dd6683a85edd3735 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For consideration of a membership as an asset by broker dealers, see Section 940-340-25. ##### [340-10-60-13](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:6c7dcb3ce00bb5e3459fd04051187a1631585e6c9fbbd7a40fc28007622a9406 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting guidance for underwriting expenses by broker dealers, see Sections 940-20-25 and 940-20-35. ##### [340-10-60-14](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:3df861dc2ee1e9b6917dce8d8004052ed5529352072de8481aa140726c541aaf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting guidance for distribution fees by broker dealers, see Subtopic 940-340. #### Financial Services—Investment Companies ##### [340-10-60-15](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:c8a44cd7575f48fde53e02504a9a94ec1ba19ee10eb62caa1834192c269dbe27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting for offering costs by investment companies, see Subtopic 946-20. #### Financial Services—Title Plant ##### [340-10-60-16](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:d2859ceb9936e9312f2ed2c114bd02998501f2cba44b09cb75bb16381840d551 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For capitalization guidance for costs incurred to construct a title plant, see paragraph [950-350-30-1](https://asc.understandingaccounting.org/asc/350/950/#350-950-30-1). #### Software ##### [340-10-60-17](https://asc.understandingaccounting.org/asc/340/10/#340-10-60-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:39.128Z to 2026-09-09T23:54:39.128Z Record version: sha256:3e1b88f08c3778db8827a62ebd1c33345a684ef463e76848f64e632d5ecab8a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting for the costs of computer software to be sold, leased, or otherwise marketed, see Subtopic 985-20. Source downloaded (UTC): 2026-09-09T23:54:45.903Z to 2026-09-09T23:54:45.903Z Record version: sha256:b1f028dda54e17c1e4f05b650b070d70bd887e9f82a7ee01d614086c46b93761 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/340/10/#sec-00-status) SEC content: yes ##### [340-10-S00-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:45.903Z to 2026-09-09T23:54:45.903Z Record version: sha256:a3a99568c949540160d30989cba599e54f0f06a65707072815a070c9f70d8600 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
340-10-S99-2AmendedAccounting Standards Update No. 2012-0308/27/2012
340-10-S99-2AmendedAccounting Standards Update No. 2010-2208/19/2010
Source downloaded (UTC): 2026-09-09T23:54:48.227Z to 2026-09-09T23:54:48.227Z Record version: sha256:3fefaebc6f762524fa1a4d17efd1b04e6ef4ad392161cd8dea61da1269f8945e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-S25: SEC 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/340/10/#sec-25-recognition) SEC content: yes #### Expenses Incurred Before the Effective Date of an Offering of Equity Securities ##### [340-10-S25-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:48.227Z to 2026-09-09T23:54:48.227Z Record version: sha256:823a5986e47ade756e4e3fa4aca0e22e8f7fa78b34cbf34070d7a2cc0d5e74dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [340-10-S99-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S99-1), SAB Topic 5.A, for SEC Staff views on deferral of costs related to an equity offering incurred before the effective date of the offering. Source downloaded (UTC): 2026-09-09T23:54:49.884Z to 2026-09-09T23:54:49.884Z Record version: sha256:6679bf6624038297b8aebbaa725cc1e2321fb45dfb4d58c76002bc08aa4ebb0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-S30: SEC 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/340/10/#sec-30-initial-measurement) SEC content: yes #### Debt Issue Costs in Conjunction with a Business Combination ##### [340-10-S30-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S30-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:49.884Z to 2026-09-09T23:54:49.884Z Record version: sha256:aba87285f991f334f3cad7684dc231f6f9bc447c0bfcf895416f4190e2a61d67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [340-10-S99-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-S99-2), SAB Topic 2.A.6, Question 1, for SEC Staff views on accounting for debt issues costs paid to an investment banker in connection with a business combination. Source downloaded (UTC): 2026-09-09T23:54:51.546Z to 2026-09-09T23:54:51.546Z Record version: sha256:ce6bfc1ca0c75ee0be2c1521922a2d6262fc016680e741448509dc5ceacdeacd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-S35: SEC 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/340/10/#sec-35-subsequent-measurement) SEC content: yes #### Debt Issue Costs in Conjunction with a Business Combination ##### [340-10-S35-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:51.546Z to 2026-09-09T23:54:51.546Z Record version: sha256:a4095b3194c82df802046c5fef70bfc2c2967c7b2157fc11c635a0a3777f2f71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [340-10-S99-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-S99-2), SAB Topic 2.A.6, Question 1, for SEC Staff views on the amortization of debt issue costs for interim "bridge financing." Source downloaded (UTC): 2026-09-09T23:54:55.217Z to 2026-09-09T23:54:55.217Z Record version: sha256:0fa6f2639ba6da98d2228087592de15b00075f4bc1bebf53d4a69e3a787efb5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/340/10/#sec-45-other-presentation-matters) SEC content: yes #### Balance Sheet Presentation of Deferred Charges ##### [340-10-S45-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S45-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:55.217Z to 2026-09-09T23:54:55.217Z Record version: sha256:3e4acf8d75e83d9f78a376b4e424f8e3df2832e731d6e0737674fe6eb3b4a00e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [210-10-S99-1](https://asc.understandingaccounting.org/asc/210/10/#210-10-S99-1), Regulation S-X Rule 5-02.17, for required balance sheet presentation for deferred charges and other assets. Source downloaded (UTC): 2026-09-09T23:54:58.602Z to 2026-09-09T23:54:58.602Z Record version: sha256:66991a5cb3df6c73aa94835c47ba313b2384d485ecc8c9f99f8589ee8b1c4744 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/340/10/#sec-50-disclosure) SEC content: yes #### Pre-Production Costs Related to Long-Term Supply Agreements ##### [340-10-S50-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:58.602Z to 2026-09-09T23:54:58.602Z Record version: sha256:bc7531133ae9f44bedfc627abe46ecf642e82bb663e1c877b9a6075e5765731d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [340-10-S99-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-S99-3), SEC Observer Comment: Accounting for Pre-Production Costs Related to Long-Term Supply Arrangements, for SEC Staff views on disclosure of accounting policy and other matters pertaining to pre-production design and development costs. ##### [340-10-S50-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-S50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:54:58.602Z to 2026-09-09T23:54:58.602Z Record version: sha256:805e522708d5bd8a47b02a6de91603b1a0ec3b809375058a412c9b92c8e1c39a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [210-10-S99-1](https://asc.understandingaccounting.org/asc/210/10/#210-10-S99-1), Regulation S-X Rule 5-02.17, for the requirement to disclose policy for deferral and amortization of deferred costs. Source downloaded (UTC): 2026-09-09T23:55:04.724Z to 2026-09-09T23:55:04.724Z Record version: sha256:7cb260014a29d9d06fba24329e3c2c29353788851d0fb2c8500fdb1b43b07af0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-10-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/340/10/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [340-10-S99-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-S99-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:55:04.724Z to 2026-09-09T23:55:04.724Z Record version: sha256:b20163ac5d676ada1468c80292be4a5b99417acf0520498eaa486ab0c8c5d58b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 5.A, Expenses of Offering. - Facts: Prior to the effective date of an offering of equity securities, Company Y incurs certain expenses related to the offering. - Question: Should such costs be deferred? - Interpretive Response: Specific incremental costs directly attributable to a proposed or actual offering of securities may properly be deferred and charged against the gross proceeds of the offering. However, management salaries or other general and administrative expenses may not be allocated as costs of the offering and deferred costs of an aborted offering may not be deferred and charged against proceeds of a subsequent offering. A short postponement (up to 90 days) does not represent an aborted offering. ##### [340-10-S99-2](https://asc.understandingaccounting.org/asc/340/10/#340-10-S99-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:55:04.724Z to 2026-09-09T23:55:04.724Z Record version: sha256:f7bd69ee56bd97204b859632f51ed0e3c4e6dff7f819d72fb71fda86a3428ec5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 2.A.6, Debt Issue Costs in Conjunction with a Business Combination. - Facts: Company A is to acquire the net assets of Company B in a transaction to be accounted for as a business combination. In connection with the transaction, Company A has retained an investment banker to provide advisory services in structuring the acquisition and to provide the necessary financing. It is expected that the acquisition will be financed on an interim basis using "bridge financing" provided by the investment banker. Permanent financing will be arranged at a later date through a debt offering, which will be underwritten by the investment banker. Fees will be paid to the investment banker for the advisory services, the bridge financing and the underwriting of the permanent financing. These services may be billed separately or as a single amount. - Question 1: Should total fees paid to the investment banker for acquisition-related services and the issuance of debt securities be allocated between the services received? - Interpretive Response: Yes. Fees paid to an investment banker in connection with a business combination or asset acquisition, when the investment banker is also providing interim financing or underwriting services, must be allocated between acquisition related services and debt issue costs. - When an investment banker provides services in connection with a business combination or asset acquisition and also provides underwriting services associated with the issuance of debt or equity securities, the total fees incurred by an entity should be allocated between the services received on a relative fair value basis. The objective of the allocation is to ascribe the total fees incurred to the actual services provided by the investment banker. - FASB ASC Topic 805, Business Combinations, provides guidance for the portion of the costs that represent acquisition-related services. The portion of the costs pertaining to the issuance of debt or equity securities should be accounted for in accordance with other applicable GAAP. - Question 2: May the debt issue costs of the interim "bridge financing" be amortized over the anticipated combined life of the bridge and permanent financings? - Interpretive Response: No. Debt issue costs should be amortized by the interest method over the life of the debt to which they relate. Debt issue costs related to the bridge financing should be recognized as interest cost during the estimated interim period preceding the placement of the permanent financing with any unamortized amounts charged to expense if the bridge loan is repaid prior to the expiration of the estimated period. Where the bridged financing consists of increasing rate debt, the guidance issued in FASB ASC Topic 470, Debt, should be followed. FN1 - FN1 As noted in FASB ASC paragraph [470-10-35-2](https://asc.understandingaccounting.org/asc/470/10/#470-10-35-2), the term-extending provisions of the debt instrument should be analyzed to determine whether they constitute an embedded derivative requiring separate accounting in accordance with FASB ASC Topic 815, Derivatives and Hedging. ##### [340-10-S99-3](https://asc.understandingaccounting.org/asc/340/10/#340-10-S99-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:55:04.724Z to 2026-09-09T23:55:04.724Z Record version: sha256:d103585058bdea9e23626b55fdaac803e047767247d597da1a74e75e6778a212 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SEC Observer Comment: Accounting for Pre-Production Costs Related to Long-Term Supply Arrangements. - Registrants will be expected to disclose their accounting policy for pre-production design and development costs (paragraph [340-10-25-1](https://asc.understandingaccounting.org/asc/340/10/#340-10-25-1)) as well as the aggregate amount of: - a. Assets recognized pursuant to agreements that provide for contractual reimbursement of pre-production design and development costs - b. Assets recognized for molds, dies, and other tools that the supplier owns - c. Assets recognized for molds, dies, and other tools that the supplier does not own.