# ASC 340-952: Other Assets and Deferred Costs — Franchisors

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/340/952/)

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.

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## ASC 340-952: Other Assets and Deferred Costs — Franchisors

### Machine-generated study aids

```json
{
  "summary": "ASC 340-952 formerly contained the franchisor-specific guidance on deferred costs (for example, direct and indirect costs of franchise sales). Every paragraph in the subtopic — Sections 05, 15, and 25 — was superseded by ASU 2014-09 (Revenue from Contracts with Customers). Franchisors now account for costs of obtaining and fulfilling franchise contracts under ASC 340-40 and recognize franchise revenue under ASC 606 (including the industry guidance in ASC 952-606).",
  "key_points": [
    "All content of this subtopic, including 340-952-05-1, 340-952-15-1, and 340-952-25-1 through 25-3, was superseded by Accounting Standards Update No. 2014-09.",
    "No extant recognition, scope, or overview guidance remains in ASC 340-952; it carries no current accounting requirements.",
    "Costs incurred by a franchisor to obtain and fulfill a franchise contract are now evaluated under ASC 340-40 (incremental costs of obtaining a contract and contract fulfillment costs).",
    "Franchise fee revenue (initial fees, area development fees, continuing royalties) is recognized under ASC 606, with franchisor-specific application guidance in ASC 952-606.",
    "Legacy franchisor cost-deferral practice that matched direct costs against unrecognized franchise fee revenue is no longer authoritative GAAP."
  ],
  "categories": [
    "Revenue",
    "Industry-specific",
    "Transition and effective dates",
    "Recognition"
  ],
  "audience_level": "intermediate",
  "student_note": "This subtopic is a shell — its only exam-relevant fact is that ASU 2014-09 wiped out the old franchisor cost-deferral rules. The common mistake is citing legacy franchise accounting (deferring direct costs until the franchise opens) instead of applying ASC 340-40 and ASC 606/952-606.",
  "related_topics": [
    "340-40",
    "606",
    "952-606",
    "952-720",
    "606-10"
  ],
  "key_concepts": [
    "franchisor deferred costs",
    "superseded guidance",
    "initial franchise fees",
    "costs to obtain a contract",
    "contract fulfillment costs",
    "revenue from contracts with customers"
  ]
}
```

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## ASC 340-952-00: 00 Status

[Read section](https://asc.understandingaccounting.org/asc/340/952/#00-status)

SEC content: no

##### [340-952-00-1](https://asc.understandingaccounting.org/asc/340/952/#340-952-00-1)

Pending content: no

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The following table identifies the changes made to this Subtopic.

<table class="asc-table" id="SL51574964-203208"><tbody><tr><td class="entry"><strong class="ph b">Paragraph</strong></td><td class="entry"><strong class="ph b">Action</strong></td><td class="entry"><strong class="ph b">Accounting Standards Update</strong></td><td class="entry"><strong class="ph b">Date</strong></td></tr><tr><td class="entry"></td><td class="entry"></td><td class="entry"></td><td class="entry"></td></tr><tr><td class="entry"><strong class="ph b">Franchisor</strong></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2014-09/" class="xref">Accounting Standards Update No. 2014-09</a></td><td class="entry">05/28/2014</td></tr><tr><td class="entry"></td><td class="entry"></td><td class="entry"></td><td class="entry"></td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/340/952/#340-952-05-1" class="xref">952-340-05-1</a></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2014-09/" class="xref">Accounting Standards Update No. 2014-09</a></td><td class="entry">05/28/2014</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/340/952/#340-952-15-1" class="xref">952-340-15-1</a></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2014-09/" class="xref">Accounting Standards Update No. 2014-09</a></td><td class="entry">05/28/2014</td></tr><tr><td class="entry"><div class="xref-range displayInline"><a href="https://asc.understandingaccounting.org/asc/340/952/#340-952-25-1" class="xref">952-340-25-1 through 25-3</a></div></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2014-09/" class="xref">Accounting Standards Update No. 2014-09</a></td><td class="entry">05/28/2014</td></tr></tbody></table>

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## ASC 340-952-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/340/952/#05-overview-and-background)

SEC content: no

##### [340-952-05-1](https://asc.understandingaccounting.org/asc/340/952/#340-952-05-1)

Pending content: no

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[Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/).

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## ASC 340-952-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/340/952/#15-scope-and-scope-exceptions)

SEC content: no

##### [340-952-15-1](https://asc.understandingaccounting.org/asc/340/952/#340-952-15-1)

Pending content: no

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[Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/).

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## ASC 340-952-20: 20 Glossary

[Read section](https://asc.understandingaccounting.org/asc/340/952/#20-glossary)

SEC content: no

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## ASC 340-952-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/340/952/#25-recognition)

SEC content: no

##### [340-952-25-1](https://asc.understandingaccounting.org/asc/340/952/#340-952-25-1)

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[Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/).

##### [340-952-25-2](https://asc.understandingaccounting.org/asc/340/952/#340-952-25-2)

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[Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/).

##### [340-952-25-3](https://asc.understandingaccounting.org/asc/340/952/#340-952-25-3)

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[Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/).