ASC

ASC 360-944

Financial Services—Insurance

360 Property, Plant, and Equipment

Download JSONDownload Markdown22 paragraphs · 9 sectionsJump to summary

Source downloaded: .Record version 3e326ea4f978. Effective date must be checked in the source.

In brief

IntermediateInventory and PP&EIndustry-specificImpairmentPresentation

This subtopic tells insurance entities how to account for and report real estate. Real estate is classified by predominant use as either a real estate investment or real estate used in the business, and real estate acquired in settling mortgage guaranty and title insurance claims is a third, separately reported category measured initially at fair value (investments are measured at cost, then cost less accumulated depreciation). Depreciation and impairment charges follow the balance sheet classification — investment income/realized gains and losses for investments, and adjustments to claim costs incurred for real estate acquired in settling claims.

Key points (7)
  • Real estate is classified as either a real estate investment or real estate used in the insurance entity's operations, depending on its predominant use (360-944-25-1).
  • Real estate acquired in settling mortgage guaranty and title insurance claims is measured initially at fair value (360-944-30-1), while real estate investments are measured initially at cost (360-944-30-2) and subsequently at cost less accumulated depreciation (360-944-35-4).
  • Real estate acquired in settling claims that is held for sale is subsequently measured under Section 360-10-35 (360-944-35-1); subsequent reductions in its carrying amount and realized gains and losses on its sale are recognized as adjustments to claim costs incurred (360-944-35-2; 360-944-40-1).
  • Depreciation and related charges or credits on real estate investments are charged or credited to investment income (360-944-35-5), and impairment reductions under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 are included in realized gains and losses (360-944-35-6).
  • No imputed investment income or rental expense is recognized for real estate used in the business (360-944-35-7).
  • Realized gains and losses, including on sales of real estate investments, shall not be deferred directly or indirectly (360-944-40-2), and are reported pretax as a component of other income in the statement of earnings (360-944-45-3).
  • Real estate acquired in settling claims must be reported separately on the balance sheet and not classified as an investment (360-944-45-1); realized gains and losses must be shown as a separate income statement item or disclosed in the notes (360-944-45-4; 360-944-50-1).

For students. The exam trap is the classification-drives-everything rule: the same building produces investment income and realized gains/losses if held as an investment, operating expense if used in the business, and adjustments to claim costs incurred if acquired in settling mortgage guaranty or title insurance claims. Students often wrongly lump claim-settlement real estate into investments — it must be reported separately on the balance sheet.

real estate investmentsreal estate used in the businessreal estate acquired in settling claimspredominant use classificationclaim costs incurredrealized gains and lossesinvestment incomeother-than-temporary impairment

Machine-generated study aid for ASC 360-944. Check the source paragraphs below.

360-944-00Status

Source downloaded: .Record version ac6cd3898cbb. Effective date must be checked in the source.

360-944-05Overview and Background

Source downloaded: .Record version 31c9ff509284. Effective date must be checked in the source.

360-944-05-1
This Subtopic provides guidance to insurance entities on accounting for and financial reporting of real estate.

360-944-15Scope and Scope Exceptions

Source downloaded: .Record version 1dff0328e261. Effective date must be checked in the source.

Overall Guidance

360-944-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 944-10-15.

360-944-25Recognition

Source downloaded: .Record version e5bbd7ff9281. Effective date must be checked in the source.

360-944-25-1
Real estate shall be classified either as an investment (real estate investments) or as real estate used in the insurance entity's operations (real estate used in the business), depending on its predominant use.

360-944-30Initial Measurement

Source downloaded: .Record version 1ad5ac067ad3. Effective date must be checked in the source.

Real Estate Acquired in Settling Certain Claims

360-944-30-1
Real estate acquired in settling mortgage guaranty and title insurance claims shall be measured initially at fair value.

Real Estate Investments

360-944-30-2
Real estate investments shall be measured initially at cost.

360-944-35Subsequent Measurement

Source downloaded: .Record version 24efe221b822. Effective date must be checked in the source.

Real Estate Acquired in Settling Certain Claims

360-944-35-1
In accordance with paragraph 360-10-35-43, real estate classified as held for sale that was acquired in settling mortgage guaranty and title insurance claims shall be subsequently measured in accordance with the guidance on property, plant, and equipment in Section 360-10-35.
360-944-35-2
Paragraph 944-40-35-4 requires that subsequent reductions in the reported amount of real estate acquired in settling claims be recognized as an adjustment to claim costs incurred.

Potential Ownership Interest in Real Estate

360-944-35-3
For guidance related to estimated recoveries on unsettled claims involving a potential ownership interest in real estate, see paragraph 944-40-35-2.

Real Estate Investments

360-944-35-4
Real estate investments shall be measured subsequently at cost less accumulated depreciation.
360-944-35-5
Depreciation and other related charges or credits shall be charged or credited to investment income.
360-944-35-6
Reductions in the carrying amount of real estate investments resulting from the application of the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 shall be included in realized gains and losses.

Real Estate Used in the Business

360-944-35-7
Imputed investment income and rental expense shall not be recognized for real estate used in the business.

360-944-40Derecognition

Source downloaded: .Record version 655792658df0. Effective date must be checked in the source.

Real Estate Acquired in Settling Certain Claims

360-944-40-1
Paragraph 944-40-35-4 requires that realized gains and losses on the sale of real estate acquired in settling claims be recognized as an adjustment to claim costs incurred.

Real Estate Investments

360-944-40-2
Realized gains and losses (including those on sales of real estate investments) shall not be deferred, either directly or indirectly.

Real Estate Used in the Business

360-944-40-3
Realized gains and losses on the sale of assets other than investments, such as real estate used in the business, shall be reported in accordance with Subtopic 220-20.

360-944-45Other Presentation Matters

Source downloaded: .Record version 7714b930800b. Effective date must be checked in the source.

Balance Sheet—Real Estate Acquired in Settling Certain Claims

360-944-45-1
Real estate acquired in settling claims shall be separately reported in the balance sheet and shall not be classified as an investment.

Income Statement

360-944-45-2
Depreciation and other real estate operating costs shall be classified as investment expenses or operating expenses consistent with the balance sheet classification of the related asset.
360-944-45-3
Realized gains and losses on investments in real estate shall be reported in the statement of earnings as a component of other income, on a pretax basis.
360-944-45-4
Realized gains and losses shall be presented as a separate item in the statement of earnings or disclosed in the notes to financial statements (see paragraph 944-310-50-1).

Other-Than-Temporary Impairment

360-944-45-5
Losses arising from an other-than-temporary impairment shall be presented in accordance with Subtopic 320-10.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
105-10-65-10
Editor's Note: Paragraph 944-360-45-5 will be superseded upon transition, together with its heading.
> Other-Than-Temporary Impairment
Paragraph superseded by Accounting Standards Update No. 2025-12.

360-944-50Disclosure

Source downloaded: .Record version 41a1efcda74e. Effective date must be checked in the source.

360-944-50-1
If realized gains and losses are not presented as a separate item in the statement of earnings, they shall be disclosed in the notes to financial statements.

Related subtopics