# ASC Topic 360: Property, Plant, and Equipment Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/360/) 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): 2026-09-10T00:05:35.818Z to 2026-09-10T00:13:32.748Z Record version: sha256:b8813e733edcfd09bdf49697200634543982a86de092c43e223e0c91d37d8faa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 360 covers the accounting for property, plant, and equipment: capitalizing cost, allocating it to periods through systematic and rational depreciation, testing long-lived assets for impairment, and reporting assets to be disposed of. The general guidance in 360-10 supplies the core model — depreciation as a process of allocation, not valuation (360-10-35-3 through 35-4); a two-step held-and-used impairment test triggered by indicators (360-10-35-21) that compares carrying amount to undiscounted future cash flows and then writes the asset group down to fair value with no restoration (360-10-35-17, 35-20); and held-for-sale classification under the six criteria in 360-10-45-9, with measurement at the lower of carrying amount or fair value less cost to sell and no depreciation (360-10-35-43). Layered on top are industry subtopics that tailor capitalization, depreciation, presentation, and impairment inputs for airlines, agriculture, cable television, mining, oil and gas, insurance, health care, regulated utilities, real estate projects, CIRAs, employee benefit plans, and not-for-profits. Note also that two subtopics are now empty shells — 360-20 (real estate sales, superseded by ASC 606/610-20/842-40) and 360-910 — and may not be cited as authoritative support. Source downloaded (UTC): 2026-09-10T00:05:35.818Z to 2026-09-10T00:06:33.252Z Record version: sha256:c33572ca646cef8fa463788cb6b58bb4ca0728a662a995ce6524bb2a934cb465 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10: Property, Plant, and Equipment — Overall ### Machine-generated study aids ```json { "summary": "ASC 360-10 governs the accounting for property, plant, and equipment and, in separate \"Impairment or Disposal of Long-Lived Assets\" Subsections, the impairment testing of long-lived assets held and used and the measurement, presentation, and disclosure of long-lived assets to be disposed of. Cost (including capitalized interest) is allocated to periods through systematic and rational depreciation (360-10-35-4). A held-and-used asset group is written down only if its carrying amount fails an undiscounted cash flow recoverability test, and then only down to fair value (360-10-35-17); held-for-sale assets are measured at the lower of carrying amount or fair value less cost to sell and are not depreciated (360-10-35-43).", "key_points": [ "Depreciation is a systematic and rational allocation of cost less salvage over the asset's estimated useful life—a process of allocation, not valuation (360-10-35-3 through 35-4); annuity methods are unacceptable and tax ACRS lives may not be used unless within a reasonable range of useful life (360-10-35-9, 35-10).", "A held-and-used long-lived asset (asset group) is tested for recoverability only when events or changes in circumstances indicate the carrying amount may not be recoverable (the six indicators in 360-10-35-21); the two-step test compares carrying amount to undiscounted expected future cash flows, and an impairment loss is measured as carrying amount less fair value (360-10-35-17).", "Assets are grouped at the lowest level for which identifiable cash flows are largely independent of other assets and liabilities (360-10-35-23); the impairment loss reduces only long-lived assets, allocated pro rata on relative carrying amounts but not below an individually determinable fair value (360-10-35-28).", "The adjusted carrying amount after impairment becomes the new cost basis, depreciated over the remaining useful life, and restoration of a previously recognized impairment loss is prohibited (360-10-35-20).", "Cash flow estimates cover the remaining useful life of the primary asset of the group (which cannot be land or a nonamortized intangible), exclude interest charges, include expenditures maintaining existing service potential, and exclude capital expenditures that increase service potential (360-10-35-29, 35-31 through 35-34).", "All six criteria in 360-10-45-9 (management commitment, available for immediate sale, active program to locate a buyer, sale probable within one year, active marketing at a reasonable price, unlikely plan changes) must be met for held-for-sale classification; such assets are measured at the lower of carrying amount or fair value less cost to sell, are not depreciated, and subsequent gains are limited to cumulative losses previously recognized (360-10-35-40, 35-43).", "Assets to be disposed of other than by sale (abandonment, exchange at recorded amount, spinoff) remain classified as held and used until disposed of (360-10-45-15), and disclosures about impairments (360-10-50-2) and disposals, including individually significant components (360-10-50-3, 50-3A), are required." ], "categories": [ "Impairment", "Subsequent measurement", "Inventory and PP&E", "Presentation" ], "audience_level": "intermediate", "student_note": "This is the workhorse impairment model for tangible long-lived assets and a classic exam trap: candidates often forget that step one uses UNDISCOUNTED cash flows (so no loss is recorded if they exceed carrying amount, even if fair value is far lower), that the loss is measured against fair value, and that impairments here can never be reversed—unlike the held-for-sale model, where subsequent recoveries can be recognized up to cumulative losses previously recognized.", "related_topics": [ "205-20", "350-20", "410-20", "610-20", "842-20", "835-20" ], "key_concepts": [ "long-lived asset", "asset group", "recoverability test", "undiscounted future cash flows", "held for sale classification", "fair value less cost to sell", "primary asset", "depreciation method" ] } ``` Source downloaded (UTC): 2026-09-10T00:05:35.818Z to 2026-09-10T00:05:35.818Z Record version: sha256:765c7a714467169eb8429d1cac26da1f81ca3f2dd155448e4b0457f9e463bf35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/10/#00-status) SEC content: no ### Status ##### [360-10-00-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:35.818Z to 2026-09-10T00:05:35.818Z Record version: sha256:82242f5eb78a1d73b37c5358ab9be273b8a4164c9b02f7d4c338634630f80dbb 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
BusinessAmendedAccounting Standards Update No. 2017-0101/05/2017
BusinessAddedAccounting Standards Update No. 2014-0905/28/2014
CollectionsAddedAccounting Standards Update No. 2019-0303/21/2019
ContractAddedAccounting Standards Update No. 2014-0905/28/2014
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
Disposal GroupAmendedAccounting Standards Update No. 2014-0804/10/2014
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease TermAddedAccounting Standards Update No. 2016-0202/25/2016
LesseeAddedAccounting Standards Update No. 2016-0202/25/2016
LessorAddedAccounting Standards Update No. 2016-0202/25/2016
Net Realizable ValueAddedAccounting Standards Update No. 2015-1107/22/2015
Nonprofit ActivityAddedAccounting Standards Update No. 2014-0905/28/2014
Not-for-Profit EntityAddedAccounting Standards Update No. 2014-0804/10/2014
Performance ObligationAddedAccounting Standards Update No. 2016-0202/25/2016
Public Business EntityAmendedMaintenance Update 2017-06 (PDF)04/07/2017
Public Business EntityAmendedMaintenance Update 2016-11 (PDF)06/27/2016
Public Business EntityAddedAccounting Standards Update No. 2014-0804/10/2014
RevenueAddedAccounting Standards Update No. 2016-0202/25/2016
Right-of-Use AssetAddedAccounting Standards Update No. 2016-0202/25/2016
Underlying AssetAddedAccounting Standards Update No. 2016-0202/25/2016
360-10-05-1AmendedAccounting Standards Update No. 2016-0202/25/2016
360-10-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
360-10-05-4AmendedAccounting Standards Update No. 2014-0804/10/2014
360-10-05-5AmendedAccounting Standards Update No. 2014-0804/10/2014
360-10-15-4AmendedAccounting Standards Update No. 2016-0202/25/2016
360-10-15-6AddedAccounting Standards Update No. 2019-0303/21/2019
360-10-30-8AmendedAccounting Standards Update No. 2016-0202/25/2016
360-10-35-7AmendedAccounting Standards Update No. 2014-0905/28/2014
360-10-35-39AmendedAccounting Standards Update No. 2012-0410/01/2012
360-10-35-41AmendedAccounting Standards Update No. 2022-0203/31/2022
360-10-40-1SupersededAccounting Standards Update No. 2014-0905/28/2014
360-10-40-2SupersededAccounting Standards Update No. 2025-1212/17/2025
360-10-40-2AmendedAccounting Standards Update No. 2017-0502/22/2017
360-10-40-2AmendedAccounting Standards Update No. 2016-0202/25/2016
360-10-40-2AmendedAccounting Standards Update No. 2014-0905/28/2014
360-10-40-3SupersededAccounting Standards Update No. 2014-0905/28/2014
360-10-40-3AAmendedAccounting Standards Update No. 2017-0502/22/2017
360-10-40-3BAmendedAccounting Standards Update No. 2017-0502/22/2017
360-10-40-3A through 3CAddedAccounting Standards Update No. 2014-0905/28/2014
360-10-40-5AmendedAccounting Standards Update No. 2017-0502/22/2017
360-10-45-3AmendedAccounting Standards Update No. 2014-0804/10/2014
360-10-45-5AmendedAccounting Standards Update No. 2014-0905/28/2014
360-10-45-5AmendedAccounting Standards Update No. 2014-0804/10/2014
360-10-45-14AmendedAccounting Standards Update No. 2014-0804/10/2014
360-10-45-15AmendedAccounting Standards Update No. 2014-0804/10/2014
360-10-50-2AmendedAccounting Standards Update No. 2024-0311/04/2024
360-10-50-3AmendedAccounting Standards Update No. 2024-0311/04/2024
360-10-50-3AmendedAccounting Standards Update No. 2014-0804/10/2014
360-10-50-3AAmendedAccounting Standards Update No. 2025-1112/08/2025
360-10-50-3AAddedAccounting Standards Update No. 2014-0804/10/2014
360-10-50-4AddedAccounting Standards Update No. 2014-0401/17/2014
360-10-55-18AAddedAccounting Standards Update No. 2014-0804/10/2014
360-10-55-21AmendedAccounting Standards Update No. 2015-1107/22/2015
360-10-55-43AmendedAccounting Standards Update No. 2016-0202/25/2016
360-10-55-50 through 55-54
AddedAccounting Standards Update No. 2012-0410/01/2012
360-10-60-1AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:05:38.507Z to 2026-09-10T00:05:38.507Z Record version: sha256:fe07a29d9c15881ed60a8723653007fad9b863cc517fe01dc2e6eb92f810e600 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/10/#05-overview-and-background) SEC content: no ##### [360-10-05-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:38.507Z to 2026-09-10T00:05:38.507Z Record version: sha256:c24cc099ffd1439c26719744a25f7dfd6dce425b7f6c30bf5939833c1d611b44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Property, Plant, and Equipment Topic includes the following Subtopic: 1. a Overall 2. b [Subparagraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/). ##### [360-10-05-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:38.507Z to 2026-09-10T00:05:38.507Z Record version: sha256:6ece0b5000b1e85aa44e08e8184aaa07b53a9da277e477a4d01d7f59a6b8a9da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Overall Subtopic is presented in the following two Subsections: 1. a The General Subsections address the accounting and reporting for property, plant, and equipment, including guidance for accumulated depreciation. 2. b The Impairment or Disposal of Long-Lived Assets Subsections retain the pervasive guidance for recognizing and measuring the [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") of long-lived assets and for long-lived assets to be disposed of. ##### [360-10-05-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:38.507Z to 2026-09-10T00:05:38.507Z Record version: sha256:a68607cd1be58f0eb5fff4722cf26b4b4284c865d675cd6def639579ea79645c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Property, plant, and equipment typically consist of long-lived tangible assets used to create and distribute an entity's products and services and include: 1. a Land and land improvements 2. b Buildings 3. c Machinery and equipment 4. d Furniture and fixtures. ### Impairment or Disposal of Long-Lived Assets ##### [360-10-05-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:38.507Z to 2026-09-10T00:05:38.507Z Record version: sha256:a7bfa957ba7d501d438afc68c5907d6d537d1379ec01e53cb3ce7cadc6c76a44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Impairment or Disposal of Long-Lived Assets Subsections provide guidance for: 1. a  Recognition and measurement of the [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") of long-lived assets to be held and used 2. b  Measurement of long-lived assets to be disposed of by sale 3. c Disclosures about the impairment or disposal of long-lived assets and disposals of individually significant [components of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group."). ##### [360-10-05-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:38.507Z to 2026-09-10T00:05:38.507Z Record version: sha256:112b9511b064a86e358fbe5781436e6d6d7a126940e472da64287584bdfea534 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For long-lived assets disposed of or classified as held for sale, different presentation and disclosures are required depending on the nature of the disposal. If the long-lived assets are a significant component of an entity, more extensive disclosures are required. Additionally, if the component of an entity meets the definition of discontinued operation in paragraph [205-20-45-1B](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B), an entity shall refer to Subtopic 205-20 for the presentation and disclosure requirements for discontinued operations (see the flowchart in paragraph [360-10-55-18A](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-18A) for an illustration). ##### [360-10-05-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:38.507Z to 2026-09-10T00:05:38.507Z Record version: sha256:4d79f045ece3781b697cb7fcdbd53aaeef8b195a3e6b8ad8aaaf382c6ab5764b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection provides guidance that focuses on developing estimates of future cash flows used to test for recoverability, including the: 1. a Cash flow estimation approach 2. b Cash flow estimation period 3. c Types of asset-related expenditures that should be considered in developing estimates of future cash flows. Source downloaded (UTC): 2026-09-10T00:05:41.355Z to 2026-09-10T00:05:41.355Z Record version: sha256:9163de3d09d47a47bdf17ca71d3f38e9b89380133e369bd579257edb3bf74140 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-10-15-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:41.355Z to 2026-09-10T00:05:41.355Z Record version: sha256:4137b11b01f67ec69cda1b156b1f8bce9693242f3d0fe86dcfac02893e8e75e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific exceptions noted in the other Subsections of this Section. #### Entities ##### [360-10-15-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:41.355Z to 2026-09-10T00:05:41.355Z Record version: sha256:77647d1022cea5d12607b6d1db4028c8f48a8204b20e6413d409a0037c01885d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities. ### Impairment or Disposal of Long-Lived Assets #### Overall Guidance ##### [360-10-15-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:41.355Z to 2026-09-10T00:05:41.355Z Record version: sha256:f3a8903fd7164bac7d69d3d17a8fb06ec9aa5b50583cf749b32d2d8611663443 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Impairment or Disposal of Long-Lived Assets Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [360-10-15-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-1), with specific transaction exceptions noted below. #### Transactions ##### [360-10-15-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:41.355Z to 2026-09-10T00:05:41.355Z Record version: sha256:b4e9fae2e295596dd3ac08d8362abc112c5bda8c3e2a16da3fdbebb6cb200ef7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Impairment or Disposal of Long-Lived Assets Subsections applies to the following transactions and activities: 1. a Except as indicated in (b) and the following paragraph, all of the transactions and activities related to recognized long-lived assets of an entity to be held and used or to be disposed of, including: 1. 1 [Right-of-use assets](https://asc.understandingaccounting.org/glossary/r/#right-of-use-asset "An asset that represents a lessee's right to use an underlying asset for the lease term.") of [lessees](https://asc.understandingaccounting.org/glossary/l/#lessee "An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration.") 2. 2 Long-lived assets of lessors subject to operating leases 3. 3 Proved oil and gas properties that are being accounted for using the successful-efforts method of accounting 4. 4 Long-term prepaid assets. 2. b The following transactions and activities related to assets and liabilities that are considered part of an [asset group](https://asc.understandingaccounting.org/glossary/a/#asset-group "An asset group is the unit of accounting for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.") or a [disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation."): 1. 1 If a long-lived asset (or assets) is part of a group that includes other assets and liabilities not covered by the Impairment or Disposal of Long-Lived Assets Subsections, the guidance in the Impairment or Disposal of Long-Lived Assets Subsections applies to the group. In those situations, the unit of accounting for the long-lived asset is its group. For a long-lived asset or assets to be held and used, that group is referred to as an asset group. For a long-lived asset or assets to be disposed of by sale or otherwise, that group is referred to as a disposal group. Examples of liabilities included in a disposal group are legal obligations that transfer with a long-lived asset, such as certain environmental obligations, and obligations that, for business reasons, a potential buyer would prefer to settle when assumed as part of a group, such as warranty obligations that relate to an acquired customer base. 2. 2 The guidance in the Impairment or Disposal of Long-Lived Assets Subsections does not change generally accepted accounting principles (GAAP) applicable to those other individual assets (such as accounts receivable and inventory) and liabilities (such as accounts payable, long-term debt, and asset retirement obligations) not covered by the Impairment or Disposal of Long-Lived Assets Subsections that are included in such groups. ##### [360-10-15-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:41.355Z to 2026-09-10T00:05:41.355Z Record version: sha256:0fda5a5cd86bc52760cdd8b7f9a8ec3c103243192f583bf6ed982ccb5d6546f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Impairment or Disposal of Long-Lived Assets Subsections does not apply to the following transactions and activities: 1. a Goodwill 2. b Intangible assets not being amortized that are to be held and used 3. c Servicing assets 4. d Financial instruments, including investments in equity securities accounted for under the cost or equity method 5. e Deferred policy acquisition costs 6. f Deferred tax assets 7. g Unproved oil and gas properties that are being accounted for using the successful-efforts method of accounting 8. h Oil and gas properties that are accounted for using the full-cost method of accounting as prescribed by the Securities and Exchange Commission (SEC) (see Regulation S-X, Rule 4-10, Financial Accounting and Reporting for Oil and Gas Producing Activities Pursuant to the Federal Securities Laws and the Energy Policy and Conservation Act of 1975) 9. i Certain other long-lived assets for which the accounting is prescribed elsewhere in the standards: 1. 1 For guidance on financial reporting in the record and music industry, see Topic 928. 2. 2 For guidance on financial reporting in the broadcasting industry, see Topic 920. 3. 3 For guidance on accounting for the costs of computer software to be sold, leased, or otherwise marketed, see Subtopic 985-20. 4. 4 For guidance on accounting for abandonments and disallowances of plant costs for regulated entities, see Subtopic 980-360. #### Entities Holding Collection Items ##### [360-10-15-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:41.355Z to 2026-09-10T00:05:41.355Z Record version: sha256:a68401f87d7b5b0e8dde4600cb79555d43aec46bdbcc4b74b40a81c8e75f083a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities that hold [collections](https://asc.understandingaccounting.org/glossary/c/#collections "Works of art, historical treasures, or similar assets that meet all of the following criteria: They are held for public exhibition, education, or research in furtherance of public service rather than financial gain. They are protected, kept unencumbered, cared for, and preserved. They are subject to an organizational policy that requires the use of proceeds from items that are sold to be for the acquisitions of new collection items, the direct care of existing collections, or both. Collections generally are held by museums; botanical gardens; libraries; aquariums; arboretums; historic sites; planetariums; zoos; art galleries; nature, science, and technology centers; and similar educational, research, and public service organizations that have those divisions; however, the definition is not limited to those entities nor does it apply to all items held by those entities.") shall follow the accounting and disclosure requirements in Subtopic 958-360 on not-for-profit entities—property, plant, and equipment. Source downloaded (UTC): 2026-09-10T00:05:48.482Z to 2026-09-10T00:05:48.482Z Record version: sha256:57e8334d07224541abbced38fc219d57f24a9b92ef087be94c935d783a3e83b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/10/#25-recognition) SEC content: no ##### [360-10-25-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:48.482Z to 2026-09-10T00:05:48.482Z Record version: sha256:539375b991ae89a20d87042816b11a3f304d2057167ada8c33c3c09879e60b2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See the [Impairment or Disposal of Long-Lived Assets Subsection](https://asc.understandingaccounting.org/asc/360/10/#45-other-presentation-matters) of Section 360-10-45 for a discussion of held-for-use and held-for-sale classifications of assets and asset groups. #### Acquisition of the Residual Value in Leased Assets by a Third Party ##### [360-10-25-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:48.482Z to 2026-09-10T00:05:48.482Z Record version: sha256:976394bb52464af9b2be2c2642e5dc81d05ac1703693b06a52e8100e1de519c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section provides guidance on how a third-party entity shall account for the following: 1. a The acquisition from a lessor of the unconditional right to own and possess, at the end of the lease term, an asset subject to a lease 2. b The acquisition of the right to receive all, or a portion, of the proceeds from the sale of a leased asset at the end of the lease term. ##### [360-10-25-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:48.482Z to 2026-09-10T00:05:48.482Z Record version: sha256:dea06f871002d6770b3d60b8b01e8278d83a256a1005fbd95e7ccd5506449198 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date the rights in the preceding paragraph are acquired, both transactions involve a right to receive, at the end of the lease term, all, or a portion, of any future benefit to be derived from the leased asset and shall be accounted for as the acquisition of an asset. Both transactions are referred to as the acquisition of an interest in the residual value of a leased asset. ##### [360-10-25-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:48.482Z to 2026-09-10T00:05:48.482Z Record version: sha256:e072963866c067f980e7988e9e2d5b31ae58e441e54570b725f001a232299140 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An interest in the residual value of a leased asset shall be recorded as an asset at the date the right is acquired. #### Planned Major Maintenance Activities ##### [360-10-25-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:48.482Z to 2026-09-10T00:05:48.482Z Record version: sha256:4fbb65da88c2c0d566c6228196c8d8197d8a1243c444400de17a481528c67339 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Business Combinations ##### [360-10-25-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:48.482Z to 2026-09-10T00:05:48.482Z Record version: sha256:b7eebba0b77168f6a4fd2a76689829c648eb94fc9cd7f52a334d484a6662bab4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 805-20-25 for general guidance related to the recognition of the acquisition of property, plant, and equipment in a business combination. Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:247b48a2466757a1c84bb75f4f252eadc535b99734f82471248833c0a76fcce7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/360/10/#30-initial-measurement) SEC content: no #### Historical Cost Including Interest ##### [360-10-30-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:17f9c0ce68ddf01c8ee9535ba91cb289c8fc58a490a46427e7ec434bb599e2d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [835-20-05-1](https://asc.understandingaccounting.org/asc/835/20/#835-20-05-1) states that the historical cost of acquiring an asset includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use. As indicated in that paragraph, if an asset requires a period of time in which to carry out the activities necessary to bring it to that condition and location, the interest cost incurred during that period as a result of expenditures for the asset is a part of the historical cost of acquiring the asset. ##### [360-10-30-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:3667b17033377108f7f64ddacfc0dc67cd37380e78200d7cf11a7d5aad9c59ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See the glossary for a definition of [activities](https://asc.understandingaccounting.org/glossary/a/#activities "The term activities is to be construed broadly. It encompasses physical construction of the asset. In addition, it includes all the steps required to prepare the asset for its intended use. For example, it includes administrative and technical activities during the preconstruction stage, such as the development of plans or the process of obtaining permits from governmental authorities. It also includes activities undertaken after construction has begun in order to overcome unforeseen obstacles, such as technical problems, labor disputes, or litigation.") necessary to bring an asset to the condition and location necessary for its intended use. #### Acquisition of the Residual Value in Leased Assets ##### [360-10-30-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:ed0af0fb91101b60159439123e9e3baa068134e1d7d3bcd4d1a65947b94f7c63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An interest in the residual value of a leased asset recognized under paragraph [360-10-25-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-4) shall be measured initially at the amount of cash disbursed, the fair value of other consideration given, and the present value of liabilities assumed. ##### [360-10-30-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:3c4b1322f69eb7217faa5ffc29cad6f4240a40f16b54c6d43311a882e9b69f7d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The fair value of the interest in the residual value of the leased asset at the date of the agreement shall be used to measure its cost if that fair value is more clearly evident than the fair value of assets surrendered, services rendered, or liabilities assumed. #### Other Asset Acquisition Concepts ##### [360-10-30-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:6cfbdc9af67aea8ec889b6f92b9918653bbf86402a38b76162fdafef131cf2e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following paragraphs contain links to other Subtopics that contain guidance on acquiring property, plant, and equipment under other concepts. The following may not represent a complete list of other locations containing property, plant, and equipment acquisition guidance. ##### [360-10-30-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:7bd0270f97efecf48a6350ab847d47d2b592870836d7c5f575bc9c41ee0e43f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 805-20-25 for general guidance related to assets acquired in a business combination. ##### [360-10-30-7](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:3531c66a05298c7fcc7f2ec326ef1dba9e31e5f70a6c64905f667afa007a6eee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [845-10-30-1 through 30-10](https://asc.understandingaccounting.org/asc/845/10/#845-10-30-1) for guidance related to assets acquired in a nonmonetary exchange. ##### [360-10-30-8](https://asc.understandingaccounting.org/asc/360/10/#360-10-30-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:52.138Z to 2026-09-10T00:05:52.138Z Record version: sha256:349a587ae75d0e243b5636e5061e952515827fba6ca8e2d9bc6a462e6d5d8508 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Subtopic 842-20 for guidance related to assets acquired under a lease. Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:eccf9622585058558ae591b6fc811d22c15ade9e737b5806b830e1348430018d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/10/#35-subsequent-measurement) SEC content: no ##### [360-10-35-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:621089530b701cb1d626a54d9ccf1c551673b1b24526536be1f38fb19eb95943 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection addresses depreciation of property, plant, and equipment and the post acquisition accounting for an interest in the residual value of a leased asset. #### Depreciation ##### [360-10-35-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:85dce47de2b56dec05efa10da37c67c329fde37adb896779db0d5f8cb0795454 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses the concept of depreciation accounting and the various factors to consider in selecting the related periods and methods to be used in such accounting. ##### [360-10-35-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:d12b487e4b4be130a55cbf9ca668c84107d9fae0ba08356eceed97d31cd4393b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depreciation expense in financial statements for an asset shall be determined based on the asset's useful life. ##### [360-10-35-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:aff2f9499b4be3ea6ca84b2a765724282e812cf5c38b883a1e93583c1b769f3f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of a productive facility is one of the costs of the services it renders during its useful economic life. Generally accepted accounting principles (GAAP) require that this cost be spread over the expected useful life of the facility in such a way as to allocate it as equitably as possible to the periods during which services are obtained from the use of the facility. This procedure is known as depreciation accounting, a system of accounting which aims to distribute the cost or other basic value of tangible capital assets, less salvage (if any), over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation, not of valuation. ##### [360-10-35-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:cc1d115922e6791bd5f1da3e7a9cc7941a21ffacd771ebda0332fcdb15471d39 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [360-10-35-20](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-20) for a discussion of depreciation of a new cost basis after recognition of an [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") loss. ##### [360-10-35-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:bd2e110cd5ba604ff48ecffbdd652032eae7f8d2108429a4a8f468924b20eaab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [360-10-35-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-43) for a discussion of cessation of depreciation on long-lived assets classified as held for sale. ##### [360-10-35-7](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:625ca0072f399421765c27f58c1c2c99272212c9669aa91c7eb26e3bfbb97a2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The declining-balance method is an example of one of the methods that meet the requirements of being systematic and rational. If the expected productivity of the asset or ability of the asset to generate revenue is relatively greater during the earlier years of its life, or maintenance charges tend to increase during later years, the declining-balance method may provide the most satisfactory allocation of cost. That conclusion also applies to other methods, including the sum-of-the-years'-digits method, that produce substantially similar results. ##### [360-10-35-8](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:2469cae14fac8c3545077f797856d321b341b6934efd29a29e82518484928391 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In practice, experience regarding loss or damage to depreciable assets is in some cases one of the factors considered in estimating the depreciable lives of a group of depreciable assets, along with such other factors as wear and tear, obsolescence, and maintenance and replacement policies. ##### [360-10-35-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:60453f3399a666008e6a0358903c09c615111e99cfca439b0e88f0e31eacb1f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the number of years specified by the Accelerated Cost Recovery System of the Internal Revenue Service (IRS) for recovery deductions for an asset does not fall within a reasonable range of the asset's useful life, the recovery deductions shall not be used as depreciation expense for financial reporting. ##### [360-10-35-10](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:919e72d0b0f7bb7f43d88115bd21e210709a74b425c91c409addbb72eef127f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Annuity methods of depreciation are not acceptable for entities in general. ##### [360-10-35-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:2e625dc2abd1a0a8c221dc687e677301ae941a149ae5b0a9ab5a8ad7d5602a72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [250-10-45-17 through 45-20](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) for guidance on the accounting and presentation of changes in methods of depreciation. ##### [360-10-35-12](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:8d91c32e2621e206d98ac4b939930537df6fa1aad6dace5b0e7438b37304f9ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Adjusting the Residual Value in Leased Assets by a Third Party ##### [360-10-35-13](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:9becdbe6ed7add09e2751d7e9fdec3407a990852afc0fca86d1a25f7ee0182b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following paragraph provides guidance on how an entity acquiring an interest in the residual value of a leased asset shall account for that asset during the lease term. ##### [360-10-35-14](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:db96dd386ee4e772bad7313bf4769fb5902a9d5a6f4af052f5d0c79443360cf7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity acquiring an interest in the residual value of any leased asset, irrespective of the classification of the related lease by the lessor, shall not recognize increases to the asset's estimated value over the remaining term of the related lease, and the asset shall be reported at no more than its acquisition cost until sale or disposition. If it is subsequently determined that the fair value of the residual value of a leased asset has declined below the carrying amount of the acquired interest and that decline is other than temporary, the asset shall be written down to fair value, and the amount of the write-down shall be recognized as a loss. That fair value becomes the asset's new carrying amount, and the asset shall not be increased for any subsequent increase in its fair value before its sale or disposition. ### Impairment or Disposal of Long-Lived Assets ##### [360-10-35-15](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:1978446db34e147931806b2ea4d7b1914ff1ea79aa9a4861a09df1bb55f03bef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There are unique requirements of accounting for the [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") or disposal of long-lived assets to be held and used or to be disposed of. Although this guidance deals with matters which may lead to the ultimate disposition of assets, it is included in this Subsection because it describes the measurement and classification of assets to be held and used and assets held for disposal before actual disposition and derecognition. See the [Impairment or Disposal of Long-Lived Assets Subsection](https://asc.understandingaccounting.org/asc/360/10/#40-derecognition) of Section 360-10-40 for a discussion of assets or asset groups for which disposition has taken place in an exchange or distribution to owners. #### Long-Lived Assets Classified as Held and Used ##### [360-10-35-16](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:c997887897a5251c32354e44a0cfc9ff9a7d74a4e19218d9844971b2670bdbba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses how long-lived assets or asset groups that are intended to be held and used in an entity's business shall be reviewed for impairment. ##### [360-10-35-17](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:46adbc193dd5463fc9566cef41de6171b7af6f289621ec66887b6e09a514551b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An impairment loss shall be recognized only if the carrying amount of a long-lived asset ([asset group](https://asc.understandingaccounting.org/glossary/a/#asset-group "An asset group is the unit of accounting for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.")) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability, whether in use (see paragraph [360-10-35-33](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-33)) or under development (see paragraph [360-10-35-34](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-34)). An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value. ##### [360-10-35-18](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:03691bcb3ad53145f152de2cf69c78222ed8892b143c6657856b490951a9142a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In applying the provisions of this Subtopic, the carrying amount of the asset being tested for impairment shall include amounts of capitalized asset retirement costs. Estimated future cash flows related to the liability for an asset retirement obligation that has been recognized in the financial statements shall be excluded from both of the following: 1. a  The undiscounted cash flows used to test the asset for recoverability 2. b The discounted cash flows used to measure the asset's fair value. ##### [360-10-35-19](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:697f682c7180a9f27e3ebe5221128b0624317fb6b57e2f20410950e1645f8253 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the fair value of the asset is based on a quoted market price and that price considers the costs that will be incurred in retiring that asset, the quoted market price shall be increased by the fair value of the asset retirement obligation for purposes of measuring impairment. ##### [360-10-35-20](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:49beb6af9bf3bbbf11027c8d90b863a9092ae832323eb5bfee8fd48a31fd31e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an impairment loss is recognized, the adjusted carrying amount of a long-lived asset shall be its new cost basis. For a depreciable long-lived asset, the new cost basis shall be depreciated (amortized) over the remaining useful life of that asset. Restoration of a previously recognized impairment loss is prohibited. ##### [360-10-35-21](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:e6f8b04969e90212f77c346ff81de19b5ac7e8103ab2b7c69b3796195c87311d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The following are examples of such events or changes in circumstances: 1. a A significant decrease in the market price of a long-lived asset (asset group) 2. b A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition 3. c A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator 4. d An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group) 5. e A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group) 6. f A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term _more likely than not_ refers to a level of likelihood that is more than 50 percent. ##### [360-10-35-22](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:b827095f6ac43efa29634d5c0cfa7da63ed056ea685e002918c6fa557ce013d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a long-lived asset (asset group) is tested for recoverability, it also may be necessary to review depreciation estimates and method as required by Topic 250 or the amortization period as required by Topic 350. Paragraphs [250-10-45-17 through 45-20](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) and [250-10-50-4](https://asc.understandingaccounting.org/asc/250/10/#250-10-50-4) address the accounting for changes in estimates, including changes in the method of depreciation, amortization, and depletion. Paragraphs [350-30-35-1 through 35-5](https://asc.understandingaccounting.org/asc/350/30/#350-30-35-1) address the determination of the useful life of an intangible asset. Any revision to the remaining useful life of a long-lived asset resulting from that review also shall be considered in developing estimates of future cash flows used to test the asset (asset group) for recoverability (see paragraphs [360-10-35-31 through 35-32](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-31) ). However, any change in the accounting method for the asset resulting from that review shall be made only after applying this Subtopic. ##### [360-10-35-23](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:136b8a5fe2e7daba1b9a5554f2308314b4d231f4634d15c73ef7d848df4dc7e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of recognition and measurement of an impairment loss, a long-lived asset or assets shall be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. However, an impairment loss, if any, that results from applying this Subtopic shall reduce only the carrying amount of a long-lived asset or assets of the group in accordance with paragraph [360-10-35-28](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-28). ##### [360-10-35-24](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:1a8022f59d61f536960326fab8e23112d569aec9e792f48da79e81061c7c33e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In limited circumstances, a long-lived asset (for example, a corporate headquarters facility) may not have identifiable cash flows that are largely independent of the cash flows of other assets and liabilities and of other asset groups. In those circumstances, the asset group for that long-lived asset shall include all assets and liabilities of the entity. ##### [360-10-35-25](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:ccc3bdd6470eba0e729b07fb299a5482ee7816ab5b2c3f858a97814677e2e7ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In limited circumstances, an asset group will include all assets and liabilities of the entity. For example, the cost of operating assets such as corporate headquarters or centralized research facilities may be funded by revenue-producing activities at lower levels of the entity. Accordingly, in limited circumstances, the lowest level of identifiable cash flows that are largely independent of other asset groups may be the entity level. See Example 4 (paragraph [360-10-55-35](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-35)). ##### [360-10-35-26](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:3b7664c089f1acd261f4f753f92d540d0513c58851aff8e84d717f8908239f88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Goodwill shall be included in an asset group to be tested for impairment under this Subtopic only if the asset group is or includes a reporting unit. Goodwill shall not be included in a lower-level asset group that includes only part of a reporting unit. Estimates of future cash flows used to test that lower-level asset group for recoverability shall not be adjusted for the effect of excluding goodwill from the group. The term _reporting unit_ is defined in Topic 350 as the same level as or one level below an [operating segment](https://asc.understandingaccounting.org/glossary/o/#operating-segment "A component of a public entity. See Section 280-10-50 for additional guidance on the definition of an operating segment."). That Topic requires that goodwill be tested for impairment at the reporting unit level. ##### [360-10-35-27](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:796cee6a442d985975fe03cec8a89f98e7ddb89e13f7374c57f42b8af383671d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other than goodwill, the carrying amounts of any assets (such as accounts receivable and inventory) and liabilities (such as accounts payable, long-term debt, and asset retirement obligations) not covered by this Subtopic that are included in an asset group shall be adjusted in accordance with other applicable generally accepted accounting principles (GAAP) before testing the asset group for recoverability. Paragraph [350-20-35-31](https://asc.understandingaccounting.org/asc/350/20/#350-20-35-31) requires that goodwill be tested for impairment only after the carrying amounts of the other assets of the reporting unit, including the long-lived assets covered by this Subtopic, have been tested for impairment under other applicable accounting guidance. ##### [360-10-35-28](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:b7fa53ec5e28afbdadbb424627c0ad4da6c3698ffedaec2a45c78494ffd4eace Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An impairment loss for an asset group shall reduce only the carrying amounts of a long-lived asset or assets of the group. The loss shall be allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group shall not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. See Example 1 (paragraph [360-10-55-20](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-20)) for an illustration of this guidance. ##### [360-10-35-29](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:22c78b86df552e1ab8452b8da871f44be2ef38ab02e3bbb5da5728afc280eb8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates of future cash flows used to test the recoverability of a long-lived asset (asset group) shall include only the future cash flows (cash inflows less associated cash outflows) that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the asset (asset group). Those estimates shall exclude interest charges that will be recognized as an expense when incurred. ##### [360-10-35-30](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:04b574a306cba1a4a3b3f6b29e40fbfb5d6e5ec7abd2656a337c2208738cf01c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates of future cash flows used to test the recoverability of a long-lived asset (asset group) shall incorporate the entity's own assumptions about its use of the asset (asset group) and shall consider all available evidence. The assumptions used in developing those estimates shall be reasonable in relation to the assumptions used in developing other information used by the entity for comparable periods, such as internal budgets and projections, accruals related to incentive compensation plans, or information communicated to others. However, if alternative courses of action to recover the carrying amount of a long-lived asset (asset group) are under consideration or if a range is estimated for the amount of possible future cash flows associated with the likely course of action, the likelihood of those possible outcomes shall be considered. A probability-weighted approach may be useful in considering the likelihood of those possible outcomes. See Example 2 (paragraph [360-10-55-23](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-23)) for an illustration of this guidance. ##### [360-10-35-31](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:42ca5f44cc4fa0555c1d92503391d80736e3d5130316aee089ed0694efaa011b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates of future cash flows used to test the recoverability of a long-lived asset (asset group) shall be made for the remaining useful life of the asset (asset group) to the entity. The remaining useful life of an asset group shall be based on the remaining useful life of the primary asset of the group. For purposes of this Subtopic, the primary asset is the principal long-lived tangible asset being depreciated or intangible asset being amortized that is the most significant component asset from which the asset group derives its cash-flow-generating capacity. The primary asset of an asset group therefore cannot be land or an intangible asset not being amortized. ##### [360-10-35-32](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:fac6cc615387613f353ebff792e94107a9b782f6e1bb154d62cee3e7a5d9c4ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Factors that an entity generally shall consider in determining whether a long-lived asset is the primary asset of an asset group include the following: 1. a Whether other assets of the group would have been acquired by the entity without the asset 2. b The level of investment that would be required to replace the asset 3. c The remaining useful life of the asset relative to other assets of the group. If the primary asset is not the asset of the group with the longest remaining useful life, estimates of future cash flows for the group shall assume the sale of the group at the end of the remaining useful life of the primary asset. ##### [360-10-35-33](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:6d50dda9c41e44748da8a8ae42e7c2bec4bf5d0c449300ddd63ee679dc66fa96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates of future cash flows used to test the recoverability of a long-lived asset (asset group) that is in use, including a long-lived asset (asset group) for which development is substantially complete, shall be based on the existing service potential of the asset (asset group) at the date it is tested. The service potential of a long-lived asset (asset group) encompasses its remaining useful life, cash-flow-generating capacity, and for tangible assets, physical output capacity. Those estimates shall include cash flows associated with future expenditures necessary to maintain the existing service potential of a long-lived asset (asset group), including those that replace the service potential of component parts of a long-lived asset (for example, the roof of a building) and component assets other than the primary asset of an asset group. Those estimates shall exclude cash flows associated with future capital expenditures that would increase the service potential of a long-lived asset (asset group). ##### [360-10-35-34](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:3c948525718535b62a3c01c84ee14c941c7805ea91a81cc4c754b4a068db8a6a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Estimates of future cash flows used to test the recoverability of a long-lived asset (asset group) that is under development shall be based on the expected service potential of the asset (group) when development is substantially complete. Those estimates shall include cash flows associated with all future expenditures necessary to develop a long-lived asset (asset group), including interest payments that will be capitalized as part of the cost of the asset (asset group). Subtopic 835-20 requires the capitalization period to end when the asset is substantially complete and ready for its intended use. ##### [360-10-35-35](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-35) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:7976734c51bb3ae28a473a980600e29021dcef00aaab258f5f054a4774ed7551 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a long-lived asset that is under development is part of an asset group that is in use, estimates of future cash flows used to test the recoverability of that group shall include the cash flows associated with future expenditures necessary to maintain the existing service potential of the group (see paragraph [360-10-35-33](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-33)) as well as the cash flows associated with all future expenditures necessary to substantially complete the asset that is under development (see the preceding paragraph). See Example 3 (paragraph [360-10-55-33](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-33)). See also paragraphs [360-10-55-7 through 55-18](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-7) for considerations of site restoration and environmental exit costs. ##### [360-10-35-36](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-36) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:6db8ac560bef5e2015b169bf712fd4017061ea8640af25fa7081c28eb383fed9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For long-lived assets (asset groups) that have uncertainties both in timing and amount, an expected present value technique will often be the appropriate technique with which to estimate fair value. #### Long-Lived Assets Classified as Held for Sale ##### [360-10-35-37](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:d112aea18e04cfa3c75cdb0ec7d8696e7b9159a23860f2082ce6dea3ccca0cf1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses the accounting for expected disposal losses for long-lived assets and asset groups that are classified as held for sale but have not yet been sold. See paragraphs [360-10-45-9 through 45-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) for the initial criteria to be met for classification as held for sale. ##### [360-10-35-38](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-38) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:71d119fbdd1b98a715a1a8a0d1f8a8b1372687bdf051d0342c9e888d3b02b9a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs to sell are the incremental direct costs to transact a sale, that is, the costs that result directly from and are essential to a sale transaction and that would not have been incurred by the entity had the decision to sell not been made. Those costs include broker commissions, legal and title transfer fees, and closing costs that must be incurred before legal title can be transferred. Those costs exclude expected future losses associated with the operations of a long-lived asset ([disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.")) while it is classified as held for sale. Expected future operating losses that marketplace participants would not similarly consider in their estimates of the fair value less cost to sell of a long-lived asset (disposal group) classified as held for sale shall not be indirectly recognized as part of an expected loss on the sale by reducing the carrying amount of the asset (disposal group) to an amount less than its current fair value less cost to sell. If the sale is expected to occur beyond one year as permitted in limited situations by paragraph [360-10-45-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11), the cost to sell shall be discounted. ##### [360-10-35-39](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-39) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:24c72590724a336572e977b834d6fc233028e8aaf1062c2b7c21ce143aa5e450 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The carrying amounts of any assets that are not covered by this Subtopic, including goodwill, that are included in a disposal group classified as held for sale shall be adjusted in accordance with other applicable GAAP prior to measuring the fair value less cost to sell of the disposal group. Paragraphs [350-20-40-1 through 40-7](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-1) provide guidance for allocating goodwill to a lower-level asset group to be disposed of that is part of a reporting unit and that constitutes a business. Goodwill is not included in a lower-level asset group to be disposed of that is part of a reporting unit if it does not constitute a business. ##### [360-10-35-40](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-40) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:693d43f897b246fba9dcf46566e74a807a197070e1a4810bc9ba64a62f7a0c7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A loss shall be recognized for any initial or subsequent write-down to fair value less cost to sell. A gain shall be recognized for any subsequent increase in fair value less cost to sell, but not in excess of the cumulative loss previously recognized (for a write-down to fair value less cost to sell). The loss or gain shall adjust only the carrying amount of a long-lived asset, whether classified as held for sale individually or as part of a disposal group. ##### [360-10-35-41](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-41) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:d15df5385d299ceb29bbc3002c31cbd291ac83f86bf4ccf1b85b4fd83d075749 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [310-20-35-12D](https://asc.understandingaccounting.org/asc/310/20/#310-20-35-12D) and [310-20-40-12](https://asc.understandingaccounting.org/asc/310/20/#310-20-40-12) for guidance related to determination of cost basis for foreclosed assets under Subtopic 310-20 and the measurement of cumulative losses previously recognized under paragraph [360-10-35-40](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-40). ##### [360-10-35-42](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-42) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:567c1d89b6942c99979dbd00d1e676344733b347ca9a0b8a82e170607afb9150 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [830-30-45-13 through 45-15](https://asc.understandingaccounting.org/asc/830/30/#830-30-45-13) for guidance regarding the application of Topic 830 to an investment being evaluated for impairment that will be disposed of. ##### [360-10-35-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-43) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:55bad1167547623564eb0c4a99c2fac9e8d3f00518f9fb2cea2422974bfc3ab0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset (disposal group) classified as held for sale shall be measured at the lower of its carrying amount or fair value less cost to sell. If the asset (disposal group) is newly acquired, the carrying amount of the asset (disposal group) shall be established based on its fair value less cost to sell at the acquisition date. A long-lived asset shall not be depreciated (amortized) while it is classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be accrued. ##### [360-10-35-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-44) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:1eab0f33f298d32336723e4e6c5d3f6e74d3654eaa4786e6e3da21276be385fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If circumstances arise that previously were considered unlikely and, as a result, an entity decides not to sell a long-lived asset (disposal group) previously classified as held for sale, the asset (disposal group) shall be reclassified as held and used. A long-lived asset that is reclassified shall be measured individually at the lower of the following: 1. a Its carrying amount before the asset (disposal group) was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the asset (disposal group) been continuously classified as held and used 2. b Its fair value at the date of the subsequent decision not to sell. ##### [360-10-35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-45) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:0cdc32c96c1be8fd8b0bc8084b369ed104968b9e81f3d20a217cebc3bc26e1a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity removes an individual asset or liability from a disposal group previously classified as held for sale, the remaining assets and liabilities of the disposal group to be sold shall continue to be measured as a group only if the criteria in paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) are met. Otherwise, the remaining long-lived assets of the group shall be measured individually at the lower of their carrying amounts or fair values less cost to sell at that date. #### Long-Lived Assets to Be Disposed of Other than by Sale ##### [360-10-35-46](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-46) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:5e628bd5a9832d86f0c004a0e9f1437566b683c5a764e1721bd5c4dcc0022d37 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses the accounting for impairment of long-lived assets and asset groups that are intended to be disposed of by abandonment. ##### [360-10-35-47](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-47) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:6d48e36da2fd7fd8fcbf60df49c375c967ae94bdf2aeb9a97bfb8d8aa54b46c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of this Subtopic, a long-lived asset to be abandoned is disposed of when it ceases to be used. If an entity commits to a plan to abandon a long-lived asset before the end of its previously estimated useful life, depreciation estimates shall be revised in accordance with paragraphs [250-10-45-17 through 45-20](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) and [250-10-50-4](https://asc.understandingaccounting.org/asc/250/10/#250-10-50-4) to reflect the use of the asset over its shortened useful life (see paragraph [360-10-35-22](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-22)). ##### [360-10-35-48](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-48) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:cbe89b43785d2deed4fbec0625e40e8547b90b8771a5cb5b6dcac8c091f93074 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the continued use of a long-lived asset demonstrates the presence of service potential, only in unusual situations would the fair value of a long-lived asset to be abandoned be zero while it is being used. When a long-lived asset ceases to be used, the carrying amount of the asset should equal its salvage value, if any. The salvage value of the asset shall not be reduced to an amount less than zero. ##### [360-10-35-49](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-49) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:55.674Z to 2026-09-10T00:05:55.674Z Record version: sha256:a6df9f99aced0a0d3d8f71f0299e81d4270fa67b755fc189f1cdaa3c07e48e45 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset that has been temporarily idled shall not be accounted for as if abandoned. Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:10371bc078a18745ffdb06f0316e36153f48e6851fd10f80a08e92de26f17d7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/360/10/#40-derecognition) SEC content: no ##### [360-10-40-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:baabf1a98ce4cbc5ba194c26f00278a024174d2fae086838b256971a6fbb7b0e 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/). #### Sale of Leased Property ##### [360-10-40-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-2) Pending content: yes Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:81e55dde14b048355a513e087a95bbc8e7bb65a6b5fb4cfa15044c5572d92e5a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [840-20-40-5](https://asc.understandingaccounting.org/asc/840/20/#840-20-40-5) states that if a sale to a third party of property subject to an operating lease (or of property that is leased by or intended to be leased by the third-party purchaser to another party) is not to be recorded as a sale because the entity has not transferred control over the promised asset to the third party in accordance with paragraph [606-10-25-30](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-30), the transaction shall be accounted for as a borrowing. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)
Editor's Note: Paragraph 360-10-40-2 will be superseded upon transition, together with its heading:
> Sale of Leased Property
[Paragraph superseded by Accounting Standards Update No. 2025-12](https://asc.understandingaccounting.org/updates/asu-2025-12/). ##### [360-10-40-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:4690fa0f28df0dda8a96cc609b1a72680e53126b1b7f212046a13ee0c75c8b08 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/). #### Transfer or Sale of Property, Plant, and Equipment ##### [360-10-40-3A](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-3A) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:f2e0b703495aa8e87173c7aca3034614ed32535b78ce4a0e4224de98b5de6c27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall account for the derecognition of a nonfinancial asset, including an in substance nonfinancial asset and an asset subject to a lease , within the scope of this Topic in accordance with Subtopic 610-20 on gains and losses from the derecognition of nonfinancial assets, unless a scope exception from Subtopic 610-20 applies. For example, the derecognition of a nonfinancial asset in a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with a [customer](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.") shall be accounted for in accordance with Topic 606 on [revenue](https://asc.understandingaccounting.org/glossary/r/#revenue "Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.") from contracts with customers. ##### [360-10-40-3B](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-3B) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:f52f6952a31fb795adc11a20b58889ab35313f6b79c7f945e075cbfa19d9d243 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall account for the derecognition of a subsidiary or group of assets that is either a [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity.") in accordance with the derecognition guidance in Subtopic 810-10. ##### [360-10-40-3C](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-3C) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:8c91610f9091321bc9a1601b205ba584bf64434069202414d1177c9548b743ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity transfers a nonfinancial asset in accordance with paragraph [360-10-40-3A](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-3A), and the contract does not meet all of the criteria in paragraph [606-10-25-1](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-1), the entity shall not derecognize the nonfinancial asset and shall follow the guidance in paragraphs [606-10-25-6 through 25-8](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-6) to determine if and when the contract subsequently meets all the criteria in paragraph [606-10-25-1](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-1). Until all the criteria in paragraph [606-10-25-1](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-1) are met, the entity shall continue to do all of the following: 1. a Report the nonfinancial asset in its financial statements 2. b Recognize depreciation expense as a period cost unless the assets have been classified as held for sale in accordance with paragraphs [360-10-45-9 through 45-10](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) 3. c Apply the impairment guidance in Section 360-10-35. ### Impairment or Disposal of Long-Lived Assets #### Long-Lived Assets to Be Exchanged or to Be Distributed to Owners in a Spinoff ##### [360-10-40-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:801baed88d5df1e97265ab862bebcd91b5c87ec1b1610da2291bd49c73376058 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of this Subtopic, a long-lived asset to be disposed of in an exchange measured based on the recorded amount of the nonmonetary asset relinquished or to be distributed to owners in a spinoff is disposed of when it is exchanged or distributed. If the asset ([asset group](https://asc.understandingaccounting.org/glossary/a/#asset-group "An asset group is the unit of accounting for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.")) is tested for recoverability while it is classified as held and used, the estimates of future cash flows used in that test shall be based on the use of the asset for its remaining useful life, assuming that the disposal transaction will not occur. In such a case, an undiscounted cash flows recoverability test shall apply prior to the disposal date. In addition to any [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") losses required to be recognized while the asset is classified as held and used, an impairment loss, if any, shall be recognized when the asset is disposed of if the carrying amount of the asset ([disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.")) exceeds its fair value. The provisions of this Section apply to nonmonetary exchanges that are not recorded at fair value under the provisions of Topic 845. #### Recognition of Gain or Loss from Sale ##### [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:3f2ca14bb0cdaca7e12c99be100998b389f47a3aff397abf96dec9eb0c4884c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A gain or loss not previously recognized that results from the sale of a long-lived asset (disposal group) shall be recognized when the long-lived asset (disposal group) is derecognized in accordance with applicable Topics (for example, Topic 610 on other income, Topic 810 on consolidation, or Topic 860 on transfers and servicing). #### Long-Lived Assets to Be Abandoned ##### [360-10-40-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:05:57.844Z to 2026-09-10T00:05:57.844Z Record version: sha256:96248d75c187102ef4ad930f8a386dc77a91afda320caf3456bc0d9a75791db3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [360-10-35-47 through 35-48](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-47) for guidance related to the disposition of an asset upon its abandonment. Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:3bfbe6dc0d2e817e1c796a8ab090e7bd077e64ca1b7ae26e6c23989ef45c47c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/10/#45-other-presentation-matters) SEC content: no #### Planned Major Maintenance Activities ##### [360-10-45-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:add05070cd26e4bcb5a73baf401482dee45cbc468cd8786c38dccdf488ec17ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall apply the same method of accounting for planned major maintenance activities in annual and interim financial reporting periods. ### Impairment or Disposal of Long-Lived Assets ##### [360-10-45-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:61058109ebf5e0b1bf53d234bb64cd8428c50658a8b04d061f7ce1a10051d8ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection presents guidance for the presentation of [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") or disposal of long-lived assets or asset groups that are classified as: 1. a Held and used 2. b Held for sale 3. c To be disposed of other than by sale. ##### [360-10-45-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:07bdf2fe7e59b0315e433e04f415ddf9af36cac73c023ebfb76949de3c27a294 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [205-20-45-1A through 45-11](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) for guidance on the presentation of operations of a discontinued operation. #### Long-Lived Assets Classified as Held and Used ##### [360-10-45-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:b59e9a23cc19d191c5bcfa7b13ab1dcfb15dd86aaa8834d3d46db414f7c496d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An impairment loss recognized for a long-lived asset ([asset group](https://asc.understandingaccounting.org/glossary/a/#asset-group "An asset group is the unit of accounting for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.")) to be held and used shall be included in income from continuing operations before income taxes in the income statement of a business entity. If a subtotal such as income from operations is presented, it shall include the amount of that loss. ##### [360-10-45-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:c5c4707daf1a4480a5241567ae06c40c344edcb4d0773dca97c2053a73321e28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A gain or loss recognized (see Subtopic 610-20 on the sale or transfer of a nonfinancial asset) on the sale of a long-lived asset ([disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.")) that is not a discontinued operation shall be included in income from continuing operations before income taxes in the income statement of a business entity. If a subtotal such as income from operations is presented, it shall include the amounts of those gains or losses. ##### [360-10-45-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:d992f3aeb5a66176a63c3401aaf2af0f9521313095f5dae2ad5da3c6a9c266c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If circumstances arise that previously were considered unlikely and, as a result, an entity decides not to sell a long-lived asset (disposal group) previously classified as held for sale, the asset (disposal group) shall be reclassified as held and used. ##### [360-10-45-7](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:2aeba2d6759329f84f0aaf04f4751f62f7557979aba46228da336c3c1d0d5438 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any required adjustment to the carrying amount of a long-lived asset that is reclassified as held and used shall be included in income from continuing operations in the period of the subsequent decision not to sell. That adjustment shall be reported in the same income statement caption used to report a loss, if any, recognized in accordance with paragraph [360-10-45-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-5). If a component of an entity is reclassified as held and used, the results of operations of the component previously reported in discontinued operations in accordance with paragraph [205-20-45-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3) shall be reclassified and included in income from continuing operations for all periods presented. ##### [360-10-45-8](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:f81477663b9e73aabb2474197eff05434cb11c53220ee4532769597428c8feb8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any long-lived assets that will not be sold shall be reclassified as held and used in accordance with paragraph [360-10-35-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-44). #### Long-Lived Assets Classified as Held for Sale ##### [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:1aa890300e8b4b9443a7dbc8b718712c1d68c87be9053910054076aa19efd83a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which all of the following criteria are met: 1. a Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group). 2. b The asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups). (See Examples 5 through 7 \[paragraphs [360-10-55-37 through 55-41](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-37) \], which illustrate when that criterion would be met.) 3. c An active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated. 4. d The sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale, within one year, except as permitted by paragraph [360-10-45-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11). (See Example 8 \[paragraph [360-10-55-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-43)\], which illustrates when that criterion would be met.) The term [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") refers to a future sale that is likely to occur. 5. e The asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value. The price at which a long-lived asset (disposal group) is being marketed is indicative of whether the entity currently has the intent and ability to sell the asset (disposal group). A market price that is reasonable in relation to fair value indicates that the asset (disposal group) is available for immediate sale, whereas a market price in excess of fair value indicates that the asset (disposal group) is not available for immediate sale. 6. f Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. ##### [360-10-45-10](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:5f2369c100a14e6b1ae461e4c7cda6fc8943dcd2198aba4e6ce9f777d143627c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If at any time the criteria in this Subsection are no longer met (except as permitted by the following paragraph), a long-lived asset (disposal group) classified as held for sale shall be reclassified as held and used in accordance with paragraph [360-10-35-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-44). ##### [360-10-45-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:01781897744b8d49d7263264c61f0b47f4a27540a1971693b37d6b97fc12cb5a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Events or circumstances beyond an entity's control may extend the period required to complete the sale of a long-lived asset (disposal group) beyond one year. An exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) shall apply in the following situations in which such events or circumstances arise: 1. a If at the date an entity commits to a plan to sell a long-lived asset (disposal group) the entity reasonably expects that others (not a buyer) will impose conditions on the transfer of the asset (group) that will extend the period required to complete the sale and both of the following conditions are met: 1. 1 Actions necessary to respond to those conditions cannot be initiated until after a [firm purchase commitment](https://asc.understandingaccounting.org/glossary/f/#firm-purchase-commitment "A firm purchase commitment is an agreement with an unrelated party, binding on both parties and usually legally enforceable, that meets both of the following conditions: It specifies all significant terms, including the price and timing of the transaction. It includes a disincentive for nonperformance that is sufficiently large to make performance probable.") is obtained. 2. 2 A firm purchase commitment is probable within one year. (See Example 9 \[paragraph [360-10-55-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-44)\], which illustrates that situation.) 2. b If an entity obtains a firm purchase commitment and, as a result, a buyer or others unexpectedly impose conditions on the transfer of a long-lived asset (disposal group) previously classified as held for sale that will extend the period required to complete the sale and both of the following conditions are met: 1. 1 Actions necessary to respond to the conditions have been or will be timely initiated. 2. 2 A favorable resolution of the delaying factors is expected. (See Example 10 \[paragraph [360-10-55-46](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-46)\], which illustrates that situation.) 3. c If during the initial one-year period, circumstances arise that previously were considered unlikely and, as a result, a long-lived asset (disposal group) previously classified as held for sale is not sold by the end of that period and all of the following conditions are met: 1. 1 During the initial one-year period the entity initiated actions necessary to respond to the change in circumstances. 2. 2 The asset (group) is being actively marketed at a price that is reasonable given the change in circumstances. 3. 3 The criteria in paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) are met. (See Example 11 \[paragraph [360-10-55-48](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-48)\], which illustrates that situation.) ##### [360-10-45-12](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:9b11037dbbae4a8b1136007fdcce5f57e529d3021247f88c85d52bb6dc3d458e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset (disposal group) that is newly acquired and that will be sold rather than held and used shall be classified as held for sale at the acquisition date only if the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) is met (except as permitted by the preceding paragraph) and any other criteria in paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) that are not met at that date are probable of being met within a short period following the acquisition (usually within three months). ##### [360-10-45-13](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:bc7ae17cfb8a51eae0579b9662027596894096760afa4c1a8b158682f642b309 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the criteria in paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) are met after the balance sheet date but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), a long-lived asset shall continue to be classified as held and used in those financial statements when issued or when available to be issued. In addition, information required by paragraph [205-20-50-1(a)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-1) shall be disclosed in the notes to financial statements. If the asset (asset group) is tested for recoverability (on a held-and-used basis) as of the balance sheet date, the estimates of future cash flows used in that test shall consider the likelihood of possible outcomes that existed at the balance sheet date, including the assessment of the likelihood of the future sale of the asset. That assessment made as of the balance sheet date shall not be revised for a decision to sell the asset after the balance sheet date. Because it is difficult to separate the benefit of hindsight when assessing conditions that existed at a prior date, it is important that judgments about those conditions, the need to test an asset for recoverability, and the application of a recoverability test be made and documented together with supporting evidence on a timely basis. An impairment loss, if any, to be recognized shall be measured as the amount by which the carrying amount of the asset (asset group) exceeds its fair value at the balance sheet date. ##### [360-10-45-14](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:682bba7a6a71b47a2cc4e18eeea4892f6185a1df1601fd72ac0f77a0b6ea4a9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset classified as held for sale (but not qualifying for presentation as a discontinued operation in the statement of financial position in accordance with paragraph [205-20-45-10](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-10)) shall be presented separately in the statement of financial position of the current period. The assets and liabilities of a disposal group classified as held for sale shall be presented separately in the asset and liability sections, respectively, of the statement of financial position. Those assets and liabilities shall not be offset and presented as a single amount. The major classes of assets and liabilities classified as held for sale shall be separately presented on the face of the statement of financial position or disclosed in the notes to financial statements (see paragraph [360-10-50-3(e)](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3)). #### Long-Lived Assets to Be Disposed of Other Than by Sale ##### [360-10-45-15](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:01.538Z to 2026-09-10T00:06:01.538Z Record version: sha256:e0fc3754acd0a3b3a000ba7b05417f9d1d737863bb223bdc23bd1781e389d95d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset to be disposed of other than by sale (for example, by abandonment, in an exchange measured based on the recorded amount of the nonmonetary asset relinquished, or in a distribution to owners in a spinoff) shall continue to be classified as held and used until it is disposed of. The guidance on long-lived assets to be held and used in Sections 360-10-35, 360-10-45, and 360-10-50 shall apply while the asset is classified as held and used. If a long-lived asset is to be abandoned or distributed to owners in a spinoff together with other assets (and liabilities) as a group and that disposal group meets the conditions in paragraphs [205-20-45-1A through 45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) to be reported in discontinued operations, paragraphs [205-20-45-3 through 45-5](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3) shall apply to the disposal group at the date it is disposed of. Source downloaded (UTC): 2026-09-10T00:06:03.812Z to 2026-09-10T00:06:03.812Z Record version: sha256:055f24b66227d89fe1eb1fed7c9e3023db71a94e9e13981a97872cec5b62728c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/10/#50-disclosure) SEC content: no ##### [360-10-50-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:03.812Z to 2026-09-10T00:06:03.812Z Record version: sha256:a703492d5df30053535658d2235dece01d0fc52c6f1808212965d848e5d1a365 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because of the significant effects on financial position and results of operations of the depreciation method or methods used, all of the following disclosures shall be made in the financial statements or in notes thereto: 1. a Depreciation expense for the period 2. b Balances of major classes of depreciable assets, by nature or function, at the balance sheet date 3. c Accumulated depreciation, either by major classes of depreciable assets or in total, at the balance sheet date 4. d A general description of the method or methods used in computing depreciation with respect to major classes of depreciable assets. ### Impairment or Disposal of Long-Lived Assets #### Impairment of Long-Lived Assets Classified as Held and Used ##### [360-10-50-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-2) Pending content: yes Source downloaded (UTC): 2026-09-10T00:06:03.812Z to 2026-09-10T00:06:03.812Z Record version: sha256:7d557fca04db39dc6f8f612a4d49c83e6a39902bdeafd5fd7801399d64e93fbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following information shall be disclosed in the notes to financial statements that include the period in which an [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") loss is recognized: 1. a A description of the impaired long-lived asset ([asset group](https://asc.understandingaccounting.org/glossary/a/#asset-group "An asset group is the unit of accounting for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.")) and the facts and circumstances leading to the impairment 2. b If not separately presented on the face of the statement, the amount of the impairment loss and the caption in the income statement or the statement of activities that includes that loss 3. c The method or methods for determining fair value (whether based on a quoted market price, prices for similar assets, or another valuation technique) 4. d If applicable, the segment in which the impaired long-lived asset (asset group) is reported under Topic 280. 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)All of the following information shall be disclosed in the notes to financial statements that include the period in which an [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") loss is recognized: 1. a A description of the impaired long-lived asset ([asset group](https://asc.understandingaccounting.org/glossary/a/#asset-group "An asset group is the unit of accounting for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.")) and the facts and circumstances leading to the impairment 2. b If not separately presented on the face of the statement, the amount of the impairment loss and the caption in the income statement or the statement of activities that includes that loss 3. c The method or methods for determining fair value (whether based on a quoted market price, prices for similar assets, or another valuation technique) 4. d If applicable, the segment in which the impaired long-lived asset (asset group) is reported under Topic 280. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. #### Long-Lived Assets Classified as Held for Sale or Disposed Of ##### [360-10-50-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3) Pending content: yes Source downloaded (UTC): 2026-09-10T00:06:03.812Z to 2026-09-10T00:06:03.812Z Record version: sha256:a1f9f9786997ca082c9771f9bae5033a949852dbade4125ecf841403dee1754d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For any period in which a long-lived asset ([disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.")) either has been disposed of or is classified as held for sale (see paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9)), an entity shall disclose all of the following in the notes to financial statements: 1. a A description of the facts and circumstances leading to the disposal or the expected disposal. 2. b The expected manner and timing of that disposal. 3. c The gain or loss recognized in accordance with paragraphs [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37) and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5). 4. d If not separately presented on the face of the statement where net income is reported (or in the statement of activities for a not-for-profit entity), the caption in the statement where net income is reported (or in the statement of activities for a not-for-profit entity) that includes that gain or loss. 5. e If not separately presented on the face of the statement of financial position, the carrying amount(s) of the major classes of assets and liabilities included as part of a disposal group classified as held for sale. Any loss recognized on the disposal group classified as held for sale in accordance with paragraphs [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37) and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5) shall not be allocated to the major classes of assets and liabilities of the disposal group. 6. f If applicable, the segment in which the long-lived asset (disposal group) is reported under Topic 280 on segment reporting. 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 any period in which a long-lived asset ([disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.")) either has been disposed of or is classified as held for sale (see paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9)), an entity shall disclose all of the following in the notes to financial statements: 1. a A description of the facts and circumstances leading to the disposal or the expected disposal. 2. b The expected manner and timing of that disposal. 3. c The gain or loss recognized in accordance with paragraphs [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37) and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5). 4. d If not separately presented on the face of the statement where net income is reported (or in the statement of activities for a not-for-profit entity), the caption in the statement where net income is reported (or in the statement of activities for a not-for-profit entity) that includes that gain or loss. 5. e If not separately presented on the face of the statement of financial position, the carrying amount(s) of the major classes of assets and liabilities included as part of a disposal group classified as held for sale. Any loss recognized on the disposal group classified as held for sale in accordance with paragraphs [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37) and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5) shall not be allocated to the major classes of assets and liabilities of the disposal group. 6. f If applicable, the segment in which the long-lived asset (disposal group) is reported under Topic 280 on segment reporting. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. ##### [360-10-50-3A](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3A) Pending content: yes Source downloaded (UTC): 2026-09-10T00:06:03.812Z to 2026-09-10T00:06:03.812Z Record version: sha256:da2f3f4845f665d8a9c5a7aeda41ffece01d72e5a14b35a06d5acc1640222e1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition to the disclosures in paragraph [360-10-50-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3), if a long-lived asset (disposal group) includes an individually significant [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") that either has been disposed of or is classified as held for sale (see paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9)) and does not qualify for presentation and disclosure as a discontinued operation (see Subtopic 205-20 on discontinued operations), a [public business entity](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC.") and a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market shall disclose the information in (a). All other entities shall disclose the information in (b). 1. a For a public business entity and a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, both of the following: 1. 1 The pretax profit or loss (or change in net assets for a not-for-profit entity) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity) calculated in accordance with paragraphs [205-20-45-6 through 45-9](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-6) 2. 2 If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 2. b For all other entities, both of the following: 1. 1 The pretax profit or loss (or change in net assets for a not-for-profit entity) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale calculated in accordance with paragraphs [205-20-45-6 through 45-9](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-6) 2. 2 If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the period in which it is disposed of or is classified as held for sale. 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)In addition to the disclosures in paragraph [360-10-50-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3), if a long-lived asset (disposal group) includes an individually significant [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") that either has been disposed of or is classified as held for sale (see paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9)) and does not qualify for presentation and disclosure as a discontinued operation (see Subtopic 205-20 on discontinued operations), a [public business entity](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC.") and a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market shall disclose the information in (a). All other entities shall disclose the information in (b). The following disclosures are required in interim and annual reporting periods: 1. a For a public business entity and a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, both of the following: 1. 1 The pretax profit or loss (or change in net assets for a not-for-profit entity) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity) calculated in accordance with paragraphs [205-20-45-6 through 45-9](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-6) 2. 2 If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 2. b For all other entities, both of the following: 1. 1 The pretax profit or loss (or change in net assets for a not-for-profit entity) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale calculated in accordance with paragraphs [205-20-45-6 through 45-9](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-6) 2. 2 If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the period in which it is disposed of or is classified as held for sale. #### Foreclosed Properties Held for Sale ##### [360-10-50-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:03.812Z to 2026-09-10T00:06:03.812Z Record version: sha256:bf2f7621c7f44e6af9c5be892af9f440374ecb8748dbc0c4391224c10ba16b1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [310-10-50-11](https://asc.understandingaccounting.org/asc/310/10/#310-10-50-11) for guidance related to foreclosed and repossessed assets. Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:f6d8ba7344b2396f284ffdb4d363f9e28c293c51f2fc939de943ea140d1ac2ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/10/#55-implementation-guidance-and-illustrations) SEC content: no ### Impairment or Disposal of Long-Lived Assets #### Implementation Guidance ##### [360-10-55-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:5bfb93aa8e920f8da24398f219e3519210951d80f3f103e93f9d9c0681b9768b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance demonstrates the consideration of restoration and environmental exit costs when testing a long-lived asset for [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value."). Paragraphs [360-10-35-18 through 35-19](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-18) also provide guidance for such testing for assets subject to asset retirement obligations. ##### [360-10-55-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:0bae5c3823b8538cdcde9b7b96da889fc011475e78ca10cf290e1d1154665e02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For certain assets covered by this Subtopic, costs for future site restoration or closure (environmental exit costs) may be incurred if the asset is sold, is abandoned, or ceases operations. Environmental exit costs within the scope of this Subsection include: 1. a Asset retirement costs recognized pursuant to Subtopic 410-20 2. b Asset retirement costs that have not been recognized because the obligation has not been incurred 3. c Certain environmental remediation costs that have not yet been recognized as a liability pursuant to Subtopic 410-30. ##### [360-10-55-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:30fecc7d0f89224d68e2a35e1e7f3670b41b4441924c6911ff513afe173b8790 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to Subtopic 410-20, asset retirement costs may be incurred over more than one reporting period. For example, the liability for performing certain capping, closure, and postclosure activities in connection with operating a landfill is incurred as the landfill receives waste. ##### [360-10-55-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:9bb5552a9488963ff046bbfad5c43cf51fa1ccd8b80ba820db3321075575abb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The related cash flows, if any, might not occur until the end of the asset's life if the asset ceases operations, or they might be deferred indefinitely as long as the asset is not sold or abandoned. ##### [360-10-55-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:041e8dc4c12c677a5a3db1973f40b5d0f166b1c9b1112868c3549b2ce759e417 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The issue is whether the cash flows associated with environmental exit costs that may be incurred if a long-lived asset is sold, is abandoned, or ceases operations should be included in the undiscounted expected future cash flows used to test a long-lived asset for recoverability under this Subtopic. ##### [360-10-55-6](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:1881bb10c27183ab2ffca68019a063b216c495eb6075a3badfe29abd50e3daa2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For environmental exit costs that have not been recognized as a liability for accounting purposes, whether those environmental exit costs shall be included in the undiscounted expected future cash flows used to test a long-lived asset for recoverability under this Subtopic depends on management's intent with respect to the asset. Pursuant to this Subtopic, if management's intent contemplates alternative courses of action to recover the carrying amount of the asset or if a range is estimated for the amount of possible future cash flows, the likelihood of those possible outcomes shall be considered. Examples of management's intent and the corresponding treatment of the environmental exit costs in this Subtopic's recoverability test are described below. (Environmental remediation costs discussed in certain of these cases refer to environmental remediation costs that have not yet been recognized as a liability pursuant to Subtopic 410-30.) This paragraph illustrates the guidance in paragraphs [360-10-35-29 through 35-35](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-29) on estimating future cash flows used to test a long-lived asset for recoverability. ##### [360-10-55-7](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:c5c019991a36fd4384caab03ba74ba5bd5c85f0d493639874313bc565db7650a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance demonstrates the consideration of restoration and environmental exit costs when testing a long-lived asset for impairment. In all of the following situations, environmental exit costs would be excluded from this Subtopic's recoverability test. ##### [360-10-55-8](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:6ec09c49de8cfdecd1565bb8ebee262858fe1db8c4a077ac828b4c9136288044 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management intends to operate the asset for at least the asset's remaining depreciable life, the sum of the undiscounted future cash flows expected from the asset's use during that period exceeds the asset's carrying amount including any associated goodwill, and management has no reason to believe that the asset's eventual disposition will result in a net cash outflow. ##### [360-10-55-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:f430e5416cd0d94adfb906d677b79454f5c453adb8f5f0aecf828dd509fee7c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management expects to operate the asset indefinitely and has the ability to do so, the asset is generating positive cash flows, management's best information indicates that the asset will continue to be profitable in the future, and there are no known constraints to the asset's economic life. This Subtopic's recoverability test shall include the future cash outflows for repairs, maintenance, and capital expenditures necessary to obtain the future cash inflows expected to be generated by the asset based on its existing service potential. ##### [360-10-55-10](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:63f6f1dde2b3fe7de3e3755bef1c76e89e3996f4f12fa7a45ebebff063323dd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The asset has a finite economic life, but environmental remediation costs will only be incurred if the asset is sold or abandoned. At the end of the asset's life, management intends either to close the asset permanently because the costs of remediating the asset exceed the proceeds that likely would be received if the asset were sold or, alternatively, to idle the asset by reducing production to a minimal or nominal amount. (Although the environmental remediation costs are excluded from this Subtopic's recoverability test, the recoverability test shall incorporate the entity's own assumptions about its use of the asset. That is, the recoverability test shall consider the likelihood of the alternative courses of action \[either closing or idling the asset\] and the resulting cash flows associated with those alternative courses.) ##### [360-10-55-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:51806b92f0fda59524693fa1a15932007e313ad73a545312c12c5f01b559f9e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management expects to sell the asset in the future, and the asset's sale will not require the environmental remediation costs to be incurred. (Although the environmental remediation costs are excluded from this Subtopic's recoverability test, the fair value of the asset is likely to be affected by the existence of those costs. The diminished fair value shall be considered in estimating the cash flows expected to arise from the eventual sale of the asset.) ##### [360-10-55-12](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:d5e136bb2423ce5399e6f1bccec921b325bcbee6e5ed058e9d53bf85fa4af43f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance demonstrates the consideration of restoration and environmental exit costs when testing a long-lived asset for impairment. In all of the following situations, environmental exit costs would be included in this Subtopic's recoverability test. ##### [360-10-55-13](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:1905544eda3f70829e2cda3407c1e5f322b9bfdba8eddbff074735de61600fd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management expects to take a future action related to the asset that may cause the environmental remediation costs to be incurred. However, uncertainties or inconsistencies exist in how the related laws or regulatory requirements are applied. Management estimates, based on the weight of the available evidence, a 60 percent chance that the remediation costs will not be incurred and a 40 percent chance that those costs will be incurred. Pursuant to this Subtopic, other situations may exist in which cash flows are estimated using a single set or best estimate of cash flows. ##### [360-10-55-14](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:ef4af981c7d21a47a2b1ba30ede94264fda35f0388aa2ee18267b343596ae8c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The useful life of the asset is limited as a result of any of the following: 1. a Actual or expected technological advances 2. b Contractual provisions 3. c Regulatory restrictions. Also, when the asset's service potential has ended, management will be required to dispose of the asset under paragraph [360-10-55-16](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-16) or [360-10-55-17](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-17). ##### [360-10-55-15](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:7f5481bb0c38d17fce733251008c8011336b9bf93fe2466ebe0c57a950b19c20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The asset has a current period cash flow loss from operations combined with a projection or forecast that anticipates continuing losses. Management expects the asset to achieve profitability in the future but uncertainty exists about management's ability to fund the future cash outflows up to the time that net cash inflows are expected from the asset's use. In the event of a forced liquidation, management would likely dispose of the asset under the following paragraph or paragraph [360-10-55-17](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-17). ##### [360-10-55-16](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:0ef5c012198874fb70c8c76e16f2a8cf27afbab3e2acba76fa4b1b00d58f7c97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management intends to abandon or close the asset in the future, and the event of abandonment or closure will cause the environmental remediation costs to be incurred. ##### [360-10-55-17](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:8361af7148844aa88614be8a0e1e140301930eb7f23908cf96339fd54c681bab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management intends to sell the asset in the future, and the applicable laws, regulations, or interpretations thereof require that appropriate environmental remediation (not within the scope of Subtopic 410-20) occur in connection with the sale. ##### [360-10-55-18](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:bb835bec1b4e5280c116393536b4b8eb51e90b00c5697091aa14fc887d162425 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management expects to operate the asset for the remainder of its useful life. Related asset retirement costs are incurred over the life of the asset (for example, the operation of a landfill). Estimated cash flows associated with the asset retirement costs yet to be incurred and recognized shall be included in this Subtopic's recoverability test. ##### [360-10-55-18A](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-18A) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:57c73fb7589c795f6c82cbcc1994b025447bc09ef3b337b5db9b395c1115c5e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following flowchart provides an overview of the disclosures required for disposals of long-lived assets and individually significant components of an entity that do not qualify for presentation and disclosure as a discontinued operation (see Subtopic 205-20 on discontinued operations). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C01B2D26-66C6-4A65-AD77-F3F089D2CCDA-low.gif) "Does the disposal meet the criteria in paragraphs 205-20-45-1A through 45-1C?" "For any period in which a long-lived asset (disposal group) either has been disposed of or is classified as held for sale (see paragraph 360-10-45-9), disclose all of the following in the notes to financial statements (see paragraph 360-10-50-3):" Disposal qualifies as a discontinued operation. See the flowchart in paragraph 205-20-55-82 for the required disclosures for a discontinued operation. Yes a. A description of the facts and circumstances leading to the disposal or expected disposal. b. The expected manner and timing of that disposal. "e. If not separately presented on the face of the statement of financial position, the carrying amount(s) of the major classes of assets and liabilities included as part of the disposal group classified as held for sale." c. The gain or loss recognized in accordance with paragraphs 360-10-35-37 through 35-45 and 360-10-40-5. "d. If not separately presented on the face of the statement where net income is reported (or statement of activities), the caption in the statement where net income is reported (or statement of activities) that includes that gain or loss." "f. If applicable, the segment in which the long-lived asset (disposal group) is reported under Topic 280 on segment reporting." "Does the long-lived asset include an individually significant component of an entity that either has been disposed of or is classified as held for sale?" Disclosures are complete. No Yes "Is the entity a public business entity or a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market?" "Disclose both of the following in the notes to financial statements (see paragraph 360-10-50-3A(a)):" Disclose both of the following in the notes to financial statements (see paragraph 360-10-50-3A(b)): 1. Pretax profit or loss (or change in net assets) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities) calculated in accordance with paragraphs 205-20-45-6 through 45-9. "2. If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets) attributable to the parent for the period in which it is disposed of or is classified as held for sale and for all prior periods that are presented in the statement where net income is reported (or statement of activities)." 1. Pretax profit or loss (or change in net assets) of the individually significant component of an entity for the period in which it is disposed of or is classified as held for sale calculated in accordance with paragraphs 205-20-45-6 through 45-9. "2. If the individually significant component of an entity includes a noncontrolling interest, the pretax profit or loss (or change in net assets) attributable to the parent for the period in which it is disposed of or is classified as held for sale." No No Yes Required Disclosures for the Disposal of an Asset and Component of an Entity #### Illustrations ##### [360-10-55-19](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:a1088fa76e34b28ca4411667367f179e8eb8a876e71f842e3a5ff02d23d11249 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Examples illustrate application of some of the provisions of this Subtopic. The Examples do not address all possible situations or applications of this Subtopic. ##### [360-10-55-20](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:db79b1aceaafe70f81561953d0a9a43a6bb34fcf1c34caaa28a361dba71c712e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the allocation of an impairment loss to the long-lived assets of an [asset group](https://asc.understandingaccounting.org/glossary/a/#asset-group "An asset group is the unit of accounting for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.") (see paragraph [360-10-35-28](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-28)). ##### [360-10-55-21](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:b2bce6906f4767b3fca92ee478635bcd37d5eeeb49a6ca56cf025ee09e028566 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity owns a manufacturing facility that together with other assets is tested for recoverability as a group. In addition to long-lived assets (Assets A-D), the asset group includes inventory measured using first-in, first-out (FIFO), which is reported at the lower of cost and [net realizable value](https://asc.understandingaccounting.org/glossary/n/#net-realizable-value "Estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.") in accordance with Topic 330, and other current assets and liabilities that are not covered by this Subtopic. The $2.75 million aggregate carrying amount of the asset group is not recoverable and exceeds its fair value by $600,000. In accordance with paragraph [360-10-35-28](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-28), the impairment loss of $600,000 would be allocated as shown below to the long-lived assets of the group. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-8FC98CC6-9F79-4B79-90EE-C6D13AC67187-low.gif) Asset Group Carrying Amount (in $ 000s) Pro Rata Allocation Factor Allocation of Impairment (Loss) (in $ 000s) Adjusted Carrying Amount (in $ 000s) Current assets $400 - $- $400 Liabilities (150) - - (150) Long-lived assets: Asset A 590 24% (144) 446 Asset B 780 31 (186) 594 Asset C 950 38 (228) 722 Asset D 180 7 (42) 138 Subtotal—long-lived assets " 2,500 " 100 (600) " 1,900 " Total " $2,750 " 100% $(600) " $2,150 " ##### [360-10-55-22](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:05573766a5f789494bde6dd64c3122e6609577a08bd3828e215e8235623453ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the fair value of an individual long-lived asset of an asset group is determinable without undue cost and effort and exceeds the adjusted carrying amount of that asset after an impairment loss is allocated initially, the excess impairment loss initially allocated to that asset would be reallocated to the other long-lived assets of the group. For example, if the fair value of Asset C is $822,000, the excess impairment loss of $100,000 initially allocated to that asset (based on its adjusted carrying amount of $722,000) would be reallocated as shown below to the other long-lived assets of the group on a pro rata basis using the relative adjusted carrying amounts of those assets. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-30155C57-8514-4CEE-971F-42AD9EF8C918-low.gif) Long-Lived Assets of Asset Group Adjusted Carrying Amount (in $ 000s) Pro Rata Reallocation Factor Reallocation of Excess Impairment (Loss) (in $ 000s) Adjusted Carrying Amount after Reallocation (in $ 000s) Asset A $446 38% $(38) $408 Asset B 594 50 (50) 544 Asset D 138 12 (12) 126 Subtotal " 1,178 " 100% (100) " 1,078 " Asset C 722 100 822 Total—long-lived assets " $1,900 " $- " $1,900 " ##### [360-10-55-23](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:f8166f10e3f1ab00ac400ca90d95951b8158d3a81c8e810f05c9dce4a33dd563 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the use of a probability-weighted approach for developing estimates of future cash flows used to test a long-lived asset for recoverability when alternative courses of action are under consideration (see paragraph [360-10-35-30](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-30)). This Example has the following Cases: 1. a Probability-weighted cash flows (Case A) 2. b Expected cash flows technique (Case B). ##### [360-10-55-24](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:30f55d3ba33e13942587fdff1e4839c9a2341e401ce1e8cce48d883081350554 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A and B share all of the following assumptions. ##### [360-10-55-25](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:dab032751beeda89b33f1ea200b05d18eaa87723d345a57b41ab40ae5a7584cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As of December 31, 20X2, a manufacturing facility with a carrying amount of $48 million is tested for recoverability. At that date, 2 courses of action to recover the carrying amount of the facility are under consideration—sell in 2 years or sell in 10 years (at the end of its remaining useful life). ##### [360-10-55-26](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:b9d2a36c401d23b99fbc9924195b058f4a679ed12f47b391fc0912a68bcc226b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The possible cash flows associated with each of those courses of action are $41 million and $48.7 million, respectively. They are developed based on entity-specific assumptions about future sales (volume and price) and costs in varying scenarios that consider the likelihood that existing customer relationships will continue, changes in economic (market) conditions, and other relevant factors. ##### [360-10-55-27](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:170c97277dfc1c03b72a3100585022a70685fff3c61f1064ab615b028b1cefee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table shows the possible cash flows associated with each of the courses of action—sell in 2 years or sell in 10 years. - ![](https://asc.understandingaccounting.org/asc-img/GUID-7ED3B439-5822-4F15-9A60-FAE3E47EF30F-low.gif) Course of Action Cash Flows (Use) (in $ millions) Cash Flows (Disposition) (in $ millions) "Cash Flows (Total) (in $ millions)" Probability Assessment Possible Cash Flows (Probability-Weighted) (in $ millions) Sell in 2 years $8 $30 $38 20% $7.6 11 30 41 50 20.5 13 30 43 30 12.9 $41.0 Sell in 10 years 36 1 37 20% $7.4 48 1 49 50 24.5 55 1 56 30 16.8 $48.7 ##### [360-10-55-28](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:49bf7b463ab2a916d3c0e7aa7088ae45301483e3b5a9de75f7c7d79b172d1d1d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As further indicated in the following table, there is a 60 percent probability that the facility will be sold in 2 years and a 40 percent probability that the facility will be sold in 10 years. ##### [360-10-55-29](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:826f3d170e29d063566f6281a9ffa9b6dd79f45c2f28d342023327ac2917ea58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The alternatives of whether to sell or use an asset are not necessarily independent of each other. In many situations, after estimating the possible future cash flows relating to those potential courses of action, an entity might select the course of action that results in a significantly higher estimate of possible future cash flows. In that situation, the entity generally would use the estimates of possible future cash flows relating only to that course of action in computing future cash flows. As shown, the expected cash flows are $44.1 million (undiscounted). Therefore, the carrying amount of the facility of $48 million would not be recoverable. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-8B5F62AE-5682-4258-92D7-36E2038A2B49-low.gif) Course of Action Possible Cash Flows (Probability-Weighted) (in $ millions) Probability Assessment (Course of Action) Expected Cash Flows (Undiscounted) (in $ millions) Sell in 2 years $41.0 60% $24.6 Sell in 10 years 48.7 40 19.5 $44.1 ##### [360-10-55-30](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:25aa7f293dd0bc68cc4c4a34a7312d73fd7b1b6dc2a91455aca759ba7def9ec4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the application of an expected present value technique to estimate the fair value of a long-lived asset in an impairment situation. ##### [360-10-55-31](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:9bd3af7095055de46cb2fc37f6e63848a99f2cff313f4809d5594f933db29153 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table shows by year the computation of the expected cash flows used in the measurement. They reflect the possible cash flows (probability-weighted) used to test the manufacturing facility for recoverability in Case A, adjusted for relevant marketplace assumptions, which increases the possible cash flows in total by approximately 15 percent. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9B4FF84B-E504-412A-A07D-6D95F0A3DBEF-low.gif) Year Possible Cash Flows (Market) (in $ millions) Probability Assessment Expected Cash Flows (Undiscounted) (in $ millions) 1 $4.6 20% $0.9 6.3 50 3.2 7.5 30 2.3 $6.4 2 $4.6 20% $0.9 6.3 50 3.2 7.5 30 2.3 $6.4 3 $4.3 20% $0.9 5.8 50 2.9 6.7 30 2.0 $5.8 4 $4.3 20% $0.9 5.8 50 2.9 6.7 30 2.0 $5.8 5 $4.0 20% $0.8 5.4 50 2.7 6.4 30 1.9 $5.4 6 $4.0 20% $0.8 5.4 50 2.7 6.4 30 1.9 $5.4 7 $3.9 20% $0.8 5.1 50 2.6 5.6 30 1.7 $5.1 8 $3.9 20% $0.8 5.1 50 2.6 5.6 30 1.7 $5.1 9 $3.9 20% $0.8 5.0 50 2.5 5.5 30 1.7 $5.0 10 $4.9 20% $1.0 6.0 50 3.0 6.5 30 2.0 $6.0 ##### [360-10-55-32](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:01c1488befc8f72f2c3e6683b20b31bcb1d3b3dfdf7a269285b218adcea1b0b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table shows the computation of the expected present value; that is, the sum of the present values of the expected cash flows by year, each discounted at a risk-free interest rate determined from the yield curve for U.S. Treasury instruments. In this Case, a market risk premium is included in the expected cash flows; that is, the cash flows are certainty equivalent cash flows. As shown, the expected present value is $42.3 million, which is less than the carrying amount of $48 million. In accordance with paragraph [360-10-35-17](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-17) the entity would recognize an impairment loss of $5.7 million. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C02BFC7F-6EFA-4605-8F75-29DAEE50D9CB-low.gif) Year Expected Cash Flows (Undiscounted) (in $ millions) Risk-Free Rate of Interest Expected Present Value (in $ millions) 1 $6.4 5.0% $6.1 2 6.4 5.1 5.8 3 5.8 5.2 5.0 4 5.8 5.4 4.7 5 5.4 5.6 4.1 6 5.4 5.8 3.9 7 5.1 6.0 3.4 8 5.1 6.2 3.2 9 5.0 6.4 2.9 10 6.0 6.6 3.2 $56.4 $42.3 ##### [360-10-55-33](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:1f027ef858fd391194eef22c82ea61729fad693a4cb965ed1ae3fce6f59eea20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A long-lived asset that is under development may be part of an asset group that is in use. In that situation, estimates of future cash flows used to test the recoverability of that group shall include the cash flows associated with future expenditures necessary to maintain the existing service potential of the group as well as the cash flows associated with future expenditures necessary to substantially complete the asset that is under development (see paragraph [360-10-35-35](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-35)). ##### [360-10-55-34](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:0651a0b539306b860a7166162e40563284f578d995f70c7a25d7c71a1c432d5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity engaged in mining and selling phosphate estimates future cash flows from its commercially minable phosphate deposits in order to test the recoverability of the asset group that includes the mine and related long-lived assets (plant and equipment). Deposits from the mined rock must be processed in order to extract the phosphate. As the active mining area expands along the geological structure of the mine, a new processing plant is constructed near the production area. Depending on the size of the mine, extracting the minable deposits may require building numerous processing plants over the life of the mine. In testing the recoverability of the mine and related long-lived assets, the estimates of future cash flows from its commercially minable phosphate deposits would include cash flows associated with future expenditures necessary to build all of the required processing plants. ##### [360-10-55-35](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:f9c4997df48c33bcdfbc49bcc8840d9894b02f95e353c353903ee8bea6e81048 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Varying facts and circumstances will inevitably justify different groupings of assets for impairment review. While grouping at the lowest level for which there are identifiable cash flows for recognition and measurement of an impairment loss is understood, determining that lowest level requires considerable judgment. ##### [360-10-55-36](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:d83a171dcd373a7caafa4d673cb65257cfdac31d9bcf17251c68cf6d7efdd638 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the need for judgment in grouping assets for impairment, as discussed in paragraphs [360-10-35-23 through 35-25](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-23) . In this Example, an entity operates a bus entity that provides service under contract with a municipality that requires minimum service on each of five separate routes. Assets devoted to serving each route and the cash flows from each route are discrete. One of the routes operates at a significant deficit that results in the inability to recover the carrying amounts of the dedicated assets. The five bus routes would be an appropriate level at which to group assets to test for and measure impairment because the entity does not have the option to curtail any one bus route. ##### [360-10-55-37](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:643edd397703d96f0d8401fde83fe9957f898410819294bcebf46d648506e8e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the classification as held for sale of a long-lived asset ([disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.")) in accordance with paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9). ##### [360-10-55-38](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:eee53dd330310874c7ff326cf03a9d753b7241cdf9b9c284f85e6c374fff4fa3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity commits to a plan to sell its headquarters building and has initiated actions to locate a buyer. The following illustrate situations in which the criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would or would not be met: 1. a The entity intends to transfer the building to a buyer after it vacates the building. The time necessary to vacate the building is usual and customary for sales of such assets. The criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would be met at the plan commitment date. 2. b The entity will continue to use the building until construction of a new headquarters building is completed. The entity does not intend to transfer the existing building to a buyer until after construction of the new building is completed (and it vacates the existing building). The delay in the timing of the transfer of the existing building imposed by the entity (seller) demonstrates that the building is not available for immediate sale. The criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would not be met until construction of the new building is completed, even if a [firm purchase commitment](https://asc.understandingaccounting.org/glossary/f/#firm-purchase-commitment "A firm purchase commitment is an agreement with an unrelated party, binding on both parties and usually legally enforceable, that meets both of the following conditions: It specifies all significant terms, including the price and timing of the transaction. It includes a disincentive for nonperformance that is sufficiently large to make performance probable.") for the future transfer of the existing building is obtained earlier. ##### [360-10-55-39](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:bb83ae21b8ee83f0b833e34f8c9e0df4c915a7053a401236ce738c069f74e408 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the classification as held for sale of a long-lived asset (disposal group) in accordance with paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9). ##### [360-10-55-40](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:138a3023f21330f0481e31c1c91b0f853d421fb6084a22d2bade6346953e4648 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity commits to a plan to sell a manufacturing facility and has initiated actions to locate a buyer. At the plan commitment date, there is a backlog of uncompleted customer orders. The following illustrate situations in which the criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would or would not be met: 1. a The entity intends to sell the manufacturing facility with its operations. Any uncompleted customer orders at the sale date would transfer to the buyer. The transfer of uncompleted customer orders at the sale date will not affect the timing of the transfer of the facility. The criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would be met at the plan commitment date. 2. b The entity intends to sell the manufacturing facility, but without its operations. The entity does not intend to transfer the facility to a buyer until after it ceases all operations of the facility and eliminates the backlog of uncompleted customer orders. The delay in the timing of the transfer of the facility imposed by the entity (seller) demonstrates that the facility is not available for immediate sale. The criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would not be met until the operations of the facility cease, even if a firm purchase commitment for the future transfer of the facility is obtained earlier. ##### [360-10-55-41](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:cddf779057d1bd419c994167022332da688600236dd0053b8f29b66e0f08d3c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the classification as held for sale of a long-lived asset (disposal group) in accordance with paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9). ##### [360-10-55-42](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:8682bd3a616fe954ab16c27cad7ca80781f2189c285bc8dff434d7f5a2daf010 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity acquires through foreclosure a real estate property that it intends to sell. The following illustrate situations in which the criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would not be met: 1. a The entity does not intend to transfer the property to a buyer until after it completes renovations to increase its sales value. The delay in the timing of the transfer of the property imposed by the entity (seller) demonstrates that the property is not available for immediate sale. The criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would not be met until the renovations are completed. 2. b After the renovations are completed and the property is classified as held for sale but before a firm purchase commitment is obtained, the entity becomes aware of environmental damage requiring remediation. The entity still intends to sell the property. However, the entity does not have the ability to transfer the property to a buyer until after the remediation is completed. The delay in the timing of the transfer of the property imposed by others before a firm purchase commitment is obtained demonstrates that the property is not available for immediate sale. The criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would not continue to be met. The property would be reclassified as held and used in accordance with paragraph [360-10-45-7](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-7). ##### [360-10-55-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:cf0a90f77e6c7a91ed00f610d3a6e4f1b3231a1ce40ca53b5a003911b0ebc05f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the classification as held for sale of a long-lived asset (disposal group) in accordance with the criterion in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9). The following illustrates situations in which that criterion would not be met: 1. a An entity that is a commercial leasing and finance company is holding for sale or lease equipment that has recently come off lease and the ultimate form of a future transaction (sale or lease) has not yet been determined. 2. b An entity commits to a plan to sell an asset that is in use and lease back that asset; however, the transfer of the asset will not be accounted for as a sale and leaseback transaction because the buyer-lessor does not obtain control of the asset based on the guidance in paragraphs [842-40-25-1 through 25-3](https://asc.understandingaccounting.org/asc/842/40/#842-40-25-1) . The asset would continue to be classified as held and used following the appropriate guidance in Sections 360-10-35, 360-10-45, and 360-10-50. ##### [360-10-55-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:daf13827359ed5371441917743be22e20d4388181e4c71f477fc66c666f0bd4a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates an exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) to complete the sale of a long-lived asset (disposal group) (see paragraph [360-10-45-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11)). The following illustrates situations in which the conditions for an exception to the criterion in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would be met. ##### [360-10-55-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:131bc251a05a9207b08c5e0cac35e31babbf0984065c7dc9db292fdd0dce75d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity in the utility industry commits to a plan to sell a disposal group that represents a significant portion of its regulated operations. The sale will require regulatory approval, which could extend the period required to complete the sale beyond one year. Actions necessary to obtain that approval cannot be initiated until after a buyer is known and a firm purchase commitment is obtained. However, a firm purchase commitment is probable within one year. In that situation, the conditions in paragraph [360-10-45-11(a)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11) for an exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would be met. ##### [360-10-55-46](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:52758d8397a4e98ac4ed54475bd8797e76be934ea931e8b30cad9b10a3643f57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates an exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) to complete the sale of a long-lived asset (disposal group) (see paragraph [360-10-45-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11)). The following illustrates a situation in which the conditions for an exception to the criterion in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would be met. ##### [360-10-55-47](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:d176610d14ddc884e2f75ed9392545f3e64a4016511d744804e4e583bd37b024 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity commits to a plan to sell a manufacturing facility in its present condition and classifies the facility as held for sale at that date. After a firm purchase commitment is obtained, the buyer's inspection of the property identifies environmental damage not previously known to exist. The entity is required by the buyer to remediate the damage, which will extend the period required to complete the sale beyond one year. However, the entity has initiated actions to remediate the damage, and satisfactory remediation of the damage is probable. In that situation, the conditions in paragraph [360-10-45-11(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11) for an exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would be met. ##### [360-10-55-48](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:46a6bb1a7aae13b4d8dfae6e51f2ae7e130afb4dceebb473976efafc01ba8294 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates an exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) to complete the sale of a long-lived asset (disposal group) (see paragraph [360-10-45-11](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11)). ##### [360-10-55-49](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:64f4f2d96eee7fd5c88e83e40ba7af1923094a6b257ee7c8b17f3a48b11b84f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity commits to a plan to sell a long-lived asset and classifies the asset as held for sale at that date. The following illustrates situations in which the conditions for an exception to the criterion in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would or would not be met: 1. a During the initial one-year period, the market conditions that existed at the date the asset was classified initially as held for sale deteriorate and, as a result, the asset is not sold by the end of that period. During that period, the entity actively solicited but did not receive any reasonable offers to purchase the asset and, in response, reduced the price. The asset continues to be actively marketed at a price that is reasonable given the change in market conditions, and the criteria in paragraph [360-10-45-9](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) are met. In that situation, the conditions in paragraph [360-10-45-11(c)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11) for an exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would be met. At the end of the initial one-year period, the asset would continue to be classified as held for sale. 2. b During the following one-year period, market conditions deteriorate further, and the asset is not sold by the end of that period. The entity believes that the market conditions will improve and has not further reduced the price of the asset. The asset continues to be held for sale, but at a price in excess of its current fair value. In that situation, the absence of a price reduction demonstrates that the asset is not available for immediate sale as required by the criterion in paragraph [360-10-45-9(b)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9). In addition, the criterion in paragraph [360-10-45-9(e)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) requires that an asset be marketed at a price that is reasonable in relation to its current fair value. Therefore, the conditions in paragraph [360-10-45-11(c)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-11) for an exception to the one-year requirement in paragraph [360-10-45-9(d)](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-9) would not be met. The asset would be reclassified as held and used in accordance with paragraph [360-10-35-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-44). ##### [360-10-55-50](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:fbd21dcc0790715e49bf82da5f6284e7e3bc3c1a9da3351516d517df9539eca9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Offshore Industries is a manufacturer of offshore drilling rigs and platforms. The entity's manufacturing process requires significant specialized equipment, which it currently owns. As a result of a decline in the price of oil, the demand for its products and services has fallen dramatically in the past two years, resulting in a significant underutilization of its manufacturing capacity. ##### [360-10-55-51](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:917f0a7545b2391a5d356d1b34ec6deb0bafb8a8184eb8e4d11fe1cfa9bc9d60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity depreciates its investments in specialized equipment based on its original estimate of the remaining useful lives of the equipment using the units-of-production method, since it believes that the exhaustion of usefulness of these specialized assets relates more to their use than to the passage of time. The entity reevaluates these estimates in light of current conditions in accordance with generally accepted accounting principles (GAAP). The entity also monitors the policies of its major competitors and is aware that several have reported large write-downs of similar assets. Nevertheless, while the entity believes that it is at least reasonably possible that its estimate that it will recover the carrying amount of those assets from future operations will change during the next year, it believes it is more likely that conditions in the industry will improve and that no write-down for impairment will be necessary. ##### [360-10-55-52](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-52) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:039dadcfadaea90b1eb5c9a68cb3814cc44c6b7994044eca1b6ee1fc9a5203b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity would make the following disclosure: - Offshore's policy is to depreciate specialized manufacturing equipment (with a net book value of $25 million at December 31, 19X7) over its remaining useful life using the units-of-production method and to evaluate the remaining life and recoverability of such equipment in light of current conditions. \[Given the excess capacity in the industry,\] it is reasonably possible that the entity's estimate that it will recover the carrying amount of this equipment from future operations will change in the near term. ##### [360-10-55-53](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-53) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:5932c1ac57f73013d362dd12c12d19c8c6834eb5847bbb26400c7a47d019538c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Regarding the preceding illustrative disclosure, if the information in the first sentence is already disclosed elsewhere in the notes, it need not be repeated. Also, the bracketed material in the second sentence represents an example of voluntary disclosure that is encouraged by paragraph [275-10-50-9](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-9). ##### [360-10-55-54](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-54) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:07.246Z to 2026-09-10T00:06:07.246Z Record version: sha256:1f79aae4edc0e1b96b6880ced69140aac04397fbac8737191d4832e6110d5e18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, the entity acknowledges that the carrying amount of the specialized assets is subject to significant uncertainty based on current conditions. The uncertainty relates to the measurement of the specialized assets at the date of the financial statements, and the entity's disclosure makes clear that it is at least reasonably possible that the carrying amount will change in the near term. Source downloaded (UTC): 2026-09-10T00:06:09.827Z to 2026-09-10T00:06:09.827Z Record version: sha256:a5272a2d458121e3b67274a0c607068251b82a32b4b38a0755d5115e8b6c71cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/360/10/#60-relationships) SEC content: no #### Real Estate—Real Estate Investment Trusts ##### [360-10-60-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:09.827Z to 2026-09-10T00:06:09.827Z Record version: sha256:323c28923cadb5f7a73ced821c2e9f8156089bfca7c536a1f7a1ed9934b28506 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a discussion of the appropriate accounting affecting property, plant, and equipment by a real estate investment trust for operating support from its adviser, see paragraph [974-720-25-2](https://asc.understandingaccounting.org/asc/720/974/#720-974-25-2). Source downloaded (UTC): 2026-09-10T00:06:15.250Z to 2026-09-10T00:06:15.250Z Record version: sha256:3306b87cb7c54f5009cb902a8292d25f932cd8396758344f9f4466df3eea28f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/10/#sec-00-status) SEC content: yes ##### [360-10-S00-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:15.250Z to 2026-09-10T00:06:15.250Z Record version: sha256:379c2e1df8ced09da0075735088df53926e0aa14088272318c40687ec1353201 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
360-10-S99-2AmendedAccounting Standards Update No. 2012-0308/27/2012
Source downloaded (UTC): 2026-09-10T00:06:18.996Z to 2026-09-10T00:06:18.996Z Record version: sha256:20ac9825f605f689494f3cccff71d98eef3328e583db56c95cb2a9ce011b366e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/10/#sec-45-other-presentation-matters) SEC content: yes #### Presentation of Disposal Gains or Losses in Continuing Operations ##### [360-10-S45-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-S45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:18.996Z to 2026-09-10T00:06:18.996Z Record version: sha256:b78b7bb3758d42f2dd38f8d97303f4045213611ce8b1558f7cfb5a50a4558971 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [360-10-S99-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-S99-1), SAB Topic 5.B, for SEC Staff views on the presentation of gains or losses from the disposition of equipment. #### Presentation of Accumulated Depreciation ##### [360-10-S45-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-S45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:18.996Z to 2026-09-10T00:06:18.996Z Record version: sha256:5edf8dd2d8c4915c4585933a0e916f6a930aac926d2f0fc5724021feba692a02 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 5-02.14, for the presentation requirements of accumulated depreciation within the balance sheet or notes thereto. ### Impairment or Disposal of Long-lived Assets #### Presentation of Disposal Gains or Losses ##### [360-10-S45-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-S45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:18.996Z to 2026-09-10T00:06:18.996Z Record version: sha256:116f334b3fad7fff3288c22319b09cc79789541740b2377f2edd045fc0316b9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [360-10-S99-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-S99-1), SAB Topic 5.B, for SEC Staff views on the presentation of gains or losses from the disposal of equipment. Source downloaded (UTC): 2026-09-10T00:06:23.052Z to 2026-09-10T00:06:23.052Z Record version: sha256:e830cd8183de01fee89adac5f0719f865f545603f425485730973b55b74a9c16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/10/#sec-50-disclosure) SEC content: yes #### Required Disclosure Regarding Basis for Determining Amounts of Property, Plant, and Equipment ##### [360-10-S50-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:23.052Z to 2026-09-10T00:06:23.052Z Record version: sha256:2368a876e28a631ed03999dec940501989724fa7f3cc067b15aacf28781352d3 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 5-02.13(a), for required disclosure regarding the basis for determining amounts of property, plant, and equipment. Source downloaded (UTC): 2026-09-10T00:06:26.889Z to 2026-09-10T00:06:26.889Z Record version: sha256:b4b6a0e217210cc00119a8becc40386c19f7c9af3415ed7f84cceb291bcaa246 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-S55: SEC 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/10/#sec-55-implementation-guidance-and-illustrations) SEC content: yes ### Impairment or Disposal of Long-lived Assets #### Long-Lived Assets to Be Abandoned ##### [360-10-S55-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-S55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:26.889Z to 2026-09-10T00:06:26.889Z Record version: sha256:d7312c10231897a445e5e3b4d893aed6fa76417f2100ca981bdfc54bfbbdfe40 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [360-10-S99-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-S99-2), SAB Topic 5.CC, for SEC Staff views on the accounting for long-lived assets that are to be abandoned in the near future. #### Estimates of Future Cash Flows Used to Test a Long-Lived Asset for Recoverability ##### [360-10-S55-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-S55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:26.889Z to 2026-09-10T00:06:26.889Z Record version: sha256:f1a28c44798dc4405ce7e5f062a3564fbd1deab3f57b158a4dd99631985c1952 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [360-10-S99-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-S99-2), SAB Topic 5.CC, for SEC Staff views on estimating future cash flows for the purposes of performing an impairment test. Source downloaded (UTC): 2026-09-10T00:06:33.252Z to 2026-09-10T00:06:33.252Z Record version: sha256:59329e2bab1c576f7631175b63964a4f906ed90d3a83559c4373acc0b13096af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-10-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/360/10/#sec-99-sec-materials) SEC content: yes ### Impairment or Disposal of Long-lived Assets #### SEC Staff Guidance ##### [360-10-S99-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:33.252Z to 2026-09-10T00:06:33.252Z Record version: sha256:69c0c77adefdad694e352061526d0c4bafcc56a03bf3a70e6f3c52ef351b3882 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 5.B, Gain or Loss from Disposition of Equipment. - Facts: Company A has adopted the policy of treating gains and losses from disposition of revenue producing equipment as adjustments to the current year's provision for depreciation. Company B reflects such gains and losses as a separate item in the statement of income. - Question: Does the staff have any views as to which method is preferable? - Interpretive Response: Gains and losses resulting from the disposition of revenue producing equipment should not be treated as adjustments to the provision for depreciation in the year of disposition, but should be shown as a separate item in the statement of income. - If such equipment is depreciated on the basis of group of composite accounts for fleets of like vehicles, gains (or losses) may be charged (or credited) to accumulated depreciation with the result that depreciation is adjusted over a period of years on an average basis. It should be noted that the latter treatment would not be appropriate for (1) an enterprise (such as an airline) which replaces its fleet on an episodic rather than a continuing basis or (2) an enterprise (such as a car leasing company) where equipment is sold after limited use so that the equipment on hand is both fairly new and carried at amounts closely related to current acquisition cost. ##### [360-10-S99-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-S99-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:33.252Z to 2026-09-10T00:06:33.252Z Record version: sha256:135b6a5626991e5b8ed3eb86a231e4509f66592a245939e5a3c513ad2ccc9a57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 5.CC, Impairments. - Standards for recognizing and measuring impairment of the carrying amount of long-lived assets including certain identifiable intangibles to be held and used in operations are found in FASB ASC Topic 360, Property, Plant, and Equipment. Standards for recognizing and measuring impairment of the carrying amount of goodwill and identifiable intangible assets that are not currently being amortized are found in FASB ASC Topic 350, Intangibles—Goodwill and Other. - Facts: Company X has mainframe computers that are to be abandoned in six to nine months as replacement computers are put in place. The mainframe computers were placed in service in January 20X0 and were being depreciated on a straight-line basis over seven years. No salvage value had been projected at the end of seven years and the original cost of the computers was $8,400. The board of directors, with the appropriate authority, approved the abandonment of the computers in March 20X3 when the computers had a remaining carrying value of $4,600. No proceeds are expected upon abandonment. Abandonment cannot occur prior to the receipt and installation of replacement computers, which is expected prior to the end of 20X3. Management had begun reevaluating its mainframe computer capabilities in January 20X2 and had included in its 20X3 capital expenditures budget an estimated amount for new mainframe computers. The 20X3 capital expenditures budget had been prepared by management in August 20X2, had been discussed with the company's board of directors in September 20X2 and was formally approved by the board of directors in March 20X3. Management had also begun soliciting bids for new mainframe computers beginning in the fall of 20X2. The mainframe computers, when grouped with assets at the lowest level of identifiable cash flows, were not impaired on a "held and used" basis throughout this time period. Management had not adjusted the original estimated useful life of the computers (seven years) since 20X0. - Question 1: Company X proposes to recognize an impairment charge under FASB ASC Topic 360 for the carrying value of the mainframe computers of $4,600 in March 20X3. Does Company X meet the requirements in FASB ASC Topic 360 to classify the mainframe computer assets as "to be abandoned?" - Interpretive Response: No. FASB ASC paragraph [360-10-35-47](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-47) provides that "a long-lived asset to be abandoned is disposed of when it ceases to be used. If an entity commits to a plan to abandon a long-lived asset before the end of its previously estimated useful life, depreciation estimates shall be revised in accordance with FASB ASC Topic 250, Accounting Changes and Error Corrections, to reflect the use of the asset over its shortened useful life." - Question 2: Would the staff accept an adjustment to write down the carrying value of the computers to reflect a "normalized depreciation" rate for the period from March 20X3 through actual abandonment (e. g., December 20X3)? Normalized depreciation would represent the amount of depreciation otherwise expected to be recognized during that period without adjustment of the asset's useful life, or $1,000 ($100/month for ten months) in the example fact pattern. - Interpretive Response: No. The mainframe computers would be viewed as "held and used" at March 20X3 under the fact pattern described. There is no basis under FASB ASC Topic 360 to write down an asset to an amount that would subsequently result in a "normalized depreciation" charge through the disposal date, whether disposal is to be by sale, abandonment, or other means. FASB ASC paragraph [360-10-35-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-43) requires the asset to be valued at the lower of carrying amount or fair value less cost to sell in order to be classified as "held for sale." For assets that are classified as "held and used" under FASB ASC Topic 360, an assessment must first be made as to whether the asset (asset group) is impaired. FASB ASC paragraph [360-10-35-17](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-17) indicates that an impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). The staff would object to a write down of long-lived assets to a "normalized depreciation" value as representing an acceptable alternative to the approaches required in FASB ASC Topic 360. - The staff also believes that registrants must continually evaluate the appropriateness of useful lives assigned to long-lived assets, including identifiable intangible assets and goodwill. In the above fact pattern, management had contemplated removal of the mainframe computers beginning in January 20X2 and, more formally, in August 20X2 as part of compiling the 20X3 capital expenditures budget. At those times, at a minimum, management should have reevaluated the original useful life assigned to the computers to determine whether a seven year amortization period remained appropriate given the company's current facts and circumstances, including ongoing technological changes in the market place. This reevaluation process should have continued at the time of the September 20X2 board of directors' meeting to discuss capital expenditure plans and, further, as the company pursued mainframe computer bids. Given the contemporaneous evidence that management's best estimate during much of 20X2 was that the current mainframe computers would be removed from service in 20X3, the depreciable life of the computers should have been adjusted prior to 20X3 to reflect this new estimate. The staff does not view the recognition of an impairment charge to be an acceptable substitute for choosing the appropriate initial amortization or depreciation period or subsequently adjusting this period as company or industry conditions change. The staff's view applies also to selection of, and changes to, estimated residual values. Consequently, the staff may challenge impairment charges for which the timely evaluation of useful life and residual value cannot be demonstrated. - Question 3: Has the staff expressed any views with respect to company-determined estimates of cash flows used for assessing and measuring impairment of assets under FASB ASC Topic 360? - Interpretive Response: In providing guidance on the development of cash flows for purposes of applying the provisions of that Topic, FASB ASC paragraph [360-10-35-30](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-30) indicates that "estimates of future cash flows used to test the recoverability of a long-lived asset (asset group) shall incorporate the entity's own assumptions about its use of the asset (asset group) and shall consider all available evidence. The assumptions used in developing those estimates shall be reasonable in relation to the assumptions used in developing other information used by the entity for comparable periods, such as internal budgets and projections, accruals related to incentive compensation plans, or information communicated to others." - The staff recognizes that various factors, including management's judgments and assumptions about the business plans and strategies, affect the development of future cash flow projections for purposes of applying FASB ASC Topic 360. The staff, however, cautions registrants that the judgments and assumptions made for purposes of applying FASB ASC Topic 360 must be consistent with other financial statement calculations and disclosures and disclosures in MD&A. The staff also expects that forecasts made for purposes of applying FASB ASC Topic 360 be consistent with other forward-looking information prepared by the company, such as that used for internal budgets, incentive compensation plans, discussions with lenders or third parties, and/or reporting to management or the board of directors. - For example, the staff has reviewed a fact pattern where a registrant developed cash flow projections for purposes of applying the provisions of FASB ASC Topic 360 using one set of assumptions and utilized a second, more conservative set of assumptions for purposes of determining whether deferred tax valuation allowances were necessary when applying the provisions of FASB ASC Topic 740, Income Taxes. In this case, the staff objected to the use of inconsistent assumptions. - In addition to disclosure of key assumptions used in the development of cash flow projections, the staff also has required discussion in MD&A of the implications of assumptions. For example, do the projections indicate that a company is likely to violate debt covenants in the future? What are the ramifications to the cash flow projections used in the impairment analysis? If growth rates used in the impairment analysis are lower than those used by outside analysts, has the company had discussions with the analysts regarding their overly optimistic projections? Has the company appropriately informed the market and its shareholders of its reduced expectations for the future that are sufficient to cause an impairment charge? The staff believes that cash flow projections used in the impairment analysis must be both internally consistent with the company's other projections and externally consistent with financial statement and other public disclosures. Source downloaded (UTC): 2026-09-10T00:06:36.995Z to 2026-09-10T00:07:04.384Z Record version: sha256:bd2e0e74435e298c503694d1ed416c6b037d6881513ec875bbb58533757468fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20: Property, Plant, and Equipment — Real Estate Sales ### Machine-generated study aids ```json { "summary": "ASC 360-20 formerly contained the specialized U.S. GAAP for recognizing profit on sales of real estate (the old FASB Statement No. 66 model with full accrual, installment, cost recovery, deposit, and percentage-of-completion methods, plus sale-leaseback and continuing-involvement rules). Every paragraph in the subtopic has been superseded — mostly by ASU 2014-09 (Revenue from Contracts with Customers) and ASU 2016-02 (Leases). Sales of real estate are now accounted for under ASC 606 if the counterparty is a customer, or under ASC 610-20 for sales of nonfinancial assets to noncustomers, with sale-leaseback transactions governed by ASC 842-40.", "key_points": [ "The entire subtopic is a shell: 360-20-05, 15, 40, 55, and 60 paragraphs are marked 'Paragraph superseded by Accounting Standards Update No. 2016-02,' and several implementation guidance paragraphs (360-20-55-11, 55-18, 55-68 through 55-77) were superseded by ASU 2014-09.", "The transition paragraphs in Section 65 are also gone: 360-20-65-1 was superseded on 03/23/2010 (end of the EITF Issue No. 07-6 buy-sell clause transition period) and 360-20-65-2 on 06/26/2015 (end of the ASU 2011-10 in-substance real estate transition period).", "Because ASU 2014-09 eliminated the real-estate-specific profit recognition model, a sale of real estate to a customer is now evaluated under ASC 606, including the control-transfer criteria in 606-10-25-30 and the repurchase-agreement guidance in 606-10-55-66 through 55-78.", "Sales or transfers of nonfinancial assets, including in-substance real estate, to counterparties that are not customers are accounted for under ASC 610-20, which applies the ASC 606 control and measurement concepts to derecognition.", "Sale-leaseback transactions involving real estate, formerly subject to the continuing-involvement and deposit-method restrictions in this subtopic, are now governed by ASC 842-40 following ASU 2016-02.", "Because no operative guidance remains, no recognition, measurement, presentation, or disclosure requirement may be sourced to 360-20; citing it as authoritative support is an error." ], "categories": [ "Derecognition", "Revenue", "Leases", "Transition and effective dates" ], "audience_level": "intermediate", "student_note": "Historically one of the most-tested areas of GAAP (full accrual vs. installment vs. deposit method), ASC 360-20 is now entirely superseded — the common mistake is applying the old adequate-initial-investment and continuing-involvement tests instead of the ASC 606/610-20 control model and ASC 842-40 for sale-leasebacks.", "related_topics": [ "606", "610-20", "842-40", "360-10", "976-605", "845" ], "key_concepts": [ "superseded guidance", "real estate sales", "profit recognition", "in-substance real estate", "sale-leaseback", "continuing involvement", "derecognition of nonfinancial assets", "transition period" ] } ``` Source downloaded (UTC): 2026-09-10T00:06:36.995Z to 2026-09-10T00:06:36.995Z Record version: sha256:863b9c4612c1ceac208fa76d960c084f1c1974bcafc3dde12a216683e24a8ac2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/20/#00-status) SEC content: no ##### [360-20-00-1](https://asc.understandingaccounting.org/asc/360/20/#360-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:36.995Z to 2026-09-10T00:06:36.995Z Record version: sha256:d1bcf9fc219443bc833993e0e40dcf74b53b70289df6be776c973e386bdb5a96 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
Conduit Debt SecuritiesSupersededAccounting Standards Update No. 2016-0202/25/2016
Conduit Debt SecurityAddedMaintenance Update 2014-20 (PDF)09/29/2014
Cost Recovery MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Deposit MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Fair Value (2nd def.)SupersededAccounting Standards Update No. 2016-0202/25/2016
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
Installment MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Integral EquipmentSupersededAccounting Standards Update No. 2016-0202/25/2016
Market ParticipantsSupersededAccounting Standards Update No. 2016-0202/25/2016
Nonpublic Entity (1st def.)SupersededAccounting Standards Update No. 2016-0202/25/2016
Nonpublic Entity (1st def.)AmendedMaintenance Update 2014-20 (PDF)09/29/2014
Orderly TransactionSupersededAccounting Standards Update No. 2016-0202/25/2016
Reduced-Profit MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
Related PartiesSupersededAccounting Standards Update No. 2016-0202/25/2016
Sale-Leaseback AccountingSupersededAccounting Standards Update No. 2016-0202/25/2016
Sale-Leaseback AccountingAddedAccounting Standards Update No. 2014-0905/28/2014
360-10-05-1SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-05-1AmendedAccounting Standards Update No. 2014-0905/28/2014
360-10-05-2SupersededAccounting Standards Update No. 2016-0202/25/2016
360-10-15-1 through 15-6
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-15-1 through 15-3
AmendedAccounting Standards Update No. 2014-0905/28/2014
360-20-15-3AmendedAccounting Standards Update No. 2011-1012/14/2011
360-20-15-4AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-5AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-7AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-8AmendedAccounting Standards Update No. 2012-0410/01/2012
360-20-15-10AmendedAccounting Standards Update No. 2016-0101/05/2016
360-20-40-1 through 40-64
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-1 through 55-10
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-2AmendedMaintenance Update 2016-17 (PDF)09/02/2016
360-20-55-3AmendedAccounting Standards Update No. 2016-1912/14/2016
360-20-55-10AmendedMaintenance Update 2016-11 (PDF)06/27/2016
360-20-55-10AmendedAccounting Standards Update No. 2014-0905/28/2014
360-20-55-11SupersededAccounting Standards Update No. 2014-0905/28/2014
360-20-55-12 through 55-17
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-18SupersededAccounting Standards Update No. 2014-0905/28/2014
360-20-55-19 through 55-67
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-55-21AmendedAccounting Standards Update No. 2014-0905/28/2014
360-20-55-68 through 55-77
SupersededAccounting Standards Update No. 2014-0905/28/2014
360-20-55-68 through 55-77
AddedAccounting Standards Update No. 2011-1012/14/2011
360-20-60-1 through 60-3
SupersededAccounting Standards Update No. 2016-0202/25/2016
360-20-65-2AddedAccounting Standards Update No. 2011-1012/14/2011
Source downloaded (UTC): 2026-09-10T00:06:40.180Z to 2026-09-10T00:06:40.180Z Record version: sha256:092de3b524b2d01474427400346e1f1a4d96f02cf79e75da800f40c931ca8143 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/20/#05-overview-and-background) SEC content: no ##### [360-20-05-1](https://asc.understandingaccounting.org/asc/360/20/#360-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:40.180Z to 2026-09-10T00:06:40.180Z Record version: sha256:b1d4914654feddc99099c2b639918b0716caf9db3a3799ba4dee18423d5cb301 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/). ##### [360-20-05-2](https://asc.understandingaccounting.org/asc/360/20/#360-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:40.180Z to 2026-09-10T00:06:40.180Z Record version: sha256:1600c73ed4eadd7ac11203124899cb7498c3ea52c0791112898ae8b29c1d2fd9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02](https://asc.understandingaccounting.org/updates/asu-2016-02/). Source downloaded (UTC): 2026-09-10T00:06:42.102Z to 2026-09-10T00:06:42.102Z Record version: sha256:a6f516156a33ed3ed241cddd94363238a45d26e3de7ca0e24a01cb36b7552696 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/20/#15-scope-and-scope-exceptions) SEC content: no ##### [360-20-15-1](https://asc.understandingaccounting.org/asc/360/20/#360-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:42.102Z to 2026-09-10T00:06:42.102Z Record version: sha256:60a8172716aa7dd98e1660b4524a97fd24fb0b1cfaf48e113fd822acfa72f12b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-15-2](https://asc.understandingaccounting.org/asc/360/20/#360-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:42.102Z to 2026-09-10T00:06:42.102Z Record version: sha256:71a0b563e2bf80c0ee3052f5d07670a86f5aeec256a64497c4a38084205643c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:16ba82f257257c5df259de71247a841ddcdc6ef20f16efabacfe22987349308a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/360/20/#40-derecognition) SEC content: no ##### [360-20-40-1](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:39cb4de9737cde0d88cbb1dfbe36af1a96cc6a9e1feb5f512605e7fd8d7ddf88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-40-58](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-58) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:8456f4d8085e435ed3ee3dbc3a2a76f2674677e28e4a9dc59abb6dcefcf75cf8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-40-59](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-59) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:5b24a3099822a2c8b78be1f0ab40cac81a61f848df2cbeef1ea80c817a802604 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-40-60](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-60) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:98a9d1c6c7064f7416ff69b6a60b5595a247c21bb892c3db399657d1715de8cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-40-61](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-61) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:5b2d7ccc5a9de40aa30b99ca77d6dfa6f89099970fb3a7f73c5a4b4773ff60b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-40-62](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-62) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:32579801563f55a4d13ec4544f826fe4f1a56d46c3c96b76ddd9a70f0689c2d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-40-63](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-63) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:f2a8b512487378859853d564e4576bf29ce41c9525f0ce1e6bdf29d3a6ecf21b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-40-64](https://asc.understandingaccounting.org/asc/360/20/#360-20-40-64) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:49.873Z to 2026-09-10T00:06:49.873Z Record version: sha256:d71d1844cc957e67c2a17557c136aa5594ca34bab7b730c10a9fc756ffe9e4d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:64b9a71b9468620e29055867141e936602c500381ef70b9668d7014a5b385d14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/20/#55-implementation-guidance-and-illustrations) SEC content: no ##### [360-20-55-1](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:f9afea5a2a2ad49aec2a0e3d78721f30d95d2d21cecc583f390c0dffe6152e8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-2](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:89dfd21006d1b6afe842e81c818704b8334f6895200c5ad5b0bef1c057ad8cfe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-3](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:2b9e289c80762c2da4ed1f0a76292aff958df88bbff6198a6f48da16b5f5a707 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-4](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:169c95a81f3c802e8f64835260ff330493213617a385a1f515bef29f55b41cb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-5](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:f4dc10fb2e2a23b84b902c1f5a213cbdb8536017438173fe445817e378c9e9b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-6](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:8403ffece67a9edc91db28b6c585683c6526cd8e2b0981cb91e57b3356f6abe3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-7](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:9ff917ddcd1e63209bd3311ae0f40c72dc4aa7782331a2a17a29de3aa5239f92 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-8](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:cb62b554438c981c567bdb292e15d23571c0bfde38c0b65ad443d96524ffca26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-9](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:c7e37a733ba24c3cdc59ca3e38ec17fd0707adc5a3a0461550621c42e551aefa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-11](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:49cec890b65237277a6db3987000a54afd37156fa59395965badd2b6d852c189 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/). ##### [360-20-55-12](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:520875bf3256c55a8b6a0aae05f8330bf9dc39fffd3b52f5f40aee2a84a98937 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-13](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:7bb9d9e93bc1e9833de3a7325400ccd3e4007433750c83809a2f298ab7d26fe8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-14](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:640256119699c3822b745c0b815fe383a4e80e269ce29d3a897f295ebca3c480 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-15](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:00f2538351537f320786cea49be55566ee2df42032fea5f7ee9fefeb8c418f13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-16](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:b6efbeb143223c66f7dd83a7da1c264f543bf9820c10c0bf92f84daa3574889a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-17](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:633cd8fa29519729647d501bc19d82af4d10d0730cb55c0d783852e83baedd97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-18](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:6d0690c01ca51b82720fc6a8ccc6745ee6dc210eb4aca3f5a3e1532c5b0f1107 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/). ##### [360-20-55-19](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:6ae722cf797aa08200dfbccbce110885f1e3a05ce394fc48c0e70f144902aa98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-20](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:371ad06850e916f9db7bf642b0d3e54870ab97c721ec3306757115d1490ed927 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-21](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:5649769926f28795133662161199f069d62d8dd9ad446305b1a41021694c81ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-21A](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-21A) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:7addfb3495f050f40c2b34311e6e9f5fa2933943dd8655833be11d516bc0e997 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-22](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:44369d28badf0da3334275d9579bcd6634aa54b529ddb1d59a7fc3a219fb437a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-31](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:41a7a3a58a754cb1b8b49d5e24ae9c4085d72ce25ce8ae65f85f69a3b80af5e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-62](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-62) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:d6bf285870be4324ddc68826e119f96a6cb614dc1e5adb7a9c7d4b74500fdc3c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-65](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-65) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:8815b069f6cc032b6e6308bccb7f903fcd53fa8b1a4f1564d4876364f8f23abd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-55-67](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-67) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:a31be6319bb8bf96cbbf7ae98dd6d5ea46ec3aacc4274f43a5ddc0b44788ec4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [360-20-55-72](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-72) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:90fa47e2e5efa19adf880e78ebd162f261dd9144b9859697062faf977e7373b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [360-20-55-74](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-74) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:8afb2324f917c8b9b91c603afa3029b24569ddb0354b04a41090d9997f84d91d 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/). ##### [360-20-55-75](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-75) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:1432f0d3cc1d582e6248b99483825e7e673ae0d6e347d8543d7105e2589082f4 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/). ##### [360-20-55-76](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-76) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:adcedfe429cd5021c3a193e2035a97b57840ec23de815604f620dec1da146bbe 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/). ##### [360-20-55-77](https://asc.understandingaccounting.org/asc/360/20/#360-20-55-77) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:53.689Z to 2026-09-10T00:06:53.689Z Record version: sha256:f9ed9762c9d098f8494ee92a16ab12cb3cd8de38f98a4ed261890d7458d80c73 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/). Source downloaded (UTC): 2026-09-10T00:06:57.603Z to 2026-09-10T00:06:57.603Z Record version: sha256:f7de5caf871f142da46176773628c6fafbd19e9f8bf8ce78ef650c5330c8004a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/360/20/#60-relationships) SEC content: no ##### [360-20-60-1](https://asc.understandingaccounting.org/asc/360/20/#360-20-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:57.603Z to 2026-09-10T00:06:57.603Z Record version: sha256:1f7ea807c6f657ecd1c9d9a2bafe78c38f3f1a32e74ec62deeae2e8e7d215ed2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-60-2](https://asc.understandingaccounting.org/asc/360/20/#360-20-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:57.603Z to 2026-09-10T00:06:57.603Z Record version: sha256:83afc07984660090db1925599f53783ffe27640bdc1d2d69a434e467d1394b75 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) ##### [360-20-60-3](https://asc.understandingaccounting.org/asc/360/20/#360-20-60-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:06:57.603Z to 2026-09-10T00:06:57.603Z Record version: sha256:943d20ce33b8a6c169c5d45b8caf56b510b372aff4185339d62f8261681ba3b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-02.](https://asc.understandingaccounting.org/updates/asu-2016-02/) Source downloaded (UTC): 2026-09-10T00:07:01.124Z to 2026-09-10T00:07:01.124Z Record version: sha256:8256856ebe37c9706d1e6da8975cecc0d44f3f932255fe3f54995f75defbdbec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-20-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/360/20/#65-transition-and-open-effective-date-information) SEC content: no ##### [360-20-65-1](https://asc.understandingaccounting.org/asc/360/20/#360-20-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:01.124Z to 2026-09-10T00:07:01.124Z Record version: sha256:784c2c85b5df097410286ed75154dd82e026bc97d87d79c76d5dfd118bc2e23a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 03/23/2010 after the end of the transition period stated in EITF Issue No. 07-6, "Accounting for the Sale of Real Estate Subject to the Requirements of FASB Statement No. 66 When the Agreement Includes a Buy-Sell Clause." ##### [360-20-65-2](https://asc.understandingaccounting.org/asc/360/20/#360-20-65-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:01.124Z to 2026-09-10T00:07:01.124Z Record version: sha256:b86af2f6e28a7c0e340ce90abe711ed8157e79f0da0ea8810b0219007da1b898 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 06/26/2015 after the end of the transition period stated in Accounting Standards Update No. 2011-10, _Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate—a Scope Clarification_. Source downloaded (UTC): 2026-09-10T00:07:07.550Z to 2026-09-10T00:07:25.862Z Record version: sha256:c9937836b20c9092acb279e0328d9fb06f20c1f9237190066a1fb68de5a5a2e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905: Property, Plant, and Equipment — Agriculture ### Machine-generated study aids ```json { "summary": "ASC 360-905 governs how agricultural producers account for property, plant, and equipment — land development, orchards/groves/vineyards, intermediate-life plants, and animals. The core rule is that development costs (permanent and limited-life land development, cultural costs of trees and vines, and direct and indirect costs of developing animals) are capitalized during the development period; permanent land development is never depreciated because it has an indefinite life, while limited-life development, plantings, and mature breeding/production animals are depreciated over estimated useful or productive lives beginning when commercial production or maturity is reached.", "key_points": [ "Permanent land development costs (clearing, initial leveling, terracing, earthen dams) shall be capitalized (360-905-25-1) and shall not be depreciated or amortized because they have an indefinite useful life (360-905-35-6).", "Limited-life land development costs and the direct and indirect development costs of orchards, groves, vineyards, and intermediate-life plants shall be capitalized during the development period (360-905-25-3) and depreciated over the useful life of the land development or of the tree, vine, or plant (360-905-35-7).", "Cultural costs during the development of trees and vines (stakes and wires, grafting, labor for pruning and forming) are capitalized, and net proceeds from sales of products before commercial production begins are applied against the capitalized cost of the plants, trees, or vines (360-905-25-2).", "Breeding animals, all livestock, and production animals are recognized as fixed assets, except animals with short productive lives classified as inventory under 905-330-25-3 (360-905-25-4).", "All direct and indirect development costs of animals are accumulated until maturity and transfer to a productive function; immature animals are not considered in service, and upon maturity accumulated costs less estimated salvage value are depreciated over estimated productive lives (360-905-30-1; 360-905-35-2).", "Animals available and held for sale are measured under Subtopic 330-10 or, per established industry practice, at net realizable value if there are reliable, readily determinable, realizable market prices, insignificant and predictable disposal costs, and immediate availability for delivery (360-905-30-2).", "Depreciation of orchard, vineyard, grove, and intermediate-life plant costs begins when production in commercial quantities begins (360-905-35-4; 360-905-35-5), and accumulated costs and estimated useful lives for intermediate-life plants must be disclosed (360-905-50-1)." ], "categories": [ "Inventory and PP&E", "Industry-specific", "Subsequent measurement", "Initial measurement" ], "audience_level": "intermediate", "student_note": "The exam trap is the line between capitalized development costs (PP&E under 360-905) and inventoriable growing-crop costs (905-330), and the fact that permanent land development is capitalized but never depreciated. Also remember depreciation does not start until commercial production or animal maturity, and pre-production sales proceeds reduce the capitalized cost rather than being reported as revenue.", "related_topics": [ "905-330", "905-10", "330-10", "360-10", "905-360" ], "key_concepts": [ "development period costs", "permanent land development", "limited-life land development", "intermediate-life plants", "breeding and production animals", "commercial production threshold", "net realizable value for animals held for sale", "salvage value and depreciable base" ] } ``` Source downloaded (UTC): 2026-09-10T00:07:07.550Z to 2026-09-10T00:07:07.550Z Record version: sha256:b15c251c5a9d097caf49d20619c01243e6e16eb5f46bc6eb66eecb87648266b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/905/#00-status) SEC content: no ##### [360-905-00-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:07.550Z to 2026-09-10T00:07:07.550Z Record version: sha256:cda3ea51deeed20e0ebb7199e284aaf792793b00a5fa84f834a832a3dd7ba309 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
Land Development CostsAddedAccounting Standards Update No. 2014-0603/14/2014
Land Improvement CostsSupersededAccounting Standards Update No. 2014-0603/14/2014
Limited Life Land Development CostsAmendedAccounting Standards Update No. 2014-0603/14/2014
Permanent Land Development CostsAmendedAccounting Standards Update No. 2014-0603/14/2014
Net Realizable ValueAddedAccounting Standards Update No. 2015-1107/22/2015
905-360-30-1AmendedAccounting Standards Update No. 2015-1107/22/2015
905-360-30-2AmendedAccounting Standards Update No. 2015-1107/22/2015
Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:df7da859e4d361dbbd892cf2b6781793255d45bef32fa67f876fe877fe1588e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/905/#05-overview-and-background) SEC content: no ##### [360-905-05-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:990e7641a3057d140f8790f67024feefecbe599a273dcfc2f15c03407cd6dfe0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses accounting for property, plant, and equipment for entities in the agricultural industry. ##### [360-905-05-2](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:ac4e846893ddf8f563d9970a5c437d241b8cd4da527a77dbf4c4209a4875bc95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Development costs of land, trees and vines, [intermediate-life plants](https://asc.understandingaccounting.org/glossary/i/#intermediate-life-plants "Intermediate-life plants have growth and production cycles of more than one year but less than those of trees and vines."), and animals incurred by [agricultural producers](https://asc.understandingaccounting.org/glossary/a/#agricultural-producers "Farmers and ranchers including, for example, those who raise crops from seeds or seedlings, breed livestock (whether registered or commercial), and feed livestock in preparation for slaughter.") are different from inventoriable costs incurred in raising [crops](https://asc.understandingaccounting.org/glossary/c/#crops "Grains, vegetables, fruits, berries, nuts, and fibers grown by agricultural producers.") for harvest (see Subtopic 905-330). ##### [360-905-05-3](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:0b2ff0d480418b82a10a8e693150c364eaae0b4af7f0738e2429fbc30c5e29b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Land development generally includes improvements to bring the land into a suitable condition for general agricultural use and to maintain its productive condition. Some improvements are permanent; some have a limited life. Permanent land developments include, for example, clearing, initial leveling, terracing, and construction of earthen dams; they involve changes to the grade and contour of the ground and generally have an indefinite life if they are properly maintained. Limited-life developments usually include such items as water distribution systems and fencing and may also include the costs of wells, levees, ponds, drain tile, and ditches, depending on the climate, topography, soil conditions, and farming practices in the area. ##### [360-905-05-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:180154f67be033ab5373d997e42e45028c5bb34f005e570d9a4910a9399d988a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Orchards, [vineyards](https://asc.understandingaccounting.org/glossary/v/#vineyards "Grapevines planted in patterns for commercial cultivation and production."), and groves generally develop over several years before they reach [commercial production](https://asc.understandingaccounting.org/glossary/c/#commercial-production "The point at which production from an orchard, vineyard, or grove first reaches a level that makes operations economically feasible, based on prices normally expected to prevail."). Production continues for varying numbers of years, depending on such influences as type of plant, soil, and climate. During development, the plants normally require grafting, pruning, spraying, cultivation, or other care. ##### [360-905-05-5](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:4f9dd66a861c482005c5dd2084d4a6bc60877c9863882fec04c28edb8838732b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Intermediate-life plants include, for example, artichokes, various types of berries, asparagus, alfalfa, and grazing grasses. Development costs of intermediate-life plants include the cost of land preparation, plants, and cultural care until the plant, bush, or vine begins to produce in commercial quantities. ##### [360-905-05-6](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:3c62bbe688b592253ace93f492559850c9ebc0871311cb203a0e05b3e1938aa3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The terms [livestock](https://asc.understandingaccounting.org/glossary/l/#livestock "Registered and commercial cattle, sheep, hogs, horses, poultry, and small animals bred and raised by agricultural producers.") and _animals_ are used interchangeably and are meant to include cattle, sheep, hogs, horses, poultry, and other small animals. The development of animals requires care and maintenance of the breeding stock and their [progeny](https://asc.understandingaccounting.org/glossary/p/#progeny "Offspring of animals or plants.") until their transfer from the brood herd. Animals purchased before maturity also require care and maintenance to ready them for productive use or sale. The animals are ultimately identified for transfer to [breeding herds](https://asc.understandingaccounting.org/glossary/b/#breeding-herds "Breeding herds consist of mature and immature male and female animals, either of registered or commercial grade, that are maintained for their progeny."), dairy herds, or other productive functions, are selected for sale, or are transferred to a feeding or other marketing operation. ##### [360-905-05-7](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:f44aac177348dd056e2b8bef74aca094bf536deee6c4f43c6d25b754f9314c5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some agricultural operations a field or [row crop](https://asc.understandingaccounting.org/glossary/r/#row-crops "See Field and Row Crops.") is raised for use in the development of another product, such as grain or hay used by the producer to feed livestock. ##### [360-905-05-8](https://asc.understandingaccounting.org/asc/360/905/#360-905-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:10.548Z to 2026-09-10T00:07:10.548Z Record version: sha256:c09988b7268095cd19fdf72945fa034b597eae06d635176e9010268fab0d15e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See also Section 905-10-05 for further background. Source downloaded (UTC): 2026-09-10T00:07:12.269Z to 2026-09-10T00:07:12.269Z Record version: sha256:5d5fdce9dbec096e8106d60db075ef57c3c9b4a8e3807d93f218f208f4a2a09b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/905/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-905-15-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:12.269Z to 2026-09-10T00:07:12.269Z Record version: sha256:20d26bc794788f006bd5f97235b0c4c97f35f6e9be006806a33f82d9ab5eceb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the [General Subsection](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) of Section 905-10-15. Source downloaded (UTC): 2026-09-10T00:07:17.458Z to 2026-09-10T00:07:17.458Z Record version: sha256:6f0cf6904b2f890b87049e2dec52d163d5f733f4ad0ffe4852b71491d6287a5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/905/#25-recognition) SEC content: no #### Permanent Land Development Costs ##### [360-905-25-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:17.458Z to 2026-09-10T00:07:17.458Z Record version: sha256:0c5d4b94f88804e1dbef1460952a5952d20efcd03d83a25ccb08f8487b186f77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Permanent land development costs](https://asc.understandingaccounting.org/glossary/p/#permanent-land-development-costs "See Land Development Costs.") shall be capitalized. #### Trees and Vines ##### [360-905-25-2](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:17.458Z to 2026-09-10T00:07:17.458Z Record version: sha256:eb3427dff550e97f7df989ccca1ea2285effc9c7d1230c4fced29de64d54b274 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Trees and vines may be planted and brought to production by the producer or on a contract basis. The young trees and vines are usually purchased as nursery stock and transplanted into the [orchard](https://asc.understandingaccounting.org/glossary/o/#orchard "Fruit trees planted in geometric patterns to economically facilitate care of the trees and harvest of the fruit. See also Grove.") or vineyard in the desired pattern. Cultural costs during the development period, including stakes and wires, grafting, and labor for pruning and forming, shall be capitalized. Net proceeds from sales of products before [commercial production](https://asc.understandingaccounting.org/glossary/c/#commercial-production "The point at which production from an orchard, vineyard, or grove first reaches a level that makes operations economically feasible, based on prices normally expected to prevail.") begins shall be applied to the capitalized cost of the plants, trees, or vines. #### Development Costs of Land, Orchards, Groves, Vineyards, and Intermediate-Life Plants ##### [360-905-25-3](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:17.458Z to 2026-09-10T00:07:17.458Z Record version: sha256:0890bd3acb51191a61a06cfd866b691c5d125b98e08752981540d2cbc687637a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Limited-life land development costs](https://asc.understandingaccounting.org/glossary/l/#limited-life-land-development-costs "See Land Development Costs.") and direct and indirect development costs of orchards, groves, [vineyards](https://asc.understandingaccounting.org/glossary/v/#vineyards "Grapevines planted in patterns for commercial cultivation and production."), and [intermediate-life plants](https://asc.understandingaccounting.org/glossary/i/#intermediate-life-plants "Intermediate-life plants have growth and production cycles of more than one year but less than those of trees and vines.") shall be capitalized during the development period. #### Breeding and Production Animals ##### [360-905-25-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:17.458Z to 2026-09-10T00:07:17.458Z Record version: sha256:c48454dea0f92551fa848ac371e239c611bd313aaf3829b58a0272a8b2460a62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except for animals with short productive lives classified as inventory under paragraph [905-330-25-3](https://asc.understandingaccounting.org/asc/330/905/#330-905-25-3)all of the following shall be recognized as fixed assets: 1. a Breeding animals 2. b All livestock (which includes cattle, hogs, sheep, and goats) 3. c Production animals. #### Field or Row Crops ##### [360-905-25-5](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:17.458Z to 2026-09-10T00:07:17.458Z Record version: sha256:122c932ddfa2827c6adebcabf1ffa41e916a16ca623aa8a44d52950d8930cf8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The costs involved in the production of the field or row crops for the producer's own use shall be identified as part of the maintenance costs of the livestock and accounted for in the same manner as other maintenance costs. Source downloaded (UTC): 2026-09-10T00:07:19.597Z to 2026-09-10T00:07:19.597Z Record version: sha256:be136bf07b0e462dc727928e2d9e255f04081c3a5ff86f682863eb5cb4d259e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/360/905/#30-initial-measurement) SEC content: no #### Developing Animals ##### [360-905-30-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:19.597Z to 2026-09-10T00:07:19.597Z Record version: sha256:26c39bc3a383249d53629cd9967a5d5668a8c4d494aaa00114be9bb6107d7857 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All direct and indirect costs of developing animals shall be accumulated until the animals reach maturity and are transferred to a productive function. All direct and indirect development costs of animals raised for sale shall be accumulated, and the animals shall be accounted for in accordance with the measurement guidance in Subtopic 330-10 until they are available for sale. #### Animals Available and Held for Sale ##### [360-905-30-2](https://asc.understandingaccounting.org/asc/360/905/#360-905-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:19.597Z to 2026-09-10T00:07:19.597Z Record version: sha256:6d9ba975b58bb0a20234ade8005ea089651dd563bc36f9eb723d551d14080ec5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Agricultural producers](https://asc.understandingaccounting.org/glossary/a/#agricultural-producers "Farmers and ranchers including, for example, those who raise crops from seeds or seedlings, breed livestock (whether registered or commercial), and feed livestock in preparation for slaughter.") shall report animals available and held for sale either: 1. a In accordance with the measurement guidance in Subtopic 330-10 2. b In accordance with established industry practice at [net realizable value](https://asc.understandingaccounting.org/glossary/n/#net-realizable-value "Estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.") if all of the following conditions exist: 1. 1 There are reliable, readily determinable, and realizable market prices for the animals. 2. 2 The costs of disposal are relatively insignificant and predictable. 3. 3 The animals are available for immediate delivery. ##### [360-905-30-3](https://asc.understandingaccounting.org/asc/360/905/#360-905-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:19.597Z to 2026-09-10T00:07:19.597Z Record version: sha256:9504c383b27fd3162d382d74a718f52a4c00a54cfb35430b203d54681032146b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The costs of raised or purchased animals kept in grazing areas or open ranges shall be determined in the same manner as for breeding animals. #### Production Animals ##### [360-905-30-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:19.597Z to 2026-09-10T00:07:19.597Z Record version: sha256:cc10eab9f7f1f49dec398c3d822d6ed1d539e568bd5a3e39a7f9d82d27aece73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The production costs of chickens raised for an egg-laying unit shall include the initial cost of the birds (or, if hatched, the costs of eggs and hatching expenses), the costs of materials and labor, and allocated indirect costs during the prematurity period. ##### [360-905-30-5](https://asc.understandingaccounting.org/asc/360/905/#360-905-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:19.597Z to 2026-09-10T00:07:19.597Z Record version: sha256:55fbafb89cb4a0f5b6a12ce94bcd99785012b5326c98d7e051e14a2c17b50b26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some [production animals](https://asc.understandingaccounting.org/glossary/p/#production-animals "Production animals provide a service or primary product other than their progeny. Examples are dairy cows (milk), poultry (meat and eggs), and sheep (meat and wool).") produce more than one product. For example, sheep produce lambs, wool, and meat; dairy cattle produce milk, calves, and meat. The primary products are lambs and milk, whereas the secondary products are usually wool and calves. Costs may be allocated as either joint products or by-products depending on the estimated relative values of each. In most instances the meat, or slaughter value, of the production animal is considered salvage. The method of accounting shall be determined by the amounts anticipated to be received for each product. Those amounts are affected by the breeding, production, and marketing practices of the producer. Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:5c2528f41108b3e90001f77dca300fd3a71259f5931e9886997fd75c12c34fa4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/905/#35-subsequent-measurement) SEC content: no #### Breeding and Production Animals ##### [360-905-35-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:ecf0d6af994faa51b35f7a2ce5030fcd2c4a616ff057fabed094f180193dfd76 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fixed assets recognized under paragraph [905-360-25-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-4) shall be depreciated over their useful lives. ##### [360-905-35-2](https://asc.understandingaccounting.org/asc/360/905/#360-905-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:1015d2a3731d1c107fa2604ff1493f907e95924f22846d24a7b8ab0d2d8cedbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the point that breeding and production animals reach maturity and are transferred to a production function, the accumulated development costs recognized under paragraph [905-360-25-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-4), less any estimated salvage value, shall be depreciated over the animals' estimated productive lives. Immature animals shall not be considered to be in service until they reach maturity, at which time their accumulated costs recognized under paragraph [905-360-25-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-4) shall become subject to depreciation. ##### [360-905-35-3](https://asc.understandingaccounting.org/asc/360/905/#360-905-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:fe1b4a38b8a33af58624c651c89f78bb5ab4a08346e447c752dc58fde859ef5f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The production costs recognized under paragraph [905-360-25-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-4) of chickens raised for an egg-laying unit, less estimated salvage value of the chickens, shall be amortized over the egg-laying period. #### Trees and Vines ##### [360-905-35-4](https://asc.understandingaccounting.org/asc/360/905/#360-905-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:396190249b0d4220d07eb6e824878feb1f34e112470ce96e5775e0a1ac8eaa21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When production in commercial quantities begins, the accumulated costs shall be depreciated over the estimated useful life of the particular [orchard](https://asc.understandingaccounting.org/glossary/o/#orchard "Fruit trees planted in geometric patterns to economically facilitate care of the trees and harvest of the fruit. See also Grove."), vineyard, or [grove](https://asc.understandingaccounting.org/glossary/g/#grove "Fruit or nut trees planted in geometric patterns to economically facilitate care of the trees and harvest of the fruit or nuts. See also Orchard."). #### Intermediate-Life Plants ##### [360-905-35-5](https://asc.understandingaccounting.org/asc/360/905/#360-905-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:a07c4d0e387234a9a0118a813e50d3a49e7d4b7322e36c99eaa83f824e677374 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When production in commercial quantities begins for [intermediate-life plants](https://asc.understandingaccounting.org/glossary/i/#intermediate-life-plants "Intermediate-life plants have growth and production cycles of more than one year but less than those of trees and vines."), the capitalized costs shall be depreciated over the estimated productive life of the plantings. Regional differences, climate and soil conditions, and cultural practices may affect the productive capacity and life of intermediate-life plants and shall be considered when establishing depreciable lives. #### Permanent Land Development Costs ##### [360-905-35-6](https://asc.understandingaccounting.org/asc/360/905/#360-905-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:62a2beaabeaf9e8b7f8402bd29b5c9dad89bb2eef9ccd39e2a02d31b9c3ae41f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Permanent land development costs](https://asc.understandingaccounting.org/glossary/p/#permanent-land-development-costs "See Land Development Costs.") capitalized under paragraph [905-360-25-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-1) shall not be depreciated or amortized, since they have, by definition, an indefinite useful life. #### Development Costs for Limited-Life Land Development, Orchards, Groves, Vineyards, and Intermediate-life Plants ##### [360-905-35-7](https://asc.understandingaccounting.org/asc/360/905/#360-905-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:21.415Z to 2026-09-10T00:07:21.415Z Record version: sha256:f77b2671253b7397bd7dd3321562cae584e02be1de5ca96351f241b982b05baf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs capitalized during the development period under paragraph [905-360-25-3](https://asc.understandingaccounting.org/asc/360/905/#360-905-25-3) shall be depreciated over the estimated useful life of the land development or that of the tree, vine or plant. Source downloaded (UTC): 2026-09-10T00:07:23.088Z to 2026-09-10T00:07:23.088Z Record version: sha256:d1c9099c400aef38f609a1b262252147f7b44b1ea1805eeb27e5ccbb92314046 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-905-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/905/#50-disclosure) SEC content: no #### Intermediate-life Plants ##### [360-905-50-1](https://asc.understandingaccounting.org/asc/360/905/#360-905-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:23.088Z to 2026-09-10T00:07:23.088Z Record version: sha256:78e8f44c720557bc5b321525a248d9cc84983b420b5fa46b51118c23b05a7d6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial statement disclosure of the accumulated costs for [intermediate-life plants](https://asc.understandingaccounting.org/glossary/i/#intermediate-life-plants "Intermediate-life plants have growth and production cycles of more than one year but less than those of trees and vines.") and estimated useful lives shall be made. Source downloaded (UTC): 2026-09-10T00:07:28.720Z to 2026-09-10T00:07:56.986Z Record version: sha256:339983c8b07867b9c39ec1c0a09e7ec6be86ccea09029e0dd14e363e045ae04b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908: Property, Plant, and Equipment — Airlines ### Machine-generated study aids ```json { "summary": "ASC 360-908 governs property, plant, and equipment accounting unique to airlines: unit versus group depreciation, rotable parts, airframe modifications, and airframe/engine overhauls. Its core rules are that modifications enhancing an aircraft's usefulness must be capitalized and depreciated over the shorter of the aircraft's or the modification's useful life, and that overhauls must be accounted for under one of three permitted methods—direct expensing, built-in overhaul, or deferral—with the accrue-in-advance (accrual) method prohibited.", "key_points": [ "A depreciation method may be applied to a single asset (unit method, typically aircraft and engines with large unit costs) or to a homogeneous pool (group method, typically rotable parts and assemblies), with ease of application being the basis of selection (360-908-35-1).", "Rotable parts and assemblies of significant value are classified with flight equipment as fixed assets (360-908-45-1) and are normally depreciated over their useful or service lives under a group method (360-908-35-2).", "Costs of interior configuration modifications that enhance the usefulness of the aircraft shall be capitalized (360-908-25-1) and depreciated over the estimated useful life of the aircraft or of the modification, whichever is less (360-908-35-3).", "Air carriers must adopt a method that recognizes overhaul expense in the appropriate period; permitted methods are direct expensing (908-720-25-3), the built-in overhaul method, and the deferral method, and the accrue-in-advance method is prohibited in annual and interim periods (360-908-25-2; 360-10-25-5).", "Under the built-in overhaul method, aggregate aircraft cost is segregated into components depreciated over the aircraft's useful life and an overhaul component that is set up separately and amortized to the date of the initial overhaul; each subsequent overhaul cost is then capitalized and amortized to the next overhaul (360-908-30-2; 360-908-35-5).", "Under the deferral method, the actual cost of each overhaul is capitalized and amortized to the next overhaul (360-908-30-3; 360-908-35-6).", "On replacement, the cost of the replaced asset net of accumulated depreciation and anticipated recovery value is charged to income in the current period, using estimates where detailed records are inadequate (360-908-40-1); manufacturer purchase incentive credits are accounted for under 705-20-25-1 through 25-5, or as a lease incentive under Topic 842 if the aircraft is leased (360-908-55-1)." ], "categories": [ "Inventory and PP&E", "Subsequent measurement", "Industry-specific", "Recognition" ], "audience_level": "intermediate", "student_note": "Airlines are the classic example of component depreciation and of the prohibition on accruing maintenance before it occurs; the most common error is assuming an airline may build a reserve for future overhauls—the accrue-in-advance method is banned, and only direct expensing, built-in overhaul, or deferral is permitted (and the chosen method must be applied consistently in interim and annual periods).", "related_topics": [ "908-720", "360-10", "705-20", "842", "908-360" ], "key_concepts": [ "unit depreciation", "group depreciation", "rotable parts", "airframe modifications", "built-in overhaul method", "deferral method", "planned major maintenance activities", "manufacturer purchase incentives" ] } ``` Source downloaded (UTC): 2026-09-10T00:07:28.720Z to 2026-09-10T00:07:28.720Z Record version: sha256:921ae5752a77d916c5a5c2ecb74c1abf06204a3e8c3043beebccc070227b0442 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/908/#00-status) SEC content: no ##### [360-908-00-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:28.720Z to 2026-09-10T00:07:28.720Z Record version: sha256:e9634983671e16671951f71a9272a49a2b93a69fd5165058f9ee9c15388cde1d 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
Cash ConsiderationSupersededAccounting Standards Update No. 2014-0905/28/2014
908-360-55-1AmendedAccounting Standards Update No. 2016-0202/25/2016
908-360-55-1AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:07:31.218Z to 2026-09-10T00:07:31.218Z Record version: sha256:37b8cf1533cd41536ded1698840612025e81db1ceb90e39b30699af4289a0b2b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/908/#05-overview-and-background) SEC content: no ##### [360-908-05-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:31.218Z to 2026-09-10T00:07:31.218Z Record version: sha256:463ea53fe9f5c2b25a47d226fcb2a35ebe31f1a61a62921d2cdf0286b3f13b1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for accounting for certain property, plant, and equipment assets for entities in the airline industry. It includes guidance on: 1. a The use of unit and group depreciation methods. 2. b Rotable parts. [Rotable parts](https://asc.understandingaccounting.org/glossary/r/#rotable-parts "Rotable parts are normally repaired and reused, as opposed to those parts that are consumed in the operations (expendable parts).") relate to flight equipment. 3. c [Airframe](https://asc.understandingaccounting.org/glossary/a/#airframe "The structure of an aircraft, excluding engines and accessories. The principal parts of the airframe of an airplane include the fuselage (the body), wings, empennage (the assembly of stabilizing and control surfaces at the tail), landing gear, and nacelles or pods (engine housings).") modifications. Airlines have undertaken major programs to modify interior configurations of certain aircraft types—including the reconfiguration and replacement of seats, galley equipment, and storage space—in response to market forces and passenger demands. Since deregulation, such changes have been more frequent. 4. d Airframe and engine overhauls. As a result of overhaul requirements established by the Federal Aviation Administration, aircraft airframes and engines must be overhauled within specific intervals. The value and usefulness of an aircraft can be heavily dependent on its stage of overhaul. For accounting purposes, airframe and aircraft engine overhauls encompass all inspections or replacements of major components, which the civil air regulations require at specific maximum periodic intervals to recertify that the frame or engine is completely airworthy. #### Purchase Incentives ##### [360-908-05-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:31.218Z to 2026-09-10T00:07:31.218Z Record version: sha256:9ea67388b0ebdc71528ed082e4e4c74195278cc19b77798772720e6e98d6e691 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Airlines frequently negotiate purchase incentives with aircraft manufacturers whereby, as an inducement to purchase a particular manufacturer's aircraft, the manufacturer will issue credits, which can be used for the purchase of [spare parts](https://asc.understandingaccounting.org/glossary/s/#spare-parts "Parts, appurtenances, and accessories of aircraft (other than aircraft engines and propellers), of aircraft engines (other than propellers), of propellers, or of appliances that are maintained for installation or use in an aircraft, aircraft engine, propeller, or appliance but that are not yet installed or attached.") but may not be applied as part of the purchase price of aircraft. Examples of other incentives are guaranteed trade-in values and purchase credits for flight crew training equipment (for example, flight simulators). Source downloaded (UTC): 2026-09-10T00:07:34.695Z to 2026-09-10T00:07:34.695Z Record version: sha256:2edc252ab13ade058e98396600cb93aab763886a9c56d578b0b615ffa079b107 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/908/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-908-15-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:34.695Z to 2026-09-10T00:07:34.695Z Record version: sha256:e4ef9120ca71a151f4971971f36da5154060d039e03dc55fdadbba9af46e13a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance relating to certain property, plant, and equipment assets for entities in the airline industry. #### Transactions ##### [360-908-15-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:34.695Z to 2026-09-10T00:07:34.695Z Record version: sha256:8ba0acf1794c1cd5a766864b1b697953a0dd7621f156f168bad6cfbd602ee779 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to the following transactions and activities: 1. a The cost of routine replacement of minor parts and servicing or inspection of airframes and aircraft engines 2. b Costs accounted for as restoration of assets, such as extraordinary costs associated with the renewal of major structural parts beyond the scope of normal periodic overhauls 3. c Other costs with a life span similar to the depreciable service life of the related [airframe](https://asc.understandingaccounting.org/glossary/a/#airframe "The structure of an aircraft, excluding engines and accessories. The principal parts of the airframe of an airplane include the fuselage (the body), wings, empennage (the assembly of stabilizing and control surfaces at the tail), landing gear, and nacelles or pods (engine housings).") or aircraft engine. Source downloaded (UTC): 2026-09-10T00:07:41.491Z to 2026-09-10T00:07:41.491Z Record version: sha256:55bbb6eb5875b72cce838f10e61dd171ee1b8dfbdcaa737a4d63488ad684405d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/908/#25-recognition) SEC content: no #### Airframe Modifications ##### [360-908-25-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:41.491Z to 2026-09-10T00:07:41.491Z Record version: sha256:89ccd4c2cdd3355a9f0a658344097a68b3a90244b77d834a9a407a18c74ccca5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the modifications of interior configurations of certain aircraft types enhance the usefulness of the aircraft, the costs associated with the changes shall be capitalized. #### Overhaul Costs ##### [360-908-25-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:41.491Z to 2026-09-10T00:07:41.491Z Record version: sha256:f045d4c7fcda641f915252f1e206b68f910d062f02854f8e6d6fe4a3b9cd81dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Air carriers shall adopt an accounting method that recognizes overhaul expenses in the appropriate period. This may result in different methods for different aircraft, as well as different methods for [airframe](https://asc.understandingaccounting.org/glossary/a/#airframe "The structure of an aircraft, excluding engines and accessories. The principal parts of the airframe of an airplane include the fuselage (the body), wings, empennage (the assembly of stabilizing and control surfaces at the tail), landing gear, and nacelles or pods (engine housings).") overhauls and engine overhauls. The method chosen shall recognize, among other things, the carrier's operating practices with respect to airframe and engine overhauls. The following accounting methods are permitted: 1. a The direct expensing method, addressed in Subtopic 908-720 (see paragraph [908-720-25-3](https://asc.understandingaccounting.org/asc/720/908/#720-908-25-3)) 2. b The built-in overhaul method, addressed in this Subtopic 3. c The deferral method, addressed in this Subtopic. As indicated in paragraph [360-10-25-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-5), 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. ##### [360-908-25-3](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:41.491Z to 2026-09-10T00:07:41.491Z Record version: sha256:8e1cb0b4c39e304468ec5fb7aca9e5317e6bc0a7b1c086c5ae2bb0cbfa30002a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [360-908-25-4](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:41.491Z to 2026-09-10T00:07:41.491Z Record version: sha256:93933a8bb99e9b3bb4251a55ffa94ed040b72688eca0fb21cbc280177eabf681 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). Source downloaded (UTC): 2026-09-10T00:07:44.908Z to 2026-09-10T00:07:44.908Z Record version: sha256:0180e3b192393072dca09b7c5f43726cdd8cfe4a3beac1347731c84a33f36a88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/360/908/#30-initial-measurement) SEC content: no #### Overhaul Costs ##### [360-908-30-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:44.908Z to 2026-09-10T00:07:44.908Z Record version: sha256:a9b747f5b081358b12ffcc956a910b2db971234752d3063244d10ebcedd118ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses the following methods of accounting for overhaul expenses: 1. a Built-in overhaul method 2. b Deferral method. The direct expensing method is addressed in Subtopic 908-720 (see paragraph [908-720-25-3](https://asc.understandingaccounting.org/asc/720/908/#720-908-25-3)). ##### [360-908-30-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:44.908Z to 2026-09-10T00:07:44.908Z Record version: sha256:f6bd7012374e04bca0799f2fa48e3e0832f6a097e9e9e1597884747a0a478275 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The built-in overhaul method is based on segregation of the aggregate aircraft costs into those components that shall be depreciated over the useful life of the aircraft and those that require overhaul at periodic intervals. Thus, the estimated cost of the overhaul component included in the purchase price shall be set up separately from the cost of the [airframe](https://asc.understandingaccounting.org/glossary/a/#airframe "The structure of an aircraft, excluding engines and accessories. The principal parts of the airframe of an airplane include the fuselage (the body), wings, empennage (the assembly of stabilizing and control surfaces at the tail), landing gear, and nacelles or pods (engine housings).") and engines. ##### [360-908-30-3](https://asc.understandingaccounting.org/asc/360/908/#360-908-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:44.908Z to 2026-09-10T00:07:44.908Z Record version: sha256:c2dcf8e22db5f06827b718eeeb2471c18c9949cd37536485f1b8b8f7302c3d63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the deferral method, the actual cost of each overhaul shall be capitalized. Source downloaded (UTC): 2026-09-10T00:07:47.920Z to 2026-09-10T00:07:47.920Z Record version: sha256:0f6b8f61a6fbcd6c715a3ca54ddc6ccffa06c115d6b02ab08a6171b446a0ef80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/908/#35-subsequent-measurement) SEC content: no #### Depreciation Methods ##### [360-908-35-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:47.920Z to 2026-09-10T00:07:47.920Z Record version: sha256:709d7a212f408819f4cd1bd6585436806972250a8fb8adf16fa46d921f562776 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A depreciation method may be applied to a single asset (unit depreciation) or to a group or pool of assets that are similar in nature (group depreciation). An [air carrier](https://asc.understandingaccounting.org/glossary/a/#air-carrier "Any entity that undertakes, whether directly or indirectly or by a lease or any other arrangement, to engage in air transportation.") can use unit or group depreciation methods on different groups of assets. The ease of application is the basis of selection between the two methods. 1. a Unit method. Under the unit method, the airline depreciates the cost of the individual items of property and equipment. Unit depreciation is generally used for fixed assets, such as aircraft and engines, that have large unit costs and are comparatively few in number. 2. b Group method. Under the group method, the airline depreciates the aggregate cost of a group of equipment that is fairly homogeneous, despite differences in the service lives of individual items. Group depreciation usually is applied to groups of assets that are significant in number but have relatively small unit values, such as [rotable parts](https://asc.understandingaccounting.org/glossary/r/#rotable-parts "Rotable parts are normally repaired and reused, as opposed to those parts that are consumed in the operations (expendable parts).") and assemblies. #### Rotable Parts ##### [360-908-35-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:47.920Z to 2026-09-10T00:07:47.920Z Record version: sha256:1d5e26ef10280a17b5b9b57eaed705083ac7877dc0c44eb3ffa74c21df3bc0b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Rotable parts and assemblies are normally depreciated over their useful lives or service lives according to a group method of depreciation. #### Airframe Modifications ##### [360-908-35-3](https://asc.understandingaccounting.org/asc/360/908/#360-908-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:47.920Z to 2026-09-10T00:07:47.920Z Record version: sha256:f985c0c1476414173076c2fe4a933ccddc5695364fe063bf1d77ec29e22dd176 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Airframe modifications](https://asc.understandingaccounting.org/glossary/a/#airframe-modifications "Modifications made to interior configurations of certain aircraft types—including the reconfiguration and replacement of seats, galley equipment, and storage space.") shall be depreciated over the estimated useful life of the aircraft or the modifications, whichever is less. #### Overhaul Costs ##### [360-908-35-4](https://asc.understandingaccounting.org/asc/360/908/#360-908-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:47.920Z to 2026-09-10T00:07:47.920Z Record version: sha256:e062576db1a1a00489cee9092c126088ffd7f9010f28dd17d3b74ff202f43c7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses the following methods of accounting for overhaul expenses: 1. a Built-in overhaul method 2. b Deferral method. The direct expensing method is addressed in Subtopic 908-720 (see paragraph [908-720-25-3](https://asc.understandingaccounting.org/asc/720/908/#720-908-25-3)). ##### [360-908-35-5](https://asc.understandingaccounting.org/asc/360/908/#360-908-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:47.920Z to 2026-09-10T00:07:47.920Z Record version: sha256:c3a9484030eb997ac290df25c4430a9f6666f661f1f4dccb6224358b658725ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The estimated cost of the overhaul component included in the aircraft purchase price shall be amortized to the date of the initial overhaul. The cost of the initial overhaul shall then be capitalized and amortized to the next overhaul, at which time the process shall be repeated. ##### [360-908-35-6](https://asc.understandingaccounting.org/asc/360/908/#360-908-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:47.920Z to 2026-09-10T00:07:47.920Z Record version: sha256:d2a530433984474cfa3f46dd123b6d0575697b6753a82ff0c5c844d6248fdbca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the deferral method, the actual cost of each overhaul shall be amortized to the next overhaul. Source downloaded (UTC): 2026-09-10T00:07:51.909Z to 2026-09-10T00:07:51.909Z Record version: sha256:ace88a9c79cea5da6e5f360adc46e62494486565720a4993d8bd399006cc07e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/360/908/#40-derecognition) SEC content: no #### Airframe Modifications ##### [360-908-40-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:51.909Z to 2026-09-10T00:07:51.909Z Record version: sha256:ef45aca776909ef359c7a8866f8e3f4661461089de2beb9ab49aa3cbc8c01b51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of the replaced asset net of accumulated depreciation and anticipated recovery value shall be charged to income in the current period. However, detailed records may often be inadequate to permit identification of the cost of the replaced asset; therefore, estimates may be required. Source downloaded (UTC): 2026-09-10T00:07:54.458Z to 2026-09-10T00:07:54.458Z Record version: sha256:92caab81b45dd37945fc715e9aabf6d6df2503b70c2a4624a03244c1d20d1160 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/908/#45-other-presentation-matters) SEC content: no #### Rotable Parts ##### [360-908-45-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:54.458Z to 2026-09-10T00:07:54.458Z Record version: sha256:1e3f24ed8823ad8e97e307396c06cbe002864a41c6e3d040e0deb62e659ef8e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Rotable parts](https://asc.understandingaccounting.org/glossary/r/#rotable-parts "Rotable parts are normally repaired and reused, as opposed to those parts that are consumed in the operations (expendable parts).") and assemblies of significant value are classified along with flight equipment as fixed assets. #### Overhaul Costs and Planned Major Maintenance Activities ##### [360-908-45-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:54.458Z to 2026-09-10T00:07:54.458Z Record version: sha256:b6f6c175e4663ffc5a1d8c0a1ac69aa096766ed4d1a48bb0716be93e9cf99caa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraph [360-10-45-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-1), an entity shall apply the same method of accounting for planned major maintenance activities in annual and interim financial reporting periods. Source downloaded (UTC): 2026-09-10T00:07:56.986Z to 2026-09-10T00:07:56.986Z Record version: sha256:871a8df06fc4a3fb2a7eaa1a048023ddca3e2bcf671817947f5a17a470eaaba8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-908-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/908/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [360-908-55-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:56.986Z to 2026-09-10T00:07:56.986Z Record version: sha256:01973652cd3e6de9eb1f5b4f81d8f7a6a1f9402f4669f997ee30d81eddd9d7de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Credit received as a purchase incentive from an aircraft manufacturer to induce a purchase of that manufacturer's aircraft should be accounted for in accordance with paragraphs [705-20-25-1 through 25-5](https://asc.understandingaccounting.org/asc/705/20/#705-20-25-1) for the aircraft or, if the aircraft is leased, as a lease incentive in accordance with Topic 842. Source downloaded (UTC): 2026-09-10T00:07:59.323Z to 2026-09-10T00:08:11.902Z Record version: sha256:cf806e9517048ef2355e4e8f2e8624b2bd79b21b6a37bb523f9e3b3389e0a047 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-910: Property, Plant, and Equipment — Contractors—Construction ### Machine-generated study aids ```json { "summary": "ASC 360-910 was the construction-contractor-specific guidance on property, plant, and equipment, but every substantive paragraph (05-1, 15-1, 25-1, and 35-1) was superseded by Maintenance Update No. 2019-01. The subtopic is now an empty shell containing no operative recognition, measurement, or scope guidance. Contractors therefore apply the general PP&E guidance in ASC 360-10 (and, for contract accounting, ASC 606 and ASC 340-40).", "key_points": [ "All four paragraphs of this subtopic (360-910-05-1, 360-910-15-1, 360-910-25-1, 360-910-35-1) were superseded by Maintenance Update No. 2019-01, leaving no operative guidance.", "Because no industry-specific PP&E rules remain for construction contractors, the general guidance in ASC 360-10 on recognition, depreciation, and impairment of long-lived assets applies.", "Superseded paragraph numbers are retained in the Codification as placeholders; a superseded paragraph may not be cited as authoritative support.", "Revenue and cost accounting for construction-type contracts is governed by ASC 606 and ASC 340-40 rather than by any remaining content in ASC 910.", "Maintenance Updates are non-substantive housekeeping changes, so the supersession here reflects cleanup of redundant guidance rather than a change in accounting outcomes." ], "categories": [ "Inventory and PP&E", "Industry-specific", "Transition and effective dates" ], "audience_level": "introductory", "student_note": "Know that an empty subtopic is not a gap in GAAP — it means the general topic (here ASC 360-10) controls. The common mistake is citing a superseded paragraph number found in older textbooks as if it were still authoritative.", "related_topics": [ "360-10", "910", "910-360", "606", "340-40" ], "key_concepts": [ "superseded guidance", "construction contractors", "property, plant, and equipment", "industry-specific guidance", "long-lived assets", "codification housekeeping" ] } ``` Source downloaded (UTC): 2026-09-10T00:07:59.323Z to 2026-09-10T00:07:59.323Z Record version: sha256:4249c2431d480be826ed16003697d9d615f68cefae9e31850c95a0ee795a452d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-910-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/910/#00-status) SEC content: no ##### [360-910-00-1](https://asc.understandingaccounting.org/asc/360/910/#360-910-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:07:59.323Z to 2026-09-10T00:07:59.323Z Record version: sha256:76226f2968d5394651b4394b0e61d51ae8ebb5eb4f08b90c452f2e8c9a20d450 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
910-360-05-1SupersededMaintenance Update No. 2019-01 (PDF)01/08/2019
910-360-15-1SupersededMaintenance Update No. 2019-01 (PDF)01/08/2019
910-360-25-1SupersededMaintenance Update No. 2019-01 (PDF)01/08/2019
910-360-35-1SupersededMaintenance Update No. 2019-01 (PDF)01/08/2019
Source downloaded (UTC): 2026-09-10T00:08:02.766Z to 2026-09-10T00:08:02.766Z Record version: sha256:8ef145ea2faec9655db7b32f4217811f7d37a0fc508ecb74a3c5bd87c09798a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-910-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/910/#05-overview-and-background) SEC content: no ##### [360-910-05-1](https://asc.understandingaccounting.org/asc/360/910/#360-910-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:02.766Z to 2026-09-10T00:08:02.766Z Record version: sha256:ba1c051e0749f377b7b5d82a9c752a3fcb5e0b452e0b13bb89352b65d1eebf64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Maintenance Update No. 2019-01.](https://asc.understandingaccounting.org/updates/maintenance-updates-2019/) Source downloaded (UTC): 2026-09-10T00:08:05.746Z to 2026-09-10T00:08:05.746Z Record version: sha256:a14bdb7ce830cb4a7210a8e3edea54e7e0b090a617a0a143357d2e75b46d81a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-910-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/910/#15-scope-and-scope-exceptions) SEC content: no ##### [360-910-15-1](https://asc.understandingaccounting.org/asc/360/910/#360-910-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:05.746Z to 2026-09-10T00:08:05.746Z Record version: sha256:d2219e59f69db900c0f5c93ca14ce0552ec406790c5e7c950b21e53f62c5e2aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Maintenance Update No. 2019-01.](https://asc.understandingaccounting.org/updates/maintenance-updates-2019/) Source downloaded (UTC): 2026-09-10T00:08:08.518Z to 2026-09-10T00:08:08.518Z Record version: sha256:0b124829d97d10b438716966b4158bf001db448ddf746cd9183bcb387e32b83e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-910-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/910/#25-recognition) SEC content: no ##### [360-910-25-1](https://asc.understandingaccounting.org/asc/360/910/#360-910-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:08.518Z to 2026-09-10T00:08:08.518Z Record version: sha256:93ae34cd95b5ec7d8c777cf9e67f5ebe8b25bada6730b877d5c650b44f8ca9e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Maintenance Update No. 2019-01.](https://asc.understandingaccounting.org/updates/maintenance-updates-2019/) Source downloaded (UTC): 2026-09-10T00:08:11.902Z to 2026-09-10T00:08:11.902Z Record version: sha256:c4baafd0a52c95e1a0d4416c379b8ff8405ff694fb6ffec1b26eeaa3f84e5ded Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-910-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/910/#35-subsequent-measurement) SEC content: no ##### [360-910-35-1](https://asc.understandingaccounting.org/asc/360/910/#360-910-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:11.902Z to 2026-09-10T00:08:11.902Z Record version: sha256:615c948919d97dc21eecf2f324b974e71dda6829a7530e88536032c264c4692c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Maintenance Update No. 2019-01.](https://asc.understandingaccounting.org/updates/maintenance-updates-2019/) Source downloaded (UTC): 2026-09-10T00:08:15.419Z to 2026-09-10T00:08:28.839Z Record version: sha256:29ec49710015a4e9f38cb00935cfdaea0f437ec6c40e67c5c2222b5b384ac193 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-922: Property, Plant, and Equipment — Entertainment—Cable Television ### Machine-generated study aids ```json { "summary": "This subtopic governs how cable television entities account for plant and installation costs during the \"prematurity period\" — the span between the start of construction/marketing and the point at which the system is substantially complete and serving subscribers. Management must fix the prematurity period before revenue from the first subscriber is recognized (presumed not to exceed two years), capitalize cable plant costs and initial subscriber installation costs in full during that period, and record depreciation using a subscriber-based fraction rather than full depreciation. Distinguishable portions of a system in the prematurity period are accounted for and tested for recoverability separately.", "key_points": [ "Management must establish the beginning and end of the prematurity period before revenue is recognized from the first subscriber, presumed not to exceed two years (longer only in major urban markets), and it cannot be changed except for highly unusual circumstances (360-922-25-1).", "A clearly distinguishable portion of a system in the prematurity period is accounted for separately, using characteristics such as geographic, mechanical (separate head-end), timing, investment-decision, and accounting-records differences (360-922-25-1; 360-922-25-3).", "Costs of the remainder of the system are charged to a portion in the prematurity period only if specifically identified with that portion's operations (360-922-25-4).", "During the prematurity period, cable television plant costs — materials, direct labor, and construction overhead — continue to be capitalized in full, and initial subscriber installation costs (material, labor, and overhead of the drop) are capitalized (360-922-25-5; 360-922-25-7).", "Depreciation during the prematurity period equals monthly depreciation of total capitalized costs expected at completion multiplied by a fraction whose denominator is total subscribers expected at the end of the period and whose numerator is the greatest of expected average subscribers for the month, straight-line progress subscribers, or actual average subscribers (360-922-35-2; 360-922-35-3).", "That same fraction allocates programming and other system costs between current and future operations (360-922-35-3; see 922-350-25-1).", "Capitalization does not stop when total cost exceeds recoverable amount; capitalization continues and the provision reducing capitalized costs to recoverable value is increased (360-922-35-4), and capitalized initial installation costs are depreciated over no longer than the plant depreciation period (360-922-35-5)." ], "categories": [ "Inventory and PP&E", "Initial measurement", "Subsequent measurement", "Industry-specific" ], "audience_level": "intermediate", "student_note": "The signature rule here is the subscriber-based depreciation fraction — students often assume full depreciation begins once the plant is placed in service, but during the prematurity period only a proportional amount is recorded. Also note the counterintuitive rule in 360-922-35-4: unrecoverable costs are still capitalized, with the shortfall handled through an increased valuation provision rather than by halting capitalization.", "related_topics": [ "922-10", "922-350", "922-360", "922-835", "360-10", "280" ], "key_concepts": [ "prematurity period", "cable television plant", "initial subscriber installation costs", "subscriber fraction depreciation", "portion of a cable system", "recoverability provision", "construction overhead capitalization", "cost allocation between current and future operations" ] } ``` Source downloaded (UTC): 2026-09-10T00:08:15.419Z to 2026-09-10T00:08:15.419Z Record version: sha256:02b52313151dd4df23eaa57dd9e72b98fc7e5045f286f7bca2b75e0a3f362990 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-922-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/922/#00-status) SEC content: no ##### [360-922-00-1](https://asc.understandingaccounting.org/asc/360/922/#360-922-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:15.419Z to 2026-09-10T00:08:15.419Z Record version: sha256:8d6328c2a226ec15f8b33902ba0c2b99846199bfed192f7cc8f99e647fb41f80 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
922-360-25-1AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:08:17.898Z to 2026-09-10T00:08:17.898Z Record version: sha256:4056de47383f37bbb9ca711fc60b6fcecc61702e2b11aa0a3cd116125ce1b1f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-922-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/922/#05-overview-and-background) SEC content: no ##### [360-922-05-1](https://asc.understandingaccounting.org/asc/360/922/#360-922-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:17.898Z to 2026-09-10T00:08:17.898Z Record version: sha256:7c9b7dcff6066bb98ef12802533664e75f22bef092390fa7a69af76c504743c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for certain costs incurred by entities in the cable television industry during the periods of cable construction and service. Source downloaded (UTC): 2026-09-10T00:08:20.520Z to 2026-09-10T00:08:20.520Z Record version: sha256:dd07226ab2daf438deb4f4dc344ad2885d87c4aae945f62046e755507f75358d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-922-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/922/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-922-15-1](https://asc.understandingaccounting.org/asc/360/922/#360-922-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:20.520Z to 2026-09-10T00:08:20.520Z Record version: sha256:fb1432154e917090ba6184bb1c76911e8b56c8408a2a78382dab03d7dbdc3e43 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 922-10-15. Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:c6a666a6d88bad26ee155cd911e9022b8a7f924cd0f670b59d0d1bf3f9278b7d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-922-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/922/#25-recognition) SEC content: no #### Prematurity Period—Certain Capitalizable Costs ##### [360-922-25-1](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:572592600bd766bd3d26699aa8596872cd75320cc27113c6c8b1a6c4290c3ad8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Before revenue is recognized from the first subscriber, management shall establish the beginning and end of the [prematurity period](https://asc.understandingaccounting.org/glossary/p/#prematurity-period "During the prematurity period, the cable television system is partially under construction and partially in service. The prematurity period begins when revenue from the first subscriber is recognized in accordance with Topic 606 on revenue from contracts with customers.Its end will vary with circumstances of the system but will be determined based on plans for completion of the first major construction period or achievement of a specified predetermined subscriber level at which no additional investment will be required for other than cable television plant. The construction period of a cable television system varies with the size of the franchise area, density of population, and difficulty of physical construction. The construction period is not completed until the head-end, main cable, and distribution cables are installed, and includes a reasonable time to provide for installation of subscriber drops and related hardware. During the construction period, many system operators complete installation of drops and begin to provide service to some subscribers in some parts of the system while construction continues. Providing the signal for the first time is referred to as energizing the system. The length of the prematurity period varies with the franchise development and construction plans. Such plans may consist of any of the following: Small franchise that is characterized by the absence of free television signal and a short construction period. The entire system is energized at one time near the end of the construction period. Medium-size franchise that is characterized by some direct competition from free television and by a more extensive geographical franchise area lending itself to incremental construction. Some parts of the system are energized as construction progresses. Large metropolitan franchise that is characterized by heavy direct competition from free television and fringe area signal inadequacy, high cost, and difficult construction. Many parts of the system are energized as construction progresses. Except in the smallest systems, programming is usually delivered to portions of the system and some revenues are obtained before construction of the entire system is complete. Thus, virtually every cable television system experiences a prematurity period during which it is receiving some revenue while continuing to incur substantial costs related to the establishment of the total system."), subject to a presumption that the prematurity period usually will not exceed two years. The prematurity period frequently will be shorter than two years; a longer period may be reasonably justified only in major urban markets. After the prematurity period is established by management, it shall not be changed except as a result of highly unusual circumstances. A portion of a cable television system that is in the prematurity period and can be clearly distinguished from the remainder of the system shall be accounted for separately. ##### [360-922-25-2](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:b608dcccb46652c6752b84e7c4a2f90b12070aa1724fd5ec5254d7beb868d827 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. (Some cable television entities have used the word segment to refer to a portion of a cable television system. In view of the use of segment in a different context in Topic 280, the word portion is used throughout the Entertainment—Cable Television Topic.) ##### [360-922-25-3](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:4aa4bb1120dceea9bcfbdcf513613d09bbe0a53ee42fa4c7540e8ac5bd80acea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Such a portion would have most of the following characteristics: 1. a Geographical differences, such as coverage of a noncontiguous or separately awarded franchise area 2. b Mechanical differences, such as a separate head-end 3. c Timing differences, such as starting construction or marketing at a significantly later date 4. d Investment decision differences, such as separate break-even and return-on-investment analyses or separate approval of start of construction 5. e Separate accounting records, separate budgets and forecasts, or other accountability differences. ##### [360-922-25-4](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:e1b8611bbd3fd27cddb3c9e033ad54f04f0fe673ef98c8768b891cb2c79f87cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs incurred by the remainder of the system shall be charged to the portion in the prematurity period only if they are specifically identified with the operations of that portion. ##### [360-922-25-5](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:e8f1f6259114750b5b2929a0e8dae020cdedbe6dce6dc9c3c7653d087bd61efc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the prematurity period, costs of cable television plant, including materials, direct labor, and construction overhead shall continue to be capitalized in full. ##### [360-922-25-6](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:8fd28a972fa56db491617c60c8401e7be1dc8cd1c3af770e8ffe0da5a142b46e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [922-835-25-1](https://asc.understandingaccounting.org/asc/835/922/#835-922-25-1) concerning the capitalization of interest costs during the prematurity period. #### Subscriber Installation Costs ##### [360-922-25-7](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:26.653Z to 2026-09-10T00:08:26.653Z Record version: sha256:3229801046347d75aaaf202d810d7b222ea558f73b078742b1ebe73cd0ff1acc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Initial subscriber installation costs, including material, labor, and overhead costs of the drop, shall be capitalized. Source downloaded (UTC): 2026-09-10T00:08:28.839Z to 2026-09-10T00:08:28.839Z Record version: sha256:062967129b0bf00b40e6593b44d637eb3c461967e513ec40d1f6bc0f40c1179d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-922-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/922/#35-subsequent-measurement) SEC content: no #### Prematurity Period ##### [360-922-35-1](https://asc.understandingaccounting.org/asc/360/922/#360-922-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:28.839Z to 2026-09-10T00:08:28.839Z Record version: sha256:5d6016c7c8df5804d2235d65bfff34d967a640b0dc12b6dfbf8b7160da07cbcf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For capitalizable costs identified for the portion of a cable television system that is in the prematurity period, separate projections for the portion shall be developed and the portion's capitalized costs shall be evaluated separately during the [prematurity period](https://asc.understandingaccounting.org/glossary/p/#prematurity-period "During the prematurity period, the cable television system is partially under construction and partially in service. The prematurity period begins when revenue from the first subscriber is recognized in accordance with Topic 606 on revenue from contracts with customers.Its end will vary with circumstances of the system but will be determined based on plans for completion of the first major construction period or achievement of a specified predetermined subscriber level at which no additional investment will be required for other than cable television plant. The construction period of a cable television system varies with the size of the franchise area, density of population, and difficulty of physical construction. The construction period is not completed until the head-end, main cable, and distribution cables are installed, and includes a reasonable time to provide for installation of subscriber drops and related hardware. During the construction period, many system operators complete installation of drops and begin to provide service to some subscribers in some parts of the system while construction continues. Providing the signal for the first time is referred to as energizing the system. The length of the prematurity period varies with the franchise development and construction plans. Such plans may consist of any of the following: Small franchise that is characterized by the absence of free television signal and a short construction period. The entire system is energized at one time near the end of the construction period. Medium-size franchise that is characterized by some direct competition from free television and by a more extensive geographical franchise area lending itself to incremental construction. Some parts of the system are energized as construction progresses. Large metropolitan franchise that is characterized by heavy direct competition from free television and fringe area signal inadequacy, high cost, and difficult construction. Many parts of the system are energized as construction progresses. Except in the smallest systems, programming is usually delivered to portions of the system and some revenues are obtained before construction of the entire system is complete. Thus, virtually every cable television system experiences a prematurity period during which it is receiving some revenue while continuing to incur substantial costs related to the establishment of the total system.") for recoverability (see paragraph [922-360-35-4](https://asc.understandingaccounting.org/asc/360/922/#360-922-35-4)). #### Depreciation Expense ##### [360-922-35-2](https://asc.understandingaccounting.org/asc/360/922/#360-922-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:28.839Z to 2026-09-10T00:08:28.839Z Record version: sha256:434de9779842d26d3b45ac536ff188ab47fb564e31da2839ab030cc0b59e7095 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the prematurity period, depreciation expense shall be determined by multiplying the monthly depreciation of total capitalized costs expected on completion of the prematurity period by the fraction described in the following paragraph, using the depreciation method that will be applied by the entity after the prematurity period. ##### [360-922-35-3](https://asc.understandingaccounting.org/asc/360/922/#360-922-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:28.839Z to 2026-09-10T00:08:28.839Z Record version: sha256:6ede563f993485d3aab26108f86c9ebbd03248a7ea7f283332357b0456da7457 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following fraction shall be determined each month of the prematurity period. The denominator of the fraction shall be the total number of subscribers expected at the end of the prematurity period. The numerator of the fraction shall be the greatest of the following: 1. a The average number of subscribers expected that month as estimated at the beginning of the prematurity period 2. b The average number of subscribers that would be attained using at least equal (that is, straight-line) monthly progress in adding new subscribers towards the estimate of subscribers at the end of the prematurity period 3. c The average number of actual subscribers. This fraction also is to be used to allocate programming costs and other system costs between current and future operations, as discussed in paragraph [922-350-25-1](https://asc.understandingaccounting.org/asc/350/922/#350-922-25-1). #### Recoverability ##### [360-922-35-4](https://asc.understandingaccounting.org/asc/360/922/#360-922-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:28.839Z to 2026-09-10T00:08:28.839Z Record version: sha256:c87bf08c8304a66399c9e4294e526719a79346543f9fc6b2136c661e61fb2338 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Capitalized plant is subject to the provisions of Topic 360. Capitalization of costs shall not cease when the total cost reaches an amount that is not fully recoverable. Capitalization of costs shall continue, and the provision required to reduce capitalized costs to recoverable value shall be increased. #### Subscriber Installation Costs ##### [360-922-35-5](https://asc.understandingaccounting.org/asc/360/922/#360-922-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:28.839Z to 2026-09-10T00:08:28.839Z Record version: sha256:a867eeed1c78d49442303396ac3069f2183df8bb013b62700f1d459d920c2556 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Initial subscriber installation costs capitalized under paragraph [922-360-25-7](https://asc.understandingaccounting.org/asc/360/922/#360-922-25-7) shall be depreciated over a period no longer than the depreciation period used for cable television plant. Source downloaded (UTC): 2026-09-10T00:08:31.985Z to 2026-09-10T00:08:42.644Z Record version: sha256:0c20e55a2b11746f3f3cfce44ab2a963a62a709ab6a386141cdf09f25346962f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-930: Property, Plant, and Equipment — Extractive Activities—Mining ### Machine-generated study aids ```json { "summary": "This Subtopic gives mining-specific guidance on accounting for mineral rights and mining assets within Property, Plant, and Equipment. It clarifies that undeveloped land does not qualify for interest capitalization, how mineral resource asset current costs are measured when current cost disclosures are provided, and—most importantly—that impairment cash flow estimates for mining assets must include value beyond proven and probable reserves (with the related development and extraction outflows) and must reflect market-participant assumptions about mineral price fluctuations.", "key_points": [ "Land not undergoing developmental activities necessary to ready it for its intended use is not a qualifying asset for interest capitalization (360-930-25-1; see 835-20-15-8).", "When current costs are presented under Subtopic 255-10, the cost of mineral resource assets is determined by current market buying prices or by the current cost of finding and developing mineral reserves (360-930-25-2).", "Cash flows associated with value beyond proven and probable reserves must be included in both undiscounted and discounted future cash flow estimates used to test a mining asset for impairment under 360-10-15-3 through 15-5 (360-930-35-1).", "Those estimates must also include the estimated cash outflows required to develop and extract the value beyond proven and probable reserves (360-930-35-1).", "An entity must consider anticipated fluctuations in mineral market prices, using estimates consistent with those of a market participant (360-930-35-2).", "Entities generally should consider all available information—current prices, historical averages, and forward pricing curves—and it is generally inappropriate to use a single factor such as current price or a historical average as a surrogate for future prices (360-930-35-2).", "Marketplace price assumptions should be consistent with the entity's operating plans and financial projections underlying other aspects of the impairment analysis, such as the amount and timing of production (360-930-35-2)." ], "categories": [ "Impairment", "Inventory and PP&E", "Industry-specific", "Subsequent measurement" ], "audience_level": "intermediate", "student_note": "The signature rule here is counterintuitive: even though \"value beyond proven and probable reserves\" is generally not recognized as a separate asset, its cash inflows (and the outflows to develop and extract it) are included in the impairment test cash flows for mining assets. Students also often wrongly assume a single spot price or historical average is an acceptable shortcut for future mineral prices—the guidance says a market participant would consider all available pricing information.", "related_topics": [ "360-10", "930-10", "835-20", "255-10", "930-360", "820-10" ], "key_concepts": [ "mineral rights", "value beyond proven and probable reserves", "mining asset impairment", "interest capitalization", "qualifying asset", "market participant assumptions", "mineral price forecasts", "current cost of mineral resource assets" ] } ``` Source downloaded (UTC): 2026-09-10T00:08:31.985Z to 2026-09-10T00:08:31.985Z Record version: sha256:e415a476f1259c087734eff6bf96ceca431e77d2d7855e13cadca343efc4b89c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-930-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/930/#05-overview-and-background) SEC content: no ##### [360-930-05-1](https://asc.understandingaccounting.org/asc/360/930/#360-930-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:31.985Z to 2026-09-10T00:08:31.985Z Record version: sha256:b56bb1874c641fa9e49d7a351e0c2559e5cb8cdd39be5796b906649ff5110dd9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses the accounting for [mineral rights](https://asc.understandingaccounting.org/glossary/m/#mineral-rights "The legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits."). Source downloaded (UTC): 2026-09-10T00:08:34.635Z to 2026-09-10T00:08:34.635Z Record version: sha256:de3041240a0be8ae5d5c83dc8676a0cab68db06f7cc79eafd375ee8029aa5b42 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-930-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/930/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-930-15-1](https://asc.understandingaccounting.org/asc/360/930/#360-930-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:34.635Z to 2026-09-10T00:08:34.635Z Record version: sha256:574306b0bf0d8bce3f4153d26842ba2960e10db25978a46f7e912e04036cf4c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 930-10-15. Source downloaded (UTC): 2026-09-10T00:08:40.221Z to 2026-09-10T00:08:40.221Z Record version: sha256:db5b3bfa016494a32b1555d548fbbab37d29b02c6d6c01b87ed6c154ca3c6eb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-930-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/930/#25-recognition) SEC content: no ##### [360-930-25-1](https://asc.understandingaccounting.org/asc/360/930/#360-930-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:40.221Z to 2026-09-10T00:08:40.221Z Record version: sha256:313bcf66fa9f03ec110a412fec089623f867f64364195784fdb8ef08783670b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Land that is not undergoing developmental activities necessary to get it ready for its intended use is not an asset that qualifies for interest capitalization. See paragraph [835-20-15-8](https://asc.understandingaccounting.org/asc/835/20/#835-20-15-8) for interest capitalization. ##### [360-930-25-2](https://asc.understandingaccounting.org/asc/360/930/#360-930-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:40.221Z to 2026-09-10T00:08:40.221Z Record version: sha256:bc62e5e00f4f3ba856dec8a2130a4202a8680e82c5d8551e419f22dc55836733 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If current costs are provided in accordance with Subtopic 255-10 the costs of mineral resource assets is determined by current market buying prices or by the current cost of finding and developing mineral reserves. See Section 255-10-50 for current cost accounting. Source downloaded (UTC): 2026-09-10T00:08:42.644Z to 2026-09-10T00:08:42.644Z Record version: sha256:3bd2756d2d6034276e4293bed0b025b15a71416894f24cc20a71301543c78f5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-930-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/930/#35-subsequent-measurement) SEC content: no #### Asset Impairment ##### [360-930-35-1](https://asc.understandingaccounting.org/asc/360/930/#360-930-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:42.644Z to 2026-09-10T00:08:42.644Z Record version: sha256:c471a0774b91dbaa79817e998c5345a9f2441e869058911fb78874dc11274a62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall include the cash flows associated with [value beyond proven and probable reserves](https://asc.understandingaccounting.org/glossary/v/#value-beyond-proven-and-probable-reserves "Value beyond proven and probable reserves is the economic value that exists in a mining asset beyond the value attributable to proven and probable reserves. The distinction between the categories of reserves relates to the level of geological evidence and, therefore, confidence in the reserve estimates.") in estimates of future cash flows (both undiscounted and discounted) used for determining whether a mining asset is impaired under paragraphs [360-10-15-3 through 15-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-15-3) . Estimated cash flows also shall include the estimated cash outflows required to develop and extract the value beyond proven and probable reserves. ##### [360-930-35-2](https://asc.understandingaccounting.org/asc/360/930/#360-930-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:42.644Z to 2026-09-10T00:08:42.644Z Record version: sha256:19ba2a4a8cefd658d4ec00b7f4fb87db98082f4a24902a2911c2c13d759e1f99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall consider the effects of anticipated fluctuations in the market price of minerals when estimating future cash flows (both undiscounted and discounted) used for determining whether a mining asset is impaired under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10. Estimates of those effects shall be consistent with estimates of a market participant. Generally, an entity shall consider all available information including current prices, historical averages, and forward pricing curves. Those marketplace assumptions typically shall be consistent with an entity's operating plans and financial projections underlying other aspects of the impairment analysis (for example, amount and timing of production). It generally would be inappropriate for an entity to use a single factor, such as the current price or a historical average, as a surrogate for estimating future prices without considering other information that a market participant would consider. Source downloaded (UTC): 2026-09-10T00:08:46.669Z to 2026-09-10T00:09:33.153Z Record version: sha256:aa6da3d51bfde7be90e12b21aa2aaa29894d2e7d0fe5ab7d970c190ce0140ad0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932: Property, Plant, and Equipment — Extractive Activities—Oil and Gas ### Machine-generated study aids ```json { "summary": "This subtopic governs how oil and gas entities capitalize, amortize, impair, and dispose of industry-specific property, plant, and equipment—mineral interests in properties, wells and related equipment and facilities, support equipment and facilities, and uncompleted wells—under the successful efforts method (full cost accounting is left to SEC literature). Only exploration and development costs that relate directly to specific oil and gas reserves are capitalized; other costs are expensed, and exploratory well costs are held in uncompleted wells pending a determination of whether proved reserves were found. Capitalized proved property and well costs are amortized by the unit-of-production method, unproved properties are periodically assessed for impairment via a valuation allowance, and conveyances of mineral interests generally produce no gain when they are poolings of assets or involve substantial future performance obligations.", "key_points": [ "Acquisition costs of properties (lease bonuses, brokers' fees, recording fees, legal costs) are capitalized when incurred, whether the property is proved or unproved (932-360-25-7).", "Geological and geophysical costs, carrying costs of undeveloped properties, and dry/bottom hole contributions are exploration costs; all development costs are capitalized whether the well is successful or unsuccessful (932-360-25-9; 932-360-25-14).", "Costs of drilling exploratory wells and exploratory-type stratigraphic test wells are capitalized as uncompleted wells, equipment, and facilities pending determination of proved reserves; they are reclassified to wells and related equipment if proved reserves are found and charged to expense if not (932-360-25-10; 932-360-35-17; 932-360-40-2).", "Capitalized exploratory well costs may continue to be capitalized only if the well found sufficient reserves to justify completion and the entity is making 'sufficient progress' assessing the reserves and the economic/operating viability of the project; capitalization cannot be continued on the chance that prices will rise or technology will develop (932-360-35-13; 932-360-35-18 through 35-20).", "Acquisition costs of proved properties are amortized by the unit-of-production method over total proved reserves, while capitalized well and development costs are amortized over proved developed reserves; rates are revised at least annually and prospectively as changes in estimate (932-360-35-6; 932-360-35-7).", "Unproved properties are assessed periodically for impairment—individually if acquisition costs are significant, otherwise by group amortization—with loss recognized through a valuation allowance; on surrender or abandonment, costs are charged against that allowance (932-360-35-11; 932-360-40-1).", "No gain is recognized on conveyances that are poolings of assets in a joint undertaking, or where a part interest is sold and substantial uncertainty exists about recovery of the retained interest's cost or the seller has a substantial obligation for future performance; otherwise gain or loss is recognized (932-360-40-7 through 40-9)." ], "categories": [ "Industry-specific", "Inventory and PP&E", "Impairment", "Derecognition" ], "audience_level": "advanced", "student_note": "This is the core of successful efforts accounting: exam questions turn on which costs get capitalized (all development costs, even dry development wells) versus expensed (exploratory wells that find no proved reserves, most G&G costs). A common misunderstanding is applying one amortization base to everything—acquisition costs of proved properties use total proved reserves, while well and development costs use proved developed reserves.", "related_topics": [ "932-10", "932-235", "932-470", "360-10", "410", "835-20" ], "key_concepts": [ "successful efforts method", "unproved and proved properties", "exploratory well costs", "sufficient progress criterion", "unit-of-production amortization", "valuation allowance for impairment", "conveyances of mineral interests", "stratigraphic test wells" ] } ``` Source downloaded (UTC): 2026-09-10T00:08:46.669Z to 2026-09-10T00:08:46.669Z Record version: sha256:591317921e8f1fac252cc2cfc833aed886361e6896def87e861f9a58dac96b82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/932/#00-status) SEC content: no ##### [360-932-00-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:46.669Z to 2026-09-10T00:08:46.669Z Record version: sha256:d60acf5c95cb2099cfef1ba3b6cee5661c364cdd597a78d4b048d9a9d955dd80 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
Exploratory WellAmendedAccounting Standards Update No. 2010-0301/06/2010
ProductionAmendedAccounting Standards Update No. 2010-0301/06/2010
PropertiesAmendedAccounting Standards Update No. 2010-0301/06/2010
Proved Oil and Gas ReservesAmendedAccounting Standards Update No. 2010-0301/06/2010
Stratigraphic Test WellAmendedAccounting Standards Update No. 2010-0301/06/2010
932-360-25-3AmendedMaintenance Update 2014-20 (PDF)09/29/2014
932-360-35-14AmendedAccounting Standards Update No. 2012-0410/01/2012
932-360-50-1AmendedAccounting Standards Update No. 2010-0301/06/2010
932-360-55-15 through 55-19SupersededAccounting Standards Update No. 2012-0410/01/2012
932-360-60-1AddedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T00:08:50.166Z to 2026-09-10T00:08:50.166Z Record version: sha256:4702cf52905fda43a559abf60937320eeb296393f6893cc6ee58d1efb5a100d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/932/#05-overview-and-background) SEC content: no ##### [360-932-05-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:50.166Z to 2026-09-10T00:08:50.166Z Record version: sha256:0ec2454ee7b17094a2902f4060379becaacf126fdb951dc4b695f3297f62c6c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses accounting and reporting for industry-specific property, plant, and equipment in the oil and gas industry. Property, plant, and equipment include: 1. a [Mineral interests](https://asc.understandingaccounting.org/glossary/m/#mineral-interests "See Properties.") in [properties](https://asc.understandingaccounting.org/glossary/p/#properties "Mineral interests in properties (hereinafter referred to as properties), which include all of the following: Fee ownership or a lease Concession Other interest representing the legal right to produce or a revenue interest in the production of oil or gas subject to such terms as may be imposed by the conveyance of that interest. Properties also include: Royalty interests Production payments payable in oil or gas Other nonoperating interests in properties operated by others. Properties include those agreements with foreign governments or authorities under which an entity participates in the operation of the related properties or otherwise serves as producer of the underlying reserves (see paragraph 932-235-50-7); but properties do not include other supply agreements or contracts that represent the right to purchase (as opposed to extract) oil and gas. Properties are classified as proved properties or unproved properties.") 2. b [Wells and related equipment and facilities](https://asc.understandingaccounting.org/glossary/w/#wells-and-related-equipment-and-facilities "Wells and related equipment and facilities are often referred to in the oil and gas industry as lease and well equipment even though, technically, the property may have been acquired other than by a lease. The costs include those incurred to: Drill and equip those exploratory wells and exploratory-type stratigraphic test wells that have found proved reserves Obtain access to proved reserves and provide facilities for extracting, treating, gathering, and storing the oil and gas, including the drilling and equipping of development wells and development-type stratigraphic test wells (whether those wells are successful or unsuccessful) and service wells.") 3. c [Support equipment and facilities](https://asc.understandingaccounting.org/glossary/s/#support-equipment-and-facilities "Support equipment and facilities used in oil- and gas-producing activities, such as seismic equipment, drilling equipment, construction and grading equipment, vehicles, repair shops, warehouses, supply points, camps, and division, district, or field offices.") 4. d [Uncompleted wells, equipment, and facilities](https://asc.understandingaccounting.org/glossary/u/#uncompleted-wells-equipment-and-facilities "Uncompleted wells, equipment, and facilities, the costs of which include those incurred to: Drill and equip wells that are not yet completed Acquire or construct equipment and facilities that are not yet completed and installed."). Source downloaded (UTC): 2026-09-10T00:08:53.368Z to 2026-09-10T00:08:53.368Z Record version: sha256:22ef029b059b142d7f91f30d71cb6eeecb794ef75274c9add62bd883f8436507 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/932/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-932-15-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:53.368Z to 2026-09-10T00:08:53.368Z Record version: sha256:f3dff256bb23dd4e30390721de385812935474f1d1752283980f4ae0bc767f2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 932-10-15. Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:15d405219cc77a078577bcf57fe4d2ff3422a253ef2315e8a8794fa2cd571dcf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/932/#25-recognition) SEC content: no #### Full Cost ##### [360-932-25-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:c08049515518255c41204be8e0bc86cf3cebe8aff000c29a0c81396896725157 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Full cost accounting is addressed in the Securities and Exchange Commission (SEC) literature. #### Successful Efforts ##### [360-932-25-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:5dff712af8dd2ff28adb7f308af3bef110fb397d6d54c17c38e47b048d5e0111 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic deals with accounting under a successful efforts method. ##### [360-932-25-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:3aa6ea6671e890f15d6f09775376254b01b7da8c1a24e458fbe06c088626f09c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Only those [exploration costs](https://asc.understandingaccounting.org/glossary/e/#exploration-costs "See paragraph 932-10-S99-1, Regulation S-X Rule 4-10(a)(12), for the definition of exploration costs as used within that Rule.") and development costs that relate directly to specific oil and gas reserves are capitalized; costs that do not relate directly to specific reserves are charged to expense. The successful efforts method of accounting conforms to the traditional concept of the historical cost of an asset. Under the successful efforts method, certain types of costs may be capitalized as construction-in-progress pending further information about the existence of future benefits, but as soon as the additional information becomes available, and it is known whether future benefits exist, those costs are either reclassified as an amortizable asset or charged to expense. ##### [360-932-25-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:3ed59863adfbfb214e6d232fda461010d05146e09727a2fdd26c479db3c246e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity's oil- and gas-producing activities involve certain special types of assets. Costs of those assets shall be capitalized when incurred. Those assets broadly defined are: mineral interests in properties, sometimes called [properties](https://asc.understandingaccounting.org/glossary/p/#properties "Mineral interests in properties (hereinafter referred to as properties), which include all of the following: Fee ownership or a lease Concession Other interest representing the legal right to produce or a revenue interest in the production of oil or gas subject to such terms as may be imposed by the conveyance of that interest. Properties also include: Royalty interests Production payments payable in oil or gas Other nonoperating interests in properties operated by others. Properties include those agreements with foreign governments or authorities under which an entity participates in the operation of the related properties or otherwise serves as producer of the underlying reserves (see paragraph 932-235-50-7); but properties do not include other supply agreements or contracts that represent the right to purchase (as opposed to extract) oil and gas. Properties are classified as proved properties or unproved properties."); [wells and related equipment and facilities](https://asc.understandingaccounting.org/glossary/w/#wells-and-related-equipment-and-facilities "Wells and related equipment and facilities are often referred to in the oil and gas industry as lease and well equipment even though, technically, the property may have been acquired other than by a lease. The costs include those incurred to: Drill and equip those exploratory wells and exploratory-type stratigraphic test wells that have found proved reserves Obtain access to proved reserves and provide facilities for extracting, treating, gathering, and storing the oil and gas, including the drilling and equipping of development wells and development-type stratigraphic test wells (whether those wells are successful or unsuccessful) and service wells."); [support equipment and facilities](https://asc.understandingaccounting.org/glossary/s/#support-equipment-and-facilities "Support equipment and facilities used in oil- and gas-producing activities, such as seismic equipment, drilling equipment, construction and grading equipment, vehicles, repair shops, warehouses, supply points, camps, and division, district, or field offices."); and [uncompleted wells, equipment, and facilities](https://asc.understandingaccounting.org/glossary/u/#uncompleted-wells-equipment-and-facilities "Uncompleted wells, equipment, and facilities, the costs of which include those incurred to: Drill and equip wells that are not yet completed Acquire or construct equipment and facilities that are not yet completed and installed."). #### Accounting at the Time Costs Are Incurred ##### [360-932-25-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:ca9d423b26c84fd56ea42847c26be0042c43eed1adb9c628de5e7fc24ee644db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the oil and gas industry, ultimately the expected future benefits that an entity is attempting to obtain through its acquisition, exploration, and development activities are represented by oil and gas reserves. But other than by purchasing minerals-in-place, an entity does not acquire reserves directly. Rather, it acquires properties (rights to extract any reserves that may be discovered in the future) and it acquires (develops) systems capable of producing the oil and gas reserves that are discovered. ##### [360-932-25-6](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:b08d099254b1fab98650f0abe40220c0c8a918dd2e9168ba8c78705a416dd767 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The effect of paragraphs [932-360-25-7 through 25-16](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-7) , which deal with accounting at the time costs are incurred, is to recognize as assets all of the following: 1. a [Unproved properties](https://asc.understandingaccounting.org/glossary/u/#unproved-properties "Unproved properties are properties with no proved reserves.") 2. b [Proved properties](https://asc.understandingaccounting.org/glossary/p/#proved-properties "Proved properties are properties with proved reserves.") 3. c Wells and related equipment and facilities (which consist of all development costs plus the costs of drilling those [exploratory wells](https://asc.understandingaccounting.org/glossary/e/#exploratory-well "An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, a service well , or a stratigraphic test well.") and exploratory-type stratigraphic test wells that find proved reserves) 4. d Support equipment and facilities used in oil- and gas-producing activities 5. e Uncompleted wells, equipment, and facilities. ##### [360-932-25-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:3c5b2d855190d5b6753c113642769470d7e892fdd7cffe5651be46e6324d90c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) shall be capitalized when incurred. They include all of the following: 1. a The costs of lease bonuses and options to purchase or lease properties 2. b The portion of costs applicable to minerals when land including mineral rights is purchased in fee 3. c Brokers' fees 4. d Recording fees 5. e Legal costs 6. f Other costs incurred in acquiring properties. ##### [360-932-25-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:24cce4b61f9098f783177f91fe6678b3016864e929ecad274635a29d55467689 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Exploration costs may be incurred both before acquiring the related property (sometimes referred to in part as prospecting costs) and after acquiring the property. ##### [360-932-25-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:a011412dc45e60f348ea341c1bfb8ff73d781a047fa1405fb223f40c2ecd4350 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are principal types of exploration costs, which include depreciation and applicable operating costs of support equipment and facilities (see paragraph [932-360-25-16](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-16)) and other costs of exploration activities: 1. a Costs of topographical, geological, and geophysical studies, rights of access to properties to conduct those studies, and salaries and other expenses of geologists, geophysical crews, and others conducting those studies. Collectively, those are sometimes referred to as geological and geophysical costs. 2. b Costs of carrying and retaining undeveloped properties, such as delay rentals, ad valorem taxes on the properties, legal costs for title defense, and the maintenance of land and lease records. 3. c Dry hole contributions and bottom hole contributions. 4. d Costs of drilling and equipping exploratory wells. 5. e Costs of drilling exploratory-type [stratigraphic test wells](https://asc.understandingaccounting.org/glossary/s/#stratigraphic-test-well "A stratigraphic test is a drilling effort, geologically directed, to obtain information pertaining to a specific geologic condition. Such wells customarily are drilled without the intention of being completed for hydrocarbon production. This classification also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic tests are classified as exploratory-type if not drilled in a proved area or development-type if drilled in a proved area."). While the costs of drilling stratigraphic test wells are sometimes considered to be geological and geophysical costs, they are accounted for separately under this Subtopic for reasons explained in paragraphs [932-360-25-17 through 25-18](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-17) . ##### [360-932-25-10](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:26388657ef27ee20b2a64dc07850db841cbe09f6c2736374da1426696d49f17a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The costs of drilling exploratory wells and the costs of drilling exploratory-type stratigraphic test wells shall be capitalized as part of the entity's uncompleted wells, equipment, and facilities pending determination of whether the well has found proved reserves. ##### [360-932-25-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:989b3c636cfb56e6b9c1e9eb2be55348bf7df2fe3ae65027b04e29b6fd762c13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity sometimes conducts geological and geophysical studies and other exploration activities on a property owned by another party, in exchange for which the entity is contractually entitled to receive an interest in the property if proved reserves are found or to be reimbursed by the owner for the geological and geophysical and other costs incurred if proved reserves are not found. In that case, the entity conducting the geological and geophysical studies and other exploration activities shall account for those costs as a receivable when incurred and, if proved reserves are found, they shall become the cost of the proved property acquired. ##### [360-932-25-12](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:42766092f00007ea41f061dafea3b64f004604bdc76121f14afcc93a3f403e8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Development costs are incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering, and storing the oil and gas. ##### [360-932-25-13](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:114d5ef0953836d73a290c1519a534605fae7fa7599c4810ce677e38631a524d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. More specifically, development costs, including depreciation and applicable operating costs of support equipment and facilities (see paragraph [932-360-25-16](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-16)) and other costs of development activities, are costs incurred to: 1. a Gain access to and prepare well locations for drilling, including all of the following: 1. 1 Surveying well locations for the purpose of determining specific development drilling sites 2. 2 Clearing ground 3. 3 Draining 4. 4 Road building 5. 5 Relocating public roads, gas lines, and power lines, to the extent necessary in developing the proved reserves. 2. b Drill and equip [development wells](https://asc.understandingaccounting.org/glossary/d/#development-well "A development well is a well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive."), development-type stratigraphic test wells, and [service wells](https://asc.understandingaccounting.org/glossary/s/#service-well "A service well is a well drilled or completed for the purpose of supporting production in an existing field. Wells in this class are drilled for the following specific purposes: gas injection (natural gas, propane, butane, or flue gas), water injection, steam injection, air injection, salt-water disposal, water supply for injection, observation, or injection for in-situ combustion."), including the costs of platforms and of well equipment such as: 1. 1 The wellhead assembly 2. 2 Pumping equipment 3. 3 Tubing 4. 4 Casing. 3. c Acquire, construct, and install production facilities such as: 1. 1 Lease flow lines 2. 2 Separators 3. 3 Treaters 4. 4 Heaters 5. 5 Manifolds 6. 6 Measuring devices 7. 7 Production storage tanks 8. 8 Natural gas cycling and processing plants 9. 9 Utility and waste disposal systems. 4. d Provide improved recovery systems. ##### [360-932-25-14](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:fe86c1b691d530b3422196a985e5f5c6c20a5f8354c8aa075a97282f5d8b996c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Development costs shall be capitalized as part of the cost of an entity's wells and related equipment and facilities. Thus, all costs incurred to drill and equip development wells, development-type stratigraphic test wells, and service wells are development costs and shall be capitalized, whether the well is successful or unsuccessful. Costs of drilling those wells and costs of constructing equipment and facilities shall be included in the entity's uncompleted wells, equipment, and facilities until drilling or construction is completed. ##### [360-932-25-15](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:2542a593555e7d7188bded5584851ad168e32b87d6c039a1b26f40985dea9a14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Production](https://asc.understandingaccounting.org/glossary/p/#production "Production involves lifting the crude oil and natural gas to the surface, extracting saleable hydrocarbons, in the solid, liquid, or gaseous state from oil sands, shale, coalbeds, or other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas, gathering, treating, field processing (as in the case of processing gas to extract liquid hydrocarbons), and field storage. The oil and gas production function shall be regarded as ending at a terminal point, which is the outlet valve on the lease or field storage tank. If unusual physical or operational circumstances exist, it may be appropriate to regard the terminal point for the production function as: The first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal In the case of natural resources that are intended to be upgraded into synthetic oil or gas, if those natural resources are delivered to a purchaser before upgrading, the first point at which the natural resources are delivered to a main pipeline, a common carrier, a refinery, a marine terminal, or a facility that upgrades such natural resources into synthetic oil or gas.") costs are those costs incurred to operate and maintain an entity's wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities (see the following paragraph) and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced. Examples of production costs (sometimes called lifting costs) are: 1. a Costs of labor to operate the wells and related equipment and facilities 2. b Repairs and maintenance 3. c Materials, supplies, and fuel consumed and services utilized in operating the wells and related equipment and facilities 4. d Property taxes and insurance applicable to proved properties and wells and related equipment and facilities 5. e Severance taxes. Depreciation, depletion, and amortization of capitalized acquisition, exploration, and development costs also become part of the cost of oil and gas produced along with production (lifting) costs identified in this paragraph. ##### [360-932-25-16](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:9def03bb14cce2916f8113255c1fe0e2c7c5c33c578a6052d37e0a24d0eda63d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of acquiring or constructing support equipment and facilities used in oil- and gas-producing activities shall be capitalized. Examples of support equipment and facilities include: 1. a Seismic equipment 2. b Drilling equipment 3. c Construction and grading equipment 4. d Vehicles 5. e Repair shops 6. f Warehouses 7. g Supply points 8. h Camps 9. i Division, district, or field offices. Some support equipment or facilities are acquired or constructed for use exclusively in a single activity—exploration, development, or production. Other support equipment or facilities may serve two or more of those activities and may also serve the entity's transportation, refining, and marketing activities. To the extent that the support equipment and facilities are used in oil- and gas-producing activities, their depreciation and applicable operating costs become an exploration, development, or production cost, as appropriate. #### Stratigraphic Test Wells ##### [360-932-25-17](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:0c3427ed6252eca245e33062ad222dda3e07669ef6b048c372c881694b2f7c83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Stratigraphic test wells are drilled to obtain information. They are not normally intended to be completed for hydrocarbon production and are customarily abandoned after drilling is completed and the information is obtained. Normally, stratigraphic test wells are drilled offshore to determine whether an offshore property contains sufficient reserves to justify the cost of constructing and installing a production platform and to determine where to locate such a platform. ##### [360-932-25-18](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:ab5921b3708ce52c64714a49727761b233ad2ab4a9de387e897d8d5df31b8cd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Stratigraphic test wells are divided into two types—exploratory-type and development-type—and the standards of accounting for the two types parallel the accounting for exploratory wells and development wells, respectively. Thus, an exploratory-type [stratigraphic test well](https://asc.understandingaccounting.org/glossary/s/#stratigraphic-test-well "A stratigraphic test is a drilling effort, geologically directed, to obtain information pertaining to a specific geologic condition. Such wells customarily are drilled without the intention of being completed for hydrocarbon production. This classification also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic tests are classified as exploratory-type if not drilled in a proved area or development-type if drilled in a proved area.") is accounted for in a manner similar to an [exploratory well](https://asc.understandingaccounting.org/glossary/e/#exploratory-well "An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, a service well , or a stratigraphic test well.") drilled in an area requiring a major capital expenditure before production could begin (see paragraph [932-360-25-10](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-10)). The costs of drilling the exploratory-type stratigraphic test well are capitalized pending determination of whether proved reserves are found, subject to the condition that those costs shall not continue to be carried as assets if the entity is not making sufficient progress assessing the reserves and the economic and operating viability of the project or if the quantity of reserves found would not justify completion of the well for production had it not been simply a stratigraphic test well. Thus if an exploratory-type stratigraphic test well discovers reserves that are classified as proved and facilities are to be installed to produce those reserves, the cost of the exploratory-type stratigraphic test well is accounted for as part of the cost of the facilities even though the particular well itself may be abandoned. Accounting for the other type of stratigraphic test well—development-type—is identical to accounting for development wells and other development costs generally: capitalize as part of the cost of an entity's wells and related equipment and facilities (as discussed in paragraph [932-360-25-14](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-14)). #### Links to Other Relevant Topics ##### [360-932-25-19](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:4a042f54469c9aad1e33e956b46885204dd41c11b7f33ee94dbac8243d0b7eac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Land that is not undergoing developmental activities necessary to get it ready for its intended use is not an asset qualifying for interest capitalization. See paragraph [835-20-15-8](https://asc.understandingaccounting.org/asc/835/20/#835-20-15-8) for the criteria and methods for capitalizing interest costs. ##### [360-932-25-20](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:08:59.239Z to 2026-09-10T00:08:59.239Z Record version: sha256:7bbe05ee3b827b2bb445cd8ae598f673471a3ba750a7a55c8329d3f71ad8bc56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 255-10-50 for methods of determining discounted future net cash flows relating to proved oil and gas reserve quantities. Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:5b7de9e67bb00f38b350f57aef01a84bbcc61ab8a4a3ab5d32a0691b22b6e052 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/932/#35-subsequent-measurement) SEC content: no #### Successful Efforts ##### [360-932-35-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:718d05b1833fbfc9ea587a7b832566189d3c46c63556e4aa07e1a7ba0a9fcbfe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance addresses successful efforts accounting. The Securities and Exchange Commission (SEC) literature addresses full cost accounting issues. ##### [360-932-35-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:2845c66a43a81b074a22ead26d045293d8bd07ab0357db42e680016da31ff720 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section deals with disposition of the costs of assets (see paragraphs [932-360-25-5 through 25-14](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-5) and [932-360-25-16 through 25-17](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-16) ) after capitalization. Among other things, those paragraphs provide that the acquisition costs of [proved properties](https://asc.understandingaccounting.org/glossary/p/#proved-properties "Proved properties are properties with proved reserves.") and the costs of [wells and related equipment and facilities](https://asc.understandingaccounting.org/glossary/w/#wells-and-related-equipment-and-facilities "Wells and related equipment and facilities are often referred to in the oil and gas industry as lease and well equipment even though, technically, the property may have been acquired other than by a lease. The costs include those incurred to: Drill and equip those exploratory wells and exploratory-type stratigraphic test wells that have found proved reserves Obtain access to proved reserves and provide facilities for extracting, treating, gathering, and storing the oil and gas, including the drilling and equipping of development wells and development-type stratigraphic test wells (whether those wells are successful or unsuccessful) and service wells.") shall be amortized (see paragraphs [932-360-35-3 through 35-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-3) ) to become part of the cost of oil and gas produced; that impairment (see paragraphs [932-360-35-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-11) and [932-360-35-16 through 35-18](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-16) ) of [unproved properties](https://asc.understandingaccounting.org/glossary/u/#unproved-properties "Unproved properties are properties with no proved reserves.") shall be recognized; and that unproved [properties](https://asc.understandingaccounting.org/glossary/p/#properties "Mineral interests in properties (hereinafter referred to as properties), which include all of the following: Fee ownership or a lease Concession Other interest representing the legal right to produce or a revenue interest in the production of oil or gas subject to such terms as may be imposed by the conveyance of that interest. Properties also include: Royalty interests Production payments payable in oil or gas Other nonoperating interests in properties operated by others. Properties include those agreements with foreign governments or authorities under which an entity participates in the operation of the related properties or otherwise serves as producer of the underlying reserves (see paragraph 932-235-50-7); but properties do not include other supply agreements or contracts that represent the right to purchase (as opposed to extract) oil and gas. Properties are classified as proved properties or unproved properties.") shall be reclassified to proved (see paragraph [932-360-35-15](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-15)) or expensed (see Section 932-360-40) subject to sufficient progress (see paragraph [932-360-35-18](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-18)) being made toward proving the reserves. ##### [360-932-35-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:254436bbd63cec07d2556c853a0de25fcef6d3bbb59db236457d0eed71f89627 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The costs of an entity's wells and related equipment and facilities and the costs of the related proved properties shall be amortized as the related oil and gas reserves are produced. That amortization plus [production](https://asc.understandingaccounting.org/glossary/p/#production "Production involves lifting the crude oil and natural gas to the surface, extracting saleable hydrocarbons, in the solid, liquid, or gaseous state from oil sands, shale, coalbeds, or other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas, gathering, treating, field processing (as in the case of processing gas to extract liquid hydrocarbons), and field storage. The oil and gas production function shall be regarded as ending at a terminal point, which is the outlet valve on the lease or field storage tank. If unusual physical or operational circumstances exist, it may be appropriate to regard the terminal point for the production function as: The first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal In the case of natural resources that are intended to be upgraded into synthetic oil or gas, if those natural resources are delivered to a purchaser before upgrading, the first point at which the natural resources are delivered to a main pipeline, a common carrier, a refinery, a marine terminal, or a facility that upgrades such natural resources into synthetic oil or gas.") (lifting) costs become part of the cost of oil and gas produced. Estimated residual salvage values shall be taken into account in determining amortization and depreciation rates. ##### [360-932-35-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:a2ec310d9d4258ff45eaa0aef68623bdb7c36ffe24727aa128d0719755e59bde Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depreciation of [support equipment and facilities](https://asc.understandingaccounting.org/glossary/s/#support-equipment-and-facilities "Support equipment and facilities used in oil- and gas-producing activities, such as seismic equipment, drilling equipment, construction and grading equipment, vehicles, repair shops, warehouses, supply points, camps, and division, district, or field offices.") used in oil- and gas-producing activities shall be accounted for as [exploration](https://asc.understandingaccounting.org/glossary/e/#exploration "Exploration involves both of the following: Identifying areas that may warrant examination Examining specific areas that are considered to have prospects of containing oil and gas reserves, including drilling exploratory wells and exploratory-type stratigraphic test wells.") cost, development cost, or production cost, as appropriate (see paragraph [932-360-25-16](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-16)). ##### [360-932-35-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:86795ca667334d12acf58bfe1cf3356651a96bb2c734ecba8b80680f9bceb765 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The unit-of-production method of amortization requires that the total number of units of oil or gas reserves in a property or group of properties be estimated and that the number of units produced in the current period be determined. Many properties contain both oil and gas reserves. In those cases, the oil and gas reserves and the oil and gas produced shall be converted to a common unit of measure on the basis of their approximate relative energy content (without considering their relative sales values). However, if the relative proportion of gas and oil extracted in the current period is expected to continue throughout the remaining productive life of the property, unit-of-production amortization may be computed on the basis of one of the two minerals only; similarly, if either oil or gas clearly dominates both the reserves and the current production (with dominance determined on the basis of relative energy content), unit-of-production amortization may be computed on the basis of the dominant mineral only. ##### [360-932-35-6](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:49665d1409e9fe8ee3c53fc4c3d1ed8e5474a1b3fd6a7980b069942fa4b135ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Capitalized acquisition costs of proved properties shall be amortized (depleted) by the unit-of-production method so that each unit produced is assigned a pro rata portion of the unamortized acquisition costs. Under the unit-of-production method, amortization (depletion) may be computed either on a property-by-property basis or on the basis of some reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a [reservoir](https://asc.understandingaccounting.org/glossary/r/#reservoir "A reservoir is a porous and permeable underground formation containing a natural accumulation of producible oil or gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.") or [field](https://asc.understandingaccounting.org/glossary/f/#field "A field is an area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field which are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or by both. Reservoirs that are associated by being in overlapping or adjacent fields may be treated as a single or common operational field. The geological terms structural feature and stratigraphic condition are intended to identify localized geological features as opposed to the broader terms of basins, trends, provinces, plays, areas-of-interest, and so forth."). When an entity has a relatively large number of royalty interests whose acquisition costs are not individually significant, they may be aggregated, for the purpose of computing amortization, without regard to commonality of geological structural features or stratigraphic conditions; if information is not available to estimate reserve quantities applicable to royalty interests owned (see paragraph [932-235-50-4](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-4)), a method other than the unit-of-production method may be used to amortize their acquisition costs. The unit cost shall be computed on the basis of the total estimated units of [proved oil and gas reserves](https://asc.understandingaccounting.org/glossary/p/#proved-oil-and-gas-reserves "Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether the estimate is a deterministic estimate or probabilistic estimate. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time.The area of the reservoir considered as proved includes all of the following: The area identified by drilling and limited by fluid contacts, if any Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establish a lower contact with reasonable certainty.Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.Reserves that can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when both of the following occur: Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based. The project has been approved for development by all necessary parties and entities, including governmental entities. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period before the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions."). (Joint production of both oil and gas is discussed in the preceding paragraph.) Unit-of-production amortization rates shall be revised whenever there is an indication of the need for revision but at least once a year; those revisions shall be accounted for prospectively as changes in accounting estimates (see paragraphs [250-10-45-17 through 45-20](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) ). ##### [360-932-35-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:0e4c23d70cf977dba90fa7611e2917c845d6bc185cce6b1c2bbe87e1875e9a89 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Capitalized costs of exploratory wells and exploratory-type stratigraphic test wells that have found proved reserves and capitalized development costs shall be amortized (depreciated) by the unit-of-production method so that each unit produced is assigned a pro rata portion of the unamortized costs. It may be more appropriate, in some cases, to depreciate natural gas cycling and processing plants by a method other than the unit-of-production method. Under the unit-of-production method, amortization (depreciation) may be computed either on a property-by-property basis or on the basis of some reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field. The unit cost shall be computed on the basis of the total estimated units of proved developed reserves, rather than on the basis of all proved reserves, which is the basis for amortizing acquisition costs of proved properties. If significant development costs (such as the cost of an off-shore production platform) are incurred in connection with a planned group of development wells before all of the planned wells have been drilled, it shall be necessary to exclude a portion of those development costs in determining the unit-of-production amortization rate until the additional development wells are drilled. Similarly it shall be necessary to exclude, in computing the amortization rate, those proved developed reserves that will be produced only after significant additional development costs are incurred, such as for improved recovery systems. However, in no case shall future development costs be anticipated in computing the amortization rate. (Joint production of both oil and gas is discussed in paragraph [932-360-35-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-5).) Unit-of-production amortization rates shall be revised whenever there is an indication of the need for revision but at least once a year; those revisions shall be accounted for prospectively as changes in accounting estimates (see paragraphs [250-10-45-17 through 45-20](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) ). ##### [360-932-35-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:71c04ade4383b5fd890955f4938caf07ddadce0fac8fbf8b120b0e29ada92215 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Typically the evaluation of oil and gas producing properties is on a field-by-field basis or by logical grouping of assets if there is a significant shared infrastructure (for example, platform). The undiscounted future cash flows shall be based on total proved and risk-adjusted probable and possible reserves. That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability. The impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value. ##### [360-932-35-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:bd797e41db3c52f2b3e78de1cfdba1d4a3cce5acb0cd4fd8812cb834ca732383 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following paragraphs provide guidance specific to the oil and gas industry on asset impairment. However the general rules (see the [Impairment or Disposal of Long-Lived Assets Subsection](https://asc.understandingaccounting.org/asc/360/10/#15-scope-and-scope-exceptions) of Section 360-10-15 and the [Impairment or Disposal of Long-Lived Assets Subsection](https://asc.understandingaccounting.org/asc/360/10/#35-subsequent-measurement) of Section 360-10-35) for asset impairment shall also be followed. ##### [360-932-35-10](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:8fed4dd0b2c4698797d870e8ad79a72e6823a4873648c189e61121d5dc77c135 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [360-10-35-15 through 35-49](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-15) for impairment standards applicable to the costs of an entity's wells and related equipment and facilities and the costs of the related proved properties. ##### [360-932-35-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:affddba15787882bb70ff2233ca3843793cb68ccc27e8879c56bbcb863d631bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unproved properties shall be assessed periodically to determine whether they have been impaired. A property would likely be impaired, for example, if a dry hole has been drilled on it and the entity has no firm plans to continue drilling. Also, the likelihood of partial or total impairment of a property increases as the expiration of the lease term approaches if drilling activity has not commenced on the property or on nearby properties. If the results of the assessment indicate impairment, a loss shall be recognized by providing a valuation allowance. Impairment of individual unproved properties whose acquisition costs are relatively significant shall be assessed on a property-by-property basis, and an indicated loss shall be recognized by providing a valuation allowance. When an entity has a relatively large number of unproved properties whose acquisition costs are not individually significant, it may not be practical to assess impairment on a property-by-property basis, in which case the amount of loss to be recognized and the amount of the valuation allowance needed to provide for impairment of those properties shall be determined by amortizing those properties, either in the aggregate or by groups, on the basis of the experience of the entity in similar situations and other information about such factors as the primary lease terms of those properties, the average holding period of unproved properties, and the relative proportion of such properties on which proved reserves have been found in the past. ##### [360-932-35-12](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:a71fc984e3086944419477cb1f021248c15427ce2c3d6860a9cee30d2595888e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The impairment provisions relating to unproved properties referred to in paragraphs [932-360-35-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-11), [932-360-35-19](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-19), [932-360-40-1 through 40-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-1) , and [932-360-55-8 through 55-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-8) remain applicable to unproved properties. ##### [360-932-35-13](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:d957dbebb6ce0fd4ff6a1a913e390965c662fee15b3d8b415fe2c691d8d3379e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the sufficient progress criteria (see paragraphs [932-360-35-18 through 35-20](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-18) )is not met, or if an entity obtains information that raises substantial doubt about the economic or operational viability of the project, the [exploratory well](https://asc.understandingaccounting.org/glossary/e/#exploratory-well "An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, a service well , or a stratigraphic test well.") or exploratory-type stratigraphic well shall be assumed to be impaired and its costs, net of any salvage value, shall be charged to expense. Further, an entity shall not continue to capitalize exploratory well costs on the chance that either of the following might occur: 1. a Current market conditions will change (for example, an increase in the market price of oil or gas). 2. b Technology will be developed to make the development of the project economically and operationally viable. ##### [360-932-35-14](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:9a3aeb58f55eb104ee870598cfe8a24a4a1cbc4258af19b22d9b7f5fdbf7651a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An illustration of specialized equipment impairment can be seen in Example 12 (see paragraphs [360-10-55-50 through 55-54](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-50) ). ##### [360-932-35-15](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:8b1003b79fbf383b79a525f8c308333343a0a583dd561f78e54967d8f9c9fc8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A property shall be reclassified from unproved properties to proved properties when proved reserves are discovered on or otherwise attributed to the property; occasionally, a single property, such as a foreign lease or concession, covers so vast an area that only the portion of the property to which the proved reserves relate—determined on the basis of geological structural features or stratigraphic conditions—shall be reclassified from unproved to proved. For a property whose impairment has been assessed individually in accordance with paragraph [932-360-35-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-11), the net carrying amount (acquisition cost minus valuation allowance) shall be reclassified to proved properties; for properties amortized by providing a valuation allowance on a group basis, the gross acquisition cost shall be reclassified. ##### [360-932-35-16](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:3722878a312d62a93b258ca90dc4ff68277d976625e3390a6594e3ed87f33103 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As specified in paragraph [932-360-25-10](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-10), the costs of drilling an exploratory well or an exploratory-type stratigraphic well shall be capitalized as part of the entity's [uncompleted wells, equipment, and facilities](https://asc.understandingaccounting.org/glossary/u/#uncompleted-wells-equipment-and-facilities "Uncompleted wells, equipment, and facilities, the costs of which include those incurred to: Drill and equip wells that are not yet completed Acquire or construct equipment and facilities that are not yet completed and installed.") pending the determination of whether the well has found proved reserves. ##### [360-932-35-17](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:11022fdb8c6f6e6522ff75efc84e76155920d9705106487ae17075c5f891ab4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If proved reserves are found, the capitalized costs of drilling the well shall be reclassified as part of the costs of the entity's wells and related equipment and facilities at that time (even though the well may not be completed as a producing well). If proved reserves are not found, the capitalized costs of drilling the well shall be charged to expense. ##### [360-932-35-18](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:687069d0f3695ec8f657640a4f9113deee3aea1de5bcf9545c318e6de534d912 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An exploratory well or an exploratory-type stratigraphic well may be determined to have found oil and gas reserves, but those reserves cannot be classified as proved when drilling is completed. In those cases, the capitalized drilling costs shall continue to be capitalized if the well has found a sufficient quantity of reserves to justify its completion as a producing well and the entity is making sufficient progress assessing the reserves and the economic and operating viability of the project. Note that an entity is not required to complete the exploratory or exploratory-type stratigraphic well as a producing well. For purposes of determining whether capitalized drilling costs shall continue to be capitalized pending the determination of proved reserves, a project may include more than one exploratory well or exploratory-type stratigraphic well if the reserves are intended to be extracted in a single, integrated producing operation (for example, the producing wells will operate with shared infrastructure). ##### [360-932-35-19](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:d91879138fe01932285d170f0a50a814c17b5a83a82d6fabcc8efb94e6f39d8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All relevant facts and circumstances shall be evaluated when determining whether an entity is making sufficient progress on assessing the reserves and the economic and operating viability of the project. The following are some indicators, among others, that an entity is making sufficient progress (see the following paragraph). No single indicator is determinative. An entity shall evaluate indicators in conjunction with all other relevant facts and circumstances. These indicators include: 1. a Commitment of project personnel who are at the appropriate levels and who have the appropriate skills 2. b Costs that are being incurred to assess the reserves and their potential development 3. c An assessment process covering the economic, legal, political, and environmental aspects of the potential development is in progress 4. d Existence (or active negotiations) of sales contracts with customers for the oil and gas 5. e Existence (or active negotiations) of agreements with governments, lenders, and venture partners 6. f Outstanding requests for proposals for development of any required facilities 7. g Existence of firm plans, established timetables, or contractual commitments, which may include seismic testing and drilling of additional exploratory wells 8. h Progress that is being made on contractual arrangements that will permit future development 9. i Identification of existing transportation and other infrastructure that is or will be available for the project (subject to negotiations for use). Long delays in the assessment or development plan (whether anticipated or unexpected) may raise doubts about whether the entity is making sufficient progress to continue the capitalization of exploratory well or exploratory-type stratigraphic well costs after the completion of drilling. The longer the assessment process for the reserves and the project, the more difficult it is to conclude that the entity is making sufficient progress to continue the capitalization of those exploratory well or exploratory-type stratigraphic well costs. ##### [360-932-35-20](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:75615b28d65571ec5f01093dc0e50d01615e58911bff2986cd6421beaf742e10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity has not engaged in substantial activities to assess the reserves or the development of the project in a reasonable period of time after the drilling of the well is completed or activities have been suspended, any capitalized costs associated with that well shall be expensed net of any salvage value. After a reasonable period of time, the planning of future activities without engaging in substantial activities shall not be sufficient to continue the capitalization of exploratory well or exploratory-type stratigraphic well costs. However, brief interruptions in activities required to assess the reserves or the project, or other delays resulting from governmental or other third-party evaluation of a proposed project, do not require capitalized exploratory well or exploratory-type stratigraphic well costs to be expensed. ##### [360-932-35-21](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:03.187Z to 2026-09-10T00:09:03.187Z Record version: sha256:19aec2f0e32c408aa81f444d66994ee9c69735603e779465df5f7ed544a77934 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information that becomes available after the end of the period covered by the financial statements but before those financial statements are issued or are available to be issued (as discussed in Section 855-10-25) shall be taken into account in evaluating conditions that existed at the balance sheet date, for example, in assessing unproved properties (see paragraph [932-360-35-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-11)) and in determining whether an exploratory well or exploratory-type [stratigraphic test well](https://asc.understandingaccounting.org/glossary/s/#stratigraphic-test-well "A stratigraphic test is a drilling effort, geologically directed, to obtain information pertaining to a specific geologic condition. Such wells customarily are drilled without the intention of being completed for hydrocarbon production. This classification also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic tests are classified as exploratory-type if not drilled in a proved area or development-type if drilled in a proved area.") had found proved reserves (see paragraphs [932-360-35-18 through 35-20](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-18) ). Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:cbd33576fc4108dbfe504cd1419c399ebceec3ec53363e1694fb4281f682d434 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/360/932/#40-derecognition) SEC content: no #### Surrender or Abandonment of Properties ##### [360-932-40-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:6f2e8a43763ab9d40cc0c33cfc2cddcc029bcef168a8594e0b1ac583caf65e23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an unproved property is surrendered, abandoned, or otherwise deemed worthless, capitalized acquisition costs relating thereto shall be charged against the related allowance for impairment to the extent an allowance has been provided; if the allowance previously provided is inadequate, a loss shall be recognized (see Topic 410 for asset retirement obligations). ##### [360-932-40-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:258aa4c8ad4f466b07c6bd7d09d09c994e7bd131aef30af3cb41928ef16c5554 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a well has not found proved reserves, the capitalized costs of drilling the well, net of any salvage value, shall be charged to expense. The costs of an [exploratory well](https://asc.understandingaccounting.org/glossary/e/#exploratory-well "An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, a service well , or a stratigraphic test well.") or exploratory-type [stratigraphic test well](https://asc.understandingaccounting.org/glossary/s/#stratigraphic-test-well "A stratigraphic test is a drilling effort, geologically directed, to obtain information pertaining to a specific geologic condition. Such wells customarily are drilled without the intention of being completed for hydrocarbon production. This classification also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic tests are classified as exploratory-type if not drilled in a proved area or development-type if drilled in a proved area.") shall be charged to expense if the well is determined not to have found proved reserves. ##### [360-932-40-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:3a8672fc0a0d0c91acba383b0be82a814efff0b25e23c2ad670e07b1c917572f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Normally, no gain or loss shall be recognized if only an individual well or individual item of equipment is abandoned or retired or if only a single lease or other part of a group of [proved properties](https://asc.understandingaccounting.org/glossary/p/#proved-properties "Proved properties are properties with proved reserves.") constituting the amortization base is abandoned or retired as long as the remainder of the property or group of [properties](https://asc.understandingaccounting.org/glossary/p/#properties "Mineral interests in properties (hereinafter referred to as properties), which include all of the following: Fee ownership or a lease Concession Other interest representing the legal right to produce or a revenue interest in the production of oil or gas subject to such terms as may be imposed by the conveyance of that interest. Properties also include: Royalty interests Production payments payable in oil or gas Other nonoperating interests in properties operated by others. Properties include those agreements with foreign governments or authorities under which an entity participates in the operation of the related properties or otherwise serves as producer of the underlying reserves (see paragraph 932-235-50-7); but properties do not include other supply agreements or contracts that represent the right to purchase (as opposed to extract) oil and gas. Properties are classified as proved properties or unproved properties.") continues to produce oil or gas. Instead, the asset being abandoned or retired shall be deemed to be fully amortized, and its cost shall be charged to accumulated depreciation, depletion, or amortization. When the last well on an individual property (if that is the amortization base) or group of properties (if amortization is determined on the basis of an aggregation of properties with a common geological structure) ceases to produce and the entire property or property group is abandoned, gain or loss shall be recognized. Occasionally, the partial abandonment or retirement of a proved property or group of proved properties or the abandonment or retirement of wells or related equipment or facilities may result from a catastrophic event or other major abnormality. In those cases, a loss shall be recognized at the time of abandonment or retirement. #### Mineral Property Conveyances and Related Transactions ##### [360-932-40-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:7e05df3bf07323ba6923fab8ee42638e58a1ef521ae3fe5847d4ef0188e66fc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Mineral interests](https://asc.understandingaccounting.org/glossary/m/#mineral-interests "See Properties.") in properties are frequently conveyed to others for a variety of reasons, including the desire to spread risks, to obtain financing, to improve operating efficiency, and to achieve tax benefits. Conveyances of those interests may involve the transfer of all or a part of the rights and responsibilities of operating a property (operating interest). The transferor may or may not retain an interest in the oil and gas produced that is free of the responsibilities and costs of operating the property (a nonoperating interest). A transaction may, on the other hand, involve the transfer of a nonoperating interest to another party and retention of the operating interest. ##### [360-932-40-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:e46335fe37d509a3759f070f8cb9ed248698772ab1d682aee59c6005b5973444 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Implementation guidance for different types of conveyances can be found in paragraphs [932-360-55-2 through 55-14](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-2) . ##### [360-932-40-6](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:f1ab4e2251d47c47c60807863134aa5651d688b9ede64df0377911263e6b5ade Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain conveyance transactions are in substance borrowings repayable in cash or its equivalent and shall be accounted for as borrowings (see paragraph [932-470-25-1](https://asc.understandingaccounting.org/asc/470/932/#470-932-25-1)). ##### [360-932-40-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:f7e1fdf9b5cd67c0e7bc81cf488d8c40713728c699824706792179ed68c52350 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a pooling of assets in a joint undertaking intended to find, develop, or produce oil or gas from a particular property or group of properties, gain or loss shall not be recognized at the time of the conveyance. ##### [360-932-40-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:cbd58e71cbcde7d02482084d5ce2de76d11998712c0492f137d706f4d590ef67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In both of the following types of conveyances, gain shall not be recognized at the time of the conveyance (see paragraphs [932-360-55-2 through 55-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-2) ): 1. a A part of an interest owned is sold and substantial uncertainty exists about recovery of the costs applicable to the retained interest. 2. b A part of an interest owned is sold and the seller has a substantial obligation for future performance, such as an obligation to drill a well or to operate the property without proportional reimbursement for that portion of the drilling or operating costs applicable to the interest sold. ##### [360-932-40-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:9eb565ce77195336a13f7c9326a529c1b94a25f122bfd09bd38141a3e15a5114 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a conveyance is not one of the types described in paragraphs [932-360-40-7 through 40-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-7) , gain or loss shall be recognized unless there are other aspects of the transaction that would prohibit such recognition under accounting principles applicable to entities in general (see paragraphs [932-360-55-8 through 55-14](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-8) ). #### Completed Exploratory Well Information Available after Balance Sheet Date ##### [360-932-40-10](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:06.510Z to 2026-09-10T00:09:06.510Z Record version: sha256:f1b65677e52b7b7584878a16ee456729c743d039af5aafd4910e14061d63b52d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an exploratory well or exploratory-type stratigraphic test well is in progress at the end of a period and the well is determined not to have found proved reserves before the financial statements for that period are issued or are available to be issued (as discussed in Section 855-10-25), the costs incurred through the end of the period, net of any salvage value, shall be charged to expense for that period. Previously issued financial statements shall not be retroactively restated. Source downloaded (UTC): 2026-09-10T00:09:08.918Z to 2026-09-10T00:09:08.918Z Record version: sha256:ae9d588603a0a56677695e5a104a1880a9b1dc9fad05a14050bb3b28ee18f6fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/932/#50-disclosure) SEC content: no ##### [360-932-50-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:08.918Z to 2026-09-10T00:09:08.918Z Record version: sha256:9c3bb522d259f330785b09bc2cddb2dd256ca0936899b030e6e574afc5857c22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Section 932-235-50 provides various disclosure requirements for oil and gas [properties](https://asc.understandingaccounting.org/glossary/p/#properties "Mineral interests in properties (hereinafter referred to as properties), which include all of the following: Fee ownership or a lease Concession Other interest representing the legal right to produce or a revenue interest in the production of oil or gas subject to such terms as may be imposed by the conveyance of that interest. Properties also include: Royalty interests Production payments payable in oil or gas Other nonoperating interests in properties operated by others. Properties include those agreements with foreign governments or authorities under which an entity participates in the operation of the related properties or otherwise serves as producer of the underlying reserves (see paragraph 932-235-50-7); but properties do not include other supply agreements or contracts that represent the right to purchase (as opposed to extract) oil and gas. Properties are classified as proved properties or unproved properties."), including: 1. a [Proved oil and gas reserve](https://asc.understandingaccounting.org/glossary/p/#proved-oil-and-gas-reserves "Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether the estimate is a deterministic estimate or probabilistic estimate. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time.The area of the reservoir considered as proved includes all of the following: The area identified by drilling and limited by fluid contacts, if any Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establish a lower contact with reasonable certainty.Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.Reserves that can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when both of the following occur: Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based. The project has been approved for development by all necessary parties and entities, including governmental entities. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period before the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.") quantities (see paragraphs [932-235-50-3 through 50-11B](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-3)) 2. b Capitalized costs (see paragraphs [932-235-50-12 through 50-15](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-12) ) 3. c Continued capitalization (see paragraph [932-235-50-1B](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-1B)) 4. d Costs incurred for property acquisition [exploration](https://asc.understandingaccounting.org/glossary/e/#exploration "Exploration involves both of the following: Identifying areas that may warrant examination Examining specific areas that are considered to have prospects of containing oil and gas reserves, including drilling exploratory wells and exploratory-type stratigraphic test wells.") and development activities (see paragraphs [932-235-50-17 through 50-20](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-17) ) 5. e Standardized measure of discounted future cash flows (see paragraphs [932-235-50-29 through 50-33](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-29) ) 6. f Change in standardized discounted cash flows (see paragraphs [932-235-50-34 through 50-36](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-34) ). Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:572571d5938cd6d25d24cf2a788a68def1a0691bc26ec928ba6a2c34ea22980d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/932/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [360-932-55-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:c9103c00fb9f45aa2849932942e5f770ffed92906f21c73a455387dd67542055 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accordance with paragraphs [932-360-40-4 through 40-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-4) , the following types of transactions shall be accounted for as indicated in each Example. No attempt has been made to include the many variations of those arrangements that occur, but those paragraphs shall, where applicable, determine the accounting for those other arrangements as well. ##### [360-932-55-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:d8ee4a63805c6e8558f38eb07c15f6318ac3286fd8b413bc965f9e1b0ef11af7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some [production](https://asc.understandingaccounting.org/glossary/p/#production "Production involves lifting the crude oil and natural gas to the surface, extracting saleable hydrocarbons, in the solid, liquid, or gaseous state from oil sands, shale, coalbeds, or other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas, gathering, treating, field processing (as in the case of processing gas to extract liquid hydrocarbons), and field storage. The oil and gas production function shall be regarded as ending at a terminal point, which is the outlet valve on the lease or field storage tank. If unusual physical or operational circumstances exist, it may be appropriate to regard the terminal point for the production function as: The first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal In the case of natural resources that are intended to be upgraded into synthetic oil or gas, if those natural resources are delivered to a purchaser before upgrading, the first point at which the natural resources are delivered to a main pipeline, a common carrier, a refinery, a marine terminal, or a facility that upgrades such natural resources into synthetic oil or gas.") payments differ from those described in paragraph [932-470-25-1](https://asc.understandingaccounting.org/asc/470/932/#470-932-25-1) in that the seller's obligation is not expressed in monetary terms but as an obligation to deliver, free and clear of all expenses associated with operation of the property, a specified quantity of oil or gas to the purchaser out of a specified share of future production. Such a transaction is a sale of a mineral interest for which gain shall not be recognized because the seller has a substantial obligation for future performance. The seller shall account for the funds received as unearned revenue to be recognized as the oil or gas is delivered. The purchaser of such a production payment has acquired an interest in a mineral property that shall be recorded at cost and amortized by the unit-of-production method as delivery takes place. The related reserve estimates and production data shall be reported as those of the purchaser of the production payment and not of the seller (see paragraphs [932-235-50-4 through 50-11](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-4) ). ##### [360-932-55-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:39e897fccaf9ae3b0af5429e85118002288cb0b57187d0c2f66c224c839991f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An assignment of the operating interest in an unproved property with retention of a nonoperating interest in return for drilling, development, and operation by the assignee is a pooling of assets in a joint undertaking for which the assignor shall not recognize gain or loss. The assignor's cost of the original interest shall become the cost of the interest retained. The assignee shall account for all costs incurred as specified by Sections 932-360-25 and 932-360-35 and shall allocate none of those costs to the mineral interest acquired. If oil or gas is discovered, each party shall report its share of reserves and production (see paragraphs [932-235-50-4 through 50-11](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-4) ). ##### [360-932-55-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:25f24595715134c114e4b7da5ba05badcad8b8abf6888c40a667b963794f0fec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An assignment of a part of an operating interest in an [unproved property](https://asc.understandingaccounting.org/glossary/u/#unproved-properties "Unproved properties are properties with no proved reserves.") in exchange for a free well with provision for joint ownership and operation is a pooling of assets in a joint undertaking by the parties. The assignor shall record no cost for the obligatory well; the assignee shall record no cost for the mineral interest acquired. All drilling, development, and operating costs incurred by either party shall be accounted for as specified by this Topic. If the conveyance agreement requires the assignee to incur geological or geophysical expenditures instead of, or in addition to, a drilling obligation, those costs shall likewise be accounted for by the assignee as specified by this Topic. If reserves are discovered, each party shall report its share of reserves and production (see paragraphs [932-235-50-4 through 50-11](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-4) ). ##### [360-932-55-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:7b29971a6ac53801dc42eafc011142d3bec332ec3c019a854056ac99b9fbad8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A part of an operating interest in an unproved property may be assigned to effect an arrangement called a carried interest whereby the assignee (the carrying party) agrees to defray all costs of drilling, developing, and operating the property and is entitled to all of the revenue from production from the property, excluding any third party interest, until all of the assignee's costs have been recovered, after which the assignor will share in both costs and production. Such an arrangement represents a pooling of assets in a joint undertaking by the assignor and assignee. The carried party shall make no accounting for any costs and revenue until after recoupment (payout) of the carried costs by the carrying party. Subsequent to payout the carried party shall account for its share of revenue, operating expenses, and (if the agreement provides for subsequent sharing of costs rather than a carried interest) subsequent development costs. During the payout period the carrying party shall record all costs, including those carried, as specified by this Topic and shall record all revenue from the property including that applicable to the recovery of costs carried. The carried party shall report as oil or gas reserves only its share of proved reserves estimated to remain after payout, and unit-of-production amortization of the carried party's property cost shall not commence prior to payout. Prior to payout the carrying party's reserve estimates and production data shall include the quantities applicable to recoupment of the carried costs (see paragraphs [932-235-50-4 through 50-11](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-4) ). ##### [360-932-55-6](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:0acc18b4b26d4bbf8425688246c6fcf8a1431e45665da21bf8495dc1593a23ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A part of an operating interest owned may be exchanged for a part of an operating interest owned by another party. The purpose of such an arrangement, commonly called a joint venture in the oil and gas industry, often is to avoid duplication of facilities, diversify risks, and achieve operating efficiencies. No gain or loss shall be recognized by either party at the time of the transaction. In some joint ventures that may or may not involve an exchange of interests, the parties may share different elements of costs in different proportions. In such an arrangement a party may acquire an interest in a property or in wells and related equipment that is disproportionate to the share of costs borne by it. As in the case of a carried interest or a free well, each party shall account for its own cost under the provisions of this Subtopic. No gain shall be recognized for the acquisition of an interest in joint assets, the cost of which may have been paid in whole or in part by another party. ##### [360-932-55-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:3120484b12293611e0fe830cd4ba965daf6059448604f059f226c1e5dbf9fe2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a unitization all the operating and nonoperating participants pool their assets in a producing area (normally a [field](https://asc.understandingaccounting.org/glossary/f/#field "A field is an area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field which are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or by both. Reservoirs that are associated by being in overlapping or adjacent fields may be treated as a single or common operational field. The geological terms structural feature and stratigraphic condition are intended to identify localized geological features as opposed to the broader terms of basins, trends, provinces, plays, areas-of-interest, and so forth.")) to form a single unit and in return receive an undivided interest (of the same type as previously held) in that unit. Unitizations generally are undertaken to obtain operating efficiencies and to enhance recovery of reserves, often through improved recovery operations. Participation in the unit is generally proportionate to the oil and gas reserves contributed by each. Because the [properties](https://asc.understandingaccounting.org/glossary/p/#properties "Mineral interests in properties (hereinafter referred to as properties), which include all of the following: Fee ownership or a lease Concession Other interest representing the legal right to produce or a revenue interest in the production of oil or gas subject to such terms as may be imposed by the conveyance of that interest. Properties also include: Royalty interests Production payments payable in oil or gas Other nonoperating interests in properties operated by others. Properties include those agreements with foreign governments or authorities under which an entity participates in the operation of the related properties or otherwise serves as producer of the underlying reserves (see paragraph 932-235-50-7); but properties do not include other supply agreements or contracts that represent the right to purchase (as opposed to extract) oil and gas. Properties are classified as proved properties or unproved properties.") may be in different stages of development at the time of unitization, some participants may pay cash and others may receive cash to equalize contributions of [wells and related equipment and facilities](https://asc.understandingaccounting.org/glossary/w/#wells-and-related-equipment-and-facilities "Wells and related equipment and facilities are often referred to in the oil and gas industry as lease and well equipment even though, technically, the property may have been acquired other than by a lease. The costs include those incurred to: Drill and equip those exploratory wells and exploratory-type stratigraphic test wells that have found proved reserves Obtain access to proved reserves and provide facilities for extracting, treating, gathering, and storing the oil and gas, including the drilling and equipping of development wells and development-type stratigraphic test wells (whether those wells are successful or unsuccessful) and service wells.") with the ownership interests in reserves. In those circumstances, cash paid by a participant shall be recorded as an additional investment in wells and related equipment and facilities, and cash received by a participant shall be recorded as a recovery of cost. The cost of the assets contributed plus or minus cash paid or received is the cost of the participant's undivided interest in the assets of the unit. Each participant shall include its interest in reporting reserve estimates and production data (see paragraphs [932-235-50-4 through 50-11)](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-4). ##### [360-932-55-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:9ab223909dddf08cf28b6512ade173f0c4c18b0bd9acd8a49764fc68e1d53120 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the entire interest in an unproved property is sold for cash or cash equivalent, recognition of gain or loss depends on whether, in applying paragraph [932-360-35-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-11), impairment had been assessed for that property individually or by amortizing that property as part of a group. If impairment was assessed individually, gain or loss shall be recognized. For a property amortized by providing a valuation allowance on a group basis, neither gain nor loss shall be recognized when an unproved property is sold unless the sales price exceeds the original cost of the property, in which case gain shall be recognized in the amount of such excess. ##### [360-932-55-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:00f5958d484ca2ec6d4d0ed953ffb5d98ab4eaccd6dc0c1a106b3d8fb3324b30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a part of the interest in an unproved property is sold, even though for cash or cash equivalent, substantial uncertainty usually exists as to recovery of the cost applicable to the interest retained. Consequently, the amount received shall be treated as a recovery of cost. The carrying amount of the interest retained shall continue to be subject to the assessment for impairment as required by paragraph [932-360-35-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-35-11). However, if the sales price exceeds the carrying amount of a property whose impairment has been assessed individually in accordance with that paragraph, or exceeds the original cost of a property amortized by providing a valuation allowance on a group basis, gain shall be recognized in the amount of such excess. ##### [360-932-55-10](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:ef9a0ad0bc94dd8b863745498229be24ca34b50b112eef40eddb0f791f4c7af0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sale of an entire interest in a proved property that constitutes a separate amortization base is not one of the types of conveyances described in paragraphs [932-360-40-7 through 40-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-7) . The difference between the amount of sales proceeds and the unamortized cost shall be recognized as a gain or loss. ##### [360-932-55-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:e25898c7c4ab5ed9376ebf3db1abefd8c443c3b46e717ecbb9dbf43bff36d4ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sale of a part of a proved property, or of an entire proved property constituting a part of an amortization base, shall be accounted for as the sale of an asset, and a gain or loss shall be recognized, since it is not one of the conveyances described in paragraphs [932-360-40-7 through 40-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-7) . The unamortized cost of the property or group of properties a part of which was sold shall be apportioned to the interest sold and the interest retained on the basis of the fair values of those interests. However, the sale may be accounted for as a normal retirement under the provisions of paragraph [932-360-40-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-3) with no gain or loss recognized if doing so does not significantly affect the unit-of-production amortization rate. ##### [360-932-55-12](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:4db2b4233a4a7b69a1bcb8745dd24c76c79a3061198f3c900fa5a2e4d0d326e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sale of the operating interest in a proved property for cash with retention of a nonoperating interest is not one of the types of conveyances described in paragraphs [932-360-40-7 through 40-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-40-7) . Accordingly, it shall be accounted for as the sale of an asset, and any gain or loss shall be recognized. The seller shall allocate the cost of the proved property to the operating interest sold and the nonoperating interest retained on the basis of the fair values of those interests. A retained production payment denominated in money is not a mineral interest (see paragraphs [932-360-25-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-25-4) and [932-470-25-1](https://asc.understandingaccounting.org/asc/470/932/#470-932-25-1)). ##### [360-932-55-13](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:0342787ec65f9bd523e9070bea731881a03dd2d0ea25826e533f1be07fbf48ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sale of a proved property subject to a retained production payment that is expressed as a fixed sum of money payable only from a specified share of production from that property, with the purchaser of the property obligated to incur the future costs of operating the property, shall be accounted for as follows: 1. a If satisfaction of the retained production payment is reasonably assured, the seller of the property, who retained the production payment, shall record the transaction as a sale, with recognition of any resulting gain or loss. The retained production payment shall be recorded as a receivable, with interest accounted for in accordance with the provisions of Subtopic 835-30. The purchaser shall record as the cost of the assets acquired the cash consideration paid plus the present value of the retained production payment, which shall be recorded as a payable. The oil and gas reserve estimates and production data, including those applicable to liquidation of the retained production payment, shall be reported by the purchaser of the property (see paragraphs [932-235-50-4 through 50-11](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-4) ). 2. b If satisfaction of the retained production payment is not reasonably assured, the transaction is in substance a sale with retention of an overriding royalty that shall be accounted for in accordance with the preceding paragraph. ##### [360-932-55-14](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:55f430488d217b384f9bde55618e72919f6028336de08632cd3ad91e6eb27dea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sale of a proved property subject to a retained production payment that is expressed as a right to a specified quantity of oil or gas out of a specified share of future production shall be accounted for in accordance with paragraph [932-360-55-12](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-12). ##### [360-932-55-15](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:10.557Z to 2026-09-10T00:09:10.557Z Record version: sha256:7650bcff9ad68b7fcff91a5685e0901fe16fb93589cebc933fbd8c5c8a61d32b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 932-360-55-15 through 55-19 superseded by Accounting Standards Update No. 2012-04](https://asc.understandingaccounting.org/asc/360/932/#360-932-55-15). Source downloaded (UTC): 2026-09-10T00:09:12.421Z to 2026-09-10T00:09:12.421Z Record version: sha256:d2bda250db65cb1290d00ad4e13a5aad768d11c20daaababd816027facb62e50 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/360/932/#60-relationships) SEC content: no ##### [360-932-60-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:12.421Z to 2026-09-10T00:09:12.421Z Record version: sha256:a7845c8d995608edec407d2db5c7bb4ebaef5d4918ba5b5b5069f048ac0cc332 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [360-10-55-50 through 55-54](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-50) for an illustration of the disclosure of risks and uncertainties related to impairment of specialized equipment. Source downloaded (UTC): 2026-09-10T00:09:18.015Z to 2026-09-10T00:09:18.015Z Record version: sha256:00e7d6384aa85a78f33083ab2634ce15fc7477dccd0890a7c37cf4b68a5c7019 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/932/#sec-00-status) SEC content: yes ##### [360-932-S00-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:18.015Z to 2026-09-10T00:09:18.015Z Record version: sha256:e356fd17b2feef61f63b7c47928e15df95184a3105e890ea8e2494438937bf1b 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
932-360-S99-1AmendedAccounting Standards Update No. 2009-0308/24/2009
932-360-S99-1AmendedAccounting Standards Update No. 2009-0709/15/2009
932-360-S99-2AmendedAccounting Standards Update No. 2012-0308/27/2012
932-360-S99-2AmendedAccounting Standards Update No. 2009-0308/24/2009
Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:a5b99e2f64ff43cbd0dffaa087b3d4bcbe9edc73509f774ffa9be2df360a5d77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-S25: SEC 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/932/#sec-25-recognition) SEC content: yes #### Successful Efforts Method ##### [360-932-S25-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:4c828d108277497bd8bb8c17356ca405d4c5022bc85b9cdd3d0b1120945f68dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(b), for the requirements of an entity that follows the successful efforts method, including smaller reporting companies. #### Full Cost Method ##### [360-932-S25-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:606d9fcfbc117d96a42f0a30c9141713194f3878534a4d81defeafc33a5baee5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See the following rules within paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c), for the application of the full cost method of accounting, including smaller reporting companies. ##### [360-932-S25-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:b76c8d2df83e6843a4f5390eb6c592c0357f3a4442e2ea3410275b366e975fa3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(1), for how to determine cost centers for purposes of the full cost method. ##### [360-932-S25-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:ab1d3f282ef60ed2f929928bb4ebfef15832882925b8fc84e3d9b9d8dbd2ed5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(2), for discussion of which costs are required to be capitalized under the full cost method. ##### [360-932-S25-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:9ab3ccb0de5baea26377f0ed4061f9356af4669ca619f35029f93641fe0ff99d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(5), for the required accounting for production costs under the full cost method. ##### [360-932-S25-6](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:a2796d26609f8778416fc792bec0dfb30fab9d0012b855326f1a81e103a561b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(6)(i), for the required accounting for sales and abandonments of oil and gas properties under the full cost method. ##### [360-932-S25-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:432545896219181811ed3cb6b2dd5bed9c0ffa133cde3a95826c26a9300f3c34 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(6)(ii), for the required accounting for purchases of oil and gas reserves in place under the full cost method. ##### [360-932-S25-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:cdcf96afc68221e7b3d43a516aea9be414503ab77c9c4a31eb91f5d3b350265d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(6)(iii), for the required accounting for partnerships, joint venture operations, and other drilling arrangements under the full cost method. ##### [360-932-S25-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-S25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:21.785Z to 2026-09-10T00:09:21.785Z Record version: sha256:cc49f4af7101ed0ba8c9d33643661453c3b4a7cc61d4a3e5529f2eb230312c60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(6)(iv), for the a discussion of when income can be recognized in connection with contractual services performed under the full cost method. Source downloaded (UTC): 2026-09-10T00:09:24.129Z to 2026-09-10T00:09:24.129Z Record version: sha256:0dfdb1aabacfb1cd2b157baf9b1940e43ef101e79f95f46bf2b8c0658646627a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-S35: SEC 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/932/#sec-35-subsequent-measurement) SEC content: yes #### Full Cost Method ##### [360-932-S35-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:24.129Z to 2026-09-10T00:09:24.129Z Record version: sha256:9d12c74436e83e45e23d9ed3cf88190a9d810a98d9538d3f1d3d57f3d74b7668 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(3), for the requirements for amortizing capitalized costs under the full cost method of accounting. ##### [360-932-S35-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:24.129Z to 2026-09-10T00:09:24.129Z Record version: sha256:b59051a5653d2c01af215ff3a205b35a2c06cece5ea3aa96d6800adf9e927dcb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(4), for the requirement limiting capitalized costs under the full cost method of accounting. Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:6e83e2afdd99b15656fc48ea3f859e71a9e397617d74c50d8caff555d99c103f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/932/#sec-50-disclosure) SEC content: yes #### Capitalized Costs ##### [360-932-S50-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:327a67ffbcd213a7ac0d5bbcab1b5cdf121ae42863062814579679201537f140 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(7), for required disclosures under the full cost method of accounting. #### Limitation on Capitalized Costs ##### [360-932-S50-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:e4a2bd7e93acd61269dce96c696705598e485d801affc29164a90406754f48c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.3.b, for SEC Staff views on disclosure requirements when cash flow hedges are used in the computation of the limitation on capitalized costs. ##### [360-932-S50-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:0a4b50e84297f45c6a037d58b20b24f44d405aecff063ee379a3d20753200c9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.3.c, for SEC Staff views on disclosure requirements when subsequent events affect the computation of the limitation on capitalized costs. ##### [360-932-S50-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:32f29b7d9dd4a1ee96ad9eaa1d0905c7aca0147615ce48c126ba2843c321c944 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.4.a, for SEC Staff views on disclosure requirements pertaining to the interaction of FASB Statement No. 143, Accounting for Asset Retirement Obligations, and the full cost rules. #### Amortization of Capitalized Costs ##### [360-932-S50-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:7ca4fafad7715533fe86c0d42abee3d122bac62ae4db1c66d74c1768af3224f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-10-S99-1](https://asc.understandingaccounting.org/asc/932/10/#932-10-S99-1), Regulation S-X Rule 4-10(c)(7)(i), for required disclosures pertaining to the amortization of capitalized costs. ##### [360-932-S50-6](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:305cc710d98e988eec8d641b0c2109d44fa743554d060dbe86eab01e478f1427 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-3), SAB Topic 12.F, for SEC Staff views on disclosures when entities apply the gross revenue method of amortizing capitalized costs. #### Unproved Reserves ##### [360-932-S50-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:ede56afb082af32ced5c350ec55bb054b7ca14ab6cba86fe59b8f8bde596e111 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-1), SAB Topic 12.A.3.b, for SEC Staff views on disclosures for unproved properties. #### Inclusion of Methane Gas in Proved Reserves ##### [360-932-S50-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-S50-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:26.634Z to 2026-09-10T00:09:26.634Z Record version: sha256:c24d9e98d93ffd4052bf715df4578d29c1a44d38992a08c2e4b846de35e8b7b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-4), SAB Topic 12.G, for SEC Staff views on disclosure requirements when methane gas is included in proved reserves. Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:307d50cd1e5af0b0db7adfab5798d74cbe0f8be2a698738c6869dc648153268c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-S55: SEC 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/932/#sec-55-implementation-guidance-and-illustrations) SEC content: yes #### Proved Reserves ##### [360-932-S55-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:8aa777b23bc7f4cb229981ca08f6678ff41f3f28166c811fd00a2ed9c8543197 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-1), SAB Topic 12.A.1, for SEC Staff views on estimating quantities of proved reserves. ##### [360-932-S55-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:266a10ad3c2b22b5f73b188e9379b104e3cb92373e3380e8dda39b02323cfa8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-1), SAB Topic 12.A.2, for SEC Staff views on estimating future net revenues for the purposes of determining proved reserves. ##### [360-932-S55-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:6ad75b2f2f260099b6fc3d361a40274739d5e834a0fbcca6d4915a6bdf0df9ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-4), SAB Topic 12.G, for SEC Staff views on the inclusion of methane gas within the definition of proved reserves for purposes of the disclosures relating to oil and gas producing activities and the full cost ceiling test. #### Limitation on Capitalized Costs ##### [360-932-S55-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:d672ac8980eeb60637dc62c2f3dde63b066295953201fe0e7366843335499e61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.1, for SEC Staff views for the consideration of income tax effects in determining the full cost ceiling. ##### [360-932-S55-5](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:8ac91b707fa7d467aa624045c16fac1f90499594e31406cd7f1f1ee263cb9675 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.3.a, for SEC Staff views on an exemption to the full cost ceiling limitation for purchased properties. ##### [360-932-S55-6](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:ff3d8b818c77aaac096948d8def5b924ede40160ddfee07e492ea76d87426115 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.3.b, for SEC Staff views on use of cash flow hedges in the computation of the limitation on capitalized costs. ##### [360-932-S55-7](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:48dbbef89e262d75c409bf9c9308e906a7d5edb5ee7b094c6a9419a7f2d300b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.3.c, for SEC Staff views on the effect of subsequent events on the computation of the limitation on capitalized costs. ##### [360-932-S55-8](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:41c0018858470536f349cccc3488e59d4d1316c4e523514feb7cd547766c7769 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.4.b, for SEC Staff views on the effect of FASB Statement No. 143 on the full cost ceiling test. #### Amortization of Capitalized Costs ##### [360-932-S55-9](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:f5ddaec178cdce4473a50594194f06599314a3e2d7ff5a9dfefebc39a1acf6e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.2, for SEC Staff views on the exclusion of costs from amortization. ##### [360-932-S55-10](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:c3f3f69d556ddc6242fc432f772ee3f731236e4b44a60593c3a0932a8ec77fd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2), SAB Topic 12.D.4.b, for SEC Staff views on the effect of FASB Statement No. 143 on the calculation of depreciation, depletion, and amortization. ##### [360-932-S55-11](https://asc.understandingaccounting.org/asc/360/932/#360-932-S55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:29.198Z to 2026-09-10T00:09:29.198Z Record version: sha256:3c56276d5d10b16407b85797466b566c32d40a365cb483c43a40c0c7ab88aee1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [932-360-S99-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-3), SAB Topic 12.F, for SEC Staff views on using the gross revenue method when substantial production is not subject to pricing regulation. Source downloaded (UTC): 2026-09-10T00:09:33.153Z to 2026-09-10T00:09:33.153Z Record version: sha256:4a602d6544b674e6184156f483bc09fd755b6a9eea8213f48a060ced3635bd39 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-932-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/360/932/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [360-932-S99-1](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:33.153Z to 2026-09-10T00:09:33.153Z Record version: sha256:ddbcc5c341b35f4f2cb519b926ab26e6f6e2f0365ac5ccf24cc639bf2ae95866 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 12.A, Accounting Series Release 257—Requirements for Financial Accounting and Reporting Practices for Oil and Gas Producing Activities. - 1\. Estimates of Quantities of Proved Reserves - Facts: Rule 4-10 contains definitions of proved reserves, proved developed reserves, and proved undeveloped reserves to be used in determining quantities of oil and gas reserves to be reported in filings with the Commission. - Question 1: The definition of proved reserves states that reservoirs are considered proved if "economic producibility is supported by either actual production or conclusive formation test." May oil and gas reserves be considered proved if economic producibility is supported only by core analyses and/or electric or other log interpretations? - Interpretive Response: Economic producibility of estimated proved reserves can be supported to the satisfaction of the Office of Engineering if geological and engineering data demonstrate with reasonable certainty that those reserves can be recovered in future years under existing economic and operating conditions. The relative importance of the many pieces of geological and engineering data which should be evaluated when classifying reserves cannot be identified in advance. In certain instances, proved reserves may be assigned to reservoirs on the basis of a combination of electrical and other type logs and core analyses which indicate the reservoirs are analogous to similar reservoirs in the same field which are producing or have demonstrated the ability to produce on a formation test. - Question 2: In determining whether "proved undeveloped reserves" encompass acreage on which fluid injection (or other improved recovery technique) is contemplated, is it appropriate to distinguish between (i) fluid injection used for pressure maintenance during the early life of a field and (ii) fluid injection used to effect secondary recovery when a field is in the late stages of depletion? The definition in Rule 4-10(a)(4) does not make this distinction between pressure maintenance activity and fluid injection undertaken for purposes of secondary recovery. - Interpretive Response: The Office of Engineering believes that the distinction identified in the above question may be appropriate in a few limited circumstances, such as in the case of certain fields in the North Sea. The staff will review estimates of proved reserves attributable to fluid injection in the light of the strength of the evidence presented by the registrant in support of a contention that enhanced recovery will be achieved. - Question 3: What volumes of natural gas liquids should be reported as net reserves, that portion recovered in a gas processing plant and allocated to the leasehold interest or the total recovered by a plant from net interest gas? - Interpretive Response: Companies should report reserves of natural gas liquids which are net to their leasehold interests, i.e., that portion recovered in a processing plant and allocated to the leasehold interest. It may be appropriate in the case of natural gas liquids not clearly attributable to leasehold interests ownership to follow instructions to Item 3 of Securities Act Industry Guide 2 and report such reserves separately and describe the nature of the ownership. - Question 4: What pressure base should be used for reporting gas and production, 14.73 psia or the pressure base specified by the state? - Interpretive Response: The reporting instructions to the Department of Energy's Form EIA-28 specify that natural gas reserves are to be reported at 14.73 psia and 60 degrees F. There is no pressure base specified in Regulation S-X or S-K. At the present time the staff will not object to natural gas reserves and production data calculated at other pressure bases, if such other pressure bases are identified in the filing. - 2\. Estimates of Future Net Revenues - Facts: Paragraphs 30-34 of Statement 69 \[paragraphs [932-235-50-29 through 50-36](https://asc.understandingaccounting.org/asc/235/932/#235-932-50-29) \] require the disclosure of the standardized measure of discounted future net cash flows from production of proved oil and gas reserves, computed by applying year-end prices of oil and gas (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production as of the latest balance sheet date, less estimated future expenditures (based on current costs) of developing and producing the proved reserves, and assuming continuation of existing economic conditions. - Question 1: For purposes of determining reserves and estimated future net revenues, what price should be used for gas which will be produced after an existing contract expires or after the redetermination date in a contract? - Interpretive Response: The price to be used for gas which will be produced after a contract expires or has a redetermination is the current market price at the end of the fiscal year for that category of gas. This price may be increased thereafter only for additional fixed and determinable escalations, as appropriate, for that category of gas. A fixed and determinable escalation is one which is specified in amount and is not based on future events such as rates of inflation. - Question 2: What price should be applied to gas which at the end of a fiscal year is not yet subject to a gas sales contract? - Interpretive Response: The price to be used is the current market price for similarly situated gas at the end of the fiscal year provided the company can reasonably expect to sell the gas at the prevailing market price. - Question 3: To what extent should price increases announced by OPEC or by certain government agencies not yet effective at the date of the reserve report be considered in determining current prices? - Interpretive Response: Current prices should not reflect price increases announced but not yet effective at the date of the reserve valuation, i.e., the end of the fiscal year. - 3\. Disclosure of Reserve Information - a. Deleted by SAB 103 - b. Unproved properties. - Facts: Disclosures of reserve information are based on estimated quantities of proved reserves of oil and gas. Regulation S-K prohibits disclosure of estimated quantities of probable or possible reserves of oil and gas and any estimated value thereof in any document publicly filed with the Commission. - Question: What types of disclosures will be permitted by registrants who wish to indicate that some of their properties have value other than that attributable to proved reserves? - Interpretive Response: The Office of Engineering has, for the past several years, suggested to registrants the following form of disclosure for undeveloped lease acreage: - "In addition to proved reserves, the estimated (or appraised) value of leases or parts of leases to which proved reserves cannot be attributable is $xxx." - The registrant should describe the basis on which the estimate was made. For example, such estimated values are often based on the market demand for leasehold acreage which, in turn, is based on a number of qualitative factors such as proximity to production. If the disclosed amount is based on an appraisal, the person making the appraisal should be named. ##### [360-932-S99-2](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:33.153Z to 2026-09-10T00:09:33.153Z Record version: sha256:f6368840753414ab8fcee763557db431ec88ad8c3e8bee53e99b9e69dbdba42b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 12.D, Application of Full Cost Method of Accounting. - 1\. Treatment of Income Tax Effects in the Computation of the Limitation on Capitalized Costs - Facts: Item (D) of Rule 4-10(c)(4)(i) of Regulation S-X states that the income tax effects related to the properties involved should be deducted in computing the full cost ceiling. - Question 1: What specific types of income tax effects should be considered in computing the income tax effects to be deducted from estimated future net revenues? - Interpretive Response: The rule refers to income tax effects generally. Thus, the computation should take into account (i) the tax basis of oil and gas properties, (ii) net operating loss carryforwards, (iii) foreign tax credit carryforwards, (iv) investment tax credits, (v) minimum taxes on tax preference items, and (vi) the impact of statutory (percentage) depletion. - It may often be difficult to allocate net operating loss carryforwards (NOLs) between oil and gas assets and other assets. However, to the extent that the NOLs are clearly attributable to oil and gas operations and are expected to be realized within the carryforward period, they should be added to tax basis. - Similarly, to the extent that investment tax credit (ITC) carryforwards and foreign tax credit carryforwards are attributable to oil and gas operations and are expected to be realized within the carryforward period, they should be considered as a deduction from the tax effect otherwise computed. Consideration of NOLs and ITC or foreign tax credit carryforwards should not, of course, reduce the total tax effect below zero. - Question 2: How should the tax effect be computed considering the various factors discussed above? - Interpretive Response: Theoretically, taxable income and tax could be determined on a year-by-year basis and the present value of the related tax computed. However, the "shortcut" method illustrated below is also acceptable. - ![](https://asc.understandingaccounting.org/asc-img/GUID-BBF7750C-E6A2-4B36-A7EE-B43F761B21CE-low.gif) ASSUMPTIONS: Cost of proved properties being amortized " $396,000 " Lower of cost or estimated fair value of unproved properties to be amortized " 49,000 " Cost of properties not being amortized " 55,000 " Capitalized costs of oil and gas assets " 500,000 " Accumulated DD&A " (100,000)" Book basis of oil and gas assets " $400,000 " "Excess of book basis over tax basis ($270,000) of oil and gas assets" " $(130,000)" NOL carryforward \* " 20,000 " " (110,000)" Statutory tax rate (percent) x 46% " (50,600)" Foreign tax credit carryforward \* " 1,000 " ITC carryforward \* " 2,000 " Related net deferred income tax liability " (47,600)" Net book basis to be recovered " $352,400 " Other Assumptions: Present value of ITC relating to future development costs " $1,500 " Present value of statutory depletion attributable to future deductions " $10,000 " Estimated preference (minimum) tax on percentage depletion in excess of cost depletion $500 Present value of future net revenue from proved oil and gas reserves " $272,000 " CALCULATION: Present value of future net revenue " $272,000 " Cost of properties not being amortized " 55,000 " Lower of cost or estimated fair value of unproved properties included in costs being amortized " 49,000 " Total ceiling limitation before tax effects " $376,000 " Tax Effects: Total ceiling limitation before tax effects " $376,000 " Less: Tax basis of properties " (270,000)" Statutory depletion " (10,000)" NOL carryforward " (20,000)" " (300,000)" Future taxable income " 76,000 " Tax rate (percent) x 46% Tax at statutory rate " (34,960)" ITC (future development costs and carryforward) " 3,500 " Foreign tax credit carryforward " 1,000 " Estimated preference tax (500) Net tax effects " (30,960)" Cost Center Ceiling " $345,040 " Less: Net book basis to be recovered " 352,400 " "REQUIRED WRITE-OFF, net of tax \*\* " " $(7,360)" \* All carryforward amounts in this example represent amounts which are available for tax purposes and which relate to oil and gas operations. \*\* "For accounting purposes, the gross write-off should be recorded to adjust both the oil and gas properties account and the related deferred income taxes." CALCULATION OF GROSS PRE-TAX WRITE-OFF "Required write-off, net of tax" " $(7,360)" Divided by (100% minus the statutory rate of 46%) 54% Gross pre-tax write-off " $(13,630)" Related Journal Entries DR CR Full cost ceiling impairment " $13,630 " Oil and gas assets " $13,630 " Deferred income tax liability " $6,270 " Deferred income tax benefit " $6,270 " - 2\. Exclusion of Costs From Amortization - Facts: Rule 4-10(c)(3)(ii) indicates that the costs of acquiring and evaluating unproved properties may be excluded from capitalized costs to be amortized if the costs are unusually significant in relation to aggregate costs to be amortized. Costs of major development projects may also be incurred prior to ascertaining the quantities of proved reserves attributable to such properties. - Question: At what point should amortization of previously excluded costs commence-when proved reserves have been established or when those reserves become marketable? For instance, a determination of proved reserves may be made before completion of an extraction plant necessary to process sour crude or a pipeline necessary to market the reserves. May the costs continue to be excluded from amortization until the plant or pipeline is in service? - Interpretive Response: No. The proved reserves and the costs allocable to such reserves should be transferred into the amortization base on an ongoing (well-by-well or property-by-property) basis as the project is evaluated and proved reserves are established. - Once the determination of proved reserves has been made, there is no justification for continued exclusion from the full cost pool, regardless of whether other factors prevent immediate marketing. Moreover, at the same time that the costs are transferred into the amortization base, it is also necessary in accordance with FASB ASC Subtopic 932-835, Extractive Activities—Oil and Gas—Interest, and FASB ASC Subtopic 835-20, Interest—Capitalization of Interest to terminate capitalization of interest on such properties. - In this regard, registrants are reminded of their responsibilities not to delay recognizing reserves as proved once they have met the engineering standards. - 3\. Full Cost Ceiling Limitation - a. Exemptions for purchased properties. - Facts: During 20x1, a registrant purchases proved oil and gas reserves in place ("the purchased reserves") in an arm's length transaction for the sum of $9.8 million. Primarily because the registrant expects oil and gas prices to escalate, it paid $1.2 million more for the purchased reserves than the "Present Value of Estimated Future Net Revenues" computed as defined in Rule 4-10(c)(4)(i)(A) of Regulation S-X. An analysis of the registrant's full cost center in which the purchased reserves are located at December 31, 20x1 is as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-190D2DBC-F89C-44D5-A809-89120CBE8509-low.gif) "(Amounts in 1,000) " Total Purchased Reserves Other Proved Properties Unproved Properties "Present value of estimated future net revenues " " $14,100 " " 8,600 " " 5,500 " - "Cost, net of amortization " " $16,300 " " 9,800 " " 5,500 " " 1,000 " Related deferred taxes " $2,300 " - " 2,000 " 300 Income tax effects related to properties " $2,500 " - " 2,500 " - "Comparison of capitalized costs with limitation on capitalized costs at December 31, 20x1: " Including Purchased Reserves ExcIuding Purchased Reserves "Capitalized costs, net of amortization " " $16,300 " " $6,500 " Related deferred taxes " (2,300)" " (2,300)" Net book cost " 14,000 " " 4,200 " Present value of estimated future net revenues " 14,100 " " $5,500 " Lower of cost or market of unproved properties " 1,000 " " 1,000 " Income tax effects related to properties " (2,500)" " (2,500)" Limitation on capitalized costs " 12,600 " " 4,000 " "Excess of capitalized costs over limitation on Capitalized costs, net of tax " " $1,400 " $200 \* "For accounting purposes, the gross write-off should be recorded to adjust both the oil and gas properties account and the related deferred income taxes" - Question: Is it necessary for the registrant to write down the carrying value of its full cost center at December 31, 20x1 by $1,400,000? - Interpretive Response: Although the net carrying value of the full cost center exceeds the cost center's limitation on capitalized costs, the text of ASR 258 provides that a registrant may request an exemption from the rule if as a result of a major purchase of proved properties, a write down would be required even though the registrant believes the fair value of the properties in a cost center clearly exceeds the unamortized costs. - Therefore, to the extent that the excess carrying value relates to the purchased reserves, the registrant may seek a temporary waiver of the full-cost ceiling limitation from the staff of the Commission. Registrants requesting a waiver should be prepared to demonstrate that the additional value exists beyond reasonable doubt. - To the extent that the excess costs relate to properties other than the purchased reserves, however, a write-off should be recorded in the current period. In order to determine the portion of the total excess carrying value which is attributable to properties other than the purchased reserves, it is necessary to perform the ceiling computation on a "with and without" basis as shown in the example above. Thus in this case, the registrant must record a write-down of $200,000 applicable to other reserves. An additional $1,200,000 write-down would be necessary unless a waiver were obtained. - b. Use of cash flow hedges in the computation of the limitation on capitalized costs. - Facts: Rule 4-10(c)(4) of Regulation S-X provides, in pertinent part, that capitalized costs, net of accumulated depreciation and amortization, and deferred income taxes, should not exceed an amount equal to the sum of \[components that include\] the present value of estimated future net revenues computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented. - As of the reported balance sheet date, capitalized costs of an oil and gas producing company exceed the full cost limitation calculated under the above described rule based on current spot market prices for oil and natural gas. However, prior to the balance sheet date, the company enters into certain hedging arrangements for a portion of its future natural gas and oil production, thereby enabling the company to receive future cash flows that are higher than the estimated future cash flows indicated by use of the spot market price as of the reported balance sheet date. These arrangements qualify as cash flow hedges under the provisions of FASB ASC Topic 815, Derivatives and Hedging, and are documented, designated, and accounted for as such under the criteria of that standard. - Question: Under these circumstances, must the company use the higher prices to be received after taking into account the hedging arrangements ("hedge-adjusted prices") in calculating the current price of the quantities of its future production of oil and gas reserves covered by the hedges as of the reported balance sheet date? - Interpretive Response: Yes. Derivative contracts that qualify as hedging instruments in a cash flow hedge and are accounted for as such pursuant to FASB ASC Topic 815 represent the type of contractual arrangements for which consideration of price changes should be given under the existing rule. While the SEC staff has objected to previous proposals to consider various hedging techniques as being equivalent to the contractual arrangements permitted under the existing rules, the staff's objection was based on concerns that the lack of clear, consistent guidance in the accounting literature would lead to inconsistent application in practice. However, the staff believes that FASB ASC Topic 815 and related guidance (including a more systematic approach to documentation) provides sufficient guidance so that comparable financial reporting in comparable factual circumstances should result. - This interpretive response reflects the SEC staff's view that, assuming compliance with the prerequisite accounting requirements, hedge adjusted prices represent the best measure of estimated cash flows from future production of the affected oil and gas reserves to use in calculating the ceiling limitation. Nonetheless, the staff expects that oil and gas producing companies subject to the full cost rules will clearly indicate the effects of using cash flow hedges in calculating ceiling limitations within their financial statement footnotes. The staff further expects that disclosures will indicate the portion of future oil and gas production being hedged. The dollar amount that would have been charged to income had the effects of the cash flow hedges not been considered in calculating the ceiling limitation also should be disclosed. - The use of hedge-adjusted prices should be consistently applied in all reporting periods, including periods in which the hedge-adjusted price is less than the current spot market price. Oil and gas producers whose computation of the ceiling limitation includes hedge-adjusted prices because of the use of cash flow hedges also should consider the disclosure requirements under the FASB ASC Section 275-10-50, Risks and Uncertainties—Overall—Disclosure. FASB ASC paragraph [275-10-50-9](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-9) calls for disclosure when it is at least reasonably possible that the effects of cash flow hedges on capitalized costs on the reported balance sheet date will change in the near term due to one or more confirming events, such as potential future changes in commodity prices. - In addition, the use of cash flow hedges in calculating the ceiling limitation may represent a type of critical accounting policy that oil and gas producers should consider disclosing consistent with the cautionary advice provided in FR 60. Through this release, the Commission has encouraged companies to include, within their MD&A disclosures, full explanations, in plain English, of the judgments and uncertainties affecting the application of critical accounting policies, and the likelihood that materially different amounts would be reported under different conditions or using different assumptions. - The staff's guidance on this issue would apply to calculations of ceiling limitations both in interim and annual periods. - c. Effect of subsequent events on the computation of the limitation on capitalized costs. - Facts: Rule 4-10(c)(4)(ii) of Regulation S-X provides that an excess of unamortized capitalized costs within a cost center over the related cost ceiling shall be charged to expense in the period the excess occurs. - Question: Assume that at the date of company's fiscal year-end, its capitalized costs of oil and gas producing properties exceed the limitation prescribed by Rule 4-10(c)(4) of Regulation S-X. Thus, a write down is indicated. Subsequent to year-end but before the date of the auditors' report on the company's financial statements, assume that additional reserves are proved up (excluding the effect of increased oil and gas prices subsequent to year-end) on properties owned at year-end. The present value of future net revenues from the additional reserves is sufficiently large that if the full cost ceiling limitation were recomputed giving effect to those factors as of year-end, the ceiling would more than cover the costs. It is necessary to record a write down? - Interpretive Response: No. In this case, the proving up of additional reserves on properties owned at year-end or the increase in prices indicates that the capitalized costs were not in fact impaired at year-end. However, for purposes of the revised computation of the "ceiling," the net book costs capitalized as of year-end should be increased by the amount of any additional costs incurred subsequent to year-end to prove the additional reserves or by any related costs previously excluded from amortization. - While the fact pattern described herein relates to annual periods, the guidance on the effects of subsequent events applies equally to interim period calculations of the ceiling limitation. - The registrant's financial statements should disclose that capitalized costs exceeded the limitation thereon at year-end and should explain why the excess was not charged against earnings. In addition, the registrant's supplemental disclosures of estimated proved reserve quantities and related future net revenues and costs should not give effect to the reserves proved up or the cost incurred after year-end or to the price increases occurring after year-end. However, such quantities and amounts may be disclosed separately, with appropriate explanations. - Registrants should be aware that oil and gas reserves related to properties acquired after year-end would not justify avoiding a write-off indicated as of year-end. Similarly, the effects of cash flow hedging arrangements entered into after year-end cannot be factored into the calculation of the ceiling limitation at year-end. Such acquisitions and financial arrangements do not confirm situations existing at year-end. - 4\. Interaction of FASB ASC Subtopic 410-20, Asset Retirement and Environmental Obligations—Asset Retirement Obligations, and the Full Cost Rules - a. Impact of FASB ASC Subtopic 410-20 on the full cost ceiling test. - Facts: A company following the full cost method of accounting under Rule 4-10(c) of Regulation S-X must periodically calculate a limitation on capitalized costs, i.e., the full cost ceiling. Under FASB ASC Subtopic 410-20, a company must recognize a liability for an asset retirement obligation (ARO) at fair value in the period in which the obligation is incurred, if a reasonable estimate of fair value can be made. The company also must initially capitalize the associated asset retirement costs by increasing long-lived oil and gas assets by the same amount as the liability. Any asset retirement costs capitalized pursuant to FASB ASC Subtopic 410-20 are subject to the full cost ceiling limitation under Rule 4-10(c)(4) of Regulation S-X. If a company were to continue calculating the full cost ceiling by reducing expected future net revenues by the cash flows required to settle the ARO, then the effect would be to "double-count" such costs in the ceiling test. The assets that must be recovered would be increased while the future net revenues available to recover the assets continue to be reduced by the amount of the ARO settlement cash flows. - Question: How should a company compute the full cost ceiling to avoid double-counting the expected future cash outflows associated with asset retirement costs? - Interpretive Response: The future cash outflows associated with settling AROs that have been accrued on the balance sheet should be excluded from the computation of the present value of estimated future net revenues for purposes of the full cost ceiling calculation. FN1, FN2 - FN1 If an obligation for expected asset retirement costs has not been accrued under FASB ASC Subtopic 410-20 for certain asset retirement costs required to be included in the full cost ceiling calculation under Rule 4-10(c)(4), such costs should continue to be included in the full cost ceiling calculation. - FN2 This approach is consistent with the guidance in FASB ASC Subtopic 410-20 on testing for impairment under FASB ASC Section 360-10-35, Property, Plant, and Equipment—Overall—Subsequent Measurement. Under that guidance, the asset tested should include capitalized asset retirement costs. The estimated cash flows related to the associated ARO that has been recognized in the financial statements are to be excluded from both the undiscounted cash flows used to test for recoverability and the discounted cash flows used to measure the asset's fair value. - b. Impact of FASB ASC Subtopic 410-20 on the calculation of depreciation, depletion, and amortization. - Facts: Regarding the base for depreciation, depletion, and amortization (DD&A) of proved reserves, Rule 4-10(c)(3)(i) of Regulation S-X states that "\[c\]osts to be amortized shall include (A) all capitalized costs, less accumulated amortization, other than the cost of properties described in paragraph (ii) below; FN3 (B) the estimated future expenditures (based on current costs) to be incurred in developing proved reserves; and (C) estimated dismantlement and abandonment costs, net of estimated salvage values." FASB ASC Subtopic 410-20 requires that upon initial recognition of an ARO, the associated asset retirement costs be included in the capitalized costs of the company. Therefore, the estimated dismantlement and abandonment costs described in (C) above may be included in the capitalized costs described in (A) above, at least to the extent that an ARO has been incurred as a result of acquisition, exploration and development activities to date. Future development activities on proved reserves may result in additional asset retirement obligations when such activities are performed and the associated asset retirement costs will be capitalized at that time. - FN3 The reference to "cost of properties described in paragraph (ii) below" relates to the costs of investments in unproved properties and major development projects, as defined. - Question: Should the costs to be amortized under Rule 4-10(c)(3) of Regulation S-X include an amount for estimated dismantlement and abandonment costs, net of estimated salvage values, that are expected to result from future development activities? - Interpretive Response: Yes. Companies should estimate the amount of dismantlement and abandonment costs that will be incurred as a result of future development activities on proved reserves and include those amounts in the costs to be amortized. ##### [360-932-S99-3](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:33.153Z to 2026-09-10T00:09:33.153Z Record version: sha256:8233d06d165c82373d5c76ebb03a6cf6fad2fc1544ffcb6d99ae43b19ab68b09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 12.F, Gross Revenue Method of Amortizing Capitalized Costs. - Facts: Rule 4-10(c)(3)(iii) of Regulation S-X states in part: - Amortization shall be computed on the basis of physical units, with oil and gas converted to a common unit of measure on the basis of their approximate relative energy content, unless economic circumstances (related to the effects of regulated prices) indicate that use of units of revenue is a more appropriate basis of computing amortization. In the latter case, amortization shall be computed on the basis of current gross revenues (excluding royalty payments and net profits disbursements) from production in relation to future gross revenues based on current prices (including consideration of changes in existing prices provided only by contractual arrangements), from estimated production of proved oil and gas reserves. - Question: May entities using the full cost method of accounting for oil and gas producing activities compute amortization based on the gross revenue method described in the above rule when substantial production is not subject to pricing regulation? - Interpretive Response: Yes. Under the existing rules for cost amortization adopted in ASR 258, the use of the gross revenue method of amortization was permitted in those circumstances where, because of the effect of existing pricing regulations, the use of the units of production method would result in an amortization provision that would be inconsistent with the current prices being received. While the effect of regulation on gas prices has lessened, factors other than price regulation (such as changes in typical contract lengths and methods of marketing natural gas) have caused oil and gas prices to be disproportionate to their relative energy content. The staff therefore believes that it may be more appropriate for registrants to compute amortization based on the gross revenue method whenever oil and gas sales prices are disproportionate to their relative energy content to the extent that the use of the units of production method would result in an improper matching of the costs of oil and gas production against the related revenue received. The method should be consistently applied and appropriately disclosed within the financial statements. ##### [360-932-S99-4](https://asc.understandingaccounting.org/asc/360/932/#360-932-S99-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:33.153Z to 2026-09-10T00:09:33.153Z Record version: sha256:859dd90473b1d0702be1220265d55bca1a1ee4ee3e9819f222812d425b70a586 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 12.G, Inclusion of Methane Gas in Proved Reserves. - Facts: Because of a concern over worldwide oil and gas supplies, Congress, in 1980, provided for tax incentives (credits) for the production of oil and gas from other than conventional sources. As a consequence, significant amounts of gas are now recovered from seams of coal beds. This gas is referred to as coalbed methane. It is produced using conventional drilling methods, but for various reasons, it may be more costly to produce than oil and gas recovered from customary sources and some reserves may not be economical without the tax credits. - Rule 4-10(a)(1)(i)(A) of Regulation S-X indicates that oil and gas producing activities include the search for crude oil, including condensate and natural gas liquids, or natural gas in their natural states and original locations. Rule 4-10(a)(2)(iii)(D) of Regulation S-X states that estimates of proved reserves do not include (among other things) natural gas that can be recovered from coal. FN5 In addition, the definition of proved oil and gas reserves includes a provision that the quantities of natural gas be recovered from existing reservoirs. Under these definitions, "coalbed methane" gas has generally not been included in the disclosures in Commission filings required by Statement 69. Further, coalbed methane has generally not been counted in proved oil and gas reserves for purposes of the full cost ceiling test in Rule 4-10(c)(4) since that test is based on the same definition of proved oil and gas reserves. - FN5 Similar language appears in Statements 19 and 25 \[paragraph [932-10-15-3](https://asc.understandingaccounting.org/asc/932/10/#932-10-15-3)\]. - Question: Is it appropriate to consider coalbed methane gas within the definition of proved reserves for purposes of the disclosures relating to oil and gas producing activities and the full cost ceiling test? - Interpretive Response: Yes. The prohibition against the inclusion of gas derived from coal was meant to apply to the recovery of hydrocarbons from the processing of coal. The extraction of methane gas from coalbed seams using conventional methods was not contemplated at the time Rule 4-10(a) was developed. The staff believes that, since coalbed methane gas can be recovered from coal in its natural state and original location, it should be included in proved reserves, provided that it complies in all other respects with the definition of proved oil and gas reserves as specified in Rule 4-10(a)(2) including the requirement that methane production be economical at current prices, costs (net of the tax credit) and existing operating conditions. FN6 Methane gas from coalbeds (like any other hydrocarbon obtained from conventional reservoirs) that cannot be produced at a profit under current economic and operating conditions, or for which there is no market or any existing method of delivery to the market, cannot be included in the category of proved reserves. - FN6 Proved oil and gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. (Emphasis added.). - In instances where methane gas is deemed to be economically producible only as a consequence of existing Federal tax incentives, the staff believes that additional disclosure should be provided as to the specific quantities and values of reported proved reserves that are dependent on existing U.S. tax policy together with any other information necessary to inform readers of the risks attendant with any future change to existing Federal tax policy. Source downloaded (UTC): 2026-09-10T00:09:35.986Z to 2026-09-10T00:09:48.609Z Record version: sha256:63c645a1d32f012865b412488e370065080df85ac1064d7e1e5bec66c508332e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-942: Property, Plant, and Equipment — Financial Services—Depository and Lending ### Machine-generated study aids ```json { "summary": "This Subtopic addresses how depository and lending institutions (banks, savings institutions, credit unions) present property, plant, and equipment in their financial statements. Premises and equipment are generally reported as a single balance sheet caption, net of accumulated depreciation and amortization, with the accumulated amount shown on the face of the balance sheet or in the notes. Net gains or losses on disposition of premises and equipment go into noninterest income or noninterest expense rather than a separate line.", "key_points": [ "Premises and equipment are generally shown as a single caption on the balance sheet, net of accumulated depreciation and amortization (360-942-45-1).", "The amount of accumulated depreciation and amortization must be presented either on the face of the balance sheet or disclosed in the notes (360-942-45-1; 360-942-50-1).", "Net gains or net losses on dispositions of premises and equipment are included in noninterest income or noninterest expense (360-942-45-2).", "The Subtopic addresses only financial statement presentation of financial institution property, plant, and equipment (360-942-05-1).", "Scope follows the Overall Subtopic scope for depository and lending institutions in Section 942-10-15 (360-942-15-1)." ], "categories": [ "Presentation", "Disclosure", "Inventory and PP&E", "Industry-specific" ], "audience_level": "intermediate", "student_note": "This is a short, presentation-only Subtopic: recognition, measurement, depreciation, and impairment of bank premises still follow ASC 360-10. The common trap is forgetting that disposal gains/losses for a bank land in noninterest income or expense, not in a separate \"gain on sale\" line or in interest income.", "related_topics": [ "360-10", "942-360", "942-10", "942-405", "205" ], "key_concepts": [ "premises and equipment", "accumulated depreciation and amortization", "single balance sheet caption", "noninterest income", "noninterest expense", "disposition gains and losses", "depository and lending institutions" ] } ``` Source downloaded (UTC): 2026-09-10T00:09:35.986Z to 2026-09-10T00:09:35.986Z Record version: sha256:f8334d5ebef191735aff7fdb89294b0ee3174ca61fdefa2d2f8532b430a865d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-942-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/942/#00-status) SEC content: no ##### [360-942-00-1](https://asc.understandingaccounting.org/asc/360/942/#360-942-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:35.986Z to 2026-09-10T00:09:35.986Z Record version: sha256:dbfb9f0ae1a37b2ec977ff88397729c2328b2e559680be05b83cf3a865b84668 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
942-360-45-1AmendedAccounting Standards Update No. 2020-1010/29/2020
942-360-50-1AddedAccounting Standards Update No. 2020-1010/29/2020
Source downloaded (UTC): 2026-09-10T00:09:37.712Z to 2026-09-10T00:09:37.712Z Record version: sha256:d7e40472cbbab5aa3f3aad7d7461f878d8a9eea7d917f02b2204060946a97025 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-942-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/942/#05-overview-and-background) SEC content: no ##### [360-942-05-1](https://asc.understandingaccounting.org/asc/360/942/#360-942-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:37.712Z to 2026-09-10T00:09:37.712Z Record version: sha256:cae25c02b4e389626e3f386d626244b081142fda9296c35aac085f6f85f2b68b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance concerning the financial statement presentation of financial institution property, plant, and equipment. Source downloaded (UTC): 2026-09-10T00:09:40.699Z to 2026-09-10T00:09:40.699Z Record version: sha256:370406c79b7e14083dab8d44d004b461d13651aabe5dbbed0d1419bad1434a0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-942-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/942/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-942-15-1](https://asc.understandingaccounting.org/asc/360/942/#360-942-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:40.699Z to 2026-09-10T00:09:40.699Z Record version: sha256:63d925a4446abf2cc48b548442818bb3f00a2c96def7d53db41d6859b139760b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 942-10-15. Source downloaded (UTC): 2026-09-10T00:09:42.843Z to 2026-09-10T00:09:42.843Z Record version: sha256:5c06d58fe07817c4a0f974748e23281c9e8846214e5b7de7a7944b8168666a6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-942-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/942/#45-other-presentation-matters) SEC content: no #### Premises and Equipment ##### [360-942-45-1](https://asc.understandingaccounting.org/asc/360/942/#360-942-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:42.843Z to 2026-09-10T00:09:42.843Z Record version: sha256:987379af89509b8733a500ade40a17489d0273d89d509482d29cd82909089084 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Premises and equipment are generally shown as a single caption on the balance sheet, net of accumulated depreciation and amortization, the amount of which shall be presented on the face of the balance sheet or disclosed in the notes to financial statements. (See paragraph [942-360-50-1](https://asc.understandingaccounting.org/asc/360/942/#360-942-50-1).) ##### [360-942-45-2](https://asc.understandingaccounting.org/asc/360/942/#360-942-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:42.843Z to 2026-09-10T00:09:42.843Z Record version: sha256:415453d9ae81cb2b23e93a302385314639b28900872ca0e01daa26d7eaeaf62b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For premises and equipment, net gains or net losses on dispositions shall be included in noninterest income or noninterest expense. Source downloaded (UTC): 2026-09-10T00:09:46.815Z to 2026-09-10T00:09:46.815Z Record version: sha256:1376106d9ebca256fe3c42bc200f11be699c1effe8ac0b9c06f4213748b9ffaa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-942-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/942/#50-disclosure) SEC content: no ##### [360-942-50-1](https://asc.understandingaccounting.org/asc/360/942/#360-942-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:46.815Z to 2026-09-10T00:09:46.815Z Record version: sha256:1f94af7b1412b0c7606383261f7fe3bc4cd59cace7c16c88014f4e8f856ab3c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Premises and equipment are generally shown as a single caption on the balance sheet, net of accumulated depreciation and amortization, the amount of which shall be presented on the face of the balance sheet or disclosed in the notes to financial statements. (See paragraph [942-360-45-1](https://asc.understandingaccounting.org/asc/360/942/#360-942-45-1).) Source downloaded (UTC): 2026-09-10T00:09:52.264Z to 2026-09-10T00:10:22.345Z Record version: sha256:3e326ea4f978f19d8d1f72b02c049ea531dd66a4f9e7de1d207b72230a2c246a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944: Property, Plant, and Equipment — Financial Services—Insurance ### Machine-generated study aids ```json { "summary": "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": [ "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)." ], "categories": [ "Inventory and PP&E", "Industry-specific", "Impairment", "Presentation" ], "audience_level": "intermediate", "student_note": "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.", "related_topics": [ "360-10", "944-40", "944-310", "320-10", "220-20" ], "key_concepts": [ "real estate investments", "real estate used in the business", "real estate acquired in settling claims", "predominant use classification", "claim costs incurred", "realized gains and losses", "investment income", "other-than-temporary impairment" ] } ``` Source downloaded (UTC): 2026-09-10T00:09:52.264Z to 2026-09-10T00:09:52.264Z Record version: sha256:ac6cd3898cbbc57e45fc20e5810165512a78326b833030f0b3fe78b2eb47664a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/944/#00-status) SEC content: no ##### [360-944-00-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:52.264Z to 2026-09-10T00:09:52.264Z Record version: sha256:0ef0a5ddca025f59d6a979f7c9dfce7e1547a23d79643d54668a3f03b2dac709 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
944-360-35-1AmendedAccounting Standards Update No. 2018-0907/16/2018
944-360-40-2AmendedAccounting Standards Update No. 2016-0101/05/2016
944-360-40-3AmendedMaintenance Update 2017-19 (PDF)11/15/2017
944-360-45-3AmendedAccounting Standards Update No. 2018-0907/16/2018
944-360-45-4AmendedAccounting Standards Update No. 2018-0907/16/2018
944-360-45-5SupersededAccounting Standards Update No. 2025-1212/17/2025
944-360-50-1AmendedAccounting Standards Update No. 2018-0907/16/2018
Source downloaded (UTC): 2026-09-10T00:09:56.079Z to 2026-09-10T00:09:56.079Z Record version: sha256:31c9ff50928495d499f7a5e7d5af419ecd83bc71a64f4576c32f78dbd22d58d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/944/#05-overview-and-background) SEC content: no ##### [360-944-05-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:56.079Z to 2026-09-10T00:09:56.079Z Record version: sha256:1a9095c6e4d5dc7f152115059f88ca57f86d29a5ed94882df8e7dd12b79ee46a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance to insurance entities on accounting for and financial reporting of real estate. Source downloaded (UTC): 2026-09-10T00:09:57.909Z to 2026-09-10T00:09:57.909Z Record version: sha256:1dff0328e261ce5677bcb2d959415fa72d2aaa67d75370b9af1c83d97a5168cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/944/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-944-15-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:09:57.909Z to 2026-09-10T00:09:57.909Z Record version: sha256:22d6ad4b6874adaed7b77b681305022d26774012533461aeece77c69ed1d802e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 944-10-15. Source downloaded (UTC): 2026-09-10T00:10:03.205Z to 2026-09-10T00:10:03.205Z Record version: sha256:e5bbd7ff92813876cd446235682d39ca357375789c169bcc53b93a6c034278cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/944/#25-recognition) SEC content: no ##### [360-944-25-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:03.205Z to 2026-09-10T00:10:03.205Z Record version: sha256:8a3d5d6ba0182ca0b7e1ba94cb676556fa398f0c3dc64a68822da882f7c9738e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T00:10:06.445Z to 2026-09-10T00:10:06.445Z Record version: sha256:1ad5ac067ad38dcd3d8e6228f6a348d12c81ea9281608fcef32a22a3408fc613 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/360/944/#30-initial-measurement) SEC content: no #### Real Estate Acquired in Settling Certain Claims ##### [360-944-30-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:06.445Z to 2026-09-10T00:10:06.445Z Record version: sha256:81c379635c5d4acb3fd3fcb6a46b4396947bdff6570615cfd0cd7efc96ba5dd0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Real estate acquired in settling mortgage guaranty and title insurance claims shall be measured initially 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."). #### Real Estate Investments ##### [360-944-30-2](https://asc.understandingaccounting.org/asc/360/944/#360-944-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:06.445Z to 2026-09-10T00:10:06.445Z Record version: sha256:033151a45af357bd653deb6ff7345df08ced87713610cd66f9566c300188127d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Real estate investments shall be measured initially at cost. Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:24efe221b82204d88585123b388a46b07a7f549eae828477d9818a2c10265d35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/944/#35-subsequent-measurement) SEC content: no #### Real Estate Acquired in Settling Certain Claims ##### [360-944-35-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:bc17d89710e17a8152d7bac0bc017fd9aa147ca7f4896583e43f36ec09b80dfd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accordance with paragraph [360-10-35-43](https://asc.understandingaccounting.org/asc/360/10/#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](https://asc.understandingaccounting.org/asc/360/944/#360-944-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:0b5a0a35d0be932a925b2c25ad676cd0df24deefde6e29d81054534a6b67183a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [944-40-35-4](https://asc.understandingaccounting.org/asc/944/40/#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](https://asc.understandingaccounting.org/glossary/c/#claim "A demand for payment of a policy benefit because of the occurrence of an insured event.") costs incurred. #### Potential Ownership Interest in Real Estate ##### [360-944-35-3](https://asc.understandingaccounting.org/asc/360/944/#360-944-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:e44c2f967e4256171ad90a41d1e1071547e77d8051c2d14779e59fa59c37bd3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance related to estimated recoveries on unsettled claims involving a potential ownership interest in real estate, see paragraph [944-40-35-2](https://asc.understandingaccounting.org/asc/944/40/#944-40-35-2). #### Real Estate Investments ##### [360-944-35-4](https://asc.understandingaccounting.org/asc/360/944/#360-944-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:5efac4af6ea36c2dbdec0d8723672d0579641e275032544ba2ae973934b97124 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Real estate investments shall be measured subsequently at cost less accumulated depreciation. ##### [360-944-35-5](https://asc.understandingaccounting.org/asc/360/944/#360-944-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:43d668e7fc1c062a05ebf65b9ada8378b4c3c2341cce37a71e6a474024adfcbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depreciation and other related charges or credits shall be charged or credited to investment income. ##### [360-944-35-6](https://asc.understandingaccounting.org/asc/360/944/#360-944-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:d01c2b5ea7e0ec099763267dfa7ee9eb92dd6a8514bd151bf0aed315e1d4a059 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Reductions in the [carrying amount](https://asc.understandingaccounting.org/glossary/c/#carrying-amount "The amount of an item as displayed in the financial statements.") 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](https://asc.understandingaccounting.org/asc/360/944/#360-944-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:09.909Z to 2026-09-10T00:10:09.909Z Record version: sha256:c09c7a54080b965f54f82e732a0c797389e24de483ac645bb4bf0994794af7e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Imputed investment income and rental expense shall not be recognized for real estate used in the business. Source downloaded (UTC): 2026-09-10T00:10:11.945Z to 2026-09-10T00:10:11.945Z Record version: sha256:655792658df09c0b6930fdb50ad512650b5fdfca6e29e5ca6b1afb6035164cf8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/360/944/#40-derecognition) SEC content: no #### Real Estate Acquired in Settling Certain Claims ##### [360-944-40-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:11.945Z to 2026-09-10T00:10:11.945Z Record version: sha256:3aed54dcdf37d7cdee75f4decc948954453785c09f4e208fc69f89843b6c3594 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [944-40-35-4](https://asc.understandingaccounting.org/asc/944/40/#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](https://asc.understandingaccounting.org/glossary/c/#claim "A demand for payment of a policy benefit because of the occurrence of an insured event.") costs incurred. #### Real Estate Investments ##### [360-944-40-2](https://asc.understandingaccounting.org/asc/360/944/#360-944-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:11.945Z to 2026-09-10T00:10:11.945Z Record version: sha256:be0c246e20b2875c2f8b8f62e521582147ba7f154c53a81b12c2a3bb8ec1be2c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/360/944/#360-944-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:11.945Z to 2026-09-10T00:10:11.945Z Record version: sha256:02dd57dd557ee8069a365f104ef78a3c8baa1e6c16c12e1bc5e9543138cb938d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T00:10:15.471Z to 2026-09-10T00:10:15.471Z Record version: sha256:7714b930800bfee8f31b1a459c00f3c51f769a8cfad34c382fa23aad7bf74abb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/944/#45-other-presentation-matters) SEC content: no #### Balance Sheet—Real Estate Acquired in Settling Certain Claims ##### [360-944-45-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:15.471Z to 2026-09-10T00:10:15.471Z Record version: sha256:ec578c01b715da6b66f8509414542b2b13c3cf42a3a0e3896c5162184a1e6a66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/360/944/#360-944-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:15.471Z to 2026-09-10T00:10:15.471Z Record version: sha256:d7f165f79ac6b81fbdbfe9e872649ae710e329e449cd672e27b7ab8544a10c08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/360/944/#360-944-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:15.471Z to 2026-09-10T00:10:15.471Z Record version: sha256:69ffc33b3ad5d78e918a04d493dc6b542b2f8b3cf9bde63124f6b4ea444094e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/360/944/#360-944-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:15.471Z to 2026-09-10T00:10:15.471Z Record version: sha256:627d79bbe13cfcd4ed0c35fa7c4f68787643dae4af629e391f7310ab3061e757 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/310/944/#310-944-50-1)). #### Other-Than-Temporary Impairment ##### [360-944-45-5](https://asc.understandingaccounting.org/asc/360/944/#360-944-45-5) Pending content: yes Source downloaded (UTC): 2026-09-10T00:10:15.471Z to 2026-09-10T00:10:15.471Z Record version: sha256:668ba6372245ff365e9025e5e1f3c3713b10fe05fc7ee148cfbcc7f395025f4e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/105/10/#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.](https://asc.understandingaccounting.org/updates/asu-2025-12/) Source downloaded (UTC): 2026-09-10T00:10:18.930Z to 2026-09-10T00:10:18.930Z Record version: sha256:41a1efcda74e1af17a52bebfa768281b7a73e036ec3fceb5465d3bd9f26e4fd8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-944-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/944/#50-disclosure) SEC content: no ##### [360-944-50-1](https://asc.understandingaccounting.org/asc/360/944/#360-944-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:18.930Z to 2026-09-10T00:10:18.930Z Record version: sha256:2b55e0f3a1a753b2d12906566f065ed7f15648ee45af8a634826c168419883a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T00:10:25.235Z to 2026-09-10T00:10:29.992Z Record version: sha256:880ba3767109c4d626d2ab67655cccc7990f93220474567c2fab653c5f3bfc87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-954: Property, Plant, and Equipment — Health Care Entities ### Machine-generated study aids ```json { "summary": "This industry subtopic addresses how health care entities present property that is held for investment purposes rather than used in operations. Its single substantive rule is that such property is reported as part of investments (360-954-45-1), not within operating property, plant, and equipment. Its scope follows the health care entities Overall Subtopic scope in Section 954-10-15.", "key_points": [ "The Subtopic provides guidance on presentation of property held for investment purposes by health care entities (360-954-05-1).", "Scope is the same as the health care entities Overall Subtopic, Section 954-10-15 (360-954-15-1).", "Property held for investment purposes shall be presented as part of investments (360-954-45-1).", "By implication, only property used in operations remains classified within property, plant, and equipment on the health care entity's balance sheet." ], "categories": [ "Presentation", "Industry-specific", "Inventory and PP&E", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "A short but testable classification rule: for health care entities, investment property is reported in the investments caption, not in PP&E. The common mistake is assuming all real estate a hospital or health system owns belongs in property, plant, and equipment — purpose of holding, not asset type, drives the presentation.", "related_topics": [ "954-10", "954-360", "360-10", "954-210", "954-320" ], "key_concepts": [ "property held for investment", "balance sheet classification", "health care entities", "property, plant, and equipment", "investments presentation", "industry-specific guidance" ] } ``` Source downloaded (UTC): 2026-09-10T00:10:25.235Z to 2026-09-10T00:10:25.235Z Record version: sha256:1dbe179893043cfa628ecd74c8a0728b0e1df147abc57c61835ff94a863129c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-954-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/954/#05-overview-and-background) SEC content: no ##### [360-954-05-1](https://asc.understandingaccounting.org/asc/360/954/#360-954-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:25.235Z to 2026-09-10T00:10:25.235Z Record version: sha256:af1eb1ad096f4e71b8c260b5532f63c0dbd8f32f2d6c93754fde64140165127c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the presentation of property held for investment purposes for health care entities within the scope of this Topic. Source downloaded (UTC): 2026-09-10T00:10:27.629Z to 2026-09-10T00:10:27.629Z Record version: sha256:4fb9e4b36a419ad010a9d0e71a0b002defdc54e77ddc58cf8eb4ad1d71fe6318 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-954-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/954/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-954-15-1](https://asc.understandingaccounting.org/asc/360/954/#360-954-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:27.629Z to 2026-09-10T00:10:27.629Z Record version: sha256:f1212dbc8eabcd378efd527b24953ecc3acfe15bda3724fba649e60416c8e3eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 954-10-15. Source downloaded (UTC): 2026-09-10T00:10:29.992Z to 2026-09-10T00:10:29.992Z Record version: sha256:5f2c682c309835d0c541ebddb38daa5ec2811350242cb4527be723f55891c9fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-954-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/954/#45-other-presentation-matters) SEC content: no ##### [360-954-45-1](https://asc.understandingaccounting.org/asc/360/954/#360-954-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:29.992Z to 2026-09-10T00:10:29.992Z Record version: sha256:51e4bae824df5a07c84dbb4cac755d2d0e4dc869ca86f5fb9ae56544e23984d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Property held for investment purposes shall be presented as part of investments. Source downloaded (UTC): 2026-09-10T00:10:33.971Z to 2026-09-10T00:11:05.946Z Record version: sha256:73accc3b191b1c2d8c2a3b13c83dc131d3d8310559a4c2b62f9922e08478ad44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958: Property, Plant, and Equipment — Not-for-Profit Entities ### Machine-generated study aids ```json { "summary": "This subtopic governs long-lived tangible assets held by not-for-profit entities, including contributed property, plant, and equipment and collection items. Its core rules are that all NFPs must recognize depreciation on long-lived tangible assets (360-958-35-1), that contributed PP&E is recognized under the Contributions Received Subsections of 958-605 with initial measurement including all costs to place the asset in use (360-958-30-1), and that an NFP holding a \"collection\" may elect one of three policies—full capitalization, prospective capitalization, or no capitalization—but capitalizing selected items is precluded (360-958-25-3).", "key_points": [ "All NFPs shall recognize depreciation on long-lived tangible assets (360-958-35-1), and grant or reimbursement 'allowable cost' terms do not affect recognition or measurement of depreciation for financial reporting (360-958-35-7).", "Works of art and historical treasures not part of a collection must be recognized as assets (360-958-25-2); contributed collection items need not be recognized, and the NFP must elect capitalization of all items, prospective capitalization, or no capitalization—selective capitalization is precluded (360-958-25-1 through 25-3).", "Depreciation need not be recognized on an individual work of art or historical treasure only if verifiable evidence shows both perpetual cultural, aesthetic, or historical value worth preserving and the holder's technological and financial ability to preserve the service potential essentially undiminished, and is doing so (360-958-35-3 through 35-4).", "Buildings, structures, landmarks, and monuments—and items comprising collections in the ordinary sense—are depreciated because wear, pollutants, and vibrations use up their service potential (360-958-35-5), and capitalized major preservation or restoration costs are depreciated until the next expected effort (360-958-35-6).", "Purpose-restricted contributions of PP&E without a donor time stipulation, and cash restricted for acquiring or constructing PP&E, are reclassified in full to net assets without donor restrictions when the asset is placed in service (360-958-45-1A); an explicit donor time restriction instead releases over the specified period, an amount that may differ from depreciation (360-958-45-1).", "An NFP that does not capitalize (or capitalizes prospectively) must show a statement of financial position line item referring to the collections disclosures, and report purchases, sale proceeds, and insurance recoveries of noncapitalized collection items on the face of the statement of activities separately from revenues, expenses, gains, and losses (360-958-45-3, 45-5).", "Required disclosures include the capitalization and collection policies and basis of valuation (360-958-50-1), liquidity and limitations on use of PP&E such as liens and donor restrictions (360-958-50-3 through 50-4), and the policy on use of deaccession proceeds including the definition of 'direct care' (360-958-50-7)." ], "categories": [ "Not-for-profit", "Inventory and PP&E", "Disclosure", "Subsequent measurement" ], "audience_level": "intermediate", "student_note": "Exam questions focus on the three-way collection capitalization election (all, prospective, or none—never selective) and the narrow exception from depreciation for individual works of art, which requires BOTH perpetual value and demonstrated preservation ability. A common misunderstanding is releasing restrictions on donated PP&E over the asset's useful life; absent an explicit donor time stipulation, the entire amount is reclassified when the asset is placed in service.", "related_topics": [ "958-605", "958-205", "958-220", "360-10", "958-10", "958-360" ], "key_concepts": [ "collections", "collection capitalization policy", "depreciation of long-lived assets", "works of art and historical treasures", "contributed property, plant, and equipment", "net assets with donor restrictions", "placed-in-service release of restrictions", "deaccessioning and direct care" ] } ``` Source downloaded (UTC): 2026-09-10T00:10:33.971Z to 2026-09-10T00:10:33.971Z Record version: sha256:65222098c50f55a0bd992610a48e70409e8e81c2fb27a6e03d9a85aba5699607 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/958/#00-status) SEC content: no ##### [360-958-00-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:33.971Z to 2026-09-10T00:10:33.971Z Record version: sha256:e0857b033364b4b41fc47b970e0e33a84686d23e13968546f9786651cbb089f0 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
CollectionsAmendedAccounting Standards Update No. 2019-0303/21/2019
Conditional ContributionAddedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2010-0701/28/2010
Donor-Imposed ConditionAddedAccounting Standards Update No. 2018-0806/21/2018
Donor-Imposed RestrictionAmendedAccounting Standards Update No. 2016-1408/18/2016
Donor-Restricted SupportAddedAccounting Standards Update No. 2016-1408/18/2016
Net Assets with Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Net Assets without Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Promise to GiveAddedAccounting Standards Update No. 2018-0806/21/2018
ReclassificationSupersededAccounting Standards Update No. 2016-1408/18/2016
Reclassification of Net AssetsAddedAccounting Standards Update No. 2016-1408/18/2016
Restricted SupportSupersededAccounting Standards Update No. 2016-1408/18/2016
Temporarily Restricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
Unrestricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
Unrestricted SupportSupersededAccounting Standards Update No. 2016-1408/18/2016
958-360-35-8AmendedAccounting Standards Update No. 2016-1408/18/2016
958-360-40-1SupersededAccounting Standards Update No. 2016-1408/18/2016
958-360-45-1AmendedAccounting Standards Update No. 2016-1408/18/2016
958-360-45-1AAddedAccounting Standards Update No. 2016-1408/18/2016
958-360-45-2SupersededAccounting Standards Update No. 2016-1408/18/2016
958-360-45-6AmendedAccounting Standards Update No. 2016-1408/18/2016
958-360-45-7AddedAccounting Standards Update No. 2016-1408/18/2016
958-360-50-1AmendedAccounting Standards Update No. 2016-1408/18/2016
958-360-50-4AmendedAccounting Standards Update No. 2025-1212/17/2025
958-360-50-7AddedAccounting Standards Update No. 2019-0303/21/2019
958-360-55-2AmendedAccounting Standards Update No. 2016-1408/18/2016
Source downloaded (UTC): 2026-09-10T00:10:36.640Z to 2026-09-10T00:10:36.640Z Record version: sha256:1459defb32c94f62304bbaf03df8aa4747a209ceb37e91e1969cf0e2c8644a78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/958/#05-overview-and-background) SEC content: no ##### [360-958-05-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:36.640Z to 2026-09-10T00:10:36.640Z Record version: sha256:d699d30235b509c1cf187300a408cd305e5e284c6e097609f95caf5ffd8ba085 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance about long-lived tangible assets held by [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs). It includes standards of financial accounting and reporting that require all NFPs to recognize the cost of using up long-lived tangible assets—depreciation—in financial statements. Source downloaded (UTC): 2026-09-10T00:10:38.635Z to 2026-09-10T00:10:38.635Z Record version: sha256:7eb0722fc1544dbc62bdd34f272489fc0ccb326c542d8d2b6ad17a771218c557 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/958/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-958-15-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:38.635Z to 2026-09-10T00:10:38.635Z Record version: sha256:e7d29df66d02107cf10c9e2276e80c0e5b06acd094d7c3c42c4d6b32c0ff5d08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15. Source downloaded (UTC): 2026-09-10T00:10:44.016Z to 2026-09-10T00:10:44.016Z Record version: sha256:268f2722f7e75be03a075fbbfe08405fcaa939310e8efddeaca046e086b4b668 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/958/#25-recognition) SEC content: no ##### [360-958-25-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:44.016Z to 2026-09-10T00:10:44.016Z Record version: sha256:28dcb3f245de994f64e8bf24dbffff2e13f82d18ced52e5af65351704348cf9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Property, plant, and equipment acquired by [contribution](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") is recognized in accordance with the Contributions Received Subsections of Subtopic 958-605. However, a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) need not recognize contributions of works of art, historical treasures, and similar assets if the donated items are added to [collections](https://asc.understandingaccounting.org/glossary/c/#collections "Works of art, historical treasures, or similar assets that meet all of the following criteria: They are held for public exhibition, education, or research in furtherance of public service rather than financial gain. They are protected, kept unencumbered, cared for, and preserved. They are subject to an organizational policy that requires the use of proceeds from items that are sold to be for the acquisitions of new collection items, the direct care of existing collections, or both. Collections generally are held by museums; botanical gardens; libraries; aquariums; arboretums; historic sites; planetariums; zoos; art galleries; nature, science, and technology centers; and similar educational, research, and public service organizations that have those divisions; however, the definition is not limited to those entities nor does it apply to all items held by those entities.") (see the following paragraph and paragraph [958-360-25-3](https://asc.understandingaccounting.org/asc/360/958/#360-958-25-3)). #### Works of Art, Historical Treasures, and Similar Items ##### [360-958-25-2](https://asc.understandingaccounting.org/asc/360/958/#360-958-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:44.016Z to 2026-09-10T00:10:44.016Z Record version: sha256:48d8b48071cc875328ea5acf0226969d6cda75ccb10fe905fffbdd513c98bb46 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Works of art, historical treasures, and similar items that are not part of a collection shall be recognized as assets in financial statements. ##### [360-958-25-3](https://asc.understandingaccounting.org/asc/360/958/#360-958-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:44.016Z to 2026-09-10T00:10:44.016Z Record version: sha256:8e1ceb6d8a77489aa7cdf8bc59972c544a1b648d7ef61d140e3532ccc5005e0e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP that holds works of art, historical treasures, and similar items that meet the definition of a collection has the following three alternative policies for reporting that collection: 1. a Capitalization of all collection items 2. b Capitalization of all collection items on a prospective basis (that is, all items acquired after a stated date) 3. c No capitalization. Capitalization of selected collections or items is precluded. Source downloaded (UTC): 2026-09-10T00:10:47.888Z to 2026-09-10T00:10:47.888Z Record version: sha256:594fe72f4707ec72feef5d34a2c0499e8af648e26215a92cca549f88fa0ac542 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/360/958/#30-initial-measurement) SEC content: no ##### [360-958-30-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:47.888Z to 2026-09-10T00:10:47.888Z Record version: sha256:a66a44e645d50a70a709d4cdd5cbb3eafbcb93e7f4ad24423ad18b5c87407e14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Similar to items acquired in exchange transactions, the amount initially recognized for contributed property, plant, and equipment shall include all the costs incurred by the entity to place those assets in use. Examples of such costs include the freight and installation costs of contributed equipment and cataloging costs for contributed library books. Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:5b466d61dbf6bd7d18668700bb49a7685270d3a7166fa90b931ed28c70bc1d72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/958/#35-subsequent-measurement) SEC content: no #### Depreciation ##### [360-958-35-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:f6de699e43d5a823ceecba2cdef2b0dc0823b88d1fb3007bf43432454ced8530 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) shall recognize the cost of using up the future economic benefits or service potentials of its long-lived tangible assets—depreciation. ##### [360-958-35-2](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:ab20a3ccd9d76f338817c7fccc18db9c2401cf8fe0d7e79c45790e9662f126fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The process of using up the future economic benefit or service potential of land often takes place over a period so long that its occurrence is imperceptible—land used as a building site is perhaps the most common example. In contrast, however, that process also sometimes occurs much more rapidly—land used as a site for toxic waste, as a source of gravel or ore, or for farming under conditions in which fertility dissipates relatively quickly and cannot be restored economically are examples. ##### [360-958-35-3](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:993c7c9059aed95592cba60b3115acf351685e96788282f92ef1fe1de1bb3958 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Consistent with the accepted practice for land used as a building site, depreciation need not be recognized on an individual work of art or historical treasure whose economic benefit or service potential is used up so slowly that its estimated useful life is extraordinarily long. A work of art or historical treasure shall be deemed to have that characteristic only if verifiable evidence exists demonstrating both of the following characteristics: 1. a The asset individually has cultural, aesthetic, or historical value that is worth preserving perpetually. 2. b The holder has the technological and financial ability to protect and preserve essentially undiminished the service potential of the asset and is doing that. ##### [360-958-35-4](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:eb00d408c6a8e18e9452a092f51319eec97e290a0b717003c13fa7a0ab968ef3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A recognized cultural, aesthetic, or historical value and, generally, an already long existence have established each work of art or historical treasure as a member of a group of rare works with that characteristic. Most of them are acquired by purchase, gift, or discovery with that characteristic already having been demonstrated, and the holder or acquirer usually takes steps to protect and preserve it, for example, by keeping a work of art in a protective environment and limiting its use solely to display. While that characteristic is not limited to assets with an already long existence, an asset that has come into existence relatively recently cannot be assumed to have it in the absence of the verifiable evidence described in the preceding paragraph. For example, to put a painting in a protective environment is not by itself evidence of cultural, aesthetic, or historical value that is worth preserving perpetually. ##### [360-958-35-5](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:c8fd2156c1e4de125ef482e9e51dca3bb0f11797d7c9bd98adf0bea8a5465f70 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The future economic benefits or service potentials of individual items comprising [collections](https://asc.understandingaccounting.org/glossary/c/#collections "Works of art, historical treasures, or similar assets that meet all of the following criteria: They are held for public exhibition, education, or research in furtherance of public service rather than financial gain. They are protected, kept unencumbered, cared for, and preserved. They are subject to an organizational policy that requires the use of proceeds from items that are sold to be for the acquisitions of new collection items, the direct care of existing collections, or both. Collections generally are held by museums; botanical gardens; libraries; aquariums; arboretums; historic sites; planetariums; zoos; art galleries; nature, science, and technology centers; and similar educational, research, and public service organizations that have those divisions; however, the definition is not limited to those entities nor does it apply to all items held by those entities.") (as that term is commonly used, not necessarily as defined within this Subtopic) and of buildings and other structures—including those designated as landmarks, monuments, cathedrals, or historical treasures—are used up not only by wear and tear in intended uses but also by the continuous destructive effects of pollutants, vibrations, and so forth. The cultural, aesthetic, or historical values of those assets can be preserved, if at all, only by periodic major efforts to protect, clean, and restore them, usually at significant cost. Thus, depreciation of those assets shall be recognized. ##### [360-958-35-6](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:0c2745e589046cc60ca7ca31d1c6dbb24d755d165759fb575c211f2a47f93281 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depreciation shall be recognized on any capitalized costs of major preservation or restoration devices or efforts, which provide future economic benefits or service potentials until the next expected preservation or restoration, regardless of whether depreciation is recognized on the asset being protected or restored. ##### [360-958-35-7](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:53d5e8412aff79493a1d52df87af1636cf517061cf2cd300a559814139b5b0f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The terms of certain grants and reimbursements from other entities may specify whether depreciation or the entire cost of the asset in the year of acquisition should be included as a cost of activities associated with those grants or reimbursements for contractual purposes (sometimes referred to as allowable costs). Those terms shall not affect the recognition and measurement of depreciation for financial reporting purposes. #### Impairment ##### [360-958-35-8](https://asc.understandingaccounting.org/asc/360/958/#360-958-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:50.672Z to 2026-09-10T00:10:50.672Z Record version: sha256:ff7303809d721819458cde11ec5e6a254cc366244e26d4bf72fcc05eb9604a36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When grouping assets for impairment testing as described in paragraphs [360-10-35-23 through 35-28](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-23) , an NFP that relies in part on [contributions](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") to maintain its assets may need to consider those contributions in determining the appropriate cash flows to compare with the carrying amount of an asset. If future contributions without donor restrictions to the entity as a whole are not considered, the sum of the expected future cash flows may be negative or positive but less than the carrying amount of the asset. For example, the costs of administering a museum may exceed the admission fees charged, but the museum may fund the cash flow deficit with contributions without donor restrictions. Source downloaded (UTC): 2026-09-10T00:10:54.518Z to 2026-09-10T00:10:54.518Z Record version: sha256:40df6807a442af269d68f83c40eea6e185044fd52a859dc96f935235ddf04e5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/360/958/#40-derecognition) SEC content: no ##### [360-958-40-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:54.518Z to 2026-09-10T00:10:54.518Z Record version: sha256:8b03be5268066dc91bf869af11e1d373ad30091c877e1689bb9be62ea28e12f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). #### Disposal of a Collection Item by Contribution ##### [360-958-40-2](https://asc.understandingaccounting.org/asc/360/958/#360-958-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:54.518Z to 2026-09-10T00:10:54.518Z Record version: sha256:2be4c0a71d2669e5e1bd749cfed5dcb5961b45a721f6f7251e36bdb4cbc82340 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [contribution](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") made by a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) of a previously recognized collection item shall be reported as an expense and a decrease in assets in the period in which the contribution is made, and shall be measured 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."). A gain or loss shall be recognized on that contribution made if the collection item's fair value differs from its carrying amount. ##### [360-958-40-3](https://asc.understandingaccounting.org/asc/360/958/#360-958-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:54.518Z to 2026-09-10T00:10:54.518Z Record version: sha256:2eae9361763ac789da567764e3690025a0e78c279c8fa3d04ee46992b7a21e66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A contribution made by an NFP of a previously unrecognized collection item shall not be recognized on the face of the financial statements. Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:3b41609a02211aa3d3a0bf5c30df86fa90cbb47129a240943dbade8af98d151e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/958/#45-other-presentation-matters) SEC content: no #### Reclassification upon Expiration of Donor-Imposed Restrictions ##### [360-958-45-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:2d7c96ffa590ac940aa606505a1bdf8458808005b4bcfed148a38f586c538e3e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the property, plant, and equipment item being depreciated was contributed to the [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) with an explicit [donor-imposed restriction](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction "A donor stipulation (donors include other types of contributors, including makers of certain grants) that specifies a use for a contributed asset that is more specific than broad limits resulting from the following: The nature of the not-for-profit entity (NFP) The environment in which it operates The purposes specified in its articles of incorporation or bylaws or comparable documents for an unincorporated association. Some donors impose restrictions that are temporary in nature, for example, stipulating that resources be used after a specified date, for particular programs or services, or to acquire buildings or equipment. Other donors impose restrictions that are perpetual in nature, for example, stipulating that resources be maintained in perpetuity. Laws may extend those limits to investment returns from those resources and to other enhancements (diminishments) of those resources. Thus, those laws extend donor-imposed restrictions.") on the length of time of the item's use, [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") shall be reclassified as [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") in a statement of activities as those restrictions expire. (For how to report a [reclassification of net assets](https://asc.understandingaccounting.org/glossary/r/#reclassification-of-net-assets "Simultaneous increase of one class of net assets and decrease of another. A reclassification of net assets usually results from a donor-imposed restriction (donors include other types of contributors, including makers of certain grants) being satisfied or otherwise lapsing."), see paragraph [958-220-45-3](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-3).) The amount reclassified may or may not be equal to the amount of the related depreciation. The amount to be reclassified shall be based on the length of time indicated by the donor-imposed restrictions, if restrictions exist, while the amount of depreciation shall be based on the useful economic life of the asset. For example, a computer with an estimated useful economic life of five years may be contributed by a donor and restricted for a specific use by the NFP for three years. Absent donor stipulations specifying how long such donated assets or assets constructed or acquired with cash restricted for such acquisition or construction must be used, restrictions on long-lived assets, if any, expire when the assets are placed in service as required by paragraph [958-205-45-12](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-12). ##### [360-958-45-1A](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-1A) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:8c8808c06432c1831164b38bb02eb1aba8238a68865bdc81e54ea0adcce8b8c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following [contributions](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") shall be reclassified from net assets with donor restrictions to net assets without donor restrictions when the acquired or constructed property, plant, or equipment is placed in service: 1. a Purpose-restricted contributions of property, plant, or equipment that are without donor-imposed stipulations specifying how long the donated asset must be used 2. b Contributions of cash restricted for the acquisition or construction of property, plant, or equipment. The entire amount of the contribution of property, plant, or equipment or cash shall be reclassified at the time the asset is placed in service. There may be circumstances in which a donor restriction might extend beyond the point at which the property, plant, or equipment is placed in service. For example, a donor might specify that a donation restricted for the acquisition of property, plant, or equipment must continue to be used for a specified period of time. In such circumstances, the restriction would expire over the period of time that the asset is to be used. ##### [360-958-45-2](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:d36ad4a2e3c46d13f9304927606ca7a852d8360afc9d7193661f59c5571070ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). #### Works of Art, Historical Treasures, and Similar Assets ##### [360-958-45-3](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:b4b43941e2125bc18dbb997968199f7a32555d25f0ea713a867bcf8a3486650e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an NFP does not recognize and capitalize its [collections](https://asc.understandingaccounting.org/glossary/c/#collections "Works of art, historical treasures, or similar assets that meet all of the following criteria: They are held for public exhibition, education, or research in furtherance of public service rather than financial gain. They are protected, kept unencumbered, cared for, and preserved. They are subject to an organizational policy that requires the use of proceeds from items that are sold to be for the acquisitions of new collection items, the direct care of existing collections, or both. Collections generally are held by museums; botanical gardens; libraries; aquariums; arboretums; historic sites; planetariums; zoos; art galleries; nature, science, and technology centers; and similar educational, research, and public service organizations that have those divisions; however, the definition is not limited to those entities nor does it apply to all items held by those entities.") or capitalizes its collections prospectively, a line item shall be shown on the face of the statement of financial position that refers to the disclosures about collections required by paragraph [958-360-50-6](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-6). That line item shall be dated if collections are capitalized prospectively, for example, collections acquired since January 1, 20X1 (Note X). If an NFP adopts a policy of capitalizing collections, a statement of financial position shall include the total amount capitalized on a separate line item, entitled collections or collection items. ##### [360-958-45-4](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:800c5c6f2e03dcfb76cac1a9ab63b520186015e173fc9abafb7755fd9932e95e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount capitalized for works of art, historical treasures, and similar assets that do not meet the definition of a collection shall be disclosed separately on the face of the statement of financial position or in the notes. ##### [360-958-45-5](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:8e4bd85438f8f656be7be8a120f09e09330d4387a3ce817a1c1464b2ffcdfc02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP that does not recognize and capitalize its collections shall report all of the following on the face of its statement of activities, separately from revenues, expenses, gains, and losses: 1. a Costs of collection items purchased as a decrease in the appropriate class of net assets 2. b Proceeds from sale of collection items as an increase in the appropriate class of net assets 3. c Proceeds from insurance recoveries of lost or destroyed collection items as an increase in the appropriate class of net assets. Similarly, an entity that capitalizes its collections prospectively shall report proceeds from sales and insurance recoveries of items not previously capitalized separately from revenues, expenses, gains, and losses. ##### [360-958-45-6](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:cbbb0ea0ae8251e3c2d968b8504d7ce1c60f557364290a2bbd388e9dcb64234d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 1 (see paragraph [958-360-55-2](https://asc.understandingaccounting.org/asc/360/958/#360-958-55-2)) illustrates a statement of activities that satisfies the requirements in paragraph [958-360-45-5](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-5). ##### [360-958-45-7](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:10:58.630Z to 2026-09-10T00:10:58.630Z Record version: sha256:0048bb48054d592f6a7860ffd7c86d3c37a0b5dc9efe61001ecaeafd3c218320 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Purpose-restricted [contributions](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") of works of art, historical treasures, and similar assets and contributions of cash restricted for the acquisition or construction of such assets are reclassified when the restrictions are met in accordance with paragraph [958-360-45-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-1). Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:3bde9363ec0a1bd14f611ee7d3399ffb32b955190bf39d2b4874f128c8acf2e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/958/#50-disclosure) SEC content: no #### Accounting Policies ##### [360-958-50-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:1a3d87442ef22da5a441ffc3226ac72eaa78803a4e608472270077fffebf9bbf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) shall disclose the following accounting policies: 1. a That the entity reports [donor-restricted support](https://asc.understandingaccounting.org/glossary/d/#donor-restricted-support "Donor-restricted revenues or gains from contributions that increase net assets with donor restrictions (donors include other types of contributors, including makers of certain grants).") whose restrictions are met in the same reporting period as support within [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") pursuant to paragraph [958-605-45-4](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-4) if that policy is adopted 2. b [Subparagraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). 3. c The capitalization policy adopted 4. d The capitalization policy for [collections](https://asc.understandingaccounting.org/glossary/c/#collections "Works of art, historical treasures, or similar assets that meet all of the following criteria: They are held for public exhibition, education, or research in furtherance of public service rather than financial gain. They are protected, kept unencumbered, cared for, and preserved. They are subject to an organizational policy that requires the use of proceeds from items that are sold to be for the acquisitions of new collection items, the direct care of existing collections, or both. Collections generally are held by museums; botanical gardens; libraries; aquariums; arboretums; historic sites; planetariums; zoos; art galleries; nature, science, and technology centers; and similar educational, research, and public service organizations that have those divisions; however, the definition is not limited to those entities nor does it apply to all items held by those entities.") (capitalization, prospective capitalization, or no capitalization) 5. e The basis of valuation of property, plant, and equipment—for example, cost for purchased items and [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.") for contributed items. #### Major Classes of Property, Plant, and Equipment ##### [360-958-50-2](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:e8c7e7a9322669e451f5558f50c9ad8cf2ff70657ef2eb9be820bd63fb403d68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the disclosures made in accordance with paragraph [360-10-50-1](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-1), separate disclosure shall be made of the following items: 1. a Nondepreciable assets 2. b Property and equipment not held for use in operations, for example, items held for sale or for investment purposes or construction in process 3. c Improvements to leased facilities and equipment. #### Liquidity and Use ##### [360-958-50-3](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:b110844237428118ff9589cd19eef080de348031f83167c14b988ba4922d7719 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The notes to financial statements shall include disclosures concerning the [liquidity](https://asc.understandingaccounting.org/glossary/l/#liquidity "An asset's or liability's nearness to cash. Donor-imposed restrictions may influence the liquidity or cash flow patterns of certain assets. For example, a donor stipulation that donated cash be used to acquire land and buildings limits an entity's ability to take effective actions to respond to unexpected opportunities or needs, such as emergency disaster relief. On the other hand, some donor-imposed restrictions have little or no influence on cash flow patterns or an entity's financial flexibility. For example, a gift of cash with a donor stipulation that it be used for emergency-relief efforts has a negligible impact on an entity if emergency relief is one of its major ongoing programs.") of property, plant, and equipment, including information about limitations on their use. ##### [360-958-50-4](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-4) Pending content: yes Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:e215cd25d500b9147cb69fc19dd961944882e0aa6790b4e3024056510003c0e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, the following information shall be provided: 1. a Property, plant, and equipment pledged as collateral or otherwise subject to lien 2. b Donor or legal limitations on the use of or proceeds from the disposal of plant, property, and equipment 3. c Property, plant, and equipment acquired with restricted assets if title may revert to another party, such as a resource provider 4. d The terms of exchange transactions (other than lease transactions), such as federal contracts, in which the resource provider retains legal title during the term of the arrangement but it is probable that the NFP will be permitted to keep the assets when the arrangement terminates. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)For example, the following information shall be provided: 1. a Property, plant, and equipment pledged as collateral or otherwise subject to lien 2. b Donor or legal limitations on the use of or proceeds from the disposal of plant, property, and equipment 3. c Property, plant, and equipment acquired with restricted assets if title may revert to another party, such as a resource provider 4. d [Subparagraph superseded by Accounting Standards Update No. 2025-12.](https://asc.understandingaccounting.org/updates/asu-2025-12/) #### Works of Art, Historical Treasures, and Similar Assets ##### [360-958-50-5](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:79e1c7847d2598cd774ed4fcfcf1569592e79a94d321fa802d67648330fa9a3c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If not presented separately on the face of the statement of financial position pursuant to paragraph [958-360-45-4](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-4), the amount capitalized for works of art, historical treasures, and similar assets that do not meet the definition of a collection shall be disclosed. ##### [360-958-50-6](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:58f0b81b59d19ede5509e774f471b52597b7b6353aa311453e9136f0e4de5726 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP that does not recognize and capitalize its collections or that capitalizes collections prospectively shall describe its collections, including their relative significance, and its stewardship policies for collections. If collection items not capitalized are deaccessed during the period, it also shall describe the items given away, damaged, destroyed, lost, or otherwise deaccessed during the period or disclose their fair value. ##### [360-958-50-7](https://asc.understandingaccounting.org/asc/360/958/#360-958-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:00.636Z to 2026-09-10T00:11:00.636Z Record version: sha256:27a84ed8b83a530855cae218dd72348b50391681a6e9eeb9d82261ef3f72e801 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A collection-holding NFP shall disclose its organizational policy for the use of proceeds from deaccessioned collection items, including whether those proceeds could be used for acquisitions of new collection items, the direct care of existing collections, or both. If the collection-holding entity allows proceeds from deaccessioned collection items to be used for direct care, the entity shall disclose its definition of direct care. Source downloaded (UTC): 2026-09-10T00:11:02.493Z to 2026-09-10T00:11:02.493Z Record version: sha256:01ca4ee836044acc164f0ffb4547b466821668886e9d18649e78cf8b7b0a6183 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-958-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/958/#55-implementation-guidance-and-illustrations) SEC content: no ##### [360-958-55-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:02.493Z to 2026-09-10T00:11:02.493Z Record version: sha256:c0333b9420047c906eee807d4c3d89a9472a8b3fb3a8bc800a67f640625b7ecc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used by a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) in reporting property, plant, and equipment. #### Illustrations ##### [360-958-55-2](https://asc.understandingaccounting.org/asc/360/958/#360-958-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:02.493Z to 2026-09-10T00:11:02.493Z Record version: sha256:178fa7291e6ac325bc830dac6a3e878037576c461157e0b991797ecdb123af5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain transactions involving collection items are required by paragraph [958-360-45-5](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-5) to be reported separately from items of revenues, gains, expenses, and losses. The following illustrates one possible format that may be used to satisfy those financial disclosure provisions. Additionally, paragraph [958-205-55-10](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-10) contains illustrations of several formats of statements of activities that might be adapted to comply with those provisions. - ![](https://asc.understandingaccounting.org/asc-img/GUID-9618B726-38BD-43B0-A079-BBA02F08F0DC-low.gif) Organization M Statement of Activities " For the Year Ended June 30, 20X1" Without Donor Restrictions With Donor Restrictions Total Revenues and other support XXX XXX XXX Gain on sale of art that is not held in a collection 1 1 Net assets released from restrictions XXX (XXX) "Total revenues, gains, and other support" XXX XX XXX Expenses XXX XXX Change in net assets before changes related to collection items not capitalized XX XX XXX Change in net assets related to collection items not capitalized: Proceeds from sale of collection items 5 10 15 Proceeds from insurance recoveries on destroyed collection items 1 1 Collection items purchased but not capitalized (12) (25) (37) (7) (14) (21) Change in net assets XX XX XXX Source downloaded (UTC): 2026-09-10T00:11:09.859Z to 2026-09-10T00:11:20.525Z Record version: sha256:cc12a1e3bf691a576a2453170ed4bb3d8213c256204612cb23642ddd375a74ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-960: Property, Plant, and Equipment — Plan Accounting—Defined Benefit Pension Plans ### Machine-generated study aids ```json { "summary": "This Subtopic governs how a defined benefit pension plan accounts for property, plant, and equipment it uses in operating the plan (buildings, equipment, furniture and fixtures, leasehold improvements). Unlike plan investments, which are generally reported at fair value, these operating assets are presented at cost less accumulated depreciation or amortization (360-960-35-1). The rationale is that expenditures for operating assets are advance payments for future administrative services rather than investments expected to generate cash flows to pay benefits (360-960-35-2).", "key_points": [ "The Subtopic provides guidance on accounting for property, plant, and equipment of defined benefit pension plans (360-960-05-1).", "Scope follows the Overall Subtopic scope in Section 960-10-15 (360-960-15-1).", "Plan assets used in plan operations are presented at cost less accumulated depreciation or amortization (360-960-35-1).", "Operating assets may include buildings, equipment, furniture and fixtures, and leasehold improvements (360-960-35-1).", "Expenditures for operating assets are in the nature of advance payments for future administrative services, distinguishing them from investments expected to generate future cash flows used to provide benefits (360-960-35-2)." ], "categories": [ "Subsequent measurement", "Inventory and PP&E", "Compensation and benefits", "Presentation" ], "audience_level": "intermediate", "student_note": "The common misunderstanding is assuming everything a pension plan holds is carried at fair value; assets the plan actually uses to run itself (its office building, furniture, leasehold improvements) stay at historical cost less depreciation because they are prepaid administrative services, not benefit-generating investments.", "related_topics": [ "960-10", "960-325", "960-205", "360-10", "962-360" ], "key_concepts": [ "defined benefit pension plan", "operating assets", "cost less accumulated depreciation", "plan investments at fair value", "leasehold improvements", "administrative services", "plan financial statements" ] } ``` Source downloaded (UTC): 2026-09-10T00:11:09.859Z to 2026-09-10T00:11:09.859Z Record version: sha256:f4d3b508f28b77b467bff4d9ce947ec2610143aa326b993e0ee752f01cfaefd9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-960-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/960/#00-status) SEC content: no ##### [360-960-00-1](https://asc.understandingaccounting.org/asc/360/960/#360-960-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:09.859Z to 2026-09-10T00:11:09.859Z Record version: sha256:c21d4af0695188407b4d62b80bc8b9441c9d94c10fc44df506d8d69201326cb8 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
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Benefits (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit PlanAddedAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit Pension Plan (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
960-360-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
960-360-35-2AmendedAccounting Standards Update No. 2014-0603/14/2014
Source downloaded (UTC): 2026-09-10T00:11:12.214Z to 2026-09-10T00:11:12.214Z Record version: sha256:e92d19ad63c7ed2306725e19802f70e5af0033ddd0efb9201333631824b2196e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-960-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/960/#05-overview-and-background) SEC content: no ##### [360-960-05-1](https://asc.understandingaccounting.org/asc/360/960/#360-960-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:12.214Z to 2026-09-10T00:11:12.214Z Record version: sha256:cfffd9455b0a0d93973562b36dd164f20c72cf48d327a2d40d9a8286ab97e566 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on accounting for property, plant, and equipment for [defined benefit pension plans](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)"). Source downloaded (UTC): 2026-09-10T00:11:14.659Z to 2026-09-10T00:11:14.659Z Record version: sha256:ce8fc6b519fba4de7a3a8157c89135f097101a84f998eebfbebde4383ed0a62b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-960-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/960/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-960-15-1](https://asc.understandingaccounting.org/asc/360/960/#360-960-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:14.659Z to 2026-09-10T00:11:14.659Z Record version: sha256:20012f29465bebf8464b498033699c1fa83ae35bc9a13ce63b6a555e5e7fc3f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 960-10-15. Source downloaded (UTC): 2026-09-10T00:11:20.525Z to 2026-09-10T00:11:20.525Z Record version: sha256:8a43dce452d917ad04ce5c1778d20d2d5e234cdd1b8492da7badc09e2423ca06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-960-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/960/#35-subsequent-measurement) SEC content: no ##### [360-960-35-1](https://asc.understandingaccounting.org/asc/360/960/#360-960-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:20.525Z to 2026-09-10T00:11:20.525Z Record version: sha256:5c745c1ed6c0ab4afcc01b1803202fbae056aefd3181ac4031833e01eb3bf4aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan assets used in plan operations shall be presented at cost less accumulated depreciation or amortization and may consist of, among others, any of the following: 1. a Buildings 2. b Equipment 3. c Furniture and fixtures 4. d Leasehold improvements. ##### [360-960-35-2](https://asc.understandingaccounting.org/asc/360/960/#360-960-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:20.525Z to 2026-09-10T00:11:20.525Z Record version: sha256:18322765e0f099821bd03032e7b0b45aa1d3f4e237e8d10aafc8955268f935db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Expenditures for operating assets are in the nature of advance payments for future administrative services. In that respect they differ from investments that are expected to generate future cash flows that will be used to provide [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment."). Source downloaded (UTC): 2026-09-10T00:11:24.376Z to 2026-09-10T00:11:35.677Z Record version: sha256:f6fcd57b1066514ef0e1b246567c7b693752634cf826ca24ce4468800396c2a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-962: Property, Plant, and Equipment — Plan Accounting—Defined Contribution Pension Plans ### Machine-generated study aids ```json { "summary": "This subtopic governs how a defined contribution pension plan accounts for property, plant, and equipment that the plan itself uses in its operations. The core rule is that such operating assets — buildings, equipment, furniture and fixtures, and leasehold improvements — are reported at cost less accumulated depreciation or amortization, rather than at fair value like investment assets.", "key_points": [ "This Subtopic provides guidance on accounting for property, plant, and equipment for defined contribution plans (360-962-05-1).", "Its scope is the same as the Overall Subtopic, Section 962-10-15 (360-962-15-1).", "Plan assets used in plan operations shall be reported at cost less accumulated depreciation or amortization (360-962-35-1).", "Operating assets covered may include buildings, equipment, furniture and fixtures, and leasehold improvements (360-962-35-1(a) through (d)).", "The cost-less-depreciation model applies to assets used in operating the plan, distinguishing them from the plan's investments, which are measured under the Topic 962 investment guidance." ], "categories": [ "Subsequent measurement", "Inventory and PP&E", "Compensation and benefits", "Industry-specific" ], "audience_level": "introductory", "student_note": "Exam trap: students assume everything a benefit plan holds is carried at fair value; assets the plan uses to run itself (its office building, computers, leasehold improvements) are instead carried at historical cost less accumulated depreciation or amortization.", "related_topics": [ "962-10", "962-325", "360-10", "960", "965", "962-40" ], "key_concepts": [ "defined contribution plan", "operating assets", "property, plant, and equipment", "cost less accumulated depreciation", "leasehold improvements", "plan accounting", "amortization" ] } ``` Source downloaded (UTC): 2026-09-10T00:11:24.376Z to 2026-09-10T00:11:24.376Z Record version: sha256:ef68dbf64869a5ffed4ccc8111f3281668de0484234fc52576e0c3856b5c2abe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-962-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/962/#00-status) SEC content: no ##### [360-962-00-1](https://asc.understandingaccounting.org/asc/360/962/#360-962-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:24.376Z to 2026-09-10T00:11:24.376Z Record version: sha256:7c4a96c60e34461f9124d012e1157e6e3193bf5c5fd98dc6dd058910a8beefac 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
Defined Contribution PlanAddedAccounting Standards Update No. 2018-0907/16/2018
962-360-05-1AddedAccounting Standards Update No. 2018-0907/16/2018
962-360-15-1AddedAccounting Standards Update No. 2018-0907/16/2018
962-360-35-1AddedAccounting Standards Update No. 2018-0907/16/2018
Source downloaded (UTC): 2026-09-10T00:11:26.654Z to 2026-09-10T00:11:26.654Z Record version: sha256:d07dae92b0803703e086d5a3539011b0058432311ce50fe7e3a705488345d7d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-962-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/962/#05-overview-and-background) SEC content: no ##### [360-962-05-1](https://asc.understandingaccounting.org/asc/360/962/#360-962-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:26.654Z to 2026-09-10T00:11:26.654Z Record version: sha256:ef9806a4226700136d0ff516154ea894d34271bba810b85c6f3d8e7a44c860d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on accounting for property, plant, and equipment for [defined contribution plans](https://asc.understandingaccounting.org/glossary/d/#defined-contribution-plan "A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account."). Source downloaded (UTC): 2026-09-10T00:11:29.652Z to 2026-09-10T00:11:29.652Z Record version: sha256:d40847a16689c1ca3ff3d408b0ad47166f9e5086c0d258d5cf2f30bba662b99a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-962-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/962/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-962-15-1](https://asc.understandingaccounting.org/asc/360/962/#360-962-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:29.652Z to 2026-09-10T00:11:29.652Z Record version: sha256:4ec3b834ff4b96d902079763edd965fc779c7c694cc9c03316e694363b9640f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic; see Section 962-10-15. Source downloaded (UTC): 2026-09-10T00:11:35.677Z to 2026-09-10T00:11:35.677Z Record version: sha256:e3765fab2f97532e258918fdc789f182b8442cd766ca5e58da9c9691e130f772 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-962-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/962/#35-subsequent-measurement) SEC content: no ##### [360-962-35-1](https://asc.understandingaccounting.org/asc/360/962/#360-962-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:35.677Z to 2026-09-10T00:11:35.677Z Record version: sha256:84c018439665545c8418ecde3e4e16eff7962a7850e9c3982cd80202840a538c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan assets used in plan operations shall be reported at cost less accumulated depreciation or amortization and may consist of any of the following: 1. a Buildings 2. b Equipment 3. c Furniture and fixtures 4. d Leasehold improvements. Source downloaded (UTC): 2026-09-10T00:11:37.708Z to 2026-09-10T00:11:48.609Z Record version: sha256:5d3e420f216177bcc9aa31104ad98d9dbea7f7cca7f360ea983861e4b7fc438d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-965: Property, Plant, and Equipment — Plan Accounting—Health and Welfare Benefit Plans ### Machine-generated study aids ```json { "summary": "This subtopic tells health and welfare benefit plans how to measure property, plant, and equipment on the plan's financial statements. Assets used in plan operations (buildings, equipment, furniture and fixtures, leasehold improvements) are carried at cost less accumulated depreciation or amortization, while real estate and other holdings held as plan investments are reported at fair value less costs to sell, if significant, as of the financial statement date.", "key_points": [ "Plan assets used in plan operations are reported at cost less accumulated depreciation or amortization (360-965-35-1).", "Assets used in operations may include buildings, equipment, furniture and fixtures, and leasehold improvements (360-965-35-1(a)-(d)).", "Plan investments in real estate or other investments (excluding insurance contracts) are reported at fair value less costs to sell, if significant, at the financial statement date (360-965-35-2).", "Accounting for other investments, particularly investment and insurance contracts, is addressed in Subtopic 965-325 (360-965-35-3).", "The scope of this Subtopic follows Section 965-10-15, the Overall Subtopic's scope and scope exceptions (360-965-15-1)." ], "categories": [ "Subsequent measurement", "Inventory and PP&E", "Fair value", "Compensation and benefits" ], "audience_level": "intermediate", "student_note": "The exam trap is the split measurement model: the same asset class (e.g., a building) is carried at depreciated cost if the plan uses it to run operations, but at fair value less costs to sell if the plan holds it as an investment. Ask what the asset is used for, not what it is.", "related_topics": [ "965-10", "965-325", "965-360", "360-10", "820", "960" ], "key_concepts": [ "health and welfare benefit plan", "assets used in plan operations", "cost less accumulated depreciation", "plan investments", "fair value less costs to sell", "real estate investments", "insurance contracts", "leasehold improvements" ] } ``` Source downloaded (UTC): 2026-09-10T00:11:37.708Z to 2026-09-10T00:11:37.708Z Record version: sha256:0e0ad6b65eac84a4703357eb0c4b56a79000753ce54e069c7cb0bb3b4489751f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-965-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/965/#00-status) SEC content: no ##### [360-965-00-1](https://asc.understandingaccounting.org/asc/360/965/#360-965-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:37.708Z to 2026-09-10T00:11:37.708Z Record version: sha256:b0c9eb935a2507d64371848f3843aee91f35ad71e8f4c74321de1e4e7becff99 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
Fair Value (2nd def.)SupersededAccounting Standards Update No. 2012-0410/01/2012
Fair ValueAddedAccounting Standards Update No. 2012-0410/01/2012
Plan Assets (1st def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Plan Assets (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
965-360-35-1AmendedAccounting Standards Update No. 2014-0603/14/2014
965-360-35-2AmendedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T00:11:41.081Z to 2026-09-10T00:11:41.081Z Record version: sha256:3415fcb34dc35185c59c9322f80a1e807cdd0decd8f0fdefb545841a355701c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-965-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/965/#05-overview-and-background) SEC content: no ##### [360-965-05-1](https://asc.understandingaccounting.org/asc/360/965/#360-965-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:41.081Z to 2026-09-10T00:11:41.081Z Record version: sha256:a392010ed4c5c75f45768b227453f9a333d3a561b99cfb69c8780b414de90aaa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on property, plant, and equipment for [health and welfare benefit plans](https://asc.understandingaccounting.org/glossary/h/#health-and-welfare-benefit-plans "Health and welfare benefit plans include plans that provide the following: Any of the following benefits: Medical, dental, visual, psychiatric, or long-term health care Life insurance (offered separately from a pension plan) Certain severance benefits Accidental death or dismemberment benefits. Benefits for unemployment, disability, vacations, or holidays Other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services."). Source downloaded (UTC): 2026-09-10T00:11:44.478Z to 2026-09-10T00:11:44.478Z Record version: sha256:478365a4f76c20bf1355b350f1caf198b2769145c115b831ca29599b7291915d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-965-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/965/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-965-15-1](https://asc.understandingaccounting.org/asc/360/965/#360-965-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:44.478Z to 2026-09-10T00:11:44.478Z Record version: sha256:5aaba81b34123339b8e94f94ff165dfcddf9c0e7a2230d42c885a382170f47bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 965-10-15. Source downloaded (UTC): 2026-09-10T00:11:48.609Z to 2026-09-10T00:11:48.609Z Record version: sha256:231f0fef8b0bcd035b9fff1bd84e288bd78ba5d0a029315bb9647ee5c09f8f3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-965-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/965/#35-subsequent-measurement) SEC content: no ##### [360-965-35-1](https://asc.understandingaccounting.org/asc/360/965/#360-965-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:48.609Z to 2026-09-10T00:11:48.609Z Record version: sha256:4286d39f5eee48e6b2851151579ddb49e4dfc6093af3701246bc0ee235c2eba7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. Plan assets ordinarily cannot be withdrawn by the employer except under certain circumstances when a plan has assets in excess of obligations and the employer has taken certain steps to satisfy existing obligations. Securities of the employer held by the plan are includable in plan assets provided they are transferable. Assets not segregated in a trust, or otherwise effectively restricted, so that they cannot be used by the employer for other purposes are not plan assets, even though the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets.") used in plan operations shall be reported at cost less accumulated depreciation or amortization and may consist of any of the following: 1. a Buildings 2. b Equipment 3. c Furniture and fixtures 4. d Leasehold improvements. ##### [360-965-35-2](https://asc.understandingaccounting.org/asc/360/965/#360-965-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:48.609Z to 2026-09-10T00:11:48.609Z Record version: sha256:18fb787f577bcc2c74df1e895beb3438350067243830807cb1d6b9280955b072 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan investments in the form of real estate or other investments (excluding insurance contracts), shall be reported at their [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.") less costs to sell, if significant, at the financial statement date. ##### [360-965-35-3](https://asc.understandingaccounting.org/asc/360/965/#360-965-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:48.609Z to 2026-09-10T00:11:48.609Z Record version: sha256:5e3068ec2d7c9492aa01880c5a94fde430f758f9bb0fb1b7ae328e60841a838d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Subtopic 965-325 for guidance on accounting for other investments, in particular investment and insurance contracts, of [health and welfare benefit plans](https://asc.understandingaccounting.org/glossary/h/#health-and-welfare-benefit-plans "Health and welfare benefit plans include plans that provide the following: Any of the following benefits: Medical, dental, visual, psychiatric, or long-term health care Life insurance (offered separately from a pension plan) Certain severance benefits Accidental death or dismemberment benefits. Benefits for unemployment, disability, vacations, or holidays Other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services."). Source downloaded (UTC): 2026-09-10T00:11:50.248Z to 2026-09-10T00:12:34.852Z Record version: sha256:4c358944ef379b6976a1b2e97438dddc2a3987a7f0ab8b9caf4b45aba02df0d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970: Property, Plant, and Equipment — Real Estate—General ### Machine-generated study aids ```json { "summary": "ASC 360-970 gathers the real estate–specific property, plant, and equipment guidance in two sets of subsections: Real Estate Syndication and Real Estate Project Costs. It requires costs clearly associated with the acquisition, development, and construction of a real estate project to be capitalized and then allocated to project components (by specific identification, then relative fair value/sales value, then area methods), addresses donated and abandoned real estate and changes in use, and applies the Subtopic 360-10 impairment model project by project. For syndications, fees paid to and rentals received from a developer-seller under a master leaseback are adjustments to the basis of the property.", "key_points": [ "Payments to and receipts from a developer-seller under a master leaseback negotiated with a real estate syndication are treated by the syndication as adjustments to the basis of the property, affecting future depreciation (360-970-25-1; 360-970-55-2).", "Project costs clearly associated with acquisition, development, and construction of a real estate project shall be capitalized as a cost of that project, and indirect project costs relating to several projects shall be capitalized and allocated among them (360-970-25-2 through 25-3).", "Capitalized costs are assigned to individual project components by specific identification; if impracticable, land and common costs (including amenities) are allocated to benefited parcels on relative fair value before construction and construction costs to units on relative sales value, and if that too is impracticable, by area or other value methods (360-970-30-1).", "Real estate donated to municipalities or governmental agencies for uses benefiting the project is not an abandonment; its cost is allocated as a common cost of the project (360-970-35-1).", "On a change in use under a formal plan expected to produce a higher economic yield, costs charged to expense are limited to the excess of capitalized costs incurred and to be incurred over the estimated value of the revised project when substantially complete (360-970-35-2).", "Impairment follows Subtopic 360-10 (held-for-sale model for substantially completed projects to be sold; held-and-used model for property under or awaiting development and completed projects to be held for rental), evaluated on an individual-project basis, where a project consists of relatively homogeneous integral components (360-970-35-3); insufficient rental demand for a rental project under construction is an additional impairment indicator (360-970-35-4).", "If real estate or rights to real estate are abandoned (e.g., allowing a mortgage foreclosure or option lapse), the capitalized costs shall be expensed and not allocated to other components or projects (360-970-40-1)." ], "categories": [ "Inventory and PP&E", "Initial measurement", "Impairment", "Industry-specific" ], "audience_level": "intermediate", "student_note": "Exam traps here are the allocation hierarchy (specific identification → relative fair value before construction for land/common costs and relative sales value for construction costs → area methods) and the sharp contrast between donated land (a common cost allocated to the project) and abandoned real estate (expensed immediately, never reallocated). Students often wrongly test impairment at the multiphase-development level; each homogeneous project (tract, condo complex, subdivision) is evaluated separately.", "related_topics": [ "970-340", "970-360", "360-10", "340-40", "410-20", "974-720" ], "key_concepts": [ "real estate project costs", "cost capitalization and allocation", "indirect project costs", "master leaseback", "real estate syndication", "abandonment", "change in use", "impairment of long-lived assets" ] } ``` Source downloaded (UTC): 2026-09-10T00:11:50.248Z to 2026-09-10T00:11:50.248Z Record version: sha256:7fa1bead34f22192e8e488ab27dafa51d1b41ae7e26b02246c45f48d1b492688 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/970/#00-status) SEC content: no ##### [360-970-00-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:50.248Z to 2026-09-10T00:11:50.248Z Record version: sha256:3c35adf9092d4619c67f9bc6c62f82b0286ecb73bd07a7acde757dfdeb62b032 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
Phase (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Phase (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
970-360-25-2AmendedAccounting Standards Update No. 2020-1010/29/2020
970-360-25-2AmendedAccounting Standards Update No. 2014-0905/28/2014
970-360-25-4AmendedAccounting Standards Update No. 2014-0905/28/2014
970-360-30-1AmendedAccounting Standards Update No. 2014-0603/14/2014
970-360-55-4SupersededAccounting Standards Update No. 2014-0905/28/2014
970-360-55-5SupersededAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T00:11:53.873Z to 2026-09-10T00:11:53.873Z Record version: sha256:e8336d0b930188d734aa74d06b63711941e7246b4a479c242a9d5baefff4f479 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/970/#05-overview-and-background) SEC content: no ##### [360-970-05-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:53.873Z to 2026-09-10T00:11:53.873Z Record version: sha256:dedb280f9976557162d702c39520c4b5503d5bd04ef00d170c7137041592a938 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content in this Subtopic is contained in the Real Estate Syndication Subsections and the Real Estate [Project Costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project.") Subsections. ### Real Estate Syndication ##### [360-970-05-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:53.873Z to 2026-09-10T00:11:53.873Z Record version: sha256:c6d5f90642e056c10d8713a2f3d9d876319cb74508f8b2f6914120b648dc467f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Real Estate Syndication Subsections of this Subtopic provide guidance on the accounting treatment by a real estate syndication for payments to and receipts from a real estate developer that sold property to the syndication. ### Real Estate Project Costs ##### [360-970-05-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:53.873Z to 2026-09-10T00:11:53.873Z Record version: sha256:2da43760cf6efac8953e20e52f22cc12748634adea1f903a750366b7514ec0e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Real Estate [Project Costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project.") Subsections of this Subtopic provide recognition and measurement guidance on the allocation of capitalized costs of real estate projects and changes in the use of real estate. In addition, they discuss the treatment of real estate donated or abandoned and the recoverability of the carrying amount of real estate projects. ##### [360-970-05-4](https://asc.understandingaccounting.org/asc/360/970/#360-970-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:53.873Z to 2026-09-10T00:11:53.873Z Record version: sha256:7fab47b576868660a702d78c1f6e20861515dea1118e8d6c849a484a5f5a153a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Subtopic 970-340 for additional guidance on capitalization of real estate project costs. Source downloaded (UTC): 2026-09-10T00:11:57.409Z to 2026-09-10T00:11:57.409Z Record version: sha256:e26d4ea9fae1201a6071ba87851d071363d90bf3438f93a8470719e686425902 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/970/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-970-15-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:57.409Z to 2026-09-10T00:11:57.409Z Record version: sha256:eb0963917570a71c05cfa67d1ca739bbf783fd4029a9d9613ddc229e80cbdddf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 970-10-15. ### Real Estate Syndication ##### [360-970-15-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:57.409Z to 2026-09-10T00:11:57.409Z Record version: sha256:26dc7b88eb06651a92a083e92e943499ffe3b52a9d0c4ad6f0aee28d1dbeee92 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Real Estate Syndication Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the [Real Estate Syndication Subsection](https://asc.understandingaccounting.org/asc/970/10/#15-scope-and-scope-exceptions) of Section 970-10-15. ### Real Estate Project Costs ##### [360-970-15-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:11:57.409Z to 2026-09-10T00:11:57.409Z Record version: sha256:570a35d827c1e81ca8765154fc011318d57b67078217fe6c1d93ba27df245fcb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Real Estate [Project Costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project.") Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the [Real Estate Project Costs Subsection](https://asc.understandingaccounting.org/asc/970/10/#15-scope-and-scope-exceptions) of Section 970-10-15. Source downloaded (UTC): 2026-09-10T00:12:05.574Z to 2026-09-10T00:12:05.574Z Record version: sha256:6af13e83ce94f20f2a8f13ca47549663ff4564a056563f96c22d8fb365efb9ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/970/#25-recognition) SEC content: no ### Real Estate Syndication ##### [360-970-25-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:05.574Z to 2026-09-10T00:12:05.574Z Record version: sha256:2668a242432b3dc49a7b1794600d3c8e174701cb80c39a73be82d170cefbc137 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a real estate developer sells a recently constructed office building to a public real estate syndication and negotiates a master leaseback agreement with the syndication general partner, under which the syndication pays a fee to the seller and the seller leases the vacant space at a market rate at the date of sale for a defined lease-up period, payments to and receipts from the seller shall be treated by the syndication as adjustments to the basis of the property and will affect future depreciation. See paragraph [970-360-55-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-55-3) for guidance if the terms of the agreement meet the definition of a derivative. ### Real Estate Project Costs #### Capitalized Project Costs ##### [360-970-25-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:05.574Z to 2026-09-10T00:12:05.574Z Record version: sha256:e95a893b8b982abf7e5de575924d026b232775e3cea5655253935758f80f7011 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Project costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project."), which are costs that are clearly associated with the acquisition, development, and construction of a real estate project, shall be capitalized as a cost of that project. See Topic 340-40 for guidance on capitalization of costs that are not within the scope of this Subtopic or Subtopic 970-340. ##### [360-970-25-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:05.574Z to 2026-09-10T00:12:05.574Z Record version: sha256:624d1a9933a32f8a6f68495957a5b9a4b985869c0a5f80601d1b470296e73a13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Indirect project costs](https://asc.understandingaccounting.org/glossary/i/#indirect-project-costs "Costs incurred after the acquisition of the property, such as construction administration (for example, the costs associated with a field office at a project site and the administrative personnel that staff the office), legal fees, and various office costs, that clearly relate to projects under development or construction. Examples of office costs that may be considered indirect project costs are cost accounting, design, and other departments providing services that are clearly related to real estate projects.") that relate to several projects shall be capitalized and allocated to the projects to which the costs relate. #### Assets Transferred Between Entities ##### [360-970-25-4](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:05.574Z to 2026-09-10T00:12:05.574Z Record version: sha256:e6c14c156b005723e542740163c27f180286242a6e7826163c1878fea1476a05 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 974-720-25 for adjustment of assets that will be transferred between a real estate investment trust and its adviser. #### Other Considerations ##### [360-970-25-5](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:05.574Z to 2026-09-10T00:12:05.574Z Record version: sha256:84e7fbcaa312a2f674f5c14c154bfaec041af55ee07b21c1ff37f75925e8ee36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 410-20-25 regarding accounting for retirement and environmental costs at acquisition. Source downloaded (UTC): 2026-09-10T00:12:09.258Z to 2026-09-10T00:12:09.258Z Record version: sha256:c16addaccd9c0024956e4659430dcd75a69b911ad1b6f4ecab49ee9703f9a1b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/360/970/#30-initial-measurement) SEC content: no ### Real Estate Project Costs #### Allocation of Capitalized Costs ##### [360-970-30-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:09.258Z to 2026-09-10T00:12:09.258Z Record version: sha256:928554e81007fc2ead7a7a4f2c1ae379cda404163d91ec3a8b50da5d162f4bb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The capitalized costs of real estate projects shall be assigned to individual components of the project based on specific identification. If specific identification is not practicable, capitalized costs shall be allocated as follows: 1. a Land cost and all other [common costs](https://asc.understandingaccounting.org/glossary/c/#common-costs "Costs that relate to two or more units or phases within a real estate or time-sharing project."), including the costs of [amenities](https://asc.understandingaccounting.org/glossary/a/#amenities "Features that enhance the attractiveness or perceived value of a time-sharing interval. Examples of amenities include golf courses, utility plants, clubhouses, swimming pools, tennis courts, indoor recreational facilities, and parking facilities. See also Promised Amenities.") to be allocated as common costs per paragraphs [970-340-25-9 through 25-11](https://asc.understandingaccounting.org/asc/340/970/#340-970-25-9) (before construction), shall be allocated to each land parcel benefited. Allocation shall be based on the [relative fair value before construction](https://asc.understandingaccounting.org/glossary/r/#relative-fair-value-before-construction "The fair value of each land parcel in a real estate project in relation to the fair value of the other parcels in the project, exclusive of value added by on-site development and construction activities."). 2. b Construction costs shall be allocated to individual units in the [phase](https://asc.understandingaccounting.org/glossary/p/#phase "A contractually or physically distinguishable portion of a real estate project (including time-sharing projects). That portion is distinguishable from other portions based on shared characteristics such as: Units a developer has declared or legally registered to be for sale Units linked to an owners association Units to be constructed during a particular time period How a developer plans to build the real estate project.") on the basis of relative sales value of each unit. If allocation based on relative value also is impracticable, capitalized costs shall be allocated based on area methods (for example, square footage) or other value methods as appropriate under the circumstances. ##### [360-970-30-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:09.258Z to 2026-09-10T00:12:09.258Z Record version: sha256:ab64b255bd3419ab0347ef7a5e01b795a99b26010e17b1fec718ac75349f6a34 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraph [970-360-35-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-35-1), certain donated land shall be allocated to [project costs](https://asc.understandingaccounting.org/glossary/p/#project-costs "Costs clearly associated with the acquisition, development, and construction of a real estate project."). Source downloaded (UTC): 2026-09-10T00:12:11.808Z to 2026-09-10T00:12:11.808Z Record version: sha256:41e6a45cfe2050fe2ce670705a59471e2e82a1075acd7a5ba8d90003d5f62518 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/970/#35-subsequent-measurement) SEC content: no ### Real Estate Project Costs #### Real Estate Donated to Government Agencies ##### [360-970-35-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:11.808Z to 2026-09-10T00:12:11.808Z Record version: sha256:6ecc486090fdb45557bab99fc5f2adea46663f4750c12055e869e73bd1ee3bd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Real estate donated to municipalities or other governmental agencies for uses that will benefit the project are not abandonments. The cost of the real estate donated shall be allocated as a common cost of the project. #### Changes in Use of Real Estate Acquired for Development ##### [360-970-35-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:11.808Z to 2026-09-10T00:12:11.808Z Record version: sha256:cc2e7e77f87a54fa90b103e39697582eead6f58f85c7481fa72a0898393fed11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Changes in the use of real estate comprising a project or a portion of a project may arise after significant development and construction costs have been incurred. If the change in use is made pursuant to a formal plan for a project that is expected to produce a higher economic yield (as compared to its yield based on use before change), the development and construction costs to be charged to expense shall be limited to the amount by which the capitalized costs incurred and to be incurred exceed the estimated value of the revised project when it is substantially complete and ready for its intended use. #### Recoverability ##### [360-970-35-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:11.808Z to 2026-09-10T00:12:11.808Z Record version: sha256:4ab037850175d82be2c61049a21155dc063051a253997dca258ed205d5cab067 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The provisions in Subtopic 360-10 for long-lived assets to be disposed of by sale shall apply to a real estate project, or parts thereof, that is substantially completed and that is to be sold. The provisions in that Topic for long-lived assets to be held and used shall apply to real estate held for development, including property to be developed in the future as well as that currently under development, and to a real estate project, or parts thereof, that is substantially completed and that is to be held and used (for example, for rental). Determining whether the carrying amounts of real estate projects require recognition of an impairment loss shall be based on an evaluation of individual projects. An individual project, for this purpose, consists of components that are relatively homogeneous, integral parts of a whole (for example, individual houses in a residential tract, individual units in a condominium complex, and individual lots in a subdivision and [amenities](https://asc.understandingaccounting.org/glossary/a/#amenities "Features that enhance the attractiveness or perceived value of a time-sharing interval. Examples of amenities include golf courses, utility plants, clubhouses, swimming pools, tennis courts, indoor recreational facilities, and parking facilities. See also Promised Amenities.")). Therefore, a multiphase development consisting of a tract of single-family houses, a condominium complex, and a lot subdivision generally would be evaluated as three separate projects. ##### [360-970-35-4](https://asc.understandingaccounting.org/asc/360/970/#360-970-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:11.808Z to 2026-09-10T00:12:11.808Z Record version: sha256:6e5429fb49f89e5a740f5787ae2af2f7b4249e9a85440e4a55bc8cf4d2a68525 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [360-10-35-21](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-21) provides examples of events or changes in circumstances that indicate that the recoverability of the carrying amount of a long-lived asset shall be assessed. Insufficient rental demand for a rental project currently under construction is an additional example that indicates that the recoverability of the real estate project shall be assessed in accordance with the provisions of Subtopic 360-10. Source downloaded (UTC): 2026-09-10T00:12:15.720Z to 2026-09-10T00:12:15.720Z Record version: sha256:a11f91eaf38f1dbf65aa082f491758a458a3019ac7686b7a00e6cf2dc0d48b85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/360/970/#40-derecognition) SEC content: no ### Real Estate Project Costs #### Abandonments ##### [360-970-40-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:15.720Z to 2026-09-10T00:12:15.720Z Record version: sha256:14c6791e54d2ddbf48bc4b1c4add9d251aed62ddc2e74896a10e00e05a0caf39 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If real estate, including rights to real estate, is abandoned (for example, by allowing a mortgage to be foreclosed or a purchase option to lapse), capitalized costs of that real estate shall be expensed. Such costs shall not be allocated to other components of the project or to other projects. Source downloaded (UTC): 2026-09-10T00:12:19.300Z to 2026-09-10T00:12:19.300Z Record version: sha256:432a75a62550cc6b6f62243c5009368f2758fa2b72b0e7b272ebf7d1d8933041 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/970/#55-implementation-guidance-and-illustrations) SEC content: no ### Real Estate Syndication #### Implementation Guidance ##### [360-970-55-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:19.300Z to 2026-09-10T00:12:19.300Z Record version: sha256:07e795b6d8ae18ee174b69035daed452788bb9e228a55abbe3c5c76d5c7f7126 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the following example, a real estate developer sells a recently constructed office building to a public real estate [blind pool](https://asc.understandingaccounting.org/glossary/b/#blind-pool-or-partially-blind-pool-partnerships "Partnerships in which investment units are sold before some or all of the properties to be acquired are identified.") syndication. Because the property is not yet fully occupied, the general partner of the syndication negotiates a master leaseback agreement with the seller at the date of the sale. Under the terms of the agreement, the syndication pays a fee to the seller and the seller leases the vacant space at a market rate, at the sale date, for a two-year period. This payment is described as a fee in exchange for signing a master lease or as an escrowed portion of the purchase price. The syndication will relieve the seller of its future lease payment obligations on space the seller subsequently subleases to others if the sublease meets certain criteria. If the seller is unable to lease the vacant space during the two-year period, the rental payments to the syndication would substantially exceed the fee paid by the syndication. ##### [360-970-55-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:19.300Z to 2026-09-10T00:12:19.300Z Record version: sha256:88f399ee5ab603019e639bc7432ec7ba5da2981629a88349c8a094359b03b619 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [970-360-25-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-25-1) states payments to and receipts from the seller should be treated by the syndication as adjustments to the basis of the property and will affect future depreciation. ##### [360-970-55-3](https://asc.understandingaccounting.org/asc/360/970/#360-970-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:19.300Z to 2026-09-10T00:12:19.300Z Record version: sha256:fdf5322604b7377fb6625934fa51feaa9f4857c0ce5e9dd8bd793f41d3cdf9a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Topic 815 would apply if the terms of the agreement meet the definition of a derivative. The agreement would typically meet the scope exception in paragraph [815-10-15-13](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-13) relating to the sales or service revenues of one of the parties to the contract since the underlying is the leasing rental revenue of the syndicate, in which case that Topic would not affect the accounting in this example. ### Real Estate Project Costs ##### [360-970-55-4](https://asc.understandingaccounting.org/asc/360/970/#360-970-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:19.300Z to 2026-09-10T00:12:19.300Z Record version: sha256:175d3e0e456cd19bcac3b4b7e5bc81c7e73e5c380434ae84a8bfbe3362d59827 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/). ##### [360-970-55-5](https://asc.understandingaccounting.org/asc/360/970/#360-970-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:19.300Z to 2026-09-10T00:12:19.300Z Record version: sha256:8f60d1db4b5e78626addddddbfe7bb57baa79e0e0a923f21f87a729bc948360c 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/). Source downloaded (UTC): 2026-09-10T00:12:26.012Z to 2026-09-10T00:12:26.012Z Record version: sha256:f8796ffe245e169874dfc2e741bab86394e021649b93b2b7a40e5632c8775e74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/970/#sec-00-status) SEC content: yes ##### [360-970-S00-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:26.012Z to 2026-09-10T00:12:26.012Z Record version: sha256:48b8b273b5ef2353058b64a608d9734427e1d5879d3b7991df2f7f79da59981a 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
970-360-S99-1AmendedAccounting Standards Update No. 2019-0707/26/2019
Source downloaded (UTC): 2026-09-10T00:12:29.172Z to 2026-09-10T00:12:29.172Z Record version: sha256:e59170c2fa76d243e40b37e93216f5fdecf625bd76e498081ae12438ef410385 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/970/#sec-50-disclosure) SEC content: yes #### Supplemental Schedules ##### [360-970-S50-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:29.172Z to 2026-09-10T00:12:29.172Z Record version: sha256:a3c58c145cb8499d7d5abe2af25199aaef3bcd42c1209afac64c562119e25206 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-6](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-6), Regulation S-X Rule 5-04(c), for the entities required to include Schedule III—Real Estate and Accumulated Depreciation in their reports. ##### [360-970-S50-2](https://asc.understandingaccounting.org/asc/360/970/#360-970-S50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:29.172Z to 2026-09-10T00:12:29.172Z Record version: sha256:cab90fb2ed61dc76a327a7e5e059e0d056a727078228bab0e8f57f6f890d8c5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [970-360-S99-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-S99-1), Regulation S-X Rule 12-28, for the requirements of Schedule III—Real Estate and Accumulated Depreciation. Source downloaded (UTC): 2026-09-10T00:12:34.852Z to 2026-09-10T00:12:34.852Z Record version: sha256:9aede7591946e68d7abc99abffc9a9c106e5da35a15648fdf885d1f844a1a250 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-970-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/360/970/#sec-99-sec-materials) SEC content: yes #### SEC Rules, Regulations, and Interpretations ##### [360-970-S99-1](https://asc.understandingaccounting.org/asc/360/970/#360-970-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:34.852Z to 2026-09-10T00:12:34.852Z Record version: sha256:f8586754a4f319df28368c560840d9380d33d1d25b61e6a4c6337135a3f275e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 12-28, Real Estate and Accumulated Depreciation (17 CFR 210.12-28). - ![](https://asc.understandingaccounting.org/asc-img/GUID-3688D235-3280-413E-8798-4FA8CD8CD48D-low.gif) Reg. § 210.12-28 Real Estate and Accumulated Depreciation1 (For certain real estate companies) Column A Column B Column C Column D Column E Column F Column G Column H Column I Descriptions2 "Encum- brances " Initial cost to company "Cost capitalized subsequent to acquisition" "Gross amount of which carried at close of period 3,4,5,6,7" Accumulated depreciation Date of construc- tion Date acquired Life on which depreciation in latest statements of comprehensive income is computed Land Buildings and improvements "Improve- ments " Carrying costs Land Buildings and improvements Total 1 All money columns shall be totaled. 2 "The description for each property should include type of property (e.g., unimproved land, shopping center, garden apartments, etc.) and the geographical location." 3 The required information is to be given as to each individual investment included in column E except that an amount not exceeding 5 percent of the total of column E may be listed in one amount as “miscellaneous investments.” 4 "In a note to this schedule, furnish a reconciliation, in the following form, of the total amount at which real estate was carried at the beginning of each period for which statements of comprehensive income are required, with the total amount shown in column E: Balance at beginning of period .............................................................................................................................................. $ ............................ Additions during period: Acquisitions through foreclosure.............................................................................................. $............................... Other acquisitions........................................................................................................................................................ Improvements etc. ...................................................................................................................................................... Other (describe) ...............................................................................................................................................................$.................................. Deductions during period: ................................................................................................................... Cost of real estate sold ................................................................................................................ $ .............................. Other (describe) .......................................................................................................................................................... .............................. Balance at close of period ...................................................................................................................................................... $ ............................. " "If additions, except acquisitions through foreclosure, represent other than cash expenditures, explain. If any of the changes during the period result from transactions, directly or indirectly with affiliates, explain the bases of such transactions and state the amounts involved. A similar reconciliation shall be furnished for the accumulated depreciation." 5 "If any item of real estate investments has been written down or reserved against, describe the item and explain the basis for the write-down or reserve." 6 State in a note to column E the aggregate cost for Federal income tax purposes. 7 The amount of all intercompany profits included in the total of column E shall be stated if material. \[38 FR 6068, Mar. 6, 1983. Redesignated at 45 FR 63630, Sept. 25, 1980; 83 FR 50208, Oct. 4, 2018\] Source downloaded (UTC): 2026-09-10T00:12:38.565Z to 2026-09-10T00:12:59.332Z Record version: sha256:2fcb32fc2c407e5c1046b938f358110193d6a6b0152a12192d532b5854ddb11a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972: Property, Plant, and Equipment — Real Estate—Common Interest Realty Associations ### Machine-generated study aids ```json { "summary": "This Subtopic tells common interest realty associations (CIRAs) — cooperatives, condominium associations, and homeowners associations — when to recognize common real and personal property as assets, how to measure it, and what to disclose. Cooperatives recognize all common real property because they hold title and can dispose of it and keep the proceeds; other CIRAs generally do not recognize real property directly associated with the units, and recognize property not directly associated with the units only if they have title or other evidence of ownership plus disposal discretion or significant cash-flow generation. Recognized property is measured at cost (or fair value if acquired in a nonmonetary transaction such as a developer transfer) and depreciated over estimated useful lives.", "key_points": [ "Cooperatives shall recognize common real property as assets because they hold title and can dispose of it and retain the proceeds (360-972-25-1).", "Most non-cooperative CIRAs do not recognize as assets real property directly associated with the units, whether or not they hold title (360-972-25-2).", "Non-cooperative CIRAs recognize real property not directly associated with the units when they have title or other evidence of ownership and either (a) the board may dispose of it for cash and retain the proceeds or (b) it generates significant cash flows from members based on usage or from nonmembers (360-972-25-3); some CIRAs recognize all such titled property regardless of those conditions (360-972-25-4).", "Common personal property used in operating, preserving, maintaining, repairing, and replacing common property — furnishings, recreational and maintenance equipment, work vehicles — shall be recognized as assets (360-972-25-5).", "Recognized common property is initially measured at cost if acquired in a monetary transaction, or at fair value at the acquisition date if acquired in a nonmonetary transaction such as a nonreciprocal transfer from the developer (the developer's cost may help estimate fair value) (360-972-30-1).", "Property and equipment recognized as assets shall be depreciated over estimated useful lives (360-972-35-1).", "Required disclosures include the recognition and measurement policy, descriptions of common property both recognized and not recognized, the CIRA's maintenance responsibility, land/recreation lease terms, use and disposition restrictions (360-972-50-1), and depreciation expense, major classes of depreciable assets, accumulated depreciation, and depreciation methods (360-972-50-3); all property owned by a cooperative is presented on its balance sheet (360-972-50-2)." ], "categories": [ "Recognition", "Initial measurement", "Disclosure", "Industry-specific" ], "audience_level": "intermediate", "student_note": "The key exam trap is assuming that holding legal title automatically means the association records the asset: for condos and HOAs, property directly associated with the units is generally not recognized, and other titled property is recognized only if the board can sell it and keep the proceeds or it generates significant cash flows. Note also the cost vs. fair value split for developer-donated (nonmonetary) property.", "related_topics": [ "972-10", "972-235", "972-605", "360-10", "845", "820" ], "key_concepts": [ "common interest realty association", "common real property", "common personal property", "cooperative", "title or other evidence of ownership", "nonreciprocal transfer from developer", "depreciation of common property", "future major repairs and replacements" ] } ``` Source downloaded (UTC): 2026-09-10T00:12:38.565Z to 2026-09-10T00:12:38.565Z Record version: sha256:df9d4158e6ec04b30dcc0373a0c668f6bc60c5b169bd43b8e1c9ae7f93022b3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/972/#00-status) SEC content: no ##### [360-972-00-1](https://asc.understandingaccounting.org/asc/360/972/#360-972-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:38.565Z to 2026-09-10T00:12:38.565Z Record version: sha256:736d9be6591f611234be77428417d34520a3924ebaaf9bafada8e74e0bebd62f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. No updates have been made to this subtopic.
ParagraphActionAccounting Standards UpdateDate
Nonreciprocal TransferAddedMaintenance Update 2014-20 (PDF)09/29/2014
972-360-30-1AmendedMaintenance Update 2014-20 (PDF)09/29/2014
Source downloaded (UTC): 2026-09-10T00:12:42.588Z to 2026-09-10T00:12:42.588Z Record version: sha256:a1e28d9e70ed76685af7f59372f3b85bf03fadad7157e68665d13df5817721a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/972/#05-overview-and-background) SEC content: no ##### [360-972-05-1](https://asc.understandingaccounting.org/asc/360/972/#360-972-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:42.588Z to 2026-09-10T00:12:42.588Z Record version: sha256:ef85b9bc72eb096a8d875c181fa1ef124c692f72b53794c984b549f7ccaaa0b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses recognition and disclosure issues for common real and personal property related to [common interest realty associations](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute."). Source downloaded (UTC): 2026-09-10T00:12:46.242Z to 2026-09-10T00:12:46.242Z Record version: sha256:e781def29f95837f96a04bac11d02b8aed2e1b54de0c4ecc0c772bab8e97a799 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/972/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-972-15-1](https://asc.understandingaccounting.org/asc/360/972/#360-972-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:46.242Z to 2026-09-10T00:12:46.242Z Record version: sha256:91fc906da6ccd565cf867f0ab2517a35740d479c503de818d0edaaae13d44ac8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 972-10-15. Source downloaded (UTC): 2026-09-10T00:12:51.245Z to 2026-09-10T00:12:51.245Z Record version: sha256:23b305a1ef1afb90b7ea0a9b300181ad99459e6ba166548ac121c569fc295529 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/972/#25-recognition) SEC content: no #### Common Real Property ##### [360-972-25-1](https://asc.understandingaccounting.org/asc/360/972/#360-972-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:51.245Z to 2026-09-10T00:12:51.245Z Record version: sha256:0eccc2841968fad40e2f3dc829c668362d6ca427d74357d4afdad134ff413966 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cooperatives shall recognize common real property as assets. Because of their legal structure, cooperatives have title to all their [common property](https://asc.understandingaccounting.org/glossary/c/#common-property "A common interest realty association's real or personal property to which title or other evidence of ownership is held by either: Individual members in common The common interest realty association directly.") and have the authority to dispose of it and retain the proceeds. Other [common interest realty associations](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute."), such as [condominiums](https://asc.understandingaccounting.org/glossary/c/#condominium "A form of ownership of real property that combines exclusive ownership of a defined space and an undivided interest in the common elements. (Also referred to as a condo.) A common interest realty association is not a condominium unless the undivided interests in the common elements are vested in the unit owners.") and [homeowners associations](https://asc.understandingaccounting.org/glossary/h/#homeowners-association "See Association."), have adopted other practices for recognizing common real property. #### Real Property Directly Associated with the Units ##### [360-972-25-2](https://asc.understandingaccounting.org/asc/360/972/#360-972-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:51.245Z to 2026-09-10T00:12:51.245Z Record version: sha256:6869881c97cc8ec86e81588e3f6d2446edb5dd784cdacb69de12252d8c2c3a3b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Most common interest realty associations other than cooperatives, regardless of whether they have title, do not recognize as assets real property directly associated with the units. #### Real Property Not Directly Associated with the Units ##### [360-972-25-3](https://asc.understandingaccounting.org/asc/360/972/#360-972-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:51.245Z to 2026-09-10T00:12:51.245Z Record version: sha256:d5a7927f65197cece2671eee7d123e72a3de489a39f41b960d5f05c674f2dbdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Most common interest realty associations other than cooperatives recognize real property not directly associated with the units as assets when the common interest realty association has title or other evidence of ownership of the property and any of the following conditions are met: 1. a The common interest realty association can dispose of the property, at the discretion of its board of directors, for cash or claims to cash, with the common interest realty association retaining the proceeds. 2. b The property is used by the common interest realty association to generate significant cash flows from members on the basis of usage or from nonmembers. ##### [360-972-25-4](https://asc.understandingaccounting.org/asc/360/972/#360-972-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:51.245Z to 2026-09-10T00:12:51.245Z Record version: sha256:4942f673aecfa8f032c501d68513c148db86c78ce18372877436a3490bf77c4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, some common interest realty associations recognize as assets all real property to which they have title or other evidence of ownership and that is not directly associated with the units, regardless of whether either of the above conditions is met. #### Personal Property ##### [360-972-25-5](https://asc.understandingaccounting.org/asc/360/972/#360-972-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:51.245Z to 2026-09-10T00:12:51.245Z Record version: sha256:96fdb5704f970a96c190bc0728b9c3ce09e4542c811e0737242fe68e6f0a03b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Common interest realty associations shall recognize common personal property, such as furnishings, recreational equipment, maintenance equipment, and work vehicles, that is used by the common interest realty association in operating, preserving, maintaining, repairing, and replacing common property and providing other services, as assets. Source downloaded (UTC): 2026-09-10T00:12:54.101Z to 2026-09-10T00:12:54.101Z Record version: sha256:cdf6e0131f6c4f3bc3b0bab9f23c984d1758a1209307cf22f4ea3060f103caf6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/360/972/#30-initial-measurement) SEC content: no ##### [360-972-30-1](https://asc.understandingaccounting.org/asc/360/972/#360-972-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:54.101Z to 2026-09-10T00:12:54.101Z Record version: sha256:e54028775b0938c2697fc4354619949f692d095d747771d385213d10fbd9ed6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Common property](https://asc.understandingaccounting.org/glossary/c/#common-property "A common interest realty association's real or personal property to which title or other evidence of ownership is held by either: Individual members in common The common interest realty association directly.") recognized as assets of a [common interest realty association](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute.") shall be initially measured at the common interest realty association's cost to acquire it if the common interest realty association acquired the property in a monetary transaction. If the common interest realty association acquired the property in a nonmonetary transaction, such as by a [nonreciprocal transfer](https://asc.understandingaccounting.org/glossary/n/#nonreciprocal-transfer "Nonreciprocal transfer is a transfer of assets or services in one direction, either from an entity to its owners (whether or not in exchange for their ownership interests) or to another entity, or from owners or another entity to the entity. An entity's reacquisition of its outstanding stock is an example of a nonreciprocal transfer.") from the developer, and if the property is recognized as an asset of the common interest realty association, the common interest realty association shall initially measure the property using fair value at the date of its acquisition. It may be helpful to consider the developer's cost, if it is known, in determining the fair value. Source downloaded (UTC): 2026-09-10T00:12:56.310Z to 2026-09-10T00:12:56.310Z Record version: sha256:8a67fa31b45ff5858b614d15c5304eda573416fdf5bd412b544400f36e882e8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/972/#35-subsequent-measurement) SEC content: no ##### [360-972-35-1](https://asc.understandingaccounting.org/asc/360/972/#360-972-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:56.310Z to 2026-09-10T00:12:56.310Z Record version: sha256:0c37faae2c23fd91e0c2f806bd931bda2c0deda94dcb2103d8972b20b1375ba8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Property and equipment recognized as assets by common interest realty associations shall be depreciated based on their estimated useful lives. Source downloaded (UTC): 2026-09-10T00:12:59.332Z to 2026-09-10T00:12:59.332Z Record version: sha256:d8cf552c692366ff34819f8f3e8981723f9674bda9d78eafa090e2a24549e4f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-972-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/972/#50-disclosure) SEC content: no #### General Information ##### [360-972-50-1](https://asc.understandingaccounting.org/asc/360/972/#360-972-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:59.332Z to 2026-09-10T00:12:59.332Z Record version: sha256:0cd6ff67d6912dc81951e49e9ecd0e73ee54b94c990b7af7208ddd11b5fa70dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following information about a [common interest realty association's](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute.") [common property](https://asc.understandingaccounting.org/glossary/c/#common-property "A common interest realty association's real or personal property to which title or other evidence of ownership is held by either: Individual members in common The common interest realty association directly.") shall be disclosed in the notes to its financial statements: 1. a The accounting policy for recognition and measurement of common property 2. b A description of common property recognized as assets in the common interest realty association's balance sheet 3. c A description of common property to which the common interest realty association has title, or other evidence of ownership, that is not recognized as assets in the common interest realty association's balance sheet 4. d The common interest realty association's responsibility to preserve and maintain the common property 5. e Terms and conditions of existing land or recreation leases 6. f Restrictions on the use or disposition of the common property. ##### [360-972-50-2](https://asc.understandingaccounting.org/asc/360/972/#360-972-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:59.332Z to 2026-09-10T00:12:59.332Z Record version: sha256:9dfece82fbb73bb63e226145449b26d70c291154e386fb19d95687f9fd0f44e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All property owned by a cooperative shall be presented on its balance sheets. Cooperatives generally own the real estate and have the ability to borrow and pledge their assets as collateral. Some cooperatives, therefore, do not accumulate funds for future major repairs and replacements. #### Depreciation ##### [360-972-50-3](https://asc.understandingaccounting.org/asc/360/972/#360-972-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:12:59.332Z to 2026-09-10T00:12:59.332Z Record version: sha256:78bf7be280c0ce4bec0f9236d72e39d8ba93915f786f9dec66dd825d5f16081a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For property and equipment recognized as assets by common interest realty associations the following information shall be disclosed: 1. a Depreciation expense for the period 2. b Balances of major classes of depreciable assets, by nature or function, at the reporting date 3. c Accumulated depreciation, either by major classes of depreciable assets or in total, at the reporting date 4. d A general description of the method or methods used in computing depreciation for major classes of depreciable assets. Source downloaded (UTC): 2026-09-10T00:13:03.015Z to 2026-09-10T00:13:32.748Z Record version: sha256:56928678b44a23c2506cae016d3502d0ce529cd1c3f50eb040a986b8415a43c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980: Property, Plant, and Equipment — Regulated Operations ### Machine-generated study aids ```json { "summary": "This Subtopic tells regulated entities (utilities) how to account for property, plant, and equipment in three situations: plant abandonments, disallowances of costs of recently completed plants, and capitalization of an allowance for funds used during construction (AFUDC). When abandonment becomes probable, the asset's cost comes out of construction work-in-process or plant-in-service and a separate new asset is recorded — at full cost if a full return on investment is likely to be provided, or at the present value of expected future recovery revenues (discounted at the entity's incremental borrowing rate) if partial or no return is likely, with the shortfall and any probable, estimable disallowance recognized as a loss. When it becomes probable that part of the cost of a recently completed plant will be disallowed for rate-making purposes and the amount is reasonably estimable, that amount is deducted from the plant's reported cost and recognized as a loss.", "key_points": [ "AFUDC, including a designated cost of equity funds, may be capitalized as part of the asset's acquisition cost only if its subsequent inclusion in allowable costs for rate-making purposes is probable (360-980-25-1).", "When abandonment of an operating asset or asset under construction becomes probable, its cost must be removed from construction work-in-process or plant-in-service (360-980-35-1).", "If full return on investment is likely, any probable and reasonably estimable disallowance is a loss and the remaining cost is reported as a separate new asset; if partial or no return is likely, the new asset equals the present value of expected future recovery revenues (discounted at the incremental borrowing rate) and any excess cost is a loss (360-980-35-3).", "If the expected recovery period is a range, Section 450-20-55 applies: use the most likely period, or the minimum period if no point in the range is a better estimate (360-980-35-3(b)).", "Between recognition of the new asset and the start of recovery, a carrying charge accrues at the allowed overall cost of capital (full return case) or at the discount rate used for the present value (partial/no return case); during recovery the asset is amortized per rate-making methods or so as to produce a constant return equal to the discount rate (360-980-35-7; 35-8).", "Estimates of the new asset are updated as new information arises (the rate order is usually the confirming event), with adjustments recognized in income as a loss or gain, but the carrying amount is never adjusted for changes in the incremental borrowing rate (360-980-35-4; 35-6).", "A probable and reasonably estimable disallowance of part of a recently completed plant's cost — including an explicit but indirect disallowance, such as excluding part of the plant from rate base or an agreed cost cap — is deducted from reported plant cost and recognized as a loss (360-980-35-12; 35-13; 35-15)." ], "categories": [ "Impairment", "Subsequent measurement", "Industry-specific", "Inventory and PP&E" ], "audience_level": "advanced", "student_note": "This is the classic utility-specific \"regulatory asset\" mechanic: economic value in regulated PP&E depends on what the regulator will let the utility recover, so losses are driven by rate orders rather than market value. The most common misunderstanding is skipping the full-return vs. partial/no-return branch — only in the partial/no-return case do you discount expected recovery revenues (at the incremental borrowing rate) and recognize the resulting shortfall as a loss.", "related_topics": [ "980-10", "980-835", "450-20", "740-10", "360-10", "980-340" ], "key_concepts": [ "plant abandonment", "allowance for funds used during construction", "cost disallowance", "explicit but indirect disallowance", "return on investment", "rate base", "incremental borrowing rate", "separate new asset" ] } ``` Source downloaded (UTC): 2026-09-10T00:13:03.015Z to 2026-09-10T00:13:03.015Z Record version: sha256:15cecd20958bd945c18ec13d3dd163cffb30cc0b6d162b0592ec88ac1374f2b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/360/980/#05-overview-and-background) SEC content: no ##### [360-980-05-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:03.015Z to 2026-09-10T00:13:03.015Z Record version: sha256:af21221b90d4b0a63b72b05f5f50217dbc62d378aa90cde2b70da59e84d1ed87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for property, plant, and equipment for entities with regulated operations. It provides guidance for plant abandonments and disallowances of costs of recently completed plants, as well as for the capitalization of an [allowance for funds used during construction](https://asc.understandingaccounting.org/glossary/a/#allowance-for-funds-used-during-construction "The cost of financing construction as financed partially by borrowings and partially by equity, capitalized as part of the cost of plant and equipment pursuant to requirements of the regulator."). Source downloaded (UTC): 2026-09-10T00:13:05.536Z to 2026-09-10T00:13:05.536Z Record version: sha256:7290fa1200817c74245b4f3cb639566f8641f3f446e945ee94926e36d0c61d3b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/360/980/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [360-980-15-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:05.536Z to 2026-09-10T00:13:05.536Z Record version: sha256:6c874b01c98cd6c5113bd1fe85d17a8c41374d64161906bbcaa418fbaea04aea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 980-10-15. Source downloaded (UTC): 2026-09-10T00:13:12.506Z to 2026-09-10T00:13:12.506Z Record version: sha256:4a13e3bf1c8dd8977ebebffab80c23c179b8282a59bec5c48e0b42d5333d2a8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/360/980/#25-recognition) SEC content: no #### Allowance for Funds Used During Construction ##### [360-980-25-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:12.506Z to 2026-09-10T00:13:12.506Z Record version: sha256:64eb96b3b81e76432ec15ef30a065f33b3a4cf638c3b19e555ba36c672256645 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [980-835-25-1](https://asc.understandingaccounting.org/asc/835/980/#835-980-25-1) requires an [allowance for funds used during construction](https://asc.understandingaccounting.org/glossary/a/#allowance-for-funds-used-during-construction "The cost of financing construction as financed partially by borrowings and partially by equity, capitalized as part of the cost of plant and equipment pursuant to requirements of the regulator."), including a designated cost of equity funds, to be capitalized in specified circumstances as part of the acquisition cost of the related asset. That cost shall be capitalized under those circumstances only if its subsequent inclusion in [allowable costs](https://asc.understandingaccounting.org/glossary/a/#allowable-costs "All costs for which revenue is intended to provide recovery. Those costs can be actual or estimated. In that context, allowable costs include interest cost and amounts provided for earnings on shareholders' investments.") for rate-making purposes is probable. ##### [360-980-25-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:12.506Z to 2026-09-10T00:13:12.506Z Record version: sha256:b6f9b98a9b6dd7a01848ed8ee89e13c5ee612a9e77805ed314f5f0c902ccdc0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:7a74e3d1f9825c2d6dfb5ea92fa3f28389bc2bb686b4de11e7be96691a101856 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/360/980/#35-subsequent-measurement) SEC content: no #### Abandonments ##### [360-980-35-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:d40a0e646b29f492bd3f49926a3e6a4f012c66b7a23f37eb15ad256992114473 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When it becomes probable (likely to occur) that an operating asset or an asset under construction will be abandoned, the cost of that asset shall be removed from construction work-in-process or plant-in-service. ##### [360-980-35-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:024652b33b950176e624294658ec28de1851422f250b0b51521a588956ac07df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity shall determine whether recovery of any allowed cost is likely to be provided with either of the following: 1. a Full return on investment during the period from the time when abandonment becomes probable to the time when recovery is completed 2. b Partial or no return on investment during that period. ##### [360-980-35-3](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:dfe07b5dac0b2b93699c3a33264e71418b363f103f4220cc63f70a0676f58329 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. That determination shall focus on the facts and circumstances related to the specific abandonment and shall also consider the past practice and current policies of the applicable regulatory jurisdiction on abandonment situations. Based on that determination, the entity shall account for the cost of the abandoned plant as follows: 1. a Full return on investment is likely to be provided. Any disallowance of all or part of the cost of the abandoned plant that is both probable and reasonably estimable (as defined in Topic 450) shall be recognized as a loss, and the carrying basis of the recorded asset shall be correspondingly reduced. The remainder of the cost of the abandoned plant shall be reported as a separate new asset. 2. b Partial or no return on investment is likely to be provided. Any disallowance of all or part of the cost of the abandoned plant that is both probable and reasonably estimable shall be recognized as a loss. The present value of the future revenues expected to be provided to recover the allowable cost of that abandoned plant and return on investment, if any, shall be reported as a separate new asset. Any excess of the remainder of the cost of the abandoned plant over that present value also shall be recognized as a loss. The discount rate used to compute the present value shall be the entity's incremental borrowing rate, that is, the rate that the entity would have to pay to borrow an equivalent amount for a period equal to the expected recovery period. In determining the present value of expected future revenues, the entity shall consider such matters as the following: 1. 1 The probable time period before such recovery is expected to begin 2. 2 The probable time period over which recovery is expected to be provided. If the estimate of either period is a range, the guidance in Section 450-20-55 shall be applied to determine the loss to be recognized. Accordingly, the most likely period within that range shall be used to compute the present value. If no period within that range is a better estimate than any other, the present value shall be based on the minimum time period within that range. ##### [360-980-35-4](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:0a45a7b30230c6e3cad081e752d308cb8206e5e822c23d6563ce1a005d9bbfca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The recorded amount of the new asset shall be adjusted from time to time as necessary if new information indicates that the estimates used to record the separate new asset have changed. The rate order is usually viewed as the confirming event, permitting an estimate of the loss to be refined at that time. However, a loss shall not be recognized unless it is probable that a loss has occurred and the amount can be reasonably estimated. If those criteria are not met at the time of an initial rate order, the loss shall not be recognized at that time. ##### [360-980-35-5](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:a4dcd944c46810438721610d6b4c6fe60522795cd9d0a3bfc37150023f6a2bdb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The estimates used to record the separate new asset include both of the following: 1. a The determination of whether full return on investment will be provided and, if not, the probable time period before recovery is expected to begin and the probable time period over which recovery is expected to be provided 2. b The amount of any probable and reasonably estimable disallowance of recorded costs of the abandoned plant. ##### [360-980-35-6](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:ab5aee1b28d6fbba20dc9e31eb797d5f4edc94029ed5fd3952f9388798c7717b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount of the adjustment shall be recognized in income as a loss or gain. The recorded carrying amount of the new asset shall not be adjusted for changes in the entity's incremental borrowing rate. ##### [360-980-35-7](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:61d25bbeda9d418bb87399c1c567224c6045a61f2028e3418d940a6ab747800a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the period between the date on which the new asset is recognized and the date on which recovery begins, the carrying amount shall be increased by accruing a carrying charge. The rate used to accrue that carrying charge shall be as follows: 1. a If full return on investment is likely to be provided, a rate equal to the allowed overall cost of capital in the jurisdiction in which recovery is expected to be provided shall be used. 2. b If partial or no return on investment is likely to be provided, the rate that was used to compute the present value shall be used. ##### [360-980-35-8](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:7310bc765caebc9da122d0c4f121efbfc7187d824c4cd3dc5cc0abfdd4053123 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the recovery period, the new asset shall be amortized as follows: 1. a If full return on investment is likely to be provided, the asset shall be amortized in the same manner as that used for rate-making purposes. 2. b If partial or no return on investment is likely to be provided, the asset shall be amortized in a manner that will produce a constant return on the unamortized investment in the new asset equal to the rate at which the expected revenues were discounted. ##### [360-980-35-9](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:61ecc5f2de250812a01ef3bd947ade41784fb4d5621be149c7b856c938ca4747 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Usually, the net loss on an abandonment shall be computed by discounting the after-tax future revenues expected to be allowed by the regulator at an after-tax incremental borrowing rate and comparing the result to the recorded net investment in the abandoned plant. If that discounted present value is less than the recorded net investment, a net loss shall be recognized. However, the present accounting model generally does not permit display of losses on a net-of-tax basis. As a result, the net loss on an abandonment is grossed up for display purposes. ##### [360-980-35-10](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:5bdcfcb3928964da3fdbfb309f38eb74c636ded643b1049903249b2f511a53bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The computation of a loss on an abandonment (see Example 1 \[paragraph [980-360-55-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-2)\]) is intended to approximate the economic effects of the regulator's rate actions in the preceding paragraph. The computation is based on both of the following general assumptions about the rate-making methods used for income taxes: 1. a Deferred income taxes are allocated to the assets that resulted in those deferred income taxes. Under that assumption, if certain assets are included in the rate base (that is, a return is allowed on those assets), the deferred income taxes allocated to those assets are deducted from the rate base in computing the investment on which a return will be allowed. Similarly, if certain assets are excluded from the rate base (that is, a return is not allowed on those assets), the deferred income taxes allocated to those assets are not deducted from the rate base in computing the investment on which a return will be allowed. 2. b Income taxes that result from recovery of the recorded cost of the abandoned plant will be treated as [allowable costs](https://asc.understandingaccounting.org/glossary/a/#allowable-costs "All costs for which revenue is intended to provide recovery. Those costs can be actual or estimated. In that context, allowable costs include interest cost and amounts provided for earnings on shareholders' investments.") when those income taxes become payable to the extent those income taxes do not represent repayment of an income tax benefit that has already accrued to the entity's shareholders. ##### [360-980-35-11](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:8a24427b27626070275668d108fcacc712faa854af684a96bf151343be3aad32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the rate-making methods used for an entity differ from the assumptions stated in the preceding paragraph, the computation used to compute the loss on the abandonment shall be different from that described in paragraph [980-360-35-9](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-9) and illustrated in Example 1 (see paragraph [980-360-55-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-2)). The computation shall be changed to reflect the different economics of those different rate-making methods. For example, if the regulator deducts all existing deferred income taxes from the rate base in determining the investment on which a return will be provided (instead of allocating deferred income taxes between items included in the rate base and items excluded from the rate base), the procedure effectively disallows a return on the gross investment in the abandoned plant instead of disallowing a return on the net investment, and the recognized loss shall reflect a disallowance of a return on the gross investment in the abandoned plant. #### Cost Disallowances ##### [360-980-35-12](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:6f23e42098835c92f9889505f3025a1ff2db2a4db839a9b96ac296db1ee7ed16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When it becomes probable that part of the cost of a recently completed plant will be disallowed for rate-making purposes and a reasonable estimate of the amount of the disallowance can be made, the estimated amount of the probable disallowance shall be deducted from the reported cost of the plant and recognized as a loss. Section 450-20-55 provides guidance for making a reasonable estimate of the amount of a loss. If part of the cost is explicitly, but indirectly, disallowed (for example, by an explicit disallowance of return on investment on a portion of the plant), an equivalent amount of cost shall be deducted from the reported cost of the plant and recognized as a loss. ##### [360-980-35-13](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:8f08bcb5267b470170656c5e0af6c7fb139abbc22c5da2691a835c6c7f5403ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Excess capacity disallowances relate to part of the cost of service of a recently completed plant and are based on a finding that an entity's reserve capacity exceeds an amount deemed to be reasonable. If an excess capacity disallowance is ordered by a regulator without a specific finding that the entity should not have constructed that capacity or should have delayed the construction of that capacity, the rate order raises questions about whether the entity meets the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic, in that it is not being regulated based on its own cost of service. However, because such a rate order itself is neither a direct disallowance nor an explicit, but indirect, disallowance of part of the cost of the plant, this Section does not specify the accounting for it. If an excess capacity disallowance is ordered by a regulator with a specific finding that the entity should not have constructed that capacity or should have delayed the construction of that capacity, the rate order may be an explicit, but indirect, disallowance of part of the cost of the plant, and the entity shall account for the substance of that order as set forth in the preceding paragraph. ##### [360-980-35-14](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:d5ac0874644525d03e5f02fde8416eb17c3ae809f88a2bb3d408472569953b5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a regulator has included a recently completed plant in rates based on the assumed cost of another plant rather than based on the cost of the plant that exists, then the entity is not being regulated based on its own cost, and the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic do not appear to be met. If the rate order is based on a finding that, based on factors that were known during the construction, the entity should not have constructed the plant that it did construct, the order may be an explicit, but indirect, disallowance, and it shall be accounted for as set forth in paragraph [980-360-35-12](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-12). Otherwise, unless the order is being appealed, the entity shall consider discontinuing application of this Topic. ##### [360-980-35-15](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:8f5e83b51e822bf0838887e64cd6784cb35dba9ec5f87d1f9da3ff9ba5ab7fb2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Regulators have considerable discretion in selecting a rate that represents a fair return on equity investment, and that specific matters included in a settlement agreement might not be apparent. Explicit, but indirect, disallowances shall be reported as disallowances; however, an entity is not required to determine whether the terms of a settlement agreement or rate order contain a hidden, indirect disallowance. ##### [360-980-35-16](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:14.576Z to 2026-09-10T00:13:14.576Z Record version: sha256:bc6956fdd45b0ec5d4a8e73664eae4eb10049a7390f6ce462af38285ec3bedb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Examples illustrate specific situations related to cost disallowances: 1. a Example 2 (see paragraph [980-360-55-14](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-14)) illustrates a disallowance of plant cost. 2. b Example 3 (see paragraph [980-360-55-18](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-18)) illustrates a disallowance of plant cost resulting from a cost cap. 3. c Example 4 (see paragraph [980-360-55-26](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-26)) illustrates an explicit, but indirect, disallowance. Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:15d79b726fe30f00d73a3222e86fdfe721f14d4f74ef666c572947d3581618e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/360/980/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [360-980-55-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:ed1266569bb1bc92c0076249f0095fe6e13a17a36091e4595e0c9a7599cc7bef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases similar to those illustrated in this Section may involve income tax effects that could accrue to the utility in question. Under Subtopic 740-10, the tax effects of temporary differences are measured based on enacted tax laws and rates and are recognized based on specified criteria. ##### [360-980-55-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:c33045d04145f493843c0399e9963dec499a3525f3b99d07217c06619165105c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates how a loss on an abandonment should be computed under the guidance in Section 450-20-55 and paragraphs [980-360-35-9 through 35-11](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-9) by an entity that has applied Subtopic 740-10. The Example is based on specific rate actions related to the abandonment and on the other assumptions stated. The computations may need to be changed to reflect the economic effects of different fact situations. ##### [360-980-55-3](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:1a6997d4476cc68ba0cf5f56e319353526f1ac4e821905cf0e611e7a0c7b51f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The principal assumptions on which the Example is based are as follows: 1. a Upon initial application of Subtopic 740-10, an entity that meets the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic will adjust its deferred income tax liabilities as required. This Example is presented as though the entity has already applied Subtopic 740-10 prior to the date of the abandonment. If an entity initially applies that Subtopic after a loss has been recognized on an abandonment and before the end of the recovery period for any recoverable costs, the amount of the previously recognized loss may change. The amount of that loss will change if the tax rate used in the initial net-of-tax discount rate under that Subtopic is different from that used by the entity previously. Once that Subtopic is initially applied, the accounting for the abandonment should follow the approach described in this Example. 2. b This Example assumes a tax rate of 34 percent. 3. c Utility A decides to abandon a plant that has been under construction for some time. Although the possibility of abandoning the plant has been under consideration, abandonment was not considered probable before the actual decision was made. 4. d Immediately before the abandonment, the recorded assets for the plant and related deferred income tax liabilities are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-493F234E-01C9-469C-B94B-6CDFC7FDA583-low.gif) Assets Deferred Income Tax Liabilities Recorded plant and related deferred income tax liabilities " $750,500,000 " " $85,170,000 " Asset representing revenue that will be provided for payment of income taxes and related deferred income tax liabilities " 76,015,152 " " 25,845,152 " Total " $826,515,152 " " $111,015,152 " 5. e For income tax purposes, the abandoned plant has a basis of $500 million at the date of the abandonment. 6. f Utility A will deduct the remaining tax basis of the abandoned plant ($500,000,000) as an abandonment loss on its income tax return in the year of the abandonment and will receive a tax benefit of 34 percent of the tax basis of the plant ($170,000,000). Utility A operates in a state that has no state income taxes. The federal income tax rate is 34 percent. 7. g Accounting pretax income before the loss on the abandonment and taxable income before any deduction for the loss on the abandonment are both $1,500,000,000. Utility A has no other temporary differences or tax credits. 8. h Utility A operates solely in a single-state jurisdiction. 9. i In the past, Utility A's regulator has permitted recovery of amounts prudently invested in abandoned plants over an extended period of time without a return on unrecovered investment during the recovery period. 10. j The normal practice of Utility A's regulator is to allocate deferred income taxes to assets on which return on investment is disallowed. Deferred taxes allocated to assets excluded from the rate base are not deducted from the rate base for purposes of computing allowable return on investment. 11. k Utility A's regulator normally treats income taxes that were not previously provided as [allowable costs](https://asc.understandingaccounting.org/glossary/a/#allowable-costs "All costs for which revenue is intended to provide recovery. Those costs can be actual or estimated. In that context, allowable costs include interest cost and amounts provided for earnings on shareholders' investments.") if they result from recovery of other allowable costs. 12. l Utility A's incremental borrowing rate at the date of the decision to abandon the plant is 14 percent, interest payable monthly. 13. m Utility A believes that it is probable that recovery of cost without return on investment during the recovery period will be granted over a period that will not be less than 5 years nor more than 10 years, but it has no basis for estimating the exact time period that the regulator will select. 14. n At the date of the abandonment, Utility A believes that it will take approximately 18 months to obtain a rate order covering the abandoned plant. 15. o No disallowance of recorded cost is expected. 16. p A rate order covering the abandoned plant is received in the 18th month following the abandonment. There is no disallowance of recorded costs of the abandoned plant. Those recorded costs are to be recovered over 60 months commencing in the 19th month after abandonment. ##### [360-980-55-4](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:11b23182552ef58c14312ead40bc2dc9b0e9a84db94e16e983af11624495a855 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the amount of deferred taxes related to the remaining investment is both a component of the net investment on which return would be based in the regulatory process and based on the amount of the accounting loss on the abandonment (which is based on the present value of the net investment), the present value of the net investment cannot be derived through a simple present value calculation using a pretax rate. That present value could be derived through a series of iterative calculations, starting with an assumed loss and the resulting deferred tax amounts, then computing the accrual of return on investment and amortization by applying the pretax rate to the resulting net investment, and then computing the income tax effects of the resulting pretax income. Using the remaining asset at the end of the recovery period, the estimate of the loss could be refined until the accrual of a return, amortization, recovery of recorded costs, and the related tax effects resulted in a zero net asset at the end of the recovery period. Alternatively, the net loss can be initially computed based on a present value calculation using an after-tax rate. While that approach is used in this Example, either approach will provide the same result. The following paragraphs illustrate how that approach can be used and the resulting computations of loss recognition, return to be accrued, and amortization. ##### [360-980-55-5](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:0216b0b8466f75dfe3330367141b6d39a728ec9d66b21937103e95d3daff0632 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When the abandonment becomes probable (in this case, at the date of the decision to abandon), Utility A should remove the recorded cost of the plant from the construction work-in-process accounts. Any disallowance of the recorded cost that is probable and can be reasonably estimated should also be recorded as a loss. There is none in this Example. Utility A should record a separate new asset, representing the future revenues expected to result from the regulator's treatment of the cost of the abandoned plant, at the present value of those expected future revenues. ##### [360-980-55-6](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:ac066300a5abf86d1b66f107e29323199b72b97cd512142c1e36bb46320f5945 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The next step is to compute the deferred income tax liabilities that would be recorded if the tax consequences of the abandonment were recognized before any loss related to the disallowance of return on investment were recognized. When the tax basis of the abandoned plant is deducted as an abandonment loss on the current year's tax return, an additional $500,000,000 of the recorded cost of the asset will be without tax basis. Recovery of that additional amount will result in $500,000,000 of taxable income. The deferred income tax liability on that amount should be computed in accordance with Subtopic 740-10. This Example assumes that the rate is the statutory rate of 34 percent and that Utility A should recognize additional deferred income tax liabilities of $170,000,000. ##### [360-980-55-7](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:2d6608055543ac104cfb036c93d01648913de588474192660dd1bcff5eef9dc7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount of tax benefit that resulted from the current deduction of the abandonment loss is also $170,000,000, so no additional asset representing revenue that will be provided for the payment of income taxes should be recognized. Thus, the recorded balance sheet items related to the plant after the abandonment, but before any loss for disallowance of return on investment is recognized, and the resulting net investment should be as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-98A73DF3-7761-4E00-B0ED-6B680C76717A-low.gif) Assets Deferred Income Tax Liabilities Recorded plant and related deferred income tax liabilities " $750,500,000 " " $255,170,000 " Asset representing revenue that will be provided for payment of income taxes and related deferred income tax liabilities " 76,015,152 " " 25,845,152 " Total assets " $826,515,152 " (1) Total deferred income tax liabilities " $281,015,152 " (2) Net investment (1) - (2) " $545,500,000 " ##### [360-980-55-8](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:a6eb35763faec0a0026fb8541256b9ef39e7e8c52488a1616af6caf101a79c14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the computed additional deferred income tax liabilities did not equal the tax benefit that resulted from the abandonment loss, the difference should be recorded as an adjustment of the asset representing revenue that will be provided for the payment of income taxes. ##### [360-980-55-9](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:4208e3fa725fb5f68397b1eb600f0437cc00a1f7f214e64d9c6f8d7859eafb0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cash flows provided to recover the asset should be estimated to begin in 19 months. For purposes of computing the present value of the net investment, the probable future after-tax revenues would be estimated at $9,091,667 per month for 5 years (based on an assumed straight-line recovery of the net investment over the 5-year minimum period within the range— $545,500,000/60). The discount rate used should be 9.24 percent (14 percent net of tax at the rate computed in paragraph [980-360-55-6](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-6)). The computation of the amount to be recorded for the new asset and of the loss resulting from the abandonment would be as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-6F2B18C9-808F-4572-AC98-60AA11213F44-low.gif) "Present value of $9,091,667 per month at 9.24% for 60 months, starting at the end of the 19th month (amount of new asset net of related deferred income taxes) (components computed in the table in the following paragraph)" " $379,361,954 " Less net investment in abandoned plant (computed in the table in the preceding paragraph) " 545,500,000 " Loss (net of related income taxes) to be recognized at time of decision to abandon the plant " $166,138,046 " ##### [360-980-55-10](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:cd0a45a723fc0c7777f05ecbe39c6c4fbe994f6034412cd5edcc564f05181807 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The net loss should be allocated between the new asset resulting from the abandonment and the existing deferred taxes based on the relationship between the investment (100 percent), deferred taxes (34 percent, computed as $281,015,152/$826,515,152), and the net investment (66 percent). The computation would be as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-B49D7534-EE70-4DE2-8284-FAD4A2E6B5F9-low.gif) Gross Investment Deferred Taxes Net Investment Balances before loss recognition " $826,515,152 " " $281,015,152 " " $545,500,000 " Loss to be recognized " (251,724,312)" (a) " (85,586,266)" (b) " (166,138,046)" Balances after loss recognition " $574,790,840 " " $195,428,886 " " $379,361,954 " (a) "Computed as $166,138,046 ÷ 0.66" (b) "Computed as $251,724,312 × 34%" ##### [360-980-55-11](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:d77248d82d40c9717447cccdbb498e573a9d87e3be18c80d051c3c4a6ac7257a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pending receipt of a rate order, Utility A should accrue carrying charges on the net recorded asset at a monthly rate of 1/12 of 14 percent. Taxes should be provided on those accrued carrying charges based on the rate required to adjust the accumulated deferred income tax liabilities to the amounts required by Subtopic 740-10. Usually, that rate will be the statutory rate. The following table illustrates those computations based on the statutory rate. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-2136505E-31AC-4249-A0E8-71191BA7DFD8-low.gif) Schedule 3 (1) (2) (3) (4) (5) (6) Beginning of Month Mo. Gross Investment Deferred Charge Related Deferred Taxes Net Investment Carrying Charges Accrued Inc. Tax Liability Accrued Comp. (a) (b) \[(1) + (2) - (3)\] \[14% ÷ 12 × (4)\] \[34% × (5)\] 1 " $498,775,688 " " $76,015,152 " " $195,428,886 " " $379,361,954 " " $4,425,889 " " $1,504,802 " 2 " 503,201,577 " " 76,015,152 " " 196,933,688 " " 382,283,041 " " 4,459,969 " " 1,516,390 " 3 " 507,661,546 " " 76,015,152 " " 198,450,078 " " 385,226,620 " " 4,494,310 " " 1,528,065 " 4 " 512,155,856 " " 76,015,152 " " 199,978,143 " " 388,192,865 " " 4,528,917 " " 1,539,832 " 5 " 516,684,773 " " 76,015,152 " " 201,517,975 " " 391,181,950 " " 4,563,789 " " 1,551,688 " 6 " 521,248,562 " " 76,015,152 " " 203,069,663 " " 394,194,051 " " 4,598,931 " " 1,563,636 " 7 " 525,847,493 " " 76,015,152 " " 204,633,299 " " 397,229,346 " " 4,634,342 " " 1,575,677 " 8 " 530,481,835 " " 76,015,152 " " 206,208,976 " " 400,288,011 " " 4,670,027 " " 1,587,809 " 9 " 535,151,862 " " 76,015,152 " " 207,796,785 " " 403,370,229 " " 4,705,986 " " 1,600,035 " 10 " 539,857,848 " " 76,015,152 " " 209,396,820 " " 406,476,180 " " 4,742,222 " " 1,612,356 " 11 " 544,600,070 " " 76,015,152 " " 211,009,176 " " 409,606,046 " " 4,778,737 " " 1,624,770 " 12 " 549,378,807 " " 76,015,152 " " 212,633,946 " " 412,760,013 " " 4,815,534 " " 1,637,282 " 13 " 554,194,341 " " 76,015,152 " " 214,271,228 " " 415,938,265 " " 4,852,613 " " 1,649,888 " 14 " 559,046,954 " " 76,015,152 " " 215,921,116 " " 419,140,990 " " 4,889,978 " " 1,662,593 " 15 " 563,936,932 " " 76,015,152 " " 217,583,709 " " 422,368,375 " " 4,927,631 " " 1,675,394 " 16 " 568,864,563 " " 76,015,152 " " 219,259,103 " " 425,620,612 " " 4,965,574 " " 1,688,295 " 17 " 573,830,137 " " 76,015,152 " " 220,947,398 " " 428,897,891 " " 5,003,809 " " 1,701,296 " 18 " 578,833,946 " " 76,015,152 " " 222,648,694 " " 432,200,404 " " 5,042,338 " " 1,714,395 " 19 " 583,876,284 " " 76,015,152 " " 224,363,089 " " 435,528,347 " Computations: (a) Prior month (1) + prior month (5) (b) Prior month (3) + prior month (6) ##### [360-980-55-12](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:c4d8da80486913f35922bd794462039bc68c82eee50268a4f33fcdb8f8d45c8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on the rate order (see paragraph [980-360-55-3(n)](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-3)), revenues actually allowed would be $13,775,253 per month ($826,515,152/60). Earnings should continue to be recognized each month equal to 1/12 of 14 percent of the remaining net investment, and taxes should continue to be provided on those earnings at the rate required to adjust the recorded deferred income tax liabilities to the amount required by Subtopic 740-10. Usually that rate would be the statutory rate. The following table illustrates those computations using the 34 percent statutory rate. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-68322895-3F93-434F-A122-EEEFBDD69B23-low.gif) Schedule 4 (1) (2) (3) (4) (5) (6) (7) (8) (9) Beginning of Month Mo. Gross Investment Deferred Charge Income Tax Liability Net Investment Return on Net Investment Amortization of Gross Investment Amortization of Deferred Charge Income Tax Expense Payment of Previously Recorded Income Tax Liability Comp. (a) (b) (c) \[(1)+(2)-3)\] \[14%÷12 x (3)\] (d) \[34% x (5)\] (e) 19 " $583,876,284 " " $76,015,152 " " $224,363,089 " " $435,528,347 " " $5,081,164 " " $7,427,169 " " $1,266,919 " " $1,727,596 " " $2,955,990 " 20 " 576,449,115 " " 74,748,233 " " 221,407,099 " " 429,790,249 " " 5,014,219 " " 7,494,114 " " 1,266,919 " " 1,704,835 " " 2,978,751 " 21 " 568,955,001 " " 73,481,314 " " 218,428,348 " " 424,007,967 " " 4,946,759 " " 7,561,574 " " 1,266,919 " " 1,681,898 " " 3,001,688 " 22 " 561,393,427 " " 72,214,395 " " 215,426,660 " " 418,181,162 " " 4,878,780 " " 7,629,553 " " 1,266,919 " " 1,658,786 " " 3,024,801 " 23 " 553,763,874 " " 70,947,475 " " 212,401,859 " " 412,309,490 " " 4,810,277 " " 7,698,056 " " 1,266,919 " " 1,635,494 " " 3,048,092 " 24 " 546,065,818 " " 69,680,556 " " 209,353,767 " " 406,392,607 " " 4,741,247 " " 7,767,086 " " 1,266,919 " " 1,612,024 " " 3,071,561 " 25 " 538,298,732 " " 68,413,637 " " 206,282,206 " " 400,430,163 " " 4,671,685 " " 7,836,648 " " 1,266,919 " " 1,588,373 " " 3,095,213 " 26 " 530,462,084 " " 67,146,718 " " 203,186,993 " " 394,421,809 " " 4,601,587 " " 7,906,746 " " 1,266,919 " " 1,564,540 " " 3,119,046 " 27 " 522,555,338 " " 65,879,799 " " 200,067,947 " " 388,367,190 " " 4,530,951 " " 7,977,382 " " 1,266,919 " " 1,540,524 " " 3,143,063 " 28 " 514,577,956 " " 64,612,879 " " 196,924,884 " " 382,265,951 " " 4,459,769 " " 8,048,564 " " 1,266,919 " " 1,516,322 " " 3,167,264 " 29 " 506,529,392 " " 63,345,960 " " 193,757,620 " " 376,117,732 " " 4,388,040 " " 8,120,293 " " 1,266,919 " " 1,491,934 " " 3,191,652 " 30 " 498,409,099 " " 62,079,041 " " 190,565,968 " " 369,922,172 " " 4,315,758 " " 8,192,575 " " 1,266,919 " " 1,467,358 " " 3,216,228 " 31 " 490,216,524 " " 60,812,122 " " 187,349,740 " " 363,678,906 " " 4,242,920 " " 8,265,413 " " 1,266,919 " " 1,442,593 " " 3,240,993 " 32 " 481,951,111 " " 59,545,203 " " 184,108,747 " " 357,387,567 " " 4,169,521 " " 8,338,812 " " 1,266,919 " " 1,417,638 " " 3,265,949 " 33 " 473,612,299 " " 58,278,283 " " 180,842,798 " " 351,047,784 " " 4,095,558 " " 8,412,775 " " 1,266,919 " " 1,392,490 " " 3,291,096 " 34 " 465,199,524 " " 57,011,364 " " 177,551,702 " " 344,659,186 " " 4,021,023 " " 8,487,310 " " 1,266,919 " " 1,367,148 " " 3,316,438 " 35 " 456,712,214 " " 55,744,445 " " 174,235,264 " " 338,221,395 " " 3,945,916 " " 8,562,417 " " 1,266,919 " " 1,341,612 " " 3,341,975 " . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 " 72,867,498 " " 7,601,515 " " 27,359,464 " " 53,109,549 " " 619,612 " " 11,888,721 " " 1,266,919 " " 210,669 " " 4,472,917 " 74 " 60,978,777 " " 6,334,596 " " 22,886,547 " " 44,426,826 " " 518,312 " " 11,990,021 " " 1,266,919 " " 176,226 " " 4,507,360 " 75 " 48,988,756 " " 5,067,677 " " 18,379,187 " " 35,677,246 " " 416,234 " " 12,092,099 " " 1,266,919 " " 141,520 " " 4,542,066 " 76 " 36,896,657 " " 3,800,758 " " 13,837,121 " " 26,860,294 " " 313,370 " " 12,194,963 " " 1,266,919 " " 106,546 " " 4,577,039 " 77 " 24,701,694 " " 2,533,839 " " 9,260,082 " " 17,975,451 " " 209,714 " " 12,298,619 " " 1,266,919 " " 71,304 " " 4,612,284 " 78 " 12,403,075 " " 1,266,919 " " 4,647,798 " " 9,022,196 " " 105,258 " " 12,403,075 " " 1,266,919 " " 35,788 " " 4,647,798 " Computations: (a) Prior month (1) − prior month (6) (b) Prior month (2) − prior month (7) (c) Prior month (3) − prior month (9) (d) "$13,775,253 − (5) − (7)" (e) "$4,683,685 − (8)" ##### [360-980-55-13](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:c3053612c689f69f1d7360ba26b3e73c9d06c782360220b1ce4eb4566d7663b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the event of a change in tax rates, the accumulated deferred income tax liabilities should be adjusted to the computed liability at the new rates. If the change in tax rates causes a reduction of the recorded deferred income tax liability, that reduction would usually result in a reduction of the recorded asset representing revenue that will be provided for payment of income taxes. If the change in tax rates causes an increase of the recorded deferred income tax liability, that increase would usually result in an increase of the recorded asset representing revenue that will be provided for payment of income taxes. However, the regulator's expected rate actions could change that result. ##### [360-980-55-14](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:f780b5b1b4b766eb3fe07053e4ab53ccc50b6abb62809ef951ea644f4531cbb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [980-360-35-12 through 35-14](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-12) . ##### [360-980-55-15](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:70191ea106967b46b2c009073f8e8c7cb72e5863df98ff6cd85c2b8e11deabe3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example assumes a tax rate of 34 percent. ##### [360-980-55-16](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:8c604dfb8890db366b0d028487ddee3dd0af87e241720f5aeaa1f79da7c89c87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume that Utility B operates in two state jurisdictions. After an extensive prudence investigation, the regulator in one of those state jurisdictions disallows $865 million of the $3.6 billion total cost of Utility B's recently completed nuclear generating plant. That state jurisdiction represents approximately 50 percent of Utility B's operations, and approximately 50 percent of the output of the recently completed plant is expected to be used in that state. The tax basis of the plant is $2.4 billion. The regulator indicates that the tax benefit from a ratable portion of depreciation will be given to the shareholders as a result of the disallowance. After consultation with counsel, Utility B decides that it should not appeal the regulator's disallowance. The regulator in Utility B's other state jurisdiction has not participated in the prudence investigation, and there is no indication that a similar disallowance is likely in that jurisdiction. ##### [360-980-55-17](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:a5e7b3849cd8dcf1c9d23d7aee26de356ee4772abf1c5c871b6a851a1aaa7b38 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Utility B should recognize the effective disallowance as a loss. Because only 50 percent of the plant's cost will be recoverable from customers in the state, the effective disallowance is 50 percent of the amount disallowed, or $432.5 million. The disallowance should be recognized when the disallowance is probable and the amount of the disallowance can be reasonably estimated, and those conditions are met in this case. The tax benefit of the loss will be realized as future depreciation is taken for income tax purposes. Since the tax benefit of the plant is based on $2.4 billion and the cost of the plant prior to the disallowance is $3.6 billion, only two-thirds of the loss is available for tax benefit. A deferred tax benefit, based on two-thirds of the loss, can be recognized when the loss is recognized providing that benefit meets the criteria of Subtopic 740-10 for recognition. ##### [360-980-55-18](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:41b88ca2af7ce21eca1637024fdfec8a9b4483757c34b80b4e53671c12817af5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [980-360-35-12 through 35-14](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-12) . ##### [360-980-55-19](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:d4e60619a0c12c700f7c353633f5eb84a8ce29f448dc7362b73bc8ccc5024c0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example assumes a tax rate of 34 percent. ##### [360-980-55-20](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:fc786599794d15176827dc530ed5e67dab5b9dbdf45198bb2d6332bee799ea37 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume that Utility C, which operates solely in one state jurisdiction, is constructing a new electric generating plant. Completion is expected to take approximately one year. The cost of the plant, which was originally expected to be $1.25 billion, is now estimated to be as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-6DFCD36A-FDB0-464D-86C2-F11B77C8024E-low.gif) Costs capitalized to date " $2,700,000,000 " Allowance for funds used during construction on above for 1 year at 11.25% " 303,750,000 " "Remaining labor, materials, and so forth, to complete, expected to be spent ratably over the year" " 469,822,500 " Allowance for funds used during construction on above for 1/2 year at 11.25% " 26,427,500 " Total estimated cost at completion " $3,500,000,000 " ##### [360-980-55-21](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:aeac6f8323afe1e9e11490060dca70dd29b3656d6c78bfa8136b54df8bebe491 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Various parties have charged that certain cost increases were a result of imprudent management of the construction. ##### [360-980-55-22](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:eb82d20af9eaa3169f6d1192b137cc6487bccceafd7a85dcd517c05192c20740 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To avoid the cost and time delay that would be involved in a full-scale prudence investigation of the construction of the plant, Utility C and its regulator agree that the total cost of the plant that will be allowable in determining depreciation and that will be allowed in Utility C's rate base will be $3.4 billion. If the eventual cost of the plant exceeds that cap, a ratable portion of the tax benefit of depreciation will accrue to the benefit of the shareholders. For tax purposes, the plant is expected to have a net depreciable basis of $2.0 billion. ##### [360-980-55-23](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:2768e9effefbe2333edda1d07d0a76cd9b0d3ff624d4de07f6386eefe8f734ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The loss that results from the disallowance inherent in the cost cap would be computed as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E92FDB69-6C7F-469E-A4BA-E74AAEC35D23-low.gif) Total estimated cost at completion " $3,500,000,000 " Maximum allowable cost " 3,400,000,000 " Difference " $100,000,000 " "Loss to be recognized (present value of difference at 11.25% allowance for funds used during construction rate, based on 1 year to complete)" " $89,887,600 " "Deferred tax benefit of loss (2.0 ÷ 3.5 × $100,000,000 × 34%)" " 19,428,600 " Net loss to be recognized when cost cap is agreed to " $70,459,000 " ##### [360-980-55-24](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:b0921e6eec7cc1c4f3f74d8afaed5d5b9157ab4f48e29f72fcc508fc253527ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. After the loss is recognized, an [allowance for funds used during construction](https://asc.understandingaccounting.org/glossary/a/#allowance-for-funds-used-during-construction "The cost of financing construction as financed partially by borrowings and partially by equity, capitalized as part of the cost of plant and equipment pursuant to requirements of the regulator.") would continue to be recorded based on the remaining recorded costs. Subsequently, if additional increases in the cost of the plant become probable and those costs are not allowable under the agreed cost cap, those increases would also be recognized as losses from disallowances when they become probable. ##### [360-980-55-25](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:5d2cfdf47e19304a73ebd9afb772039c3dcaa7dd4f1385009de4412d713917bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the regulator ordered a cost cap that Utility C did not agree to, Utility C would have to assess whether the criteria of Topic 450 for loss recognition are met. If those criteria are met, the accounting would be as indicated above. Otherwise, no loss would be recognized until that loss was probable and could be reasonably estimated. Because of the possible disallowance inherent in the cost cap, it may no longer be probable that some amount of allowance for funds used during construction will be included in allowable costs in the future, and that amount may be reasonably estimable. In that case, that amount of allowance for funds used during construction would not be capitalized. ##### [360-980-55-26](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:560776ba34fe97ec481c62962ea5f32448026119050ab08530a37e0bdba53a94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [980-360-35-12 through 35-14](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-12) . ##### [360-980-55-27](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:bcf093d8aac49c46650f70da993714d2cf9417f41ed5a93030d65a41ea64f754 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume that Utility D operates solely in a single-state jurisdiction. On January 1, 19X1, Utility D's new electric generating plant becomes operational. The cost of that plant is $1 billion. ##### [360-980-55-28](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:a5b1eb07f356d2a5c3ee2bf639ca0944cae2a9180114ff6f118b78ff6ecc5b75 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Utility D's regulator concludes that part of the cost of the recently completed plant was imprudently incurred. However, rather than disallow the specific costs that were imprudent, the regulator instead excludes 10 percent ($100 million) of the plant from the rate base, thereby providing no return on investment on that portion of the plant. The regulator does not intend any part of the tax benefit of depreciation to accrue to the benefit of Utility D's shareholders. The regulator indicates that the exclusion of 10 percent of the plant's cost from the rate base is intended to be permanent. The utility concludes that it will not appeal the disallowance after considering the likely outcome of an appeal. ##### [360-980-55-29](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:7fc2cf68d1a270c469938c37b83d92a4727e2860fef1231570b7fd96238421fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Utility D should record the indirect disallowance as a loss and should estimate the amount of that loss using the best available information. If the regulator specifies the amount of cost that was imprudent, that amount may be the best estimate of the loss. Otherwise, Utility D would have to estimate the future cash flows that have been disallowed as a result of the order and determine the effective disallowance by computing the present value of those disallowed future cash flows. Since both the disallowed future cash flows and the appropriate discount rate to compute the present value would be estimates, those estimates should be calculated on a consistent basis. Accordingly, if the future cash flows are estimated based on the current weighted-average overall cost of Utility D's capital, that weighted-average overall cost of capital should also be used as the discount rate. The loss has no tax benefit to Utility D. ##### [360-980-55-30](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:892d2c85e5ebcac5666e082d3b1d133675905ce07e646d6f55fe28d0920df864 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [360-980-55-31](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:b5d2125d3ea2f5ededa61f51df31fc49510ee1774e35db692e2d294cd4d76adb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [360-980-55-32](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:3c3c7d9c9eee37b20438b331ad490ee2dba4552ac041c53afc13642994c11130 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [360-980-55-33](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:cf23316809c9aabb8e89cdb13b7c84cae95c9a15e99f8d4f23ab5ac8e16fe152 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [360-980-55-34](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:efd427b2ef76d15a2407d1019a1d431264fea624a3137911e9ab3255fdcab205 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [360-980-55-35](https://asc.understandingaccounting.org/asc/360/980/#360-980-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:17.858Z to 2026-09-10T00:13:17.858Z Record version: sha256:6d40c461dfc3ec849e54cc17cc9549368b942896d0661e66703878f88175aea2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). Source downloaded (UTC): 2026-09-10T00:13:22.181Z to 2026-09-10T00:13:22.181Z Record version: sha256:8c84b07fe2f7a315a0387516fc2601720ad452e88d530fcdeeccfd1b49b44243 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/360/980/#sec-00-status) SEC content: yes ##### [360-980-S00-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:22.181Z to 2026-09-10T00:13:22.181Z Record version: sha256:0c6ad09e0b78082dd38b0fbf903a381d7271f76c13015d458452d9bfb5946fed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. No updates have been made to this subtopic. Source downloaded (UTC): 2026-09-10T00:13:24.993Z to 2026-09-10T00:13:24.993Z Record version: sha256:acc1ce04156a96e523d37a0b611ed8f5da9cd8ee87fc247d4cfb02108a40424c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/360/980/#sec-45-other-presentation-matters) SEC content: yes #### Classification of Charges for Abandonment and Disallowances ##### [360-980-S45-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-S45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:24.993Z to 2026-09-10T00:13:24.993Z Record version: sha256:cdd62fdd449836a4c9f7d63189614bd83c0731dea267352a5832a1caa935e540 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [980-360-S99-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-S99-2), SAB Topic 10.E, for SEC Staff views on the classification of charges for abandonment and disallowances. Source downloaded (UTC): 2026-09-10T00:13:27.652Z to 2026-09-10T00:13:27.652Z Record version: sha256:9762b809886edd87d74d4998a998e6bebcdda7bedf2a77a4cabf54b939bd0c9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/360/980/#sec-50-disclosure) SEC content: yes #### Tangible and Intangible Utility Plant ##### [360-980-S50-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:27.652Z to 2026-09-10T00:13:27.652Z Record version: sha256:287ca03f74458885ed20eacfbd31641cd48e7f325d446fba6e0d115defee894a 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 5-02.13(b), for disclosure requirements for tangible and intangible utility plants of a public utility company. #### Jointly Owned Electric Utility Plants ##### [360-980-S50-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-S50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:27.652Z to 2026-09-10T00:13:27.652Z Record version: sha256:b96d91e22fc34ebccd004c08c356e3fff84483e965ba107340cdbe305c171fac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [980-360-S99-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-S99-1), SAB Topic 10.C, for SEC Staff views on disclosure concerning interests in jointly owned utility plants. Source downloaded (UTC): 2026-09-10T00:13:32.748Z to 2026-09-10T00:13:32.748Z Record version: sha256:057e0fb4900fefa07f9a682bc3bd459085f2a829825742a5f4c680e8b694352a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 360-980-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/360/980/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [360-980-S99-1](https://asc.understandingaccounting.org/asc/360/980/#360-980-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:32.748Z to 2026-09-10T00:13:32.748Z Record version: sha256:1ae0bd1f1506a3d973340c8aa1dfd4caa9f76b40d095ec790b5ad06368d199c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 10.C, Jointly Owned Electric Utility Plants. - Facts: Groups of electric utility companies have been building and operating utility plants under joint ownership agreements or arrangements which do not create legal entities for which separate financial statements are presented. FN1 Under these arrangements, a participating utility has an undivided interest in a utility plant and is responsible for its proportionate share of the costs of construction and operation and its entitled to its proportionate share of the energy produced. - FN1 Before considering the guidance in this SAB Topic, registrants are reminded that the arrangement should be evaluated in accordance with the provisions of Interpretation 46 \[Topic 810\]. - During the construction period a participating utility finances its own share of a utility plant using its own financial resources and not the combined resources of the group. Allowance for funds used during construction is provided in the same manner and at the same rates as for plants constructed to be used entirely by the participant utility. - When a joint-owned plant becomes operational, one of the participant utilities acts as operator and bills the other participants for their proportionate share of the direct expenses incurred. Each individual participant incurs other expenses related to transmission, distribution, supervision and control which cannot be related to the energy generated or received from any particular source. Many companies maintain depreciation records on a composite basis for each class of property so that neither the accumulated allowance for depreciation nor the periodic expense can be allocated to specific generating units whether jointly or wholly owned. - Question: What disclosure should be made on the financial statements or in the notes concerning interests in jointly owned utility plants? - Interpretive Response: A participating utility should include information concerning the extent of its interests in jointly owned plants in a note to its financial statements. The note should include a table showing separately for each interest in a jointly owned plant the amount of utility plant in service, the accumulated provision for depreciation (if available), the amount of plant under construction, and the proportionate share. The amounts presented for plant in service or plant under construction may be further subdivided to show amounts applicable to plant subcategories such as production, transmission, and distribution. The note should include statements that the dollar amounts represent the participating utility's share in each joint plant and that each participant must provide its own financing. Information concerning two or more generating plants on the same site may be combined if appropriate. - The note should state that the participating utility's share of direct expenses of the joint plants is included in the corresponding operating expenses on its income statement (e. g., fuel, maintenance of plant, other operating expense). If the share of direct expenses is charged to purchased power then the note should disclose the amount so charged and the proportionate amounts charged to specific operating expenses on the records maintained for the joint plants. ##### [360-980-S99-2](https://asc.understandingaccounting.org/asc/360/980/#360-980-S99-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:13:32.748Z to 2026-09-10T00:13:32.748Z Record version: sha256:8a772361148386c7d8b7fc1845c7ce6c3ca2020dd3669cb1e81930e3ccd3812c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 10.E, Classification of Charges for Abandonment and Disallowances. - Facts: A public utility company abandons the construction of a plant and, under the provisions of Statement 90 \[Topic 980\], must charge a portion of the costs of the abandoned plant to expense. FN3 Also, the utility determines that it is probable that certain costs of a recently completed plant will be disallowed, and charges those costs to expense as required by Statement 90 \[Topic 980\]. - FN3 Paragraph 3 of Statement 90 \[paragraph [980-360-35-3](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-3)\] requires that costs of abandoned plants in excess of the present value of the future revenues expected to be provided to recover any allowable costs be charged to expense in the period that the abandonment becomes probable. Also, paragraph 7 of Statement 90 \[paragraph [980-360-35-12](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-12)\] requires that disallowed costs for recently completed plants be charged to expense when the disallowance becomes probable and can be reasonably estimated. - Question: May such charges for abandonments and disallowances be reported as extraordinary items in the statement of income? - Interpretive Response: No. The staff does not believe that such charges meet the requirements of APB Opinion 30 \[Topic 225\] that an item be both unusual and infrequent to be classified as an extraordinary item. Accordingly, the public utility was advised by the staff that such charges should be reported as a component of income from continuing operations, separately presented, if material. FN4 - FN4 Additionally, the registrant was reminded that paragraph 26 of APB Opinion 30 \[paragraph [220-20-45-1](https://asc.understandingaccounting.org/asc/220/20/#220-20-45-1)\] provides that items which are not reported as extraordinary should not be reported on the income statement net of income taxes or in any manner that implies that they are similar to extraordinary items. - Paragraph 20 of APB Opinion 30 \[paragraph [225-20-45-2](https://asc.understandingaccounting.org/asc/225/20/#225-20-45-2)\] indicates that to be unusual, an item must "possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates." Similarly, that paragraph indicates that, to be infrequent, an event should "not reasonably be expected to recur in the foreseeable future." - Electric utilities operate under a franchise that requires them to furnish adequate supplies of electricity for their service area. That undertaking requires utilities to continually forecast the future demand for electricity, and the costs to be incurred in constructing the plants necessary to meet that demand. Abandonments and disallowances result from the failure of demand to reach projected levels and/or plant construction costs that exceed anticipated amounts. Neither event qualifies as being both unusual and infrequent in the environment in which electric utilities operate. - Accordingly, the staff believes that charges for abandonments and disallowances under Statement 90 should not be presented as extraordinary items. FN5 - FN5 The staff also notes that paragraphs 3 and 7 of Statement 90 \[paragraphs [980-360-35-3](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-3) and [980-360-35-12](https://asc.understandingaccounting.org/asc/360/980/#360-980-35-12)\], in requiring that such costs be "recognized as a loss," do not specify extraordinary item treatment. The staff believes that it generally has been the FASB's practice to affirmatively require extraordinary item treatment when it believes that it is appropriate for charges or credits to income specifically required by a provision of a statement.