# ASC 405-50: Liabilities — Liabilities—Supplier Finance Programs Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/405/50/) 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): 2026-09-10T00:15:18.657Z to 2026-09-10T00:15:40.809Z Record version: sha256:84bf3acfed55b4d5322f025348dee9ff5876047d96c1a089a1e4bfbce95b91d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50: Liabilities — Liabilities—Supplier Finance Programs ### Machine-generated study aids ```json { "summary": "ASC 405-50 is a disclosure-only subtopic requiring the buyer in a supplier finance program (also called reverse factoring, payables finance, or structured payables) to disclose qualitative and quantitative information about the program. A supplier finance program exists when the buyer agrees with a finance provider or intermediary, confirms supplier invoices as valid to that party, and the supplier can request early payment from a party other than the buyer (405-50-15-2). The subtopic does not address recognition, measurement, or balance sheet presentation of the obligation, or the accounting by other parties (405-50-10-2).", "key_points": [ "Scope: applies to all buyers using arrangements with the three characteristics in 405-50-15-2 — an agreement with a finance provider/intermediary, buyer confirmation of supplier invoices as valid, and the supplier's option to request early payment from a party other than the buyer.", "An indicator (not determinative) of a supplier finance program is a commitment to pay a party other than the supplier for a confirmed invoice without offset, deduction, or other defenses to payment (405-50-15-3); all available evidence, including buyer-supplier arrangements, must be considered (405-50-15-4).", "The subtopic is disclosure-only: it does not address the buyer's recognition, measurement, or financial statement presentation of the obligation, nor accounting by other parties to the program (405-50-10-2).", "Disclosure objective is to let users understand the nature, activity during the period, changes from period to period, and potential magnitude of the programs (405-50-50-1); multiple programs may be aggregated unless aggregation obscures useful information about programs with substantially different characteristics (405-50-50-2).", "Annually, disclose key terms — payment terms including payment timing and the basis for its determination, and assets pledged as security or other forms of guarantees for the committed payment (405-50-50-3(a)).", "Annually, disclose the amount of obligations confirmed as valid and unpaid at period-end, where they are presented in the balance sheet (by line item if more than one), and a rollforward showing beginning balance, additions, settlements, and ending balance (405-50-50-3(b)).", "In each interim reporting period, disclose the amount of confirmed obligations outstanding at the end of the period (405-50-50-4)." ], "categories": [ "Disclosure", "Presentation", "Financial statement presentation", "Debt and equity" ], "audience_level": "intermediate", "student_note": "This is a transparency rule born of concerns that reverse factoring lets companies stretch payment terms while still classifying the obligation as a trade payable rather than debt; the common misunderstanding is thinking ASC 405-50 dictates that classification — it does not, it only requires the buyer to disclose where the obligation is presented and how it moved during the period.", "related_topics": [ "470", "860", "230", "270", "405-40" ], "key_concepts": [ "supplier finance program", "reverse factoring", "confirmed invoice", "finance provider or intermediary", "rollforward disclosure", "trade payables", "interim disclosure", "balance sheet presentation" ] } ``` Source downloaded (UTC): 2026-09-10T00:15:18.657Z to 2026-09-10T00:15:18.657Z Record version: sha256:cc05a60a85fb933f48887cfae91123ed99452ea50958fe145ea80f17651d74e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/405/50/#00-status) SEC content: no ##### [405-50-00-1](https://asc.understandingaccounting.org/asc/405/50/#405-50-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:18.657Z to 2026-09-10T00:15:18.657Z Record version: sha256:6e75694c86a661991fafb4a6af40df2a565aa83749bcc04a7eaaddf111ea1a54 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
405-50-05-1AddedAccounting Standards Update No. 2022-0409/29/2022
405-50-10-1AddedAccounting Standards Update No. 2022-0409/29/2022
405-50-10-2AddedAccounting Standards Update No. 2022-0409/29/2022
405-50-15-1 through 15-4
AddedAccounting Standards Update No. 2022-0409/29/2022
405-50-50-1 through 50-4
AddedAccounting Standards Update No. 2022-0409/29/2022
405-50-55-1 through 55-5
AddedAccounting Standards Update No. 2022-0409/29/2022
405-50-65-1AddedAccounting Standards Update No. 2022-0409/29/2022
Source downloaded (UTC): 2026-09-10T00:15:22.160Z to 2026-09-10T00:15:22.160Z Record version: sha256:6f0ecafb167b61b31b391bb492e77987581ead01d353062a6aff9cff03c822ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/405/50/#05-overview-and-background) SEC content: no ##### [405-50-05-1](https://asc.understandingaccounting.org/asc/405/50/#405-50-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:22.160Z to 2026-09-10T00:15:22.160Z Record version: sha256:c3bee2a551e2be7c5a6505e9e9fdc970372e20cd64df2ad83159fe8306c758bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses the disclosures applicable for an entity that uses a supplier finance program in connection with the purchase of goods and services (the buyer in a supplier finance program). A supplier finance program also may be referred to as a reverse factoring, payables finance, or structured payables arrangement. Source downloaded (UTC): 2026-09-10T00:15:24.411Z to 2026-09-10T00:15:24.411Z Record version: sha256:e1fb71b49b81f01dbf2092a58c7374942aabacdd8735850d2caa6ae04564531b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/405/50/#10-objectives) SEC content: no ##### [405-50-10-1](https://asc.understandingaccounting.org/asc/405/50/#405-50-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:24.411Z to 2026-09-10T00:15:24.411Z Record version: sha256:a459802c86131739f703de60214b2efe32b9cb4dd0cc30cdb1c57a56a9673905 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of this Subtopic is to establish disclosures that enhance the transparency of a supplier finance program used by an entity in connection with the purchase of goods and services (the buyer in a supplier finance program). ##### [405-50-10-2](https://asc.understandingaccounting.org/asc/405/50/#405-50-10-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:24.411Z to 2026-09-10T00:15:24.411Z Record version: sha256:943a319230de66246bc74aedb5dc57b4b722ce16d34aab40e12a5ed484d95ced Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic does not address either of the following: 1. a A buyer’s recognition, measurement, or financial statement presentation of an obligation in connection with a supplier finance program 2. b The accounting and disclosure for other parties involved in a supplier finance program. Source downloaded (UTC): 2026-09-10T00:15:27.496Z to 2026-09-10T00:15:27.496Z Record version: sha256:6ce4b7a63776818b7cdee8cd0484b7b22725b5a336a119ab03c27bca928dae4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/405/50/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [405-50-15-1](https://asc.understandingaccounting.org/asc/405/50/#405-50-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:27.496Z to 2026-09-10T00:15:27.496Z Record version: sha256:c7c740dbe0f1d0d7d83db02807065a68ef56081d6ab75e1888d5ead448f27885 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities that use supplier finance programs in connection with the purchase of goods and services (buyers in a supplier finance program). #### Transactions ##### [405-50-15-2](https://asc.understandingaccounting.org/asc/405/50/#405-50-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:27.496Z to 2026-09-10T00:15:27.496Z Record version: sha256:2ae812d914491168ad5ebe9bd389d99ddaf08becc64170d73f85b6034ea308d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to obligations in connection with supplier finance programs. A supplier finance program is an arrangement that has all the following characteristics: 1. a An entity enters into an agreement with a finance provider or an intermediary. 2. b The entity confirms supplier invoices as valid to the finance provider or intermediary under the agreement described in (a). 3. c The entity’s supplier has the option to request early payment from a party other than the entity for invoices that the entity has confirmed as valid. ##### [405-50-15-3](https://asc.understandingaccounting.org/asc/405/50/#405-50-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:27.496Z to 2026-09-10T00:15:27.496Z Record version: sha256:4e80d3026606ca1e916391314abd92a62185b9639d590a8fc8756a7e8baa4eab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although not determinative, an indicator that an entity may have a supplier finance program is the commitment to pay a party other than the supplier for a confirmed invoice without offset, deduction, or any other defenses to payment. ##### [405-50-15-4](https://asc.understandingaccounting.org/asc/405/50/#405-50-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:27.496Z to 2026-09-10T00:15:27.496Z Record version: sha256:acde2bb918a820e2a988c677b10f430d3ef3f46a7314e8832c13f6110dc40be7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining whether an entity has established a supplier finance program and, therefore, is subject to the disclosures required by this Subtopic, all available evidence shall be considered, including arrangements between the entity and its finance provider or intermediary and between the entity and its suppliers whose invoices the entity has confirmed as valid to the finance provider or intermediary. Source downloaded (UTC): 2026-09-10T00:15:33.286Z to 2026-09-10T00:15:33.286Z Record version: sha256:5cd487b2ec05542f2b4678529cedb394a1515f8df9decf8e41411fb0fc24404f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/405/50/#50-disclosure) SEC content: no ##### [405-50-50-1](https://asc.understandingaccounting.org/asc/405/50/#405-50-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:33.286Z to 2026-09-10T00:15:33.286Z Record version: sha256:c4d63a3f6a24c0186e4409a83fbb9ed142aae4461cf4b308de31bf6c3e196fe9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of the requirements in this Subtopic is for an entity to disclose sufficient information to enable users of financial statements to understand the nature, activity during the period, changes from period to period, and potential magnitude of the entity’s supplier finance programs. To achieve that objective, an entity shall disclose qualitative and quantitative information about its supplier finance programs. ##### [405-50-50-2](https://asc.understandingaccounting.org/asc/405/50/#405-50-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:33.286Z to 2026-09-10T00:15:33.286Z Record version: sha256:331101834776d17022378510f8d08d534154e7988d9b25575c4912ce176c03d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall consider the level of detail necessary to satisfy the disclosure objective. If an entity uses more than one supplier finance program, the entity may aggregate disclosures, but not to the extent that useful information is obscured by the aggregation of programs that have substantially different characteristics. ##### [405-50-50-3](https://asc.understandingaccounting.org/asc/405/50/#405-50-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:33.286Z to 2026-09-10T00:15:33.286Z Record version: sha256:1e7edcd551bb4f65aa05c9fcef4de41d451a9ba0fb0b04a0c20b09fb642e238a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In each annual reporting period, an entity shall disclose all the following information about its supplier finance programs: 1. a The key terms of the program, including, but not limited to: 1. 1 A description of the payment terms, including payment timing and the basis for its determination 2. 2 Assets pledged as security or other forms of guarantees provided for the committed payment to the finance provider or intermediary. See paragraphs [405-50-55-1 through 55-3](https://asc.understandingaccounting.org/asc/405/50/#405-50-55-1) for an illustrative example. 2. b The amount of obligations outstanding at the end of the reporting period that the entity has confirmed as valid to the finance provider or intermediary under the program (that is, the amount of obligations confirmed under the program that remains unpaid by the entity) and the following information about those obligations: 1. 1 Where those obligations are presented in the balance sheet. If those obligations are presented in more than one balance sheet line item, then the entity shall disclose the amount outstanding at the end of the reporting period in each line item. 2. 2 A rollforward of those obligations showing, at a minimum, all the following: 1. i The amount of those obligations outstanding at the beginning of the reporting period 2. ii The amount of those obligations added to the program during the reporting period 3. iii The amount of those obligations settled during the reporting period 4. iv The amount of those obligations outstanding at the end of the reporting period. ##### [405-50-50-4](https://asc.understandingaccounting.org/asc/405/50/#405-50-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:33.286Z to 2026-09-10T00:15:33.286Z Record version: sha256:5b8f19ff85cd6cfc2d86b86cfa7680210a7c227dc14dd2ce72b10d75ddb40e8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In each interim reporting period, an entity shall disclose the amount of obligations outstanding that the entity has confirmed as valid to the finance provider or intermediary under the supplier finance program at the end of the reporting period. Source downloaded (UTC): 2026-09-10T00:15:36.231Z to 2026-09-10T00:15:36.231Z Record version: sha256:531807bbdcccacf3234784d690774c988633768d7a36e41ffce89f639ae0c486 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/405/50/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [405-50-55-1](https://asc.understandingaccounting.org/asc/405/50/#405-50-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:36.231Z to 2026-09-10T00:15:36.231Z Record version: sha256:94ba8d2cd70e1af27ff3b9e8888f24f48c43b5322224f421e5be8b1fefe7b078 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on the limited facts and hypothetical fact pattern described in paragraph [405-50-55-2](https://asc.understandingaccounting.org/asc/405/50/#405-50-55-2), this Example illustrates how an entity might apply the guidance in paragraph [405-50-50-3(a)](https://asc.understandingaccounting.org/asc/405/50/#405-50-50-3) to disclose the key terms of a supplier finance program, including a description of the payment terms (which includes payment timing and basis for its determination) and the assets pledged as security or other forms of guarantees provided for the committed payment to the finance provider or intermediary. This Example is not intended to illustrate every aspect of the key terms of a program that should be disclosed by a buyer entity. Identifying the key terms of a supplier finance program is a matter of judgment, based upon the facts of the arrangement. ##### [405-50-55-2](https://asc.understandingaccounting.org/asc/405/50/#405-50-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:36.231Z to 2026-09-10T00:15:36.231Z Record version: sha256:8f84c75659e8071cce24c7c901c46fc76d67c39f46de26a6813b086491176fc1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A enters into a supplier finance program with Bank B in which Entity A agrees to pay Bank B on the invoice maturity dates the stated amount of invoices that Entity A has confirmed on Bank B’s supplier finance platform. Entity A pays Bank B an annual subscription fee for the supplier finance platform and a service fee for related support. Entity A or Bank B may terminate the agreement upon at least 90 days’ notice. The agreement with Bank B does not require that Entity A provide assets pledged as security or other forms of guarantees for the supplier finance program. Bank B does not advise Entity A of the maximum size of the program. Bank B also enters into a separate arrangement with Entity A’s suppliers and provides them with the option to request early payment from Bank B for invoices confirmed by Entity A. Entity A does not determine the terms or conditions of the arrangement between Bank B and Entity A’s suppliers. Entity A does not participate in the transactions between its suppliers and Bank B. The supplier invoices that have been confirmed as valid under the program require payment in full within 90 days of the invoice date. ##### [405-50-55-3](https://asc.understandingaccounting.org/asc/405/50/#405-50-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:36.231Z to 2026-09-10T00:15:36.231Z Record version: sha256:bfdb1582a77838e26e45fbf3b0fd72c28bc5826c4734994755cdf718a40c1169 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A determined that it should disclose the following information on the key terms of its supplier finance program: - Under a supplier finance program, Entity A agrees to pay a bank the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices, an annual subscription fee for the supplier finance platform, and service fees for related support. Entity A or the bank may terminate the agreement upon at least 90 days’ notice. The supplier invoices that have been confirmed as valid under the program require payment in full within 90 days of the invoice date. ##### [405-50-55-4](https://asc.understandingaccounting.org/asc/405/50/#405-50-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:36.231Z to 2026-09-10T00:15:36.231Z Record version: sha256:62b0fa53a2cd6e32d421ce0f4e850f99f6912460f0d7a8df4d005be618cbc1b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration of the guidance in paragraph [405-50-50-3(b)(2)](https://asc.understandingaccounting.org/asc/405/50/#405-50-50-3) based on the assumptions that Entity A provides one comparative balance sheet and that its supplier finance program is denominated in Entity A’s reporting currency. ##### [405-50-55-5](https://asc.understandingaccounting.org/asc/405/50/#405-50-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:36.231Z to 2026-09-10T00:15:36.231Z Record version: sha256:f4f34a5a0b5dd1208481e1c24399a2ad7d211b10ceabb2d5109bc7f3869f3219 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the disclosures in a tabular format. - The rollforwards of Entity A’s outstanding obligations confirmed as valid under its supplier finance program for years ended December 31, 20X2, and 20X1, are as follows (in thousands): - ![](https://asc.understandingaccounting.org/asc-img/GUID-31DDE6E6-37F1-47B6-AB34-CDD8218C8A06-low.gif) 20X2 20X1 Confirmed obligations outstanding at the beginning of the year $ 733 $ 712 Invoices confirmed during the year "2,435 " "2,278 " Confirmed invoices paid during the year "(2,315)" "(2,257)" Confirmed obligations outstanding at the end of the year $ 853 Source downloaded (UTC): 2026-09-10T00:15:38.064Z to 2026-09-10T00:15:38.064Z Record version: sha256:b90753a0cb58c9448a222972cf68df9d21467918ded2c3ac16c1d0a887e9cc0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-50-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/405/50/#65-transition-and-open-effective-date-information) SEC content: no ##### [405-50-65-1](https://asc.understandingaccounting.org/asc/405/50/#405-50-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:15:38.064Z to 2026-09-10T00:15:38.064Z Record version: sha256:93a8b45ca22108289a7439c1033513ee4e81657de5bc923ce4b53198d6406235 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/02/2026 after the end of the transition period stated in Accounting Standards Update No. 2022-04, _Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations_.