# ASC 405-940: Liabilities — Financial Services—Brokers and Dealers Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/405/940/) 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): 2026-09-10T00:18:03.082Z to 2026-09-10T00:18:22.655Z Record version: sha256:735ad1897588f876ec6bec0018212c0f4569c324e1fcd7d34b0bdc98dcb5b676 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-940: Liabilities — Financial Services—Brokers and Dealers ### Machine-generated study aids ```json { "summary": "This Subtopic addresses liabilities of brokers and dealers in securities, specifically stock-loan and repurchase (repo) transactions entered into to finance investment positions in lieu of a bank loan. Topic 860 supplies the general accounting for whether such transactions are sales or financings. If they are accounted for as financing transactions, the related rebate or interest expense must be presented in the income statement separately from any trading gains or losses.", "key_points": [ "The Subtopic covers broker-dealer liabilities, including stock-loan and repo transactions used to finance investment positions (405-940-05-1).", "Scope follows the broker-dealer Overall Subtopic scope in Section 940-10-15 (405-940-15-1).", "Topic 860 (Transfers and Servicing) provides the general guidance on whether stock-loan and repurchase transactions are accounted for as sales or as secured borrowings (405-940-45-1).", "When such transactions are accounted for as financings, the rebate or interest expense must be reported in the income statement as an expense separate and apart from trading gains or losses (405-940-45-1).", "Former implementation guidance at 405-940-55-1 was superseded by ASU 2018-09." ], "categories": [ "Presentation", "Industry-specific", "Financial instruments", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "The practical point is presentation: broker-dealers cannot bury repo/stock-loan rebate or interest expense inside trading revenue. A common misunderstanding is thinking this Subtopic decides sale vs. financing treatment — that determination is made under Topic 860; ASC 405-940 only dictates income statement display once financing treatment applies.", "related_topics": [ "860", "940-10", "940-320", "210-20", "942" ], "key_concepts": [ "broker-dealer liabilities", "stock-loan transactions", "repurchase agreements", "financing transactions", "rebate expense", "interest expense presentation", "trading gains and losses" ] } ``` Source downloaded (UTC): 2026-09-10T00:18:03.082Z to 2026-09-10T00:18:03.082Z Record version: sha256:01a68b7c3f7a18bd904dabb2c442309c403966e1b597fb9357c60e11956c51a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-940-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/405/940/#00-status) SEC content: no ##### [405-940-00-1](https://asc.understandingaccounting.org/asc/405/940/#405-940-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:03.082Z to 2026-09-10T00:18:03.082Z Record version: sha256:844ad35d70271b96f0865f6a3c751561ccf40676b7fa3437bd9ce660dc2825a3 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
Financial Asset (2nd def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Repurchase AgreementAmendedAccounting Standards Update No. 2014-1106/12/2014
Repurchase Agreement (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Repurchase Agreement (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
940-405-45-1AmendedAccounting Standards Update No. 2014-0603/14/2014
940-405-55-1SupersededAccounting Standards Update No. 2018-0907/16/2018
Source downloaded (UTC): 2026-09-10T00:18:06.326Z to 2026-09-10T00:18:06.326Z Record version: sha256:0f9041be610df05530cf52632d062eab21d635bf28c142b9ff3cc663f8e2b38e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-940-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/405/940/#05-overview-and-background) SEC content: no ##### [405-940-05-1](https://asc.understandingaccounting.org/asc/405/940/#405-940-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:06.326Z to 2026-09-10T00:18:06.326Z Record version: sha256:565d6f4d8d3a9eef777325e7cca9b6ce5ee26fc8387b40c200cf0f72da9edabf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses liabilities for brokers and dealers in securities (broker-dealers), including stock-loan and repo transactions entered into for the purpose of financing investment positions (such as in lieu of a bank loan). Source downloaded (UTC): 2026-09-10T00:18:10.257Z to 2026-09-10T00:18:10.257Z Record version: sha256:d83c77fbbd3df2238908639885ba4f96b14054fd586a6b10ad5da71784b374ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-940-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/405/940/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [405-940-15-1](https://asc.understandingaccounting.org/asc/405/940/#405-940-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:10.257Z to 2026-09-10T00:18:10.257Z Record version: sha256:5e70d1eda10707fbd5b7f71716e8650e3448b5d6293426539d5b173db51b57da 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 940-10-15. Source downloaded (UTC): 2026-09-10T00:18:17.313Z to 2026-09-10T00:18:17.313Z Record version: sha256:249d0c7fa62458e00b7ebb7cba9c87dd2bca96970c6695b181f9f93013e51eab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-940-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/405/940/#45-other-presentation-matters) SEC content: no ##### [405-940-45-1](https://asc.understandingaccounting.org/asc/405/940/#405-940-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:17.313Z to 2026-09-10T00:18:17.313Z Record version: sha256:87665609c5bb19fa7983a656908393e48e1245bf04553c4bc6b4ad89d056bf4f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Stock-loan and [repurchase transactions](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred.") may be entered into for the purpose of financing positions (such as in lieu of a bank loan). Topic 860 provides general guidance on such transactions. If such transactions are accounted for as financing transactions, the rebate or interest expense shall be reflected in the income statement as an expense separate and apart from any trading gains or losses. Source downloaded (UTC): 2026-09-10T00:18:19.931Z to 2026-09-10T00:18:19.931Z Record version: sha256:47d04a49d9ebe751a6acaabcb43a9f08a94e566c59b8145065f682a84ca7fcfd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-940-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/405/940/#55-implementation-guidance-and-illustrations) SEC content: no ##### [405-940-55-1](https://asc.understandingaccounting.org/asc/405/940/#405-940-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:19.931Z to 2026-09-10T00:18:19.931Z Record version: sha256:4410b1c94565e29386ad27517ecefbdb7ac8c22dc452271df10cd513af12a571 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-09](https://asc.understandingaccounting.org/updates/asu-2018-09/).