# ASC 405-942: Liabilities — Financial Services—Depository and Lending Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/405/942/) 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): 2026-09-10T00:18:26.642Z to 2026-09-10T00:18:55.779Z Record version: sha256:366213912088da9e3d9b3727343eac31a2ceafcd7ca96f09f2fcb311b6f91171 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942: Liabilities — Financial Services—Depository and Lending ### Machine-generated study aids ```json { "summary": "This Subtopic governs how depository and lending institutions recognize, measure, present, and disclose deposit liabilities and short-sale obligations. Deposit liabilities are recognized when deposits are received (not when funds are collected), with deposit float recorded as both an asset and a liability, and credit unions must present member share/savings accounts unequivocally as liabilities. Short sales (\"securities sold, not yet purchased\") are reported as liabilities measured at fair value through income, with interest on short positions accrued as interest expense.", "key_points": [ "Obligations incurred in short sales are reported as liabilities, generally called securities sold, not yet purchased (405-942-25-1), with additional guidance in 815-10-55-57.", "Short-sale obligations are subsequently measured at fair value through the income statement at each reporting date with interest accrued as interest expense (405-942-35-1); the fair value adjustment is classified with gains and losses on securities (405-942-45-1).", "A deposit liability is recognized when deposits are received, not when the institution collects the funds; deposit float (checks in process of collection, not available for withdrawal) is recorded as both an asset and a liability, and deposits are not recorded based solely on collections (405-942-25-3).", "Credit unions and corporate credit unions must report all member deposit accounts, including member shares, unequivocally as liabilities on the statement of financial condition (405-942-25-4; 405-942-55-1).", "Credit union statements of financial condition must either present deposit/savings accounts as the first item in the liabilities and equity section or include them within a captioned total-liabilities subtotal; an unclassified presentation showing savings accounts last before retained earnings is unacceptable (405-942-45-3; 405-942-55-2).", "Interest on member accounts (commonly called dividends) is reported as expense in the statement of income, and interest payable to members is included as a liability (405-942-45-4).", "Required deposit disclosures include aggregate time deposits (including CDs) at or above the insured limit, instruments pledged as collateral for deposits not otherwise disclosed under Topic 860, demand deposits reclassified as loans such as overdrafts, and deposits received on terms other than those available in the normal course of business (405-942-50-1)." ], "categories": [ "Recognition", "Presentation", "Disclosure", "Industry-specific" ], "audience_level": "intermediate", "student_note": "Two traps: deposits become liabilities when received, not when the check clears (float sits on both sides of the balance sheet), and credit union \"shares\"/savings accounts are liabilities despite the equity-sounding label and the \"dividend\" terminology used for interest paid on them.", "related_topics": [ "942-10", "815-10", "860", "480", "825", "942-405" ], "key_concepts": [ "deposit liabilities", "deposit float", "securities sold, not yet purchased", "short sales", "member share accounts", "redeemable preferred stock of a subsidiary", "uninsured time deposits", "credit union presentation" ] } ``` Source downloaded (UTC): 2026-09-10T00:18:26.642Z to 2026-09-10T00:18:26.642Z Record version: sha256:d158c4e68e1f4c3f7f4a8f87e17fd073c6b676ca65772ebe258566870a74e438 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/405/942/#00-status) SEC content: no ##### [405-942-00-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:26.642Z to 2026-09-10T00:18:26.642Z Record version: sha256:8dfee8bd6d1b0afef7de509c638256e6ca99f9d8bd6b35755f359cee2da31fe8 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
942-405-50-1AmendedMaintenance Update 2018-02 (PDF)02/02/2018
942-405-50-1AmendedMaintenance Update 2014-07 (PDF)03/17/2014
Source downloaded (UTC): 2026-09-10T00:18:29.423Z to 2026-09-10T00:18:29.423Z Record version: sha256:e8c876a6bad90713df74e5cea4efe6218b58ab0d758ba0e6fd86824a283fcbd8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/405/942/#05-overview-and-background) SEC content: no ##### [405-942-05-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:29.423Z to 2026-09-10T00:18:29.423Z Record version: sha256:d6d8a3f0ad6b998d0d9cc62d1ca48c04cd3eb3eced4a8eeb7b41c3f53666a938 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides disclosure and implementation guidance for deposit liabilities by financial institutions. Source downloaded (UTC): 2026-09-10T00:18:33.266Z to 2026-09-10T00:18:33.266Z Record version: sha256:6dfba4cafa0268bb3ee19ac3797ddfd8aa6e91c26e157175f1d2f46b8fdea795 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/405/942/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [405-942-15-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:33.266Z to 2026-09-10T00:18:33.266Z Record version: sha256:59db736c161636ee1a299e74a1bc6536b8f3ca224e5ac1310a518152acb270e3 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): 2026-09-10T00:18:38.996Z to 2026-09-10T00:18:38.996Z Record version: sha256:613eba49205b3d4450aaac28f6ada77e739f628d05d7db67c673cef41d6d7572 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/405/942/#25-recognition) SEC content: no #### Short Sales of Securities ##### [405-942-25-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:38.996Z to 2026-09-10T00:18:38.996Z Record version: sha256:95deb84a77b1421409f0ec6e778bc856614a6192782ab85963f6c200274ca84f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The obligations incurred in short sales shall be reported as liabilities. Such liabilities are generally called securities sold, not yet purchased. ##### [405-942-25-2](https://asc.understandingaccounting.org/asc/405/942/#405-942-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:38.996Z to 2026-09-10T00:18:38.996Z Record version: sha256:9f846b8a6818074c4774cb24966e9c8f6eb4d62e390cb01593e101b839b486ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [815-10-55-57](https://asc.understandingaccounting.org/asc/815/10/#815-10-55-57) for additional guidance concerning short sales. #### Deposits ##### [405-942-25-3](https://asc.understandingaccounting.org/asc/405/942/#405-942-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:38.996Z to 2026-09-10T00:18:38.996Z Record version: sha256:e2c6ef6ec33f804b4e2c1863e06a308d4000ce4606e2de0e521b1ee41b334625 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The institution's liability for deposits originates and shall be recognized at the time deposits are received rather than when the institution collects the funds. Checks that are deposited by customers and that are in the process of collection and are currently not available for withdrawal (deposit float) shall be recorded as assets and liabilities. Deposits shall not be recorded based solely on collections. #### Member Deposits ##### [405-942-25-4](https://asc.understandingaccounting.org/asc/405/942/#405-942-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:38.996Z to 2026-09-10T00:18:38.996Z Record version: sha256:659d536c7dcd61e6e387b3e7889230b4de8fef2155dc0b0390fa18a0b2864a07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Credit unions and corporate credit unions shall report unequivocally all member deposit accounts, including member shares, as liabilities in the statement of financial condition. Source downloaded (UTC): 2026-09-10T00:18:42.712Z to 2026-09-10T00:18:42.712Z Record version: sha256:4ec2f820be2daf1f5bcc75599407033ab15f1f076a13cabc90d5eb9512893941 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/405/942/#35-subsequent-measurement) SEC content: no #### Short Sales of Securities ##### [405-942-35-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:42.712Z to 2026-09-10T00:18:42.712Z Record version: sha256:e76d4721fc7ffc3b9d7ee98501ca8a014a5029ce62362b9cf9ad761a2063d6e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The obligations incurred in short sales shall be subsequently measured at fair value through the income statement at each reporting date. Interest on the short positions shall be accrued periodically and reported as interest expense. Source downloaded (UTC): 2026-09-10T00:18:44.394Z to 2026-09-10T00:18:44.394Z Record version: sha256:0b3e9ec3c03c0dc16fbf8920b159a5bc88c27a589d45de17c2e989159714a656 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/405/942/#45-other-presentation-matters) SEC content: no #### Short Sales of Securities ##### [405-942-45-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:44.394Z to 2026-09-10T00:18:44.394Z Record version: sha256:2638a4b9a518b6fe95be6b549c5976f6f7a791509bacf2353a7baf056b59d883 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The fair value adjustment on short sales of securities shall be classified in the income statement with gains and losses on securities. #### Redeemable Preferred Stock Dividends ##### [405-942-45-2](https://asc.understandingaccounting.org/asc/405/942/#405-942-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:44.394Z to 2026-09-10T00:18:44.394Z Record version: sha256:0a241250fe6d71f733e30c438df20cf0a51a726fdfc82e277ddea3c43ecff65e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For redeemable preferred stock of a [subsidiary](https://asc.understandingaccounting.org/glossary/s/#subsidiary "An entity, including an unincorporated entity such as a partnership or trust, in which another entity, known as its parent, holds a controlling financial interest. (Also, a variable interest entity that is consolidated by a primary beneficiary.)") accounted for as a liability in a parent's [consolidated financial statements](https://asc.understandingaccounting.org/glossary/c/#consolidated-financial-statements "The financial statements of a consolidated group of entities that include a parent and all its subsidiaries presented as those of a single economic entity."), dividends shall be included in the determination of income as interest expense. For redeemable preferred stock of a subsidiary accounted for as a [noncontrolling interest](https://asc.understandingaccounting.org/glossary/n/#noncontrolling-interest "The portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. A noncontrolling interest is sometimes called a minority interest.") in a subsidiary in a [parent's](https://asc.understandingaccounting.org/glossary/p/#parent "An entity that has a controlling financial interest in one or more subsidiaries. (Also, an entity that is the primary beneficiary of a variable interest entity.)") consolidated financial statements, the dividends shall be presented as noncontrolling interest in income of a subsidiary. For redeemable preferred stock of a parent treated as capital, but displayed in the balance sheet as mezzanine capital, dividends shall be included in the statement of changes in shareholders' equity. #### Member Deposits ##### [405-942-45-3](https://asc.understandingaccounting.org/asc/405/942/#405-942-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:44.394Z to 2026-09-10T00:18:44.394Z Record version: sha256:bd26888a9120f27e370a69aacd51666c8311e329414865d564ca9e232ceb0aa1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The statement of financial condition of credit unions and corporate credit unions shall either: 1. a Present deposit accounts as the first item in the liabilities and equity section 2. b Include deposit accounts within a captioned subtotal for total liabilities. An unclassified presentation whereby all liabilities and equity are shown together under one subheading and savings accounts are presented as the last item before retained earnings shall not be an acceptable presentation. ##### [405-942-45-4](https://asc.understandingaccounting.org/asc/405/942/#405-942-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:44.394Z to 2026-09-10T00:18:44.394Z Record version: sha256:f2df08cac4fa2576badadac62aaea2da66e305cff087cd1c367efd3bb0caedfe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The interest paid or accrued on these accounts, commonly referred to as dividends, shall be reported as an expense on the statement of income, and the amount of interest payable to members shall be included as a liability in the statement of financial condition. Source downloaded (UTC): 2026-09-10T00:18:48.452Z to 2026-09-10T00:18:48.452Z Record version: sha256:c070bef8ec479951f3cf3adb00d6cd13728145a7c10717f0bfcfe117f1e23669 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/405/942/#50-disclosure) SEC content: no #### Deposits ##### [405-942-50-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:48.452Z to 2026-09-10T00:18:48.452Z Record version: sha256:706c668bfb80248803f60aafa21bc2c7ab19c29a6eed6022b1ab7006b5b1fe60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosures about deposit liabilities shall include all of the following: 1. a The aggregate amount of time deposit accounts (including certificates of deposit) in denominations that meet or exceed the insured limit at the balance sheet date 2. b Securities, mortgage loans, or other financial instruments that serve as collateral for deposits, that are otherwise not disclosed under Topic 860 3. c The aggregate amount of any demand deposits that have been reclassified as loan balances, such as overdrafts, at the balance-sheet date 4. d Deposits that are received on terms other than those available in the normal course of business. Source downloaded (UTC): 2026-09-10T00:18:51.823Z to 2026-09-10T00:18:51.823Z Record version: sha256:5045bdf379628ab5ca8f00883e0cd5e16137ecc55e9ed67525c91f24f4a77e8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-942-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/405/942/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [405-942-55-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:51.823Z to 2026-09-10T00:18:51.823Z Record version: sha256:0fbdbeddd42a20e41f8ba298a9617abfe38fc24d57b5ef312ef44f13602658c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a credit union to be in compliance with the Codification, it must be unequivocal on the face of the statement of financial condition that savings accounts are a liability. ##### [405-942-55-2](https://asc.understandingaccounting.org/asc/405/942/#405-942-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:51.823Z to 2026-09-10T00:18:51.823Z Record version: sha256:2832ace07f2ae86d30a147aa9b9b4b5fd0071350ecdc830464cac90064aa94e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A credit union statement of financial condition shall either: 1. a Present savings accounts as the first item in the liabilities and equity section 2. b Include savings accounts within a captioned subtotal for total liabilities. #### Illustrations ##### [405-942-55-3](https://asc.understandingaccounting.org/asc/405/942/#405-942-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:51.823Z to 2026-09-10T00:18:51.823Z Record version: sha256:18d8bedb225a19726f49fad884ee36a113da21fa7943958d7806084d4fff15d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration in which it is unequivocal on the face of the statement of financial condition that savings accounts are a liability. - Sample Credit Union - Statements of Financial Condition - December 31, 19X2 and 19X1 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-CE3952D1-9416-499F-9162-573F003055AB-low.gif) 19X2 19X1 Assets "Loans to members, net of allowance for loan losses (Note 3)" " $44,800,000 " " $40,900,000 " Cash " 700,000 " " 800,000 " Investments (Notes 2 and 6) " 5,000,000 " " 7,000,000 " Accrued interest receivable " 100,000 " " 70,000 " Property and equipment (Note 4) " 1,050,000 " " 900,000 " "Central liquidity facility stock, at cost" " 250,000 " " 250,000 " Other assets " 50,000 " " 40,000 " Total assets " $51,950,000 " " $49,960,000 " Liabilities and Equity Savings accounts (Note 5) " $42,600,000 " " $42,460,000 " Borrowed funds (Note 6) " 5,000,000 " " 4,000,000 " Accrued and other liabilities " 800,000 " " 500,000 " Commitments and contingent liabilities (Note 9) - - Total liabilities " 48,400,000 " " 46,960,000 " "Retained earnings, substantially restricted (Note 7)" " 3,550,000 " " 3,000,000 " Total liabilities and equity " $51,950,000 " " $49,960,000 " - The accompanying notes are an integral part of these financial statements. \[For purposes of these illustrations, the notes to financial statements have not been included in this or the following Example.\] ##### [405-942-55-4](https://asc.understandingaccounting.org/asc/405/942/#405-942-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:18:51.823Z to 2026-09-10T00:18:51.823Z Record version: sha256:b76983f18980ca76c183bd5d8800e4dde0f050b0e0574fc6abcff3c7fd4ac93e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration in which it is unequivocal on the face of the statement of financial condition that savings accounts are a liability. - Sample Credit Union - Statements of Financial Condition - December 31, 19X2 and 19X1 - ![](https://asc.understandingaccounting.org/asc-img/GUID-42A27AE9-EE96-425A-AC63-1B9CDDA73B00-low.gif) 19X2 19X1 Assets "Loans to members, net of allowance for loan losses (Note 3)" " $44,800,000 " " $40,900,000 " Cash " 700,000 " " 800,000 " Investments (Notes 2 and 6) " 5,000,000 " " 7,000,000 " Accrued interest receivable " 100,000 " " 70,000 " Property and equipment (Note 4) " 1,050,000 " " 900,000 " "Central liquidity facility stock, at cost" " 250,000 " " 250,000 " Other assets " 50,000 " " 40,000 " Total assets " $51,950,000 " " $49,960,000 " Liabilities and Equity Borrowed funds (Note 6) " $5,000,000 " " $4,000,000 " Accrued and other liabilities " 800,000 " " 500,000 " Commitments and contingent liabilities (Note 9) - - Liabilities excluding savings accounts " 5,800,000 " " 4,500,000 " Savings accounts (Note 5) " 42,600,000 " " 42,460,000 " Total liabilities " 48,400,000 " " 46,960,000 " "Retained earnings, substantially restricted (Note 7)" " 3,550,000 " " 3,000,000 " Total liabilities and equity " $51,950,000 " " $49,960,000 " - The accompanying notes are an integral part of these financial statements.