# ASC 470-10-25: Debt — Overall — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/470/10/#25-recognition) 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): 2026-09-10T00:30:25.339Z to 2026-09-10T00:30:25.339Z Record version: sha256:becd8ab8c570815a9c22105ada44ec7cdc0a9345c06e8b488e36e5ecbb5a3a69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/470/10/#25-recognition) SEC content: no #### Sales of Future Revenues or Various Other Measures of Income ##### [470-10-25-1](https://asc.understandingaccounting.org/asc/470/10/#470-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:25.339Z to 2026-09-10T00:30:25.339Z Record version: sha256:6bb304c7240285054e6869f47e9e9aea0f5631c96b1fc9843ed84a6379b1c7c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity receives cash from an investor and agrees to pay to the investor for a defined period a specified percentage or amount of the revenue or of a measure of income (for example, gross margin, operating income, or pretax income) of a particular product line, business segment, trademark, patent, or contractual right. It is assumed that immediate income recognition is not appropriate due to the facts and circumstances. The payment to the investor and the future revenue or income on which the payment is based may be denominated in a foreign currency. ##### [470-10-25-2](https://asc.understandingaccounting.org/asc/470/10/#470-10-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:25.339Z to 2026-09-10T00:30:25.339Z Record version: sha256:fbb2aff9579f0a03f75145f4cb23f5964677fd63251e5f03de856b088b1d0f09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. While the classification of the proceeds from the investor as debt or deferred income depends on the specific facts and circumstances of the transaction, the presence of any one of the following factors independently creates a rebuttable presumption that classification of the proceeds as debt is appropriate: 1. a The transaction does not purport to be a sale (that is, the form of the transaction is debt). 2. b The entity has significant continuing involvement in the generation of the cash flows due the investor (for example, active involvement in the generation of the operating revenues of a product line, subsidiary, or business segment). 3. c The transaction is cancelable by either the entity or the investor through payment of a lump sum or other transfer of assets by the entity. 4. d The investor's rate of return is implicitly or explicitly limited by the terms of the transaction. 5. e Variations in the entity's revenue or income underlying the transaction have only a trifling impact on the investor's rate of return. 6. f The investor has any recourse to the entity relating to the payments due the investor. #### Indexed Debt ##### [470-10-25-3](https://asc.understandingaccounting.org/asc/470/10/#470-10-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:25.339Z to 2026-09-10T00:30:25.339Z Record version: sha256:2d97ff207486f01eb13d06921d12ec2bf95bd6d157fdf44379236d7a35762101 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Debt instruments may be issued with both guaranteed and contingent payments. The contingent payments may be linked to the price of a specific commodity (for example, oil) or a specific index (for example, the S&P 500). In some instances, the investor's right to receive the contingent payment (an indexing feature) is separable from the debt instrument. If the indexing feature does not warrant separate accounting under Topic 815 or the instrument does not meet the definition of a derivative under Topic 815, the entire instrument shall be accounted for in accordance with paragraphs [470-10-25-4](https://asc.understandingaccounting.org/asc/470/10/#470-10-25-4) and [470-10-35-4](https://asc.understandingaccounting.org/asc/470/10/#470-10-35-4). ##### [470-10-25-4](https://asc.understandingaccounting.org/asc/470/10/#470-10-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:30:25.339Z to 2026-09-10T00:30:25.339Z Record version: sha256:90f727c316b98101e7083165f835422d7ba1356236eeeab74c1cca85aa90fa31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the investor's right to receive the contingent payment is separable, the proceeds shall be allocated between the debt instrument and the investor's stated right to receive the contingent payment. The premium or discount on the debt resulting from the allocation shall be accounted for in accordance with Subtopic 835-30.