{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/470/30/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"470","topic_title":"Debt","subtopic":"470-30","subtopic_title":"Participating Mortgage Loans","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"470-30-35-1","para":"35-1","html":"
The debt discount shall be amortized by the interest method, using the effective interest rate.
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Interest expense on participating mortgage loans consists of the following three components:
  1. a
    Amounts designated in the mortgage agreement as interest
  2. b
    Amounts related to the lender's participation in results of operations
  3. c
    Amortization of debt discount related to the lender's participation in the fair value appreciation of the mortgaged real estate project.
","snippet":"Interest expense on participating mortgage loans consists of the following three components:\n(a) Amounts designated in the mortgage agreement as interest\n(b) Amounts related to the lender's participation in results of op…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ff2aa5e29a4b76bb14632113d8131a0fc0fa7304e23d4c809c060695bdaa51d2","downloaded_from":"2026-09-10T00:32:12.876Z","last_downloaded_at":"2026-09-10T00:32:12.876Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481298","source_sha256":"df41dcbab8a5fb82e676a7639307d1a7e766f03ab71aa448f789d39025d73acf"}},{"citation":"470-30-35-3","para":"35-3","html":"
Amounts designated in the mortgage agreement as interest shall be charged to income in the period in which the interest is incurred. If the loan's stated interest rate varies based on changes in an independent factor, such as an index or rate (for example, the prime rate, the London Interbank Offered Rate [LIBOR], or the U.S. Treasury bill weekly average rate), the calculation of the interest shall be based on the factor (the index or the rate) as it changes over the life of the loan. Interest recognized pursuant to this guidance is subject to the requirements of Subtopic 835-20. Once capitalized, amounts shall not be adjusted for the effects of reversals of appreciation.
","snippet":"Amounts designated in the mortgage agreement as interest shall be charged to income in the period in which the interest is incurred. If the loan's stated interest rate varies based on changes in an independent factor, su…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:41af7f73a787d611a5d5a94ab58a30ba80151b1d4c4296976be58deb45739b5b","downloaded_from":"2026-09-10T00:32:12.876Z","last_downloaded_at":"2026-09-10T00:32:12.876Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481298","source_sha256":"df41dcbab8a5fb82e676a7639307d1a7e766f03ab71aa448f789d39025d73acf"}},{"citation":"470-30-35-4","para":"35-4","html":"
Amounts due to a lender pursuant to the lender's participation in the real estate project's results of operations (as defined in the participating mortgage loan agreement) shall be charged to interest expense in the borrower's corresponding financial reporting period, with a corresponding credit to the participation liability.
  1. a
    Subparagraph superseded by Accounting Standards Update No. 2015-10.
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2015-10.
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If a lender is entitled to participate in the appreciation of the market value of a mortgaged real estate project, both of the following are required at the end of each reporting period:
  1. a
    The balance of the participation liability shall be adjusted to equal the current fair value of the participation feature.
  2. b
    The corresponding debit or credit shall be recorded in the related debt-discount account.
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The revised debt discount shall be amortized prospectively, using the effective interest rate.
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