# ASC 470-30-35: Debt — Participating Mortgage Loans — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/470/30/#35-subsequent-measurement) 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): 2026-09-10T00:32:12.876Z to 2026-09-10T00:32:12.876Z Record version: sha256:514377c2f7127340d3a4d5a43c59fb4a264d134bdc7d6fc2c7302f37db747d8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/470/30/#35-subsequent-measurement) SEC content: no ##### [470-30-35-1](https://asc.understandingaccounting.org/asc/470/30/#470-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:12.876Z to 2026-09-10T00:32:12.876Z Record version: sha256:0117dbfda6423977fcf57dcc2306d1a64b4cc9bb71757e75b563cc9078fff522 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The debt discount shall be amortized by the interest method, using the effective interest rate. ##### [470-30-35-2](https://asc.understandingaccounting.org/asc/470/30/#470-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:12.876Z to 2026-09-10T00:32:12.876Z Record version: sha256:ff2aa5e29a4b76bb14632113d8131a0fc0fa7304e23d4c809c060695bdaa51d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") appreciation of the mortgaged real estate project. ##### [470-30-35-3](https://asc.understandingaccounting.org/asc/470/30/#470-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:12.876Z to 2026-09-10T00:32:12.876Z Record version: sha256:41af7f73a787d611a5d5a94ab58a30ba80151b1d4c4296976be58deb45739b5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [470-30-35-4](https://asc.understandingaccounting.org/asc/470/30/#470-30-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:12.876Z to 2026-09-10T00:32:12.876Z Record version: sha256:c264ec8382159bb498c4c173177659ea17e34c317d067bf5b34fe7bd16865d74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/updates/asu-2015-10/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2015-10](https://asc.understandingaccounting.org/updates/asu-2015-10/). ##### [470-30-35-4A](https://asc.understandingaccounting.org/asc/470/30/#470-30-35-4A) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:12.876Z to 2026-09-10T00:32:12.876Z Record version: sha256:e18842d6af04d0a0cd8fd92b40e2167052182e48bb82cd81d3299c9272c9440c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [470-30-35-5](https://asc.understandingaccounting.org/asc/470/30/#470-30-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:12.876Z to 2026-09-10T00:32:12.876Z Record version: sha256:02a84b3578c1776b399c0ce1bd9e3e8188dc02e479539e01159ba4d2bfe7a388 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The revised debt discount shall be amortized prospectively, using the effective interest rate.