# ASC 470-954-40: Debt — Health Care Entities — 40 Derecognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/470/954/#40-derecognition)

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## ASC 470-954-40: 40 Derecognition

[Read section](https://asc.understandingaccounting.org/asc/470/954/#40-derecognition)

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##### [470-954-40-1](https://asc.understandingaccounting.org/asc/470/954/#470-954-40-1)

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In a crossover refunding, because the old bonds are not defeased until the crossover date, no immediate gain or loss shall be recognized. If the retirement dates of the old debt have been established, the call premium, unamortized premium or discount, and initial issue costs shall be recognized systematically in the income statement over the remaining life of the old debt as an adjustment of the cost of borrowing related to the old debt. In addition, the income earned on the funds used to consummate the [advance refunding](https://asc.understandingaccounting.org/glossary/a/#advance-refunding "A transaction involving the issuance of new debt to replace existing debt with the proceeds from the new debt placed in trust or otherwise restricted to retire the existing debt at a determinable future date or dates.") and the interest expense on both the old and new debts shall be recognized in the income statement. The funds used to consummate the advance refunding shall be reported as an asset and both the old and new debts shall be reported as liabilities. The assets and liabilities shall not be offset.