{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/480/10/#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":"480","topic_title":"Distinguishing Liabilities from Equity","subtopic":"480-10","subtopic_title":"Overall","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":"Derivative Financial Instruments","paragraphs":[{"citation":"480-10-35-1","para":"35-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_64FEA8B2-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"><a href=\"/glossary/f/#financial-instrument\" class=\"term\" title=\"Cash, evidence of an ownership interest in an entity, or a contract that both: Imposes on one entity a contractual obligation either: To deliver cash or another financial instrument to a second entity To exchange other financial instruments on potentially unfavorable terms with the second entity. Conveys to that second entity a contractual right either: To receive cash or another financial instrument from the first entity To exchange other financial instruments on potentially favorable terms with the first entity. The use of the term financial instrument in this definition is recursive (because the term financial instrument is included in it), though it is not circular. The definition requires a chain of contractual obligations that ends with the delivery of cash or an ownership interest in an entity. Any number of obligations to deliver financial instruments can be links in a chain that qualifies a particular contract as a financial instrument. Contractual rights and contractual obligations encompass both those that are conditioned on the occurrence of a specified event and those that are not. All contractual rights (contractual obligations) that are financial instruments meet the definition of asset (liability) set forth in FASB Concepts Statement No. 6, Elements of Financial Statements, although some may not be recognized as assets (liabilities) in financial statements—that is, they may be off-balance-sheet—because they fail to meet some other criterion for recognition. For some financial instruments, the right is held by or the obligation is due from (or the obligation is owed to or by) a group of entities rather than a single entity. (P) December 16, 2024; (N) December 16, 2025105-10-65-9Cash, evidence of an ownership interest in an entity, or a contract that both: Imposes on one entity a contractual obligation either: To deliver cash or another financial instrument to a second entity To exchange other financial instruments on potentially unfavorable terms with the second entity. Conveys to that second entity a contractual right either: To receive cash or another financial instrument from the first entity To exchange other financial instruments on potentially favorable terms with the first entity. The use of the term financial instrument in this definition is recursive (because the term financial instrument is included in it), though it is not circular. The definition requires a chain of contractual obligations that ends with the delivery of cash or an ownership interest in an entity. Any number of obligations to deliver financial instruments can be links in a chain that qualifies a particular contract as a financial instrument. Contractual rights and contractual obligations encompass both those that are conditioned on the occurrence of a specified event and those that are not. Some contractual rights (contractual obligations) that are financial instruments may not be recognized in financial statements—that is, they may be off-balance-sheet—because they fail to meet some other criterion for recognition. For some financial instruments, the right is held by or the obligation is due from (or the obligation is owed to or by) a group of entities rather than a single entity.\"><span>Financial instruments</span></a> within the scope of Topic <a altsource=\"GUID-128369CC-8E3A-4A7E-8F25-33E42B0761E4.ditamap\" class=\"ditamap\">815</a> shall be measured subsequently as required by the provisions of that Topic. </span></span></div></div>","snippet":"Financial instruments within the scope of Topic 815 shall be measured subsequently as required by the provisions of that Topic.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cf6274236eb984619ea63f3fa2bc1ec50f495aaa2ca53ba3909616702f7847f9","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}},{"citation":"480-10-35-2","para":"35-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><a href=\"/updates/page-1833002/\" class=\"xref\">Paragraph not used</a>.</div></div>","snippet":"Paragraph not used.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f0cfb67a9dfbb3027a486ad7a0d034f9321b58d7962031f68f8499804852294","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9963d448d2d2d7cea3433c680473b624b24f4ee3deab1b493b7c2638a670178c","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}},{"block":null,"heading":"Certain Physically Settled Forward Purchase Contracts and Mandatorily Redeemable Financial Instruments","paragraphs":[{"citation":"480-10-35-3","para":"35-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_64FEA9DF-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Forward contracts that require <a href=\"/glossary/p/#physical-settlement\" class=\"term\" title=\"A form of settling a financial instrument under which both of the following conditions are met: The party designated in the contract as the buyer delivers the full stated amount of cash or other financial instruments to the seller. The seller delivers the full stated number of shares of stock or other financial instruments or nonfinancial instruments to the buyer.\"><span>physical settlement</span></a> by repurchase of a fixed number of the <a href=\"/glossary/i/#issuer-s-equity-shares\" class=\"term\" title=\"The equity shares of any entity whose financial statements are included in the consolidated financial statements.\"><span>issuer's equity shares</span></a> in exchange for cash and <a href=\"/glossary/m/#mandatorily-redeemable-financial-instrument\" class=\"term\" title=\"Any of various financial instruments issued in the form of shares that embody an unconditional obligation requiring the issuer to redeem the instrument by transferring its assets at a specified or determinable date (or dates) or upon an event that is certain to occur.\"><span>mandatorily redeemable financial instruments</span></a> shall be measured subsequently in either of the following ways: </span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_64FEAB1E-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If both the amount to be paid and the settlement date are fixed, those instruments shall be measured subsequently at the present value of the amount to be paid at settlement, accruing interest cost using the rate implicit at inception. </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_64FEAC26-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If either the amount to be paid or the settlement date varies based on specified conditions, those instruments shall be measured subsequently at the amount of cash that would be paid under the conditions specified in the contract if settlement occurred at the reporting date, recognizing the resulting change in that amount from the previous reporting date as interest cost. </span></span></div></li></ol></div></div>","snippet":"Forward contracts that require physical settlement by repurchase of a fixed number of the issuer's equity shares in exchange for cash and mandatorily redeemable financial instruments shall be measured subsequently in eit…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:964f7fae2e7cfc14f6330b93d9ade4ef6cb346f04c31e85224034c12146b8a7d","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}},{"citation":"480-10-35-4","para":"35-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_64FEAD0F-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Cash (as that term is used in the preceding paragraph) includes foreign currency, so physically settled forward purchase contracts in exchange for foreign currency shall be measured as provided in the preceding paragraph then remeasured under Topic <a altsource=\"GUID-ED6493FA-FACA-49EA-BFF9-D8F2E43F43C5.ditamap\" class=\"ditamap\">830</a>. </span></span></div></div>","snippet":"Cash (as that term is used in the preceding paragraph) includes foreign currency, so physically settled forward purchase contracts in exchange for foreign currency shall be measured as provided in the preceding paragraph…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3cdca14a79d75d5858434dab9ede08617e53745e333a611df342426d45c98c85","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:280e47062ac091cc9fd2246cdb32c4885852417941840fade45aaa90aea3725e","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}},{"block":null,"heading":"Contingent Consideration in a Business Combination","paragraphs":[{"citation":"480-10-35-4A","para":"35-4A","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_64FEAE60-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Contingent consideration issued in a business combination that is classified as a liability in accordance with the requirements of this Topic shall be subsequently measured at fair value in accordance with <a href=\"/asc/805/30/#805-30-35-1\" class=\"xref\">805-30-35-1</a>. </span></span></div></div>","snippet":"Contingent consideration issued in a business combination that is classified as a liability in accordance with the requirements of this Topic shall be subsequently measured at fair value in accordance with 805-30-35-1.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d8bf82789371dd38c9a769b82a54654e3100fb188e84591358843297517d4215","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:af9d40b8b9559b7ce2e1f78b518235b27608b29a2f8775eef20512500b2901b7","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}},{"block":null,"heading":"All Other Financial Instruments","paragraphs":[{"citation":"480-10-35-5","para":"35-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_64FEAFBC-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">All other financial instruments recognized under the guidance in Section <a altsource=\"GUID-2DEB7D6D-D0BB-4449-A4E7-B11E67B5CAC9.ditamap\" class=\"ditamap\">480-10-25</a> shall be measured subsequently at <a href=\"/glossary/f/#fair-value\" class=\"term\" title=\"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.\"><span>fair value</span></a> with changes in fair value recognized in earnings, unless either this Subtopic or another Subtopic specifies another measurement attribute. </span></span></div></div>","snippet":"All other financial instruments recognized under the guidance in Section 480-10-25 shall be measured subsequently at fair value with changes in fair value recognized in earnings, unless either this Subtopic or another Su…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:db4b34ab80918949850b557f3993d9c9a65569b66beb19451302b7e62075d3fb","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481706","source_sha256":"602eed5834f3c6674b37b5acea9069e4c1eceb4909bb13a14e6f2483a61c941d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cf0eb69f36d6447f2ce0102d819df34c72909573c507a8e8d5b923c1970d3e0e","downloaded_from":"2026-09-10T00:35:44.796Z","last_downloaded_at":"2026-09-10T00:35:44.796Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not 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