ASC

ASC 605-40

Gains and Losses

605 Revenue Recognition

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In brief

IntroductoryRevenueTransition and effective datesDerecognitionRecognition

ASC 605-40 formerly addressed gains and losses arising from involuntary conversions of nonmonetary assets (such as property destroyed by fire or taken by condemnation) into monetary assets like insurance or condemnation proceeds. Every paragraph in the subtopic — scope, recognition, measurement, presentation, and relationships — was superseded by ASU 2014-09 (the revenue recognition standard), so the subtopic contains no remaining authoritative guidance. Entities now look to ASC 610-30 for gains and losses on involuntary conversions and to ASC 606 for revenue from contracts with customers.

Key points (5)
  • Every paragraph of ASC 605-40 (Sections 05, 15, 25, 30, 45, and 60) was superseded by Accounting Standards Update No. 2014-09, leaving no operative guidance in the subtopic.
  • Because 605-40-15-1 and 15-2 are superseded, the subtopic no longer establishes any scope over transactions, and it cannot be cited as authoritative support.
  • The superseded recognition paragraphs (605-40-25-1 through 25-4) and measurement paragraph (605-40-30-1) formerly governed gains or losses from involuntary conversions of nonmonetary assets to monetary assets.
  • Guidance formerly in this subtopic on involuntary conversions now resides in ASC 610-30, Other Income — Gains and Losses on Involuntary Conversions.
  • Revenue from contracts with customers, which displaced legacy Topic 605, is accounted for under ASC 606, with related costs in ASC 340-40.

For students. This subtopic is a placeholder shell: it matters only for understanding what ASU 2014-09 replaced, and citing it as live GAAP would be an error. The common misunderstanding is assuming involuntary-conversion gains are now inside ASC 606 — they are not revenue from customers and instead fall under ASC 610-30.

superseded guidanceinvoluntary conversionnonmonetary assetmonetary assetgains and losseslegacy revenue recognition

Machine-generated study aid for ASC 605-40. Check the source paragraphs below.

605-40-00Status

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605-40-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
605-40-05-1 through 05-3
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-40-15-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-40-15-2 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-40-25-1 through 25-4
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-40-30-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-40-45-1 Amended Maintenance Update 2017-19 (PDF) 11/15/2017
605-40-45-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-40-60-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014

605-40-05Overview and Background

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605-40-15Scope and Scope Exceptions

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605-40-25Recognition

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605-40-30Initial Measurement

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605-40-45Other Presentation Matters

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605-40-60Relationships

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605-40-S00StatusSEC

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605-40-S00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
605-40-S25-1SupersededAccounting Standards Update No. 2012-0308/27/2012
605-40-S25-4SupersededAccounting Standards Update No. 2012-0308/27/2012
605-40-S45-1SupersededAccounting Standards Update No. 2012-0308/27/2012
605-40-S50-1SupersededAccounting Standards Update No. 2012-0308/27/2012
605-40-S99-1SupersededAccounting Standards Update No. 2010-2208/19/2010

605-40-S25RecognitionSEC

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Gains and Losses from the Disposition of Equipment

605-40-S25-2
See paragraph 360-10-S99-1, SAB Topic 5.B, for SEC Staff views on the recognition of gains and losses from the disposition of equipment.

Accounting for the Divestiture of a Subsidiary or Other Business Operation

605-40-S25-3
See paragraph 810-10-S99-5, SAB Topic 5.E, for SEC Staff views on gain recognition upon the divestiture of a subsidiary or other business operation.

605-40-S45Other Presentation MattersSEC

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605-40-S50DisclosureSEC

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605-40-S99SEC MaterialsSEC

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Related subtopics