ASC 605-946

Financial Services—Investment Companies

605 Revenue Recognition

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Source downloaded: 2026-09-10T00:50:00.714Z.Record version a768e40b2b75. Effective date must be checked in the source.

In brief

IntermediateRevenue Industry-specific Transition and effective dates Recognition

ASC 605-946 was the legacy revenue recognition guidance for investment company activities (notably investment advisers' incentive/performance-based fee arrangements) under the superseded Topic 605 model. Every paragraph in Sections 05, 15, 25, and 50 was superseded by ASU 2014-09 (Revenue from Contracts with Customers). The subtopic now contains no operative guidance; revenue from such contracts is accounted for under ASC 606 (with related costs under ASC 340-40).

Key points (5)

All paragraphs of this subtopic (605-946-05-1 through 05-11, 15-1 through 15-2, 25-1 through 25-8, and 50-1) were superseded by Accounting Standards Update No. 2014-09.
Because the subtopic is fully superseded, it provides no recognition, scope, or disclosure requirements that an entity may currently apply.
Investment advisers and investment companies that previously looked to 605-946 for incentive-based or performance-based fee revenue now apply the five-step model in ASC 606, including the constraint on variable consideration in 606-10-32-11 through 32-13.
ASC 606-10-55-65 (the sales- or usage-based royalty exception) and the variable consideration constraint drive when performance/incentive fees may be recognized, replacing the legacy 'Method 1/Method 2' approaches formerly discussed here.
Superseded guidance may remain relevant only for understanding comparative periods presented before adoption of ASU 2014-09 under the transition provisions in 606-10-65-1.

For students. The only thing to know here is that this subtopic is entirely dead letter — citing it as live GAAP is the classic mistake; incentive and performance fees earned by investment advisers are now measured under ASC 606's variable consideration constraint.

superseded guidance incentive-based management fees performance fees investment company revenue variable consideration constraint investment adviser

Machine-generated study aid for ASC 605-946. Check the source paragraphs below.

605-946-00Status

Source downloaded: 2026-09-10T00:49:48.732Z.Record version 11e8b651ce18. Effective date must be checked in the source.

605-946-00-1

The following table identifies the changes made to this Subtopic.

Paragraph	Action	Accounting Standards Update	Date

12b-1	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
B Shares	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
Closed-End Funds	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
Contingent-Deferred Sales Load	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
Distributor	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
Front-End Load	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
Front-End Load	Added	Accounting Standards Update No. 2014-06	03/14/2014
Front-End Sales Fee	Superseded	Accounting Standards Update No. 2014-06	03/14/2014
Offering Costs	Superseded	Accounting Standards Update No. 2014-09	05/28/2014

946-605-05-1 through 05-11	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
946-605-15-1	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
946-605-15-2	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
946-605-25-1 through 25-8	Superseded	Accounting Standards Update No. 2014-09	05/28/2014
946-605-25-8	Amended	Accounting Standards Update No. 2014-06	03/14/2014
946-605-50-1	Superseded	Accounting Standards Update No. 2014-09	05/28/2014