# ASC 610-20-05: Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/610/20/#05-overview-and-background) 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): 2026-09-10T00:54:52.644Z to 2026-09-10T00:54:52.644Z Record version: sha256:a4bf85661bc2aed40b4b3a251de9e835ec2203dc83c06f10723f2d860c223a02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 610-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/610/20/#05-overview-and-background) SEC content: no ##### [610-20-05-1](https://asc.understandingaccounting.org/asc/610/20/#610-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:54:52.644Z to 2026-09-10T00:54:52.644Z Record version: sha256:551bfdf1050b4106994363d94ba5b5c3e83f9aa7b26ea4709d3c65e8882020f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the recognition of gains and losses on transfers of nonfinancial assets and [in substance nonfinancial assets](https://asc.understandingaccounting.org/glossary/i/#in-substance-nonfinancial-asset "Paragraphs 610-20-15-5610-20-15-6610-20-15-7610-20-15-8 define an in substance nonfinancial asset.") to counterparties that are not [customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."). Although the guidance in this Subtopic applies to [contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with noncustomers, it refers to revenue recognition principles in Topic 606 on [revenue](https://asc.understandingaccounting.org/glossary/r/#revenue "Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.") from contracts with customers. ##### [610-20-05-2](https://asc.understandingaccounting.org/asc/610/20/#610-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:54:52.644Z to 2026-09-10T00:54:52.644Z Record version: sha256:a207604baddc615a0d8f18fdb2127593620c262a03d80ce04f13b1d376244fda Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The term _transfer_ in this Subtopic is used broadly and includes sales and situations in which a [parent](https://asc.understandingaccounting.org/glossary/p/#parent "An entity that has a controlling financial interest in one or more subsidiaries. (Also, an entity that is the primary beneficiary of a variable interest entity.)") transfers ownership interests (or [variable interests](https://asc.understandingaccounting.org/glossary/v/#variable-interests "The investments or other interests that will absorb portions of a variable interest entity's (VIE's) expected losses or receive portions of the entity's expected residual returns are called variable interests. Variable interests in a VIE are contractual, ownership, or other pecuniary interests in a VIE that change with changes in the fair value of the VIE's net assets exclusive of variable interests. Equity interests with or without voting rights are considered variable interests if the legal entity is a VIE and to the extent that the investment is at risk as described in paragraph 810-10-15-14. Paragraph 810-10-25-55 explains how to determine whether a variable interest in specified assets of a legal entity is a variable interest in the entity. Paragraphs 810-10-55-16810-10-55-17810-10-55-18810-10-55-19810-10-55-20810-10-55-21810-10-55-22810-10-55-23810-10-55-24810-10-55-25810-10-55-26810-10-55-27810-10-55-28810-10-55-29810-10-55-30810-10-55-31810-10-55-32810-10-55-33810-10-55-34810-10-55-35810-10-55-36810-10-55-37810-10-55-38810-10-55-39810-10-55-40810-10-55-41 describe various types of variable interests and explain in general how they may affect the determination of the primary beneficiary of a VIE.")) in a consolidated [subsidiary](https://asc.understandingaccounting.org/glossary/s/#subsidiary "An entity, including an unincorporated entity such as a partnership or trust, in which another entity, known as its parent, holds a controlling financial interest. (Also, a variable interest entity that is consolidated by a primary beneficiary.)") or other changes in facts and circumstances that result in the derecognition of nonfinancial assets or in substance nonfinancial assets that do not constitute a business. For example, an entity may lose control of nonfinancial assets or in substance nonfinancial assets because of the expiration or termination of an existing contractual arrangement, a dilution event, a government action, or upon default of a subsidiary's nonrecourse debt. An entity also may lose control of nonfinancial assets or in substance nonfinancial assets by contributing those assets to a [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities.") or other noncontrolled investee.