# ASC 610-20-32: Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets — 32 Measurement

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/610/20/#32-measurement)

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## ASC 610-20-32: 32 Measurement

[Read section](https://asc.understandingaccounting.org/asc/610/20/#32-measurement)

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##### [610-20-32-1](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-1)

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[Paragraph superseded by Accounting Standards Update No. 2017-05](https://asc.understandingaccounting.org/updates/asu-2017-05/).

##### [610-20-32-2](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-2)

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When an entity meets the criteria to derecognize a distinct nonfinancial asset or a distinct [in substance nonfinancial asset](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."), it shall recognize a gain or loss for the difference between the amount of consideration measured and allocated to that distinct asset in accordance with paragraphs

[610-20-32-3 through 32-6](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-3)

and the carrying amount of the distinct asset. The amount of consideration promised in a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") that is included in the calculation of a gain or loss includes both the [transaction price](https://asc.understandingaccounting.org/glossary/t/#transaction-price "The amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.") and the carrying amount of liabilities assumed or relieved by a counterparty.

##### [610-20-32-3](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-3)

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To determine the transaction price, an entity shall apply the following paragraphs 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](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."):

1.  a
    
    Paragraphs
    
    [606-10-32-2 through 32-27](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-2)
    
    on determining the transaction price, including all of the following:
    
    1.  1
        
        Estimating variable consideration
        
    2.  2
        
        Constraining estimates of variable consideration
        
    3.  3
        
        The existence of a significant financing component
        
    4.  4
        
        Noncash consideration
        
    5.  5
        
        Consideration payable to a customer.
        
2.  b
    
    Paragraphs
    
    [606-10-32-42 through 32-45](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-42)
    
    on accounting for changes in the transaction price.

##### [610-20-32-4](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-4)

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If an entity transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial asset in exchange for a [noncontrolling interest](https://asc.understandingaccounting.org/glossary/n/#noncontrolling-interest "The portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. A noncontrolling interest is sometimes called a minority interest."), the entity shall consider the noncontrolling interest received from the counterparty as noncash consideration and shall measure it in accordance with the guidance in paragraphs

[606-10-32-21 through 32-24](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-21)

. Similarly, if 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 control of a distinct nonfinancial asset or in substance nonfinancial asset by transferring ownership interests 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.)") but retains a noncontrolling interest in its former subsidiary, the entity shall consider the noncontrolling interest retained as noncash consideration and shall measure it in accordance with the guidance in paragraphs

[606-10-32-21 through 32-24](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-21)

. (See Case A of Example 2 in paragraphs

[610-20-55-11 through 55-14](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-11)

.)

##### [610-20-32-5](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-5)

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If a counterparty promises to assume or relieve a liability of an entity in exchange for a transfer of nonfinancial assets or in substance nonfinancial assets within the scope of this Subtopic, the transferring entity shall include the carrying amount of the liability in the consideration used to calculate the gain or loss. Although a liability assumed or relieved by a counterparty shall be included in the consideration used to calculate a gain or loss, an entity shall not derecognize the liability until it has been extinguished in accordance with the guidance in paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1) (see paragraph [610-20-45-3](https://asc.understandingaccounting.org/asc/610/20/#610-20-45-3) on how to present the liability if it is extinguished before or after the entity transfers control of the nonfinancial assets or in substance nonfinancial assets). If an entity transfers control of the nonfinancial assets or in substance nonfinancial assets before a liability is extinguished, it shall apply the guidance on constraining estimates of variable consideration in paragraph [606-10-32-11](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-11) to determine the carrying amount of the liability to be included in the gain or loss calculation.

##### [610-20-32-6](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-6)

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An entity shall allocate the consideration calculated in accordance with the guidance in paragraphs

[610-20-32-2 through 32-5](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-2)

to each distinct nonfinancial asset or in substance nonfinancial asset by applying the guidance in paragraphs

[606-10-32-28 through 32-41](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-28)

.