# ASC 610-20-55: Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/610/20/#55-implementation-guidance-and-illustrations) 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): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:dde8d022737bd08e97429b880de050cabdc5c3ea2f6bc20db0d475f48ed61b0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 610-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/610/20/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [610-20-55-1](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:7169dea24d04a72284eeba3f37450f102fcd04dd8d7397c9fb99d813ea450d5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Examples illustrate the guidance in this Subtopic. ##### [610-20-55-2](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:125e2e444632727df724ce157c25ddf50f8ab5e63db9513708161e76410685dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Seller enters into a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") to transfer real estate, the related operating leases, and accounts receivable to Buyer. Seller guarantees Buyer that the cash flows of the property will be sufficient to meet all of the operating needs of the property for two years after the sale. In the event that the cash flows are not sufficient, Seller is required to make a payment in the amount of the shortfall. ##### [610-20-55-3](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:10a1b9f43398184ee4f8c6d15a324ab0c037908d5d450b27557f58d83d8be279 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Seller concludes that the assets promised in the contract are not a [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") within the scope of Topic 810 on consolidation and are not an output of Seller's ordinary activities within the scope of 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."). In addition, assume that Seller concludes that substantially all of the fair value of the assets promised in the contract is concentrated in nonfinancial assets (that is, substantially all of the fair value is concentrated in the real estate and in-place lease intangible assets). Therefore, the accounts receivable promised in the contract are [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."). In accordance with the guidance in this Subtopic, all of the assets in the contract, including the accounts receivable, are within the scope of this Subtopic. ##### [610-20-55-4](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:f0a32b025fb2177482c65a2de3274a8fbcd104eb39a38641a79c0fb589b038cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Seller concludes that the guarantee, which is a liability of Seller, is within the scope of Topic 460 on guarantees. Therefore, Seller would apply the guidance in paragraph [606-10-15-4](https://asc.understandingaccounting.org/asc/606/10/#606-10-15-4) to separate and measure the guarantee as described in paragraph [610-20-15-9](https://asc.understandingaccounting.org/asc/610/20/#610-20-15-9). ##### [610-20-55-5](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:05dfc56201da426c2bb1016fb3ca26ec3b1a9cc44854e3f8a37f3ac9cf8cfef7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Seller's conclusions would be the same if it transferred the real estate, leases, and receivables 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.)"). That is, Seller would still conclude that all of the assets in the subsidiary are nonfinancial assets and in substance nonfinancial assets within the scope of this Subtopic and that the guarantee is within the scope of Topic 460. ##### [610-20-55-6](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:1abaa196512f853d40a31f3eaa2c8863bd6d9cbc7ac67c9900bc189cccf046b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity X enters into a contract to transfer machinery and financial assets, both of which have significant fair value. Entity X concludes that the assets promised in the contract are not a business within the scope of Topic 810 and are not an output of the entity's ordinary activities within the scope of Topic 606. Entity X also concludes that substantially all of the fair value of the assets promised in the contract is not concentrated in nonfinancial assets. Therefore, the financial assets promised in the contract are not in substance nonfinancial assets. ##### [610-20-55-7](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:89ef66d996037c873be02bfb204fd261ae0ace6223aa031966c916e94b9ba2ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accordance with the guidance in paragraph [610-20-15-9](https://asc.understandingaccounting.org/asc/610/20/#610-20-15-9), Entity X should derecognize only the machinery in accordance with this Subtopic. Entity X should apply the guidance in paragraph [606-10-15-4](https://asc.understandingaccounting.org/asc/606/10/#606-10-15-4) to separate and measure the financial assets. ##### [610-20-55-8](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:de62aebf5477b63b7182fc14b1aa25eb3b5975b80ad02cefe1661a7b0029198d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If Entity X transfers the machinery and financial assets by transferring ownership interests in a consolidated subsidiary, it would still conclude that the financial assets are not in substance nonfinancial assets. As described in paragraph [610-20-15-8](https://asc.understandingaccounting.org/asc/610/20/#610-20-15-8), if all of the assets promised to the counterparty in an individual 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.)") within a contract are not nonfinancial assets and/or in substance nonfinancial assets, those assets should not be derecognized in accordance with this Subtopic. Instead, Entity X should apply the guidance in paragraph [810-10-40-3A(c)](https://asc.understandingaccounting.org/asc/810/10/#810-10-40-3A) or [810-10-45-21A(b)(2)](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-21A) to determine the guidance applicable to that subsidiary. ##### [610-20-55-9](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:47a53545465d814565f508ab62c9afdb89de8488058c1ea64d20716ac5e539a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A enters into a contract to transfer ownership interests in two consolidated subsidiaries to a single counterparty. Subsidiary 1 consists entirely of nonfinancial assets, and Subsidiary 2 consists entirely of financial assets. Assume that the assets in Subsidiary 1 and Subsidiary 2 have an equal amount of fair value. Entity A concludes that the transaction is not the transfer of a business within the scope of Topic 810 and that the subsidiaries are not outputs of the entity's ordinary activities within the scope of Topic 606. ##### [610-20-55-10](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:8eb96e17db7144b1ec36a4837d0b681d3665abae052dfd5b8a7d874e18f6a456 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A first considers whether substantially all of the fair value of the assets promised to the counterparty in the contract is concentrated in nonfinancial assets. Because the contract includes the transfer of ownership interests in one or more consolidated subsidiaries, Entity A evaluates the underlying assets in those subsidiaries. Entity A concludes that because both the financial assets and nonfinancial assets have an equal amount of fair value, substantially all of the fair value of the assets promised to the counterparty in the contract is not concentrated in nonfinancial assets. Entity A next considers whether substantially all of the fair value of the assets within Subsidiary 1 or Subsidiary 2 is concentrated in nonfinancial assets. Because the assets transferred within Subsidiary 1 are entirely nonfinancial assets, Entity A concludes that those assets are within the scope of this Subtopic. Entity A also concludes that the financial assets in Subsidiary 2 are not in substance nonfinancial assets and, therefore, are not within the scope of this Subtopic. Entity A should apply the guidance in paragraph [606-10-15-4](https://asc.understandingaccounting.org/asc/606/10/#606-10-15-4) to separate and measure the financial assets in Subsidiary 2 from the nonfinancial assets in Subsidiary 1 that are derecognized within the scope of this Subtopic. ##### [610-20-55-11](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:a534acbb8bb46aed51d26686486360d81da8277177ccfde313ef9f2edca3fcbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A owns 100 percent of Entity B, a consolidated subsidiary. Entity B holds title to land with a carrying amount of $5 million. Entity A concludes that the land is not an output of its ordinary activities within the scope of Topic 606 and that Entity B does not meet the definition of a business within the scope of Topic 810. ##### [610-20-55-12](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:2d18aaea1fa594e05f5bf847d304c94ae61245974f0fe62225325d6b7c3a7fca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A enters into a contract to transfer 60 percent of Entity B to Entity X for $6 million cash due at contract inception. For ease of illustration, assume that at contract inception the fair value of the 40 percent interest retained by Entity A is $4 million. Because all of the assets (the land) promised to Entity X in the contract are nonfinancial assets, Entity A concludes that it should derecognize the land in accordance with this Subtopic. ##### [610-20-55-13](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:3436411bed4244188a68e8dd74f37726d3c7ce8dad46e6be5c14b776c5b2ec02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As described in paragraphs [610-20-25-2 through 25-7](https://asc.understandingaccounting.org/asc/610/20/#610-20-25-2) , Entity A first considers the guidance in Topic 810 and concludes that it no longer has a controlling financial interest in Entity B or in Entity X (the buyer). Entity A then determines that the contract meets the criteria in paragraph [606-10-25-1](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-1) and that control of the land has been transferred in accordance with the guidance in paragraph [606-10-25-30](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-30). Because Entity A continues to have a noncontrolling interest in Entity B, it evaluates the point in time at which Entity B, its former subsidiary, has control of the distinct nonfinancial asset as described in paragraph [610-20-25-7](https://asc.understandingaccounting.org/asc/610/20/#610-20-25-7). Entity A concludes that it has transferred control of the distinct nonfinancial asset because Entity B controls the distinct nonfinancial asset. When evaluating the indicators of control in paragraph [606-10-25-30](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-30), Entity A concludes the following: 1. a It has the present right to payment. 2. b Entity B has legal title to the land. 3. c It does not have physical possession of the asset because it cannot restrict or prevent other entities from accessing the land. 4. d Entity B has the significant risks and rewards of ownership. 5. e There is no acceptance clause (assumption). ##### [610-20-55-14](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:9dada8b2e4404ee314252e03b5ce8eff2282c3108a5d9d0e7e74dc360f54922d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A derecognizes the land and calculates the gain or loss as the difference between the amount of consideration measured in accordance with the guidance in paragraphs [610-20-32-2](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-2) and [610-20-32-6](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-6) and the carrying amount of the land. The amount of the consideration is $10 million, which includes $6 million in cash plus $4 million for the fair value of the noncontrolling interest in Entity B. Entity A recognizes a gain of $5 million ($10 million consideration ‒ $5 million carrying amount of the assets) and presents the gain in the income statement in accordance with the guidance in paragraph [360-10-45-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-5). In accordance with the guidance in paragraph [610-20-32-4](https://asc.understandingaccounting.org/asc/610/20/#610-20-32-4), Entity A records the noncontrolling interest in Entity B at $4 million and subsequently accounts for that interest in accordance with other Topics. ##### [610-20-55-15](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:cc21a1188bac38c025287f7c7d6d0e489ee5f3079b1fe0dd36472c7dc30335fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume the same facts as in Case A, except that Entity A has the right but not the obligation to repurchase the 60 percent ownership interest in Entity B that it transferred to Entity X (that is, Entity A has a call option). The call option gives Entity A the right to repurchase the 60 percent ownership interest in 2 years for $7 million. ##### [610-20-55-16](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:8a15e6d0a00aad4942d24eba027343ed7a123d2e8adcd403970a4c8ed560e13c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A concludes that although the call option represents a [variable interest](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 Entity B, it does not have a controlling financial interest in Entity B in accordance with the guidance in Topic 810. However, when evaluating whether control of the land has been transferred in accordance with the guidance in paragraph [606-10-25-30](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-30), Entity A considers the guidance on repurchase features in paragraphs [606-10-25-30(c)](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-30) and [606-10-55-68](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-68) and concludes that it does not transfer control of the land. In addition, because the exercise price on the call option is an amount that is greater than the original selling price, the transaction is considered a financing agreement in accordance with the guidance in paragraph [606-10-55-68(b)](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-68). Entity A does not derecognize the land and records a financial liability of $6 million in accordance with the guidance in paragraph [606-10-55-70](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-70). Entity A does not recognize an investment for its retained 40 percent ownership interest until it derecognizes the land. ##### [610-20-55-17](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:8f930314d7d80e2548d996e01d646f8497d33f3472a3f4cc0968f281dd5c9edf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity sells (that is, does not out license) the rights to in-process research and development that it recently acquired in a business combination and measured at fair value of $50 million in accordance with Topic 805 on business combinations. The entity concludes that the transferred in-process research and development is not a business. The buyer of the in-process research and development agrees to pay a nonrefundable amount of $5 million at inception plus 2 percent of sales of any products derived from the in-process research and development over the next 20 years. The entity concludes that the sale of in-process research and development is not a good or service that is an output of the entity's ordinary activities. ##### [610-20-55-18](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:ff9b8602c5b95c6a30ee58e1e913cf7e6509766665e2daa910bf3e71cef39b2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Topic 350 on goodwill and other intangibles requires the entity to apply the guidance in this Subtopic to determine the amount and timing of income to be recognized. Therefore, the entity applies the derecognition guidance in this Subtopic as follows: 1. a The entity concludes that it does not have a controlling financial interest in the buyer. 2. b The entity concludes that the contract meets the criteria in paragraph [606-10-25-1](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-1). 3. c The entity also concludes that on the basis of the guidance in paragraph [606-10-25-30](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-30), it has transferred control of the in-process research and development asset to the buyer. This is because the buyer can use the in-process research and development's records, patents, and supporting documentation to develop potential products and the entity has relinquished all substantive rights to the in-process research and development asset. 4. d In estimating the consideration received, the entity applies the guidance in Topic 606 on determining 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."), including estimating and constraining variable consideration. The entity estimates that the amount of consideration that it will receive from the sales-based royalty is $100 million over the 20-year royalty period. However, the entity cannot assert that it is probable that recognizing all of the estimated variable consideration in other income would not result in a significant reversal of that consideration. The entity reaches this conclusion on the basis of its assessment of factors in paragraph [606-10-32-12](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-12). In particular, the entity is aware that the variable consideration is highly susceptible to the actions and judgments of third parties, because it is based on the buyer completing the in-process research and development asset, obtaining regulatory approval for the output of the in-process research and development asset, and marketing and selling the output. For the same reasons, the entity also concludes that it could not include any amount, even a minimum amount, in the estimate of the consideration. Consequently, the entity concludes that the estimate of the consideration to be used in the calculation of the gain or loss upon the derecognition of the in-process research and development asset is limited to the $5 million fixed upfront payment. ##### [610-20-55-19](https://asc.understandingaccounting.org/asc/610/20/#610-20-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:55:14.020Z to 2026-09-10T00:55:14.020Z Record version: sha256:908659d0211af12960081c92c5674c394e77d27e7e234b295882071a8f503fef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At inception of the contract, the entity recognizes a net loss of $45 million ($5 million of consideration, less the in-process research and development asset of $50 million). The entity reassesses the transaction price at each reporting period to determine whether it is probable that a significant reversal would not occur from recognizing the estimate as other income and, if so, recognizes that amount as other income in accordance with paragraphs [606-10-32-14](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-14) and [606-10-32-42 through 32-45](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-42) .