{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/610/30/","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","number":"610-30","topic":"610","title":"Gains and Losses on Involuntary Conversions","area":"Revenue","paragraphs":13,"summary":"ASC 610-30 governs the accounting when a nonmonetary asset (property, equipment, inventory) is involuntarily converted into monetary assets — e.g., insurance proceeds from destruction or theft, or condemnation awards in eminent domain. Because the conversion is a monetary transaction rather than a nonmonetary exchange, any difference between the asset's cost (or carrying amount) and the monetary assets received is a realized gain or loss that must be recognized, even if the proceeds are reinvested or the entity is obligated to reinvest them in replacement assets (610-30-25-2; 610-30-25-3).","concepts":["involuntary conversion","nonmonetary asset","monetary asset","insurance proceeds","condemnation / eminent domain","gain or loss recognition","lifo inventory replacement","reinvestment in replacement assets"],"categories":["Recognition","Derecognition","Presentation","Inventory and PP&E"],"level":"intermediate","topic_title":"Other Income","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"610-30-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
610-30-05-1 through 05-3
 Added Accounting Standards Update No. 2014-09 05/28/2014
610-30-15-1 Added Accounting Standards Update No. 2014-09 05/28/2014
610-30-15-2 Added Accounting Standards Update No. 2014-09 05/28/2014
610-30-25-1 through 25-4
 Added Accounting Standards Update No. 2014-09 05/28/2014
610-30-30-1 Added Accounting Standards Update No. 2014-09 05/28/2014
610-30-45-1 Amended Maintenance Update 2017-19 (PDF) 11/15/2017
610-30-45-1 Added Accounting Standards Update No. 2014-09 05/28/2014
610-30-60-1 Added Accounting Standards Update No. 2014-09 05/28/2014
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This Subtopic clarifies the accounting for involuntary conversions of nonmonetary assets (such as property or equipment) to monetary assets (such as insurance proceeds). Examples of such conversions are total or partial destruction or theft of insured nonmonetary assets and the condemnation of property in eminent domain proceedings.
","snippet":"This Subtopic clarifies the accounting for involuntary conversions of nonmonetary assets (such as property or equipment) to monetary assets (such as insurance proceeds). Examples of such conversions are total or partial …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:83a8e0f289a95a7a2518aed089db97be8da8680142fcbc52a7211fab931da3a9","downloaded_from":"2026-09-10T00:55:19.665Z","last_downloaded_at":"2026-09-10T00:55:19.665Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479946","source_sha256":"8f22715a716283a07996258385d708876baab51c6aa37696ed012824cb9a2cf4"}},{"citation":"610-30-05-2","para":"05-2","html":"
The terms nonmonetary and monetary as used in this Subtopic have the same meaning as those terms have in Topic 845.
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Although this Subtopic provides specific guidance for gains and losses resulting from involuntary conversions, the majority of other guidance for gains and losses is included in the Derecognition Section of the relevant asset or liability Topic.
","snippet":"Although this Subtopic provides specific guidance for gains and losses resulting from involuntary conversions, the majority of other guidance for gains and losses is included in the Derecognition Section of the relevant …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4e02cb034d1d1d95e912bb672a7e248c2662d0344917e598aab74639ea8362a","downloaded_from":"2026-09-10T00:55:19.665Z","last_downloaded_at":"2026-09-10T00:55:19.665Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479946","source_sha256":"8f22715a716283a07996258385d708876baab51c6aa37696ed012824cb9a2cf4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:29491487845222e746f5e6dfa697d0f52b3950c779157477cc90b6b7560de0f7","downloaded_from":"2026-09-10T00:55:19.665Z","last_downloaded_at":"2026-09-10T00:55:19.665Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479946","source_sha256":"8f22715a716283a07996258385d708876baab51c6aa37696ed012824cb9a2cf4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f8b607bf929f0c99c7cc177f4d5684c62fcaf686952a12b90a60f04a06b41a0c","downloaded_from":"2026-09-10T00:55:19.665Z","last_downloaded_at":"2026-09-10T00:55:19.665Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479946","source_sha256":"8f22715a716283a07996258385d708876baab51c6aa37696ed012824cb9a2cf4"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Entities","paragraphs":[{"citation":"610-30-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all entities.
","snippet":"The guidance in this Subtopic applies to all entities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d94acc5f7e853d7cd7f4b7537500d3a3cd33cc55defe62a55a74bbe16f215d4f","downloaded_from":"2026-09-10T00:55:23.121Z","last_downloaded_at":"2026-09-10T00:55:23.121Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479916","source_sha256":"6dfad0437b652a5394c66fd030192c2943fb35b129e648b67c7a4235210bce89"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:467e7fefd6b4225c0666712e238ee5597310c93be9ed032cf8f173dab19bd7fd","downloaded_from":"2026-09-10T00:55:23.121Z","last_downloaded_at":"2026-09-10T00:55:23.121Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479916","source_sha256":"6dfad0437b652a5394c66fd030192c2943fb35b129e648b67c7a4235210bce89"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"610-30-15-2","para":"15-2","html":"
The guidance in this Subtopic applies to the following events and transactions:
  1. a
    Those in which nonmonetary assets are involuntarily converted (for example, as a result of total or partial destruction, theft, seizure, or condemnation) to monetary assets that are then reinvested in other nonmonetary assets.
","snippet":"The guidance in this Subtopic applies to the following events and transactions:\n(a) Those in which nonmonetary assets are involuntarily converted (for example, as a result of total or partial destruction, theft, seizure,…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a8d4ff55b9160f892b8f6e51f4744cce587668062b7d9370d715076f3fb53ffe","downloaded_from":"2026-09-10T00:55:23.121Z","last_downloaded_at":"2026-09-10T00:55:23.121Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479916","source_sha256":"6dfad0437b652a5394c66fd030192c2943fb35b129e648b67c7a4235210bce89"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5be1c4829aa0794f0b08f0ba96070f164f393e8a43cd8c84510cfb6535f0fc7c","downloaded_from":"2026-09-10T00:55:23.121Z","last_downloaded_at":"2026-09-10T00:55:23.121Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479916","source_sha256":"6dfad0437b652a5394c66fd030192c2943fb35b129e648b67c7a4235210bce89"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fc7d949276d62a8ffa50b01173f36c3054a6bbe77f945b68eef60be5919c0a2e","downloaded_from":"2026-09-10T00:55:23.121Z","last_downloaded_at":"2026-09-10T00:55:23.121Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479916","source_sha256":"6dfad0437b652a5394c66fd030192c2943fb35b129e648b67c7a4235210bce89"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"610-30-25-1","para":"25-1","html":"
As used in this Subtopic, the term cost refers to the cost of a nonmonetary asset or to its carrying amount, if different.
","snippet":"As used in this Subtopic, the term cost refers to the cost of a nonmonetary asset or to its carrying amount, if different.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c39757dfa3fbb57b18a03a0763314e5ce4224c872a14c393600c9fbc6bc04bec","downloaded_from":"2026-09-10T00:55:26.349Z","last_downloaded_at":"2026-09-10T00:55:26.349Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479885","source_sha256":"18ef321a1fe4821341de4ad80bf08ac4ba3b3f62c7e8dd59ff11a6f6a8d7a4d0"}},{"citation":"610-30-25-2","para":"25-2","html":"
An involuntary conversion of a nonmonetary asset to monetary assets and the subsequent reinvestment of the monetary assets is not equivalent to an exchange transaction between an entity and another entity. The conversion of a nonmonetary asset to monetary assets is a monetary transaction, whether the conversion is voluntary or involuntary, and such a conversion differs from exchange transactions that involve only nonmonetary assets. To the extent the cost of a nonmonetary asset differs from the amount of monetary assets received, the transaction results in the realization of a gain or loss that shall be recognized.
","snippet":"An involuntary conversion of a nonmonetary asset to monetary assets and the subsequent reinvestment of the monetary assets is not equivalent to an exchange transaction between an entity and another entity. The conversion…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cd75760cf073cf153922ff7f6d0219f419fc4aac5a33d2dd2cebb86156184af9","downloaded_from":"2026-09-10T00:55:26.349Z","last_downloaded_at":"2026-09-10T00:55:26.349Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479885","source_sha256":"18ef321a1fe4821341de4ad80bf08ac4ba3b3f62c7e8dd59ff11a6f6a8d7a4d0"}},{"citation":"610-30-25-3","para":"25-3","html":"
Involuntary conversions of nonmonetary assets to monetary assets are monetary transactions for which gain or loss shall be recognized even though an entity reinvests or is obligated to reinvest the monetary assets in replacement nonmonetary assets. However, the requirement of this Subtopic with respect to gain recognition does not apply to an involuntary conversion of a last-in, first-out (LIFO) inventory for which replacement is intended but not made by year-end and the taxpayer does not recognize gain for income tax reporting purposes. Paragraph 270-10-45-6(b) provides an exception for the liquidation of a LIFO inventory at an interim date if replacement is expected by year-end. Accordingly, that exception applies to an involuntary conversion of a LIFO inventory if replacement is expected by year-end.
","snippet":"Involuntary conversions of nonmonetary assets to monetary assets are monetary transactions for which gain or loss shall be recognized even though an entity reinvests or is obligated to reinvest the monetary assets in rep…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d47ab5e6962143a786b465d060ae928fe8f8c67d910e79b0bee1c127003b9773","downloaded_from":"2026-09-10T00:55:26.349Z","last_downloaded_at":"2026-09-10T00:55:26.349Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479885","source_sha256":"18ef321a1fe4821341de4ad80bf08ac4ba3b3f62c7e8dd59ff11a6f6a8d7a4d0"}},{"citation":"610-30-25-4","para":"25-4","html":"
In some cases, a nonmonetary asset may be destroyed or damaged in one accounting period, and the amount of monetary assets to be received is not determinable until a subsequent accounting period. In those cases, gain or loss shall be recognized in accordance with Topic 450.
","snippet":"In some cases, a nonmonetary asset may be destroyed or damaged in one accounting period, and the amount of monetary assets to be received is not determinable until a subsequent accounting period. In those cases, gain or …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a9d1ebf89d91e3bd74262a93efae30d715a7dc473c952a4413e02ac6be8b7e0","downloaded_from":"2026-09-10T00:55:26.349Z","last_downloaded_at":"2026-09-10T00:55:26.349Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479885","source_sha256":"18ef321a1fe4821341de4ad80bf08ac4ba3b3f62c7e8dd59ff11a6f6a8d7a4d0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ae842eeeb999bc6bb2bf0ccb2866ab135058a623f0d37e917ab6509ecf00b804","downloaded_from":"2026-09-10T00:55:26.349Z","last_downloaded_at":"2026-09-10T00:55:26.349Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479885","source_sha256":"18ef321a1fe4821341de4ad80bf08ac4ba3b3f62c7e8dd59ff11a6f6a8d7a4d0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ac72185eebb8df537c85e89b8a8bc2f31166586a36623e5b4702bdbe07b8f803","downloaded_from":"2026-09-10T00:55:26.349Z","last_downloaded_at":"2026-09-10T00:55:26.349Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479885","source_sha256":"18ef321a1fe4821341de4ad80bf08ac4ba3b3f62c7e8dd59ff11a6f6a8d7a4d0"}},{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"610-30-30-1","para":"30-1","html":"
The cost of subsequently acquired nonmonetary assets shall be measured by the consideration paid and not be affected by a previous transaction.
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Gain or loss resulting from an involuntary conversion of a nonmonetary asset to monetary assets shall be classified in accordance with the provisions of Subtopic 220-20.
","snippet":"Gain or loss resulting from an involuntary conversion of a nonmonetary asset to monetary assets shall be classified in accordance with the provisions of Subtopic 220-20.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f1dfd4938d5b3adc1ebfc753155788a41bf7d6efa523cc0044925ed8269b8510","downloaded_from":"2026-09-10T00:55:32.708Z","last_downloaded_at":"2026-09-10T00:55:32.708Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479822","source_sha256":"1c1b13c30b2bcf07adc152201dbf3a6f3e47b9cf681c880eb8e15823ac048e56"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d45daa7b1fe76534885bfef6a5ddf0c2eeffb698e34bdd93f39f5ab381cc1cde","downloaded_from":"2026-09-10T00:55:32.708Z","last_downloaded_at":"2026-09-10T00:55:32.708Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479822","source_sha256":"1c1b13c30b2bcf07adc152201dbf3a6f3e47b9cf681c880eb8e15823ac048e56"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cd70c6efb37b5e914dcf4d72f557b278a66a18df0211c5ad6a149fd147cebe88","downloaded_from":"2026-09-10T00:55:32.708Z","last_downloaded_at":"2026-09-10T00:55:32.708Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479822","source_sha256":"1c1b13c30b2bcf07adc152201dbf3a6f3e47b9cf681c880eb8e15823ac048e56"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Income Taxes","paragraphs":[{"citation":"610-30-60-1","para":"60-1","html":"
For guidance on temporary differences resulting from involuntary conversions, see paragraph 740-10-55-66.
","snippet":"For guidance on temporary differences resulting from involuntary conversions, see paragraph 740-10-55-66.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1416c42b9c0f6362442726e9875ab45c57f4bf258dd43a85de81326762e40621","downloaded_from":"2026-09-10T00:55:35.874Z","last_downloaded_at":"2026-09-10T00:55:35.874Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479790","source_sha256":"3390a11c0cb9797bb8d56b5f0da310700a1c461dada87e87803f09312882a34c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1252bb34a78593e0955f11bc3a5206f61d9ab061056c0724f9dcf569a037ace4","downloaded_from":"2026-09-10T00:55:35.874Z","last_downloaded_at":"2026-09-10T00:55:35.874Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479790","source_sha256":"3390a11c0cb9797bb8d56b5f0da310700a1c461dada87e87803f09312882a34c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dd4d65b88270abf30ba870be35f390864748af90e9ee8017e899484b11c3cc16","downloaded_from":"2026-09-10T00:55:35.874Z","last_downloaded_at":"2026-09-10T00:55:35.874Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479790","source_sha256":"3390a11c0cb9797bb8d56b5f0da310700a1c461dada87e87803f09312882a34c"}}],"enrichment":{"summary":"ASC 610-30 governs the accounting when a nonmonetary asset (property, equipment, inventory) is involuntarily converted into monetary assets — e.g., insurance proceeds from destruction or theft, or condemnation awards in eminent domain. Because the conversion is a monetary transaction rather than a nonmonetary exchange, any difference between the asset's cost (or carrying amount) and the monetary assets received is a realized gain or loss that must be recognized, even if the proceeds are reinvested or the entity is obligated to reinvest them in replacement assets (610-30-25-2; 610-30-25-3).","key_points":["The Subtopic applies to all entities and to events in which nonmonetary assets are involuntarily converted (destruction, theft, seizure, condemnation) into monetary assets that are then reinvested in other nonmonetary assets (610-30-15-1; 610-30-15-2(a)).","'Cost' means the cost of the nonmonetary asset or its carrying amount, if different, and gain or loss equals the difference between that amount and the monetary assets received (610-30-25-1; 610-30-25-2).","Conversion of a nonmonetary asset to monetary assets is a monetary transaction — not an exchange of nonmonetary assets — so gain or loss must be recognized even though the proceeds are or must be reinvested in replacement assets (610-30-25-2; 610-30-25-3).","Exception: gain recognition is not required for an involuntary conversion of LIFO inventory when replacement is intended but not made by year-end and no gain is recognized for income tax purposes; the interim exception in 270-10-45-6(b) applies if replacement is expected by year-end (610-30-25-3).","If the asset is destroyed or damaged in one period but the amount of monetary assets to be received is not determinable until a later period, gain or loss is recognized in accordance with Topic 450 (610-30-25-4).","The cost of nonmonetary assets acquired subsequently is measured by the consideration paid and is not affected by the previous conversion transaction — no basis carryover (610-30-30-1).","Gain or loss from the involuntary conversion is classified in accordance with Subtopic 220-20 (unusual or infrequently occurring items) (610-30-45-1); temporary differences are addressed in 740-10-55-66 (610-30-60-1)."],"categories":["Recognition","Derecognition","Presentation","Inventory and PP&E"],"audience_level":"intermediate","student_note":"The classic trap is assuming that reinvesting insurance or condemnation proceeds in a replacement asset defers the gain (as it can for tax purposes under IRC §1033) — under GAAP the gain is recognized immediately and the replacement asset is recorded at the consideration paid, with no basis reduction. Watch for the narrow LIFO inventory exception and the Topic 450 contingency treatment when the recovery amount is undetermined at period-end.","related_topics":["845","450","220-20","740-10","270-10","610-20"],"key_concepts":["involuntary conversion","nonmonetary asset","monetary asset","insurance proceeds","condemnation / eminent domain","gain or loss recognition","lifo inventory replacement","reinvestment in replacement assets"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fe6cec730a048d6ec14106a30bcec795b3be2be2f27d6a36be1542af7e07ad74","downloaded_from":"2026-09-10T00:55:17.173Z","last_downloaded_at":"2026-09-10T00:55:35.874Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"610-20","title":"Gains and Losses from the Derecognition of Nonfinancial 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