The following table identifies the changes made to this Subtopic.
The scope Section of the Overall Subtopic establishes the pervasive scope for the Other Income Topic.
The guidance in this Topic applies to all entities.
The guidance in this Subtopic applies to all entities.
(P) December 16, 2026; (N) December 16, 2026
606-10-65-3An entity shall apply the guidance in this Subtopic, including the guidance on noncash consideration in paragraphs 610-20-32-3(a)(4) and 610-20-32-4, to a contract with share-based noncash consideration (for example, shares, share options, or other equity instruments) from a counterparty for the transfer of nonfinancial assets or in substance nonfinancial assets. The guidance in other Topics (including Topic 815 on derivatives and hedging and Topic 321 on equity securities) does not apply to share-based noncash consideration from a counterparty for the transfer of nonfinancial assets or in substance nonfinancial assets unless and until the entity’s right to receive or retain the share-based noncash consideration is unconditional under this Subtopic. To assess whether the right is unconditional under this Subtopic, only the contract terms that relate to the entity’s transfer of nonfinancial assets or in substance nonfinancial assets (or a specific outcome of the entity’s transfer) within the scope of this Subtopic are evaluated. The determination of whether the right is unconditional is consistent with the guidance in paragraph 606-10-45-4, which states that a right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. The following Examples illustrate the guidance in this Subtopic.
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.
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.
The following table identifies the changes made to this Subtopic.
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.
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.
The guidance in this Subtopic applies to all entities.
As used in this Subtopic, the term cost refers to the cost of a nonmonetary asset or to its carrying amount, if different.
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.
The cost of subsequently acquired nonmonetary assets shall be measured by the consideration paid and not be affected by a previous transaction.
![](\"/asc-img/GUID-0827221F-C0A5-4C11-8B8A-28BD39929DF0-low.gif\")
\"Is the counterparty a customer? (610-20-15-4(a))\"\t1 \"Is the transaction the transfer of a business or nonprofit activity? (610-20-15-4(b))\"\t1 Is the transaction entirely accounted for in accordance with Topic 860? (610-20-15-4(e))\t1 \"Does another scope exception apply? (610-20-15-4)\"\t1 Apply Topic 606\t1 Apply Subtopic 810-10\t1 Apply Topic 860\t1 Apply other Topics or Subtopics\t1 \"Does the contract include the transfer of an ownership interest in one or more consolidated subsidiaries? (610-20-15-6)\"\t1 \"Are the assets promised in the contract all nonfinancial assets or all nonfinancial assets and in substance nonfinancial assets? (610-20-15-5)\"\t1 \"Apply Subtopic 610-20 to each distinct asset promised in the contract. Apply other Topics or Subtopics to the remaining parts of the contract, if any.1\"\t1 1\t1 \"Apply Subtopic 610-20 to each distinct nonfinancial asset promised in the contract. Apply other Topics or Subtopics to the remaining parts of the contract, if any.1\"\t1 \"If the assets in an individual consolidated subsidiary are all nonfinancial assets or all nonfinancial assets and in substance nonfinancial assets, then apply Subtopic 610-20 to each distinct asset within that subsidiary. Otherwise, apply paragraph 810-10-40-3A(c) or 810-10-45-21A(b)(2) to the subsidiary. Apply other Topics or Subtopics to the remaining parts of the contract, if any.1\"\t1