# ASC 720-944: Other Expenses — Financial Services—Insurance Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/944/) 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): 2026-09-10T01:11:16.270Z to 2026-09-10T01:11:38.484Z Record version: sha256:1454fb9e46ed68384a7d796f4dece3051a9f030cd2bafc44f5980cc672c9d2d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-944: Other Expenses — Financial Services—Insurance ### Machine-generated study aids ```json { "summary": "ASC 944-720 tells insurance entities which costs must be expensed as incurred rather than capitalized as deferred acquisition costs. Because 944-30-25-1A permits capitalization only of incremental direct acquisition costs relating to successful contract acquisitions or renewals, everything else — non-qualifying acquisition-related costs and all indirect costs — is charged to expense as incurred (944-720-25-2).", "key_points": [ "944-720-25-2(a) requires an insurance entity to expense as incurred any acquisition-related cost that fails the capitalization criteria of 944-30-25-1A.", "944-720-25-2(b) requires an insurance entity to expense as incurred all indirect costs.", "Per 944-720-55-1, non-capitalizable acquisition-related costs include soliciting potential customers, market research, training, administration, unsuccessful acquisition or renewal efforts, and product development — except direct-response advertising capitalized under 944-30-25-1AA.", "Per 944-720-55-2, indirect costs that must be expensed include administrative costs, rent, depreciation, occupancy costs, equipment costs (including data processing equipment dedicated to acquiring insurance contracts), and other general overhead.", "The Subtopic follows the scope of 944-10-15 (944-720-15-1) and observes that sales expense structures vary — agent commissions tied to business produced, salaried branch/field personnel, or mass-marketing channels (944-720-05-2 through 05-4).", "For accounting for insurance costs by an insured (non-insurer) entity, look to Subtopic 720-20 rather than this Subtopic (944-720-60-1)." ], "categories": [ "Recognition", "Industry-specific", "Initial measurement" ], "audience_level": "intermediate", "student_note": "This is the mirror image of the DAC rules: after ASU 2010-26 only incremental direct costs of *successful* contract acquisitions may be deferred, so know the expense-as-incurred lists cold. The most common mistake is deferring costs of unsuccessful selling efforts, training, or overhead allocated to acquisition activity — only direct-response advertising meeting 944-30-25-1AA escapes immediate expensing.", "related_topics": [ "944-30", "944-10", "720-20", "944-40", "340-20" ], "key_concepts": [ "deferred acquisition costs", "successful efforts capitalization", "indirect costs", "expense as incurred", "direct-response advertising", "agent commissions", "general overhead", "insurance entity" ] } ``` Source downloaded (UTC): 2026-09-10T01:11:16.270Z to 2026-09-10T01:11:16.270Z Record version: sha256:ee1650f4828fbfa1525ccd891d7e98e0087630f6031caac1e5f5aebe7aa5e603 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-944-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/720/944/#00-status) SEC content: no ##### [720-944-00-1](https://asc.understandingaccounting.org/asc/720/944/#720-944-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:16.270Z to 2026-09-10T01:11:16.270Z Record version: sha256:1fcdf00e992100efc194e29b1ad8da0ea91f14e8a7b9b7e8379d3e8f4bdebbf5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Acquisition CostsAmendedAccounting Standards Update No. 2010-2610/13/2010
944-720-25-1AmendedAccounting Standards Update No. 2010-2610/13/2010
944-720-25-2AmendedAccounting Standards Update No. 2010-2610/13/2010
944-720-55-1AmendedAccounting Standards Update No. 2014-0905/28/2014
944-720-55-1AddedAccounting Standards Update No. 2010-2610/13/2010
944-720-55-2AddedAccounting Standards Update No. 2010-2610/13/2010
Source downloaded (UTC): 2026-09-10T01:11:19.488Z to 2026-09-10T01:11:19.488Z Record version: sha256:f385b1e8af7d920ebb639ffcc4b2f0b330284026dd1dacfbb15a16fbb1ef4991 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-944-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/720/944/#05-overview-and-background) SEC content: no ##### [720-944-05-1](https://asc.understandingaccounting.org/asc/720/944/#720-944-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:19.488Z to 2026-09-10T01:11:19.488Z Record version: sha256:83b2ec012f037776768de83bc4eb7158c9ec7318992b07e60ac2700df48fd9d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance to insurance entities on accounting for and financial reporting of other expenses. ##### [720-944-05-2](https://asc.understandingaccounting.org/asc/720/944/#720-944-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:19.488Z to 2026-09-10T01:11:19.488Z Record version: sha256:8ff34678129982412b8d9c47e7ab49351c77ca413438024ef02b748cf6fdef26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a number of life insurance entities, virtually all sales expense is composed of compensation paid to agents. Such compensation relates directly to the amount of business produced by an agent. ##### [720-944-05-3](https://asc.understandingaccounting.org/asc/720/944/#720-944-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:19.488Z to 2026-09-10T01:11:19.488Z Record version: sha256:f50851c7fb3727e297f9f4790e0419abdad90d1fa57ff0bb75768c606914d4b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In other entities, considerably less compensation will be paid to agents; however, additional sums will be paid to salaried employees, such as branch managers and employees, or to field representatives, who call on and assist the agents. ##### [720-944-05-4](https://asc.understandingaccounting.org/asc/720/944/#720-944-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:19.488Z to 2026-09-10T01:11:19.488Z Record version: sha256:9e478c1e2fd0711b7d0dbad3bf718368f60cc44da3f20521bab514461258b808 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There are also entities that do not sell through agents. Some entities use mail, the internet, and other mass-marketing methods to sell their products. Source downloaded (UTC): 2026-09-10T01:11:23.343Z to 2026-09-10T01:11:23.343Z Record version: sha256:5b86f288b5e5c9a4007081a35e9bbfc7bb04b188e330c00c8b60c67d61110339 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-944-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/720/944/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [720-944-15-1](https://asc.understandingaccounting.org/asc/720/944/#720-944-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:23.343Z to 2026-09-10T01:11:23.343Z Record version: sha256:d16de187436588f8112a8e8a6ffab370bf562adbb9bd14b81f494fc866e88025 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 944-10-15. Source downloaded (UTC): 2026-09-10T01:11:30.049Z to 2026-09-10T01:11:30.049Z Record version: sha256:efc2fbe806960afe7bfeda24a1d8a7ee565ba3f27303d06dc6a3c03b6877a163 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-944-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/720/944/#25-recognition) SEC content: no ##### [720-944-25-1](https://asc.understandingaccounting.org/asc/720/944/#720-944-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:30.049Z to 2026-09-10T01:11:30.049Z Record version: sha256:87463ae9e9550a741cb5d75968952c580a1b7b587e03206d8ded88166f070c90 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [944-30-25-1A](https://asc.understandingaccounting.org/asc/944/30/#944-30-25-1A) requires that an insurance entity capitalize certain [acquisition costs](https://asc.understandingaccounting.org/glossary/a/#acquisition-costs "Costs that are related directly to the successful acquisition of new or renewal insurance contracts.") directly related to successful contracts. ##### [720-944-25-2](https://asc.understandingaccounting.org/asc/720/944/#720-944-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:30.049Z to 2026-09-10T01:11:30.049Z Record version: sha256:dfee5756953e8c7c9710eb6fe9ea801e4ea43131102d5a19a77cb661d9980fec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An insurance entity shall charge to expense as incurred any of the following costs: 1. a An acquisition-related cost that cannot be capitalized in accordance with paragraph [944-30-25-1A](https://asc.understandingaccounting.org/asc/944/30/#944-30-25-1A) (for implementation guidance, see paragraph [944-720-55-1](https://asc.understandingaccounting.org/asc/720/944/#720-944-55-1)) 2. b An indirect cost (for implementation guidance, see paragraph [944-720-55-2](https://asc.understandingaccounting.org/asc/720/944/#720-944-55-2)). Source downloaded (UTC): 2026-09-10T01:11:34.185Z to 2026-09-10T01:11:34.185Z Record version: sha256:d5fab1e7324d30c4d23a5e396ffb8f33560c460005b1001ed1cf0ea2cd5e334e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-944-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/720/944/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [720-944-55-1](https://asc.understandingaccounting.org/asc/720/944/#720-944-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:34.185Z to 2026-09-10T01:11:34.185Z Record version: sha256:7de44a8fe7a14340c6387d05f5eb495d1880bcca41cd6fd04d049361406dc9ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses paragraph [944-720-25-2(a)](https://asc.understandingaccounting.org/asc/720/944/#720-944-25-2), which requires that an insurance entity charge to expense as incurred any acquisition-related cost that cannot be capitalized in accordance with paragraphs [944-30-25-1A through 25-1AA](https://asc.understandingaccounting.org/asc/944/30/#944-30-25-1A). Such costs include costs of all of the following: 1. a Soliciting potential customers (except direct-response advertising capitalized in accordance with paragraph [944-30-25-1AA](https://asc.understandingaccounting.org/asc/944/30/#944-30-25-1AA)) 2. b Market research 3. c Training 4. d Administration 5. e Unsuccessful acquisition or renewal efforts (except direct-response advertising capitalized in accordance with paragraph [944-30-25-1AA](https://asc.understandingaccounting.org/asc/944/30/#944-30-25-1AA)) 6. f Product development. ##### [720-944-55-2](https://asc.understandingaccounting.org/asc/720/944/#720-944-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:34.185Z to 2026-09-10T01:11:34.185Z Record version: sha256:83ca83e558d456498cecde9dbbd1c7643db958f0569f695a388ce830d99e2710 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses paragraph [944-720-25-2(b)](https://asc.understandingaccounting.org/asc/720/944/#720-944-25-2), which requires that an insurance entity charge to expense as incurred any indirect cost. Such costs include all of the following: 1. a Administrative costs 2. b Rent 3. c Depreciation 4. d Occupancy costs 5. e Equipment costs (including data processing equipment dedicated to acquiring insurance contracts) 6. f Other general overhead. Source downloaded (UTC): 2026-09-10T01:11:36.351Z to 2026-09-10T01:11:36.351Z Record version: sha256:79beb7843fef31fbf2e1ecbd276ca63a8840e96b17cad18d5760b91a0953f549 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-944-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/720/944/#60-relationships) SEC content: no #### Other Expenses ##### [720-944-60-1](https://asc.understandingaccounting.org/asc/720/944/#720-944-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:11:36.351Z to 2026-09-10T01:11:36.351Z Record version: sha256:b7a320c2e75a8d56e68cba80de670882099d6938d3f58d9c78215cd4fe5872ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on accounting for insurance costs by any insured entity, see Subtopic 720-20.