# ASC 720-948-25: Other Expenses — Financial Services—Mortgage Banking — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

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## ASC 720-948-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/720/948/#25-recognition)

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#### Residential or Commercial Loan Commitment Fees

##### [720-948-25-1](https://asc.understandingaccounting.org/asc/720/948/#720-948-25-1)

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Fees paid to [permanent investors](https://asc.understandingaccounting.org/glossary/p/#permanent-investor "An entity that invests in mortgage loans for its own account, for example, an insurance entity, commercial or mutual savings bank, savings and loan association, pension plan, real estate investment trust, or Federal National Mortgage Association (FNMA).") to ensure the ultimate sale of the loans (residential or commercial loan commitment fees) shall be recognized as expense when the loans are sold to permanent investors or when it becomes evident the commitment will not be used. Because residential loan commitment fees ordinarily relate to blocks of loans, fees recognized as revenue or expense as the result of individual loan transactions shall be based on the ratio of the individual loan amount to the total commitment amount.