# ASC 805-944-45: Business Combinations — Financial Services—Insurance — 45 Other Presentation Matters Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/944/#45-other-presentation-matters) 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): 2026-09-10T01:26:58.447Z to 2026-09-10T01:26:58.447Z Record version: sha256:bd00de540ff3c559a01dc63f4012a265c1dc749e140edfe2e8fbcd142cb6f2fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-944-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/805/944/#45-other-presentation-matters) SEC content: no ### Demutualizations #### Closed Block ##### [805-944-45-1](https://asc.understandingaccounting.org/asc/805/944/#805-944-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:58.447Z to 2026-09-10T01:26:58.447Z Record version: sha256:e99163a39dcb02d0ef446b450132a5ed27d2f562d2890daeaeeb87ae5f8cfedc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Closed block](https://asc.understandingaccounting.org/glossary/c/#closed-block "A mechanism to preserve, over time, the reasonable dividend expectations of individual policyholders with individual life, health, or annuity policies for which dividends are currently being paid or are expected to be paid under the current dividend scale. A closed block comprises a defined, limited group of policies and a defined set of assets, and is governed by a set of operating rules.") assets, liabilities, revenues, and expenses shall be displayed together with all other assets, liabilities, revenues, and expenses of the insurance entity based on the nature of the particular item, with appropriate disclosures relating to the closed block. See the [Demutualizations Subsection](https://asc.understandingaccounting.org/updates/page-2147479835/) of Section 944-805-50. #### Emergence of Earnings and Policyholder Dividend Obligation ##### [805-944-45-2](https://asc.understandingaccounting.org/asc/805/944/#805-944-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:58.447Z to 2026-09-10T01:26:58.447Z Record version: sha256:26a66ece2046162f488bbbc11cc21371e2c12999abd27bd95321c02c981fc417 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unrealized investment gains and losses, other items of accumulated other comprehensive income, and the amount of offsetting policyholder dividend obligation shall not be netted in the presentation of other comprehensive income. #### Expenses of Demutualization or Holding Entity Formation ##### [805-944-45-3](https://asc.understandingaccounting.org/asc/805/944/#805-944-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:58.447Z to 2026-09-10T01:26:58.447Z Record version: sha256:b21cda789c853c5b3bca7de3dc19043e936730463c5479bada412a0b81711596 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In connection with a [demutualization](https://asc.understandingaccounting.org/glossary/d/#demutualization "The conversion of a mutual insurance entity to a stock insurance entity.") or formation of a mutual insurance holding entity, an insurance entity will incur expenses, including those for legal services, actuarial services, printing, and postage. Direct and incremental costs related to a demutualization or formation of a mutual insurance holding entity shall be classified as a single line item within income from continuing operations. #### Date of Demutualization or Holding Entity Formation ##### [805-944-45-4](https://asc.understandingaccounting.org/asc/805/944/#805-944-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:58.447Z to 2026-09-10T01:26:58.447Z Record version: sha256:b842dad1e3e630669de52c74c65b4cc2a3553eb78878505c6fda1d0413ca29b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depending on the form of demutualization, a reclassification of retained earnings at the [date of demutualization](https://asc.understandingaccounting.org/glossary/d/#date-of-demutualization "The date the plan of reorganization becomes effective.") may be appropriate. An insurance entity that demutualizes in a [distribution-form demutualization](https://asc.understandingaccounting.org/glossary/d/#distribution-form-demutualization "A situation in which eligible policyholders receive stock, policy credits, additional policyholder benefits, cash, or rights to purchase stock at favorable terms.") shall reclassify all its retained earnings as of the [date of demutualization](https://asc.understandingaccounting.org/glossary/d/#date-of-demutualization "The date the plan of reorganization becomes effective.") to capital stock and additional paid-in capital accounts (the capital accounts). If the entity distributes cash or [policy credits](https://asc.understandingaccounting.org/glossary/p/#policy-credits "Additional values applied to a policy through dividends, increases in fund values, accumulation values or accumulation account values or extensions of coverages.") to policyholders in lieu of capital stock, as part of the demutualization, the distribution shall be recorded as a direct reduction to the appropriate capital accounts. A [subscription-form demutualization](https://asc.understandingaccounting.org/glossary/s/#subscription-form-demutualization "A situation in which eligible policyholders receive only the right to purchase stock in the insurance entity or its parent at terms essentially equivalent to the terms offered to independent third parties.") does not, by itself, result in reclassification of retained earnings. ##### [805-944-45-5](https://asc.understandingaccounting.org/asc/805/944/#805-944-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:58.447Z to 2026-09-10T01:26:58.447Z Record version: sha256:a4096535d1ecc8979d17c55eb875c3230fae4ec65e61efe78943ee8691cdf0a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The equity accounts of a mutual insurance holding entity at the formation date shall be determined using the principles for transactions of entities under common control, with the amount of retained earnings of the demutualized insurance entity, before reclassification to the capital accounts, being reported as retained earnings of the mutual insurance holding entity. Because the accounting bases and carrying amounts of assets and liabilities are not changed as a consequence of demutualization or formation of a mutual insurance holding entity, the amounts in accumulated other comprehensive income also shall not be changed as a consequence of demutualization or formation of a mutual insurance holding entity.