# ASC 810-940: Consolidation — Financial Services—Brokers and Dealers

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/810/940/)

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.

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## ASC 810-940: Consolidation — Financial Services—Brokers and Dealers

### Machine-generated study aids

```json
{
  "summary": "This Subtopic gives the industry-specific consolidation guidance for brokers and dealers in securities. Its single substantive rule is a presentation exception: a broker-dealer parent within the scope of Topic 940 does not consolidate a majority-owned subsidiary in which it has a controlling financial interest (and that is not a variable interest entity) when control is likely to be temporary (810-940-45-1, cross-referencing 810-10-15-10(a)(2)).",
  "key_points": [
    "The Subtopic addresses consolidation by brokers and dealers in securities (810-940-05-1).",
    "Scope follows the Overall broker-dealer Subtopic, Section 940-10-15 (810-940-15-1).",
    "Under 810-940-45-1 (citing 810-10-15-10(a)(2)), a majority-owned entity in which a broker-dealer parent has a controlling financial interest is not consolidated if control is likely to be temporary.",
    "The temporary-control exception applies only to entities outside the scope of the Variable Interest Entities Subsections of Section 810-10-15; VIEs are still evaluated under the VIE model.",
    "The exception is available only to a parent that is itself a broker-dealer within the scope of Topic 940."
  ],
  "categories": [
    "Consolidation",
    "Industry-specific",
    "Presentation"
  ],
  "audience_level": "intermediate",
  "student_note": "Exam questions often test the narrow \"control is likely to be temporary\" exception—remember it is limited to broker-dealer parents under Topic 940 and to non-VIEs; a common error is assuming any parent can avoid consolidation because control is short-lived.",
  "related_topics": [
    "810-10",
    "940-10",
    "940-810",
    "323-10",
    "825-10"
  ],
  "key_concepts": [
    "broker-dealer",
    "controlling financial interest",
    "majority-owned subsidiary",
    "temporary control",
    "consolidation exception",
    "variable interest entity"
  ]
}
```

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## ASC 810-940-00: 00 Status

[Read section](https://asc.understandingaccounting.org/asc/810/940/#00-status)

SEC content: no

##### [810-940-00-1](https://asc.understandingaccounting.org/asc/810/940/#810-940-00-1)

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No updates have been made to this subtopic.

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## ASC 810-940-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/810/940/#05-overview-and-background)

SEC content: no

##### [810-940-05-1](https://asc.understandingaccounting.org/asc/810/940/#810-940-05-1)

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This Subtopic addresses consolidation by brokers and dealers in securities (broker-dealers).

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## ASC 810-940-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/810/940/#15-scope-and-scope-exceptions)

SEC content: no

#### Overall Guidance

##### [810-940-15-1](https://asc.understandingaccounting.org/asc/810/940/#810-940-15-1)

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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15.

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## ASC 810-940-45: 45 Other Presentation Matters

[Read section](https://asc.understandingaccounting.org/asc/810/940/#45-other-presentation-matters)

SEC content: no

##### [810-940-45-1](https://asc.understandingaccounting.org/asc/810/940/#810-940-45-1)

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Paragraph [810-10-15-10(a)(2)](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-10) states that a majority-owned entity that is not in the scope of the [Variable Interest Entities Subsection](https://asc.understandingaccounting.org/asc/810/10/#15-scope-and-scope-exceptions) of Section 810-10-15 and in which a parent has a controlling financial interest shall not be consolidated if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary.

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## ASC 810-940-S40: SEC 40 Derecognition

[Read section](https://asc.understandingaccounting.org/asc/810/940/#sec-40-derecognition)

SEC content: yes

#### Certain Transfers of Nonperforming Assets

##### [810-940-S40-1](https://asc.understandingaccounting.org/asc/810/940/#810-940-S40-1)

Pending content: no

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See paragraph [942-810-S99-1](https://asc.understandingaccounting.org/asc/810/942/#810-942-S99-1), SAB Topic 5.V, for SEC Staff views on accounting for certain transfers of nonperforming assets.