# ASC 815-10-40: Derivatives and Hedging — Overall — 40 Derecognition

Source: FASB Accounting Standards Codification, Basic View

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## ASC 815-10-40: 40 Derecognition

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##### [815-10-40-1](https://asc.understandingaccounting.org/asc/815/10/#815-10-40-1)

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Extinguishments of [derivative instruments](https://asc.understandingaccounting.org/glossary/d/#derivative-instrument "Paragraphs 815-10-15-83815-10-15-84815-10-15-85815-10-15-86815-10-15-87815-10-15-88815-10-15-89815-10-15-90815-10-15-91815-10-15-92815-10-15-93815-10-15-94815-10-15-95815-10-15-96815-10-15-97815-10-15-98815-10-15-99815-10-15-100815-10-15-101815-10-15-102815-10-15-103815-10-15-104815-10-15-105815-10-15-106815-10-15-107815-10-15-108815-10-15-109815-10-15-110815-10-15-111815-10-15-112815-10-15-113815-10-15-114815-10-15-115815-10-15-116815-10-15-117815-10-15-118815-10-15-119815-10-15-120815-10-15-121815-10-15-122815-10-15-123815-10-15-124815-10-15-125815-10-15-126815-10-15-127815-10-15-128815-10-15-129815-10-15-130815-10-15-131815-10-15-132815-10-15-133815-10-15-134815-10-15-135815-10-15-136815-10-15-137815-10-15-138815-10-15-139 define the term derivative instrument.") that are liabilities are addressed by paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1). Transfers of derivative instruments that are financial assets are addressed by Section 860-10-40.

##### [815-10-40-2](https://asc.understandingaccounting.org/asc/815/10/#815-10-40-2)

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Transfers of assets that are derivative instruments and subject to the requirements of this Subtopic but that are not financial assets shall be accounted for by analogy to Subtopic 860-10. This guidance is limited to transfers of nonfinancial assets that are derivative instruments that are or will be subject to the requirements of this Subtopic. An example would be a transfer to another entity of a derivative instrument, such as a forward contract to purchase gold that requires physical settlement and is or will be subject to the requirements of this Subtopic.

##### [815-10-40-3](https://asc.understandingaccounting.org/asc/815/10/#815-10-40-3)

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If a derivative instrument has the potential to be both a nonfinancial asset and a nonfinancial liability (such as a commodity forward contract that is a nonfinancial derivative instrument), then, as described in paragraph [860-10-40-40](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-40), the criteria of both Sections 405-20-40 and 860-10-40 shall be met to qualify for derecognition.