# ASC 815-10-S99: Derivatives and Hedging — Overall — SEC 99 SEC Materials Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/815/10/#sec-99-sec-materials) 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): 2026-09-10T01:35:54.090Z to 2026-09-10T01:35:54.090Z Record version: sha256:d2d57cd1a05ddc7b94135427773ed6b67f4e3572451617e85c2ca9d69d03a738 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 815-10-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/815/10/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [815-10-S99-1](https://asc.understandingaccounting.org/asc/815/10/#815-10-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:35:54.090Z to 2026-09-10T01:35:54.090Z Record version: sha256:fa1c2fd157030a3aa7620dd40ecedef77b3d539795e744bc7a6169dac798f084 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 5.DD, Written Loan Commitments Recorded at Fair Value through Earnings. - Facts: Bank A enters into a loan commitment with a customer to originate a mortgage loan at a specified rate. As part of this written loan commitment, Bank A expects to receive future net cash flows related to servicing rights from servicing fees (included in the loan's interest rate or otherwise), late charges, and other ancillary sources, or from selling the servicing rights to a third party. If Bank A intends to sell the mortgage loan after it is funded, pursuant to FASB ASC paragraph [815-10-15-83](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-83) (Derivatives and Hedging Topic), the written loan commitment is accounted for as a derivative instrument and recorded at fair value through earnings (referred to hereafter as a "derivative loan commitment"). If Bank A does not intend to sell the mortgage loan after it is funded, the written loan commitment is not accounted for as a derivative under FASB ASC Subtopic 815-10, Derivatives and Hedging—Overall. However, FASB ASC subparagraph [825-10-15-4(c)](https://asc.understandingaccounting.org/asc/825/10/#825-10-15-4) (Financial Instruments Topic), permits Bank A to record the written loan commitment at fair value through earnings (referred to hereafter as a "written loan commitment"). Pursuant to FASB ASC Subtopic 825-10, Financial Instruments—Overall, the fair value measurement for a written loan commitment would include the expected net future cash flows related to the associated servicing of the loan. - Question 1: In measuring the fair value of a derivative loan commitment accounted for under FASB ASC Subtopic 815-10, should Bank A include the expected net future cash flows related to the associated servicing of the loan? - Interpretive Response: Yes. The staff believes that, consistent with FASB ASC Subtopic 860-50, Transfers and Servicing—Servicing Assets and Liabilities, FN60, and FASB ASC Subtopic 825-10, the expected net future cash flows related to the associated servicing of the loan should be included in the fair value measurement of a derivative loan commitment. The expected net future cash flows related to the associated servicing of the loan that are included in the fair value measurement of a derivative loan commitment or a written loan commitment should be determined in the same manner that the fair value of a recognized servicing asset or liability is measured under FASB ASC Subtopic 860-50. However, as discussed in FASB ASC paragraph [860-50-25-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-1), a separate and distinct servicing asset or liability is not recognized for accounting purposes until the servicing rights have been contractually separated from the underlying loan by sale or securitization of the loan with servicing retained. - FN60 FASB ASC Subtopic 860-50 permits an entity to subsequently measure recognized servicing assets and servicing liabilities (which are nonfinancial instruments) at fair value through earnings. - The views in Question 1 apply to all loan commitments that are accounted for at fair value through earnings. However, for purposes of electing fair value accounting pursuant to FASB ASC Subtopic 825-10, the views in Question 1 are not intended to be applied by analogy to any other instrument that contains a nonfinancial element. - Question 2: In measuring the fair value of a derivative loan commitment accounted for under FASB ASC Subtopic 815-10 or a written loan commitment accounted for under FASB ASC Subtopic 825-10, should Bank A include the expected net future cash flows related to internally-developed intangible assets? - Interpretive Response: No. The staff does not believe that internally-developed intangible assets (such as customer relationship intangible assets) should be recorded as part of the fair value of a derivative loan commitment or a written loan commitment. Such nonfinancial elements of value should not be considered a component of the related instrument. Recognition of such assets would only be appropriate in a third-party transaction. For example, in the purchase of a portfolio of derivative loan commitments in a business combination, a customer relationship intangible asset is recorded separately from the fair value of such loan commitments. Similarly, when an entity purchases a credit card portfolio, FASB ASC paragraph [310-10-25-7](https://asc.understandingaccounting.org/asc/310/10/#310-10-25-7) (Receivables Topic) requires an allocation of the purchase price to a separately recorded cardholder relationship intangible asset. - The view in Question 2 applies to all loan commitments that are accounted for at fair value through earnings. ##### [815-10-S99-2](https://asc.understandingaccounting.org/asc/815/10/#815-10-S99-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:35:54.090Z to 2026-09-10T01:35:54.090Z Record version: sha256:53f9ec855e9125fffe369254a364e36c4d0ebc6fa9899ded634a1919de04ca28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2010-04](https://asc.understandingaccounting.org/updates/asu-2010-04/). ##### [815-10-S99-3](https://asc.understandingaccounting.org/asc/815/10/#815-10-S99-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:35:54.090Z to 2026-09-10T01:35:54.090Z Record version: sha256:cf8f42166f6de3daf37c4373aa2c6e5879cfda4377961104f31c3483748a71b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-11](https://asc.understandingaccounting.org/updates/asu-2016-11/). ##### [815-10-S99-4](https://asc.understandingaccounting.org/asc/815/10/#815-10-S99-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:35:54.090Z to 2026-09-10T01:35:54.090Z Record version: sha256:cea5c8627acc36dc65efa646c56dc4d3d3b9ecddd31ac7079e63d1bc59149a38 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of the SEC Observer Comment: Accounting for Written Options - SEC staff's longstanding position is that written options that do not qualify for equity classification initially should be reported at fair value and subsequently marked to fair value through earnings.