{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/815/25/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"815","topic_title":"Derivatives and Hedging","subtopic":"815-25","subtopic_title":"Fair Value Hedges","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":"Changes in Fair Value in General","paragraphs":[{"citation":"815-25-35-1","para":"35-1","html":"
Gains and losses on a qualifying fair value hedge shall be accounted for as follows:
  1. a
    The gain or loss on the hedging instrument shall be recognized currently in earnings, except for amounts excluded from the assessment of effectiveness that are recognized in earnings through an amortization approach in accordance with paragraph 815-20-25-83A. All amounts recognized in earnings shall be presented in the same income statement line item as the earnings effect of the hedged item.
  2. b
    The gain or loss (that is, the change in fair value) on the hedged item attributable to the hedged risk shall adjust the carrying amount of the hedged item and be recognized currently in earnings except as described in (c).
  3. c
    For one or more existing hedged layer or layers that are designated under the portfolio layer method in accordance with paragraph 815-20-25-12A, the gain or loss (that is, the change in fair value) on the hedged item attributable to the hedged risk shall not adjust the carrying value of the individual beneficial interest or individual assets in or removed from the closed portfolio. Instead, that amount shall be maintained on a closed portfolio basis and recognized currently in earnings.
","snippet":"Gains and losses on a qualifying fair value hedge shall be accounted for as follows:\n(a) The gain or loss on the hedging instrument shall be recognized currently in earnings, except for amounts excluded from the assessme…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60765e73ca36dafafaffb202a8fadbdc8ef5fce79d1ae40cf5378d328b250107","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-2","para":"35-2","html":"
Paragraph superseded by Accounting Standards Update No. 2017-12.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2017-12.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4e4977ad082d824f078e4c150b5fe46dbf7ef636db49a4b76ebc363939370c5","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-3","para":"35-3","html":"
Paragraph superseded by Accounting Standards Update No. 2017-12.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2017-12.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b04d4e9225f99b3c630134af06723031be0a8e6d8b93a9a5560cee93859ee582","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-4","para":"35-4","html":"
Although a hedging relationship must comply with an entity's established policy range of what is considered highly effective pursuant to paragraphs
815-20-25-75 through 25-85
for that relationship to qualify for hedge accounting, that compliance does not assure perfect offset between the gain or loss on the hedging instrument and the hedged item attributable to the hedged risk. Any gain or loss on the hedging instrument that does not offset the gain or loss on the hedged item attributable to the hedged risk is recognized in earnings in the same income statement line item as the earnings effect of the hedged item in accordance with paragraph 815-20-45-1A.
","snippet":"Although a hedging relationship must comply with an entity's established policy range of what is considered highly effective pursuant to paragraphs 815-20-25-75 through 25-85 for that relationship to qualify for hedge ac…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:90f67798960dca5d3727ded757ec55423e40052834b3edf61fa2865e722f7c1b","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-5","para":"35-5","html":"
Paragraph superseded by Accounting Standards Update No. 2017-12.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2017-12.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:882c7535a4e53f0e3316db239cf331c45110190650f7f056e8b92ff9829dd62a","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-6","para":"35-6","html":"
If a hedged item is otherwise measured at fair value with changes in fair value reported in other comprehensive income (such as an available-for-sale debt security), the adjustment of the hedged item's carrying amount discussed in paragraph 815-25-35-1(b) shall be recognized in earnings rather than in other comprehensive income to offset the gain or loss on the hedging instrument. If the hedged item is a hedged layer designated in a portfolio layer method hedge on a closed portfolio in accordance with paragraph 815-20-25-12A and the closed portfolio includes only available-for-sale debt securities, the entire gain or loss (that is, the change in fair value) on the hedged item attributable to the hedged risk shall be recognized in earnings rather than in other comprehensive income to offset the gain or loss on the hedging instrument. If the closed portfolio includes available-for-sale debt securities and assets that are not available-for-sale debt securities, an entity shall determine the portion of the change in fair value on the hedged item attributable to the hedged risk associated with the available-for-sale debt securities using a systematic and rational method. That amount shall be recognized in earnings rather than in other comprehensive income. However, an entity shall not adjust the carrying amount of the individual available-for-sale debt securities included in the closed portfolio in accordance with paragraph 815-25-35-1(c).
","snippet":"If a hedged item is otherwise measured at fair value with changes in fair value reported in other comprehensive income (such as an available-for-sale debt security), the adjustment of the hedged item's carrying amount di…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ab5bcc15905a1168ce1ddaa2e32dd898646500a3baa9d570add6bc53d8cd2aa","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-7","para":"35-7","html":"
If an entity has designated and documented that it will assess effectiveness and measure hedge results on an after-tax basis as permitted by paragraph 815-20-25-3(b)(2)(vi),the portion of the gain or loss on the hedging instrument that exceeded the loss or gain on the hedged item shall be included as an offset to the related tax effects in the period in which those tax effects are recognized.
","snippet":"If an entity has designated and documented that it will assess effectiveness and measure hedge results on an after-tax basis as permitted by paragraph 815-20-25-3(b)(2)(vi),the portion of the gain or loss on the hedging …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4c010590b895ecb462e402e6a87370635b48e0c1dc2821c0f636aedb05606393","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e347e14a224ae3979351df0118fc944d2112c00416b15f9cb0e284c690ddaf2c","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"block":null,"heading":"Existing Portfolio Layer Method Hedges","paragraphs":[{"citation":"815-25-35-7A","para":"35-7A","html":"
For each closed portfolio with one or more hedging relationships designated and accounted for under the portfolio layermethod in accordance with paragraph 815-20-25-12A, an entity shall perform and document at each effectiveness assessment date an analysis that supports the entity's expectation that the hedged layer or layers in aggregate is still anticipated to be outstanding for the designated hedge period. That analysis shall incorporate the entity's current expectations of prepayments, defaults, and other factors affecting the timing and amount of cash flows associated with the closed portfoliousing a method consistent with the method used to perform the analysis in paragraph 815-20-25-12A(a) and (b).
","snippet":"For each closed portfolio with one or more hedging relationships designated and accounted for under the portfolio layermethod in accordance with paragraph 815-20-25-12A, an entity shall perform and document at each effec…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e055a018868642c8b9a13702d987b26e32b36e507611f3d74c3b45f29f67859a","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:66d34966622c2c7c431ef24ec1ca09b2d95da65b9366f07b20a38222085304f2","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"block":null,"heading":"Changes in Fair Value of Hedged Item","paragraphs":[{"citation":"815-25-35-8","para":"35-8","html":"
The adjustment of the carrying amount of a hedged asset or liability required by paragraph 815-25-35-1(b) shall be accounted for in the same manner as other components of the carrying amount of that asset or liability. For example, an adjustment of the carrying amount of a hedged asset held for sale (such as inventory) would remain part of the carrying amount of that asset until the asset is sold, at which point the entire carrying amount of the hedged asset would be recognized as the cost of the item sold in determining earnings.
","snippet":"The adjustment of the carrying amount of a hedged asset or liability required by paragraph 815-25-35-1(b) shall be accounted for in the same manner as other components of the carrying amount of that asset or liability. F…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e823956f7b63a3e6dfb4ad3259765ec656091476f83e74a564c8fdce0643169f","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-9","para":"35-9","html":"
An adjustment of the carrying amount of a hedged interest-bearing financial instrument that is required by paragraph 815-25-35-1(b) and an adjustment that is maintained on a closed portfolio basis in a portfolio layer method hedge in accordance with paragraph 815-25-35-1(c) shall be amortized to earnings. Amortization shall begin no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
","snippet":"An adjustment of the carrying amount of a hedged interest-bearing financial instrument that is required by paragraph 815-25-35-1(b) and an adjustment that is maintained on a closed portfolio basis in a portfolio layer me…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cda5a164d38564c64fb76204d960a8cd80e3895434ba4de183b3704bd6b8591b","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-9A","para":"35-9A","html":"
If, as permitted by paragraph 815-25-35-9, an entity amortizes the adjustment to the carrying amount of the hedged item during an existing partial-term hedge of an interest-bearing financial instrument or amortizes the basis adjustment in an existing portfolio layer method hedge, the entity shall fully amortize that adjustment by the hedged item's assumed maturity date in accordance with paragraph 815-25-35-13B. For a discontinued hedging relationship, all remaining adjustments to the carrying amount of the hedged item shall be amortized over a period that is consistent with the amortization of other discounts or premiums associated with the hedged item in accordance with other Topics (for example, Subtopic Check output number.310-20 on receivables—nonrefundable fees and other costs). See paragraphs
815-25-40-9 through 40-9A
for further guidance on accounting for a basis adjustment attributable to a discontinued portfolio layer method hedge.
","snippet":"If, as permitted by paragraph 815-25-35-9, an entity amortizes the adjustment to the carrying amount of the hedged item during an existing partial-term hedge of an interest-bearing financial instrument or amortizes the b…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aeca00726b6bc90cb36a5147eccab0801d78ec5684623e557abde4f9d874b21d","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-10","para":"35-10","html":"
An asset or liability that has been designated as being hedged and accounted for pursuant to this Section remains subject to the applicable requirements in generally accepted accounting principles (GAAP) for assessing impairment or credit losses for that type of asset or for recognizing an increased obligation for that type of liability. Those impairment or credit loss requirements shall be applied after hedge accounting has been applied for the period and the carrying amount of the hedged asset or liability has been adjusted pursuant to paragraph 815-25-35-1(b). A portfolio layer method basis adjustment that is maintained on a closed portfolio basis for an existing hedge in accordance with paragraph 815-25-35-1(c) shall not be considered when assessing the individual assets or individual beneficial interest included in the closed portfolio for impairment or when assessing a portfolio of assets for impairment. An entity may not apply this guidance by analogy to other components of amortized cost basis. Because the hedging instrument is recognized separately as an asset or liability, its fair value or expected cash flows shall not be considered in applying those impairment or credit loss requirements to the hedged asset or liability.
","snippet":"An asset or liability that has been designated as being hedged and accounted for pursuant to this Section remains subject to the applicable requirements in generally accepted accounting principles (GAAP) for assessing im…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ce2041978dd2ff3d64d8905848243710f193db6ad16bf63bec5bff421ed562a3","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-11","para":"35-11","html":"
This Subtopic implicitly affects the measurement of credit losses under Subtopic 326-20 on financial instruments measured at amortized cost by requiring the present value of expected future cash flows to be discounted by the new effective rate based on the adjusted amortized cost basis in a hedged loan. Paragraph 326-20-55-9 requires that, when the amortized cost basis of a loan has been adjusted under fair value hedge accounting, the effective rate is the discount rate that equates the present value of the loan's future cash flows with that adjusted amortized cost basis. That paragraph states that the adjustment under fair value hedge accounting for changes in fair value attributable to the hedged risk under this Subtopic shall be considered to be an adjustment of the loan's amortized cost basis. As discussed in that paragraph, the loan's original effective interest rate becomes irrelevant once the recorded amount of the loan is adjusted for any changes in its fair value. Because paragraph 815-25-35-10 requires that the loan's amortized cost basis be adjusted for hedge accounting before the requirements of Subtopic 326-20 are applied, this Subtopic implicitly supports using the new effective rate and the adjusted amortized cost basis. A portfolio layer method basis adjustment that is maintained on a closed portfolio basis for an existing hedge in accordance with paragraph 815-25-35-1(c) shall not adjust the amortized cost basis of the individual assets or individual beneficial interest included in the closed portfolio. An entity may not apply this guidance by analogy to other components of amortized cost basis.
","snippet":"This Subtopic implicitly affects the measurement of credit losses under Subtopic 326-20 on financial instruments measured at amortized cost by requiring the present value of expected future cash flows to be discounted by…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:518d2e97c16328ca278b00c42762b206c4a967a30b615dc84fa2e275ae548841","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-12","para":"35-12","html":"
This guidance applies to all entities applying Subtopic 326-20 to financial assets that are hedged items in a fair value hedge, regardless of whether those entities have delayed amortizing to earnings the adjustments of the loan's amortized cost basis arising from fair value hedge accounting until the hedging relationship is dedesignated. The guidance on recalculating the effective rate is not intended to be applied to all other circumstances that result in an adjustment of a loan's amortized cost basis and is not intended to be applied to the individual assets or individual beneficial interest in an existing portfolio layer method hedge closed portfolio.
","snippet":"This guidance applies to all entities applying Subtopic 326-20 to financial assets that are hedged items in a fair value hedge, regardless of whether those entities have delayed amortizing to earnings the adjustments of …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5ea1cc5ee72222df1f90cdd5d7458f3dac7d3d94caa6e36ef3f5706fef5d8520","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-13","para":"35-13","html":"
In calculating the change in the hedged item's fair value attributable to changes in the benchmark interest rate (see paragraph 815-20-25-12(f)(2)), the estimated coupon cash flows used in calculating fair value shall be based on either the full contractual coupon cash flows or the benchmark rate component of the contractual coupon cash flows of the hedged item determined at hedge inception.
","snippet":"In calculating the change in the hedged item's fair value attributable to changes in the benchmark interest rate (see paragraph 815-20-25-12(f)(2)), the estimated coupon cash flows used in calculating fair value shall be…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2ce44de7714dcb20891fa58d9f8498f10071ac9144ce5c068abdbcbc2fdb7d6f","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-13A","para":"35-13A","html":"
In a hedge of interest rate risk in which the hedged item is a prepayable instrument in accordance with paragraph 815-20-25-6, the factors incorporated for the purpose of adjusting the carrying amount of the hedged item shall be the same factors that the entity incorporated for the purpose of assessing hedge effectiveness in accordance with paragraph 815-20-25-6B. For example, if an entity considers only how changes in the benchmark interest rate affect an obligor's decision to prepay a debt instrument when assessing hedge effectiveness, it shall consider only that factor when adjusting the carrying amount of the hedged item. The election to consider only how changes in the benchmark interest rate affect an obligor's decision to prepay a debt instrument does not affect an entity's election to use either the full contractual coupon cash flows or the benchmark rate component of the contractual coupon cash flows determined at hedge inception for purposes of measuring the change in fair value of the hedged item in accordance with paragraph 815-25-35-13.
","snippet":"In a hedge of interest rate risk in which the hedged item is a prepayable instrument in accordance with paragraph 815-20-25-6, the factors incorporated for the purpose of adjusting the carrying amount of the hedged item …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39d759529bbc7cd499176c701ea7ed20c8021dead2b8690cde121a28d9feef65","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-13B","para":"35-13B","html":"
For a fair value hedge of interest rate risk in which the hedged item is designated for a partial term in accordance with paragraph 815-20-25-12(b)(2)(ii), an entity may measure the change in the fair value of the hedged item attributable to interest rate risk using an assumed term that begins when the first hedged cash flow begins to accrue and ends at the end of the designated hedge period. The assumed issuance of the hedged item occurs on the date that the first hedged cash flow begins to accrue. The assumed maturity of the hedged item occurs at the end of the designated hedge period.An entity may measure the change in fair value of the hedged item attributable to interest rate risk in accordance with this paragraph when the entity is designating the hedged item in a hedge of both interest rate risk and foreign exchange risk. In that hedging relationship, the change in carrying value of the hedged item attributable to foreign exchange risk shall be measured on the basis of changes in the foreign currency spot rate in accordance with paragraph 815-25-35-18. Additionally, an entity may have one or more separately designated partial-term hedging relationships outstanding at the same time for the same debt instrument (for example, 2 outstanding hedging relationships for consecutive interest cash flows in Years 1-3 and consecutive interest cash flows in Years 5-7 of a 10-year debt instrument).
","snippet":"For a fair value hedge of interest rate risk in which the hedged item is designated for a partial term in accordance with paragraph 815-20-25-12(b)(2)(ii), an entity may measure the change in the fair value of the hedged…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a87612c1e8f1cd67180c1e74aae5a4c685cef64a51efcb7906d46b515091941d","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-14","para":"35-14","html":"
Amounts recorded in an entity's income statement as interest costs shall be reflected in the capitalization rate under Subtopic 835-20. Those amounts could include amortization of the adjustments of the carrying amount of the hedged liability, under paragraphs 815-25-35-9 through 35-9A, if an entity elects to begin amortization of those adjustments during the period in which interest is eligible for capitalization.
","snippet":"Amounts recorded in an entity's income statement as interest costs shall be reflected in the capitalization rate under Subtopic 835-20. Those amounts could include amortization of the adjustments of the carrying amount o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eb68e21aec56aa4db6e49280a659f76ac4fbca19958aea9a5fb562efaec9cd03","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-15","para":"35-15","html":"
Gains and losses on a qualifying foreign currency fair value hedge shall be accounted for as specified in Section 815-25-40 and paragraphs
815-25-35-1 through 35-10
.
","snippet":"Gains and losses on a qualifying foreign currency fair value hedge shall be accounted for as specified in Section 815-25-40 and paragraphs 815-25-35-1 through 35-10.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:16ec5da837fd0e1f33832d8920227b30117ec2cace8e49575f59100eff296b64","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-16","para":"35-16","html":"
If a nonderivative instrument qualifies as a hedging instrument under paragraph 815-20-25-58, the gain or loss on the nonderivative hedging instrument attributable to foreign currency risk shall be the foreign currency transaction gain or loss as determined under Subtopic 830-20. The foreign currency transaction gain or loss on a hedging instrument shall be determined, consistent with paragraph 830-20-35-1, as the increase or decrease in functional currency cash flows attributable to the change in spot exchange rates between the functional currency and the currency in which the hedging instrument is denominated. That foreign currency transaction gain or loss shall be recognized currently in earnings along with the change in the carrying amount of the hedged firm commitment.
","snippet":"If a nonderivative instrument qualifies as a hedging instrument under paragraph 815-20-25-58, the gain or loss on the nonderivative hedging instrument attributable to foreign currency risk shall be the foreign currency t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9cd4838bfbee22116abf3f1ffe7595edbfdabeeb736e438754134beb40b9d12","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-17","para":"35-17","html":"
Paragraph not used.
","snippet":"Paragraph not used.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1885250a4daf7a4c79c2c7d8f0860da3861fe17c93970891e38e23af2ffab933","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"citation":"815-25-35-18","para":"35-18","html":"
Remeasurement of hedged foreign-currency-denominated assets and liabilities is based on the guidance in Subtopic 830-20, which requires remeasurement based on spot exchange rates, regardless of whether a fair value hedging relationship exists.
","snippet":"Remeasurement of hedged foreign-currency-denominated assets and liabilities is based on the guidance in Subtopic 830-20, which requires remeasurement based on spot exchange rates, regardless of whether a fair value hedgi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1379f0e8583ba5abf3d80720e8c9f17ca30e4fc8d92b5b50e0304ca79c64db20","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ed159eeee6afe9e16a0cfcad2b93661f57a7957bb9e77df8ff416c7b38aa517a","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},{"block":null,"heading":"Entities That Do Not Report Earnings","paragraphs":[{"citation":"815-25-35-19","para":"35-19","html":"
An entity that does not report earnings as a separate caption in a statement of financial performance (for example, a not-for-profit entity [NFP] or a defined benefit pension plan) shall recognize the gain or loss on a hedging instrument as a change in net assets in the period of change unless the hedging instrument is designated as a hedge of the foreign currency exposure of a net investment in a foreign operation. In that circumstance, the provisions of paragraphs 815-20-25-66 and
815-35-35-1 through 35-2
shall be applied. Entities that do not report earnings shall recognize the changes in the carrying amount of the hedged item pursuant to paragraphs 815-25-35-1 and 815-25-35-4 in a fair value hedge as a change in net assets in the period of change.
","snippet":"An entity that does not report earnings as a separate caption in a statement of financial performance (for example, a not-for-profit entity [NFP] or a defined benefit pension plan) shall recognize the gain or loss on a h…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c9cc0117d88d82147f0f35817dbc504dbd565f5b8b8a1a505cae5a650e7e64fb","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8e635664baaaba073dcf0f22e7ffeadb6ed218ae361e413286bb3f1db69ff5c5","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fa4621fc4ebe2108454e94a71052f15cfcd66f4b06139af1e95109a9023d7bad","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fa4621fc4ebe2108454e94a71052f15cfcd66f4b06139af1e95109a9023d7bad","downloaded_from":"2026-09-10T01:37:20.445Z","last_downloaded_at":"2026-09-10T01:37:20.445Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480295","source_sha256":"f156796d49e910140f4f777221c79f0452723121c4a7adb5639463597c1ebce5"}}