# ASC 815-25-35: Derivatives and Hedging — Fair Value Hedges — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/815/25/#35-subsequent-measurement) 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): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:fa4621fc4ebe2108454e94a71052f15cfcd66f4b06139af1e95109a9023d7bad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 815-25-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/815/25/#35-subsequent-measurement) SEC content: no #### Changes in Fair Value in General ##### [815-25-35-1](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:60765e73ca36dafafaffb202a8fadbdc8ef5fce79d1ae40cf5378d328b250107 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Gains and losses on a qualifying [fair value hedge](https://asc.understandingaccounting.org/glossary/f/#fair-value-hedge "A hedge of the exposure to changes in the fair value of a recognized asset or liability, or of an unrecognized firm commitment, that are attributable to a particular risk.") 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](https://asc.understandingaccounting.org/asc/815/20/#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](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.")) 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](https://asc.understandingaccounting.org/glossary/h/#hedged-layer "The hedged item designated in a portfolio layer method hedging relationship, representing a stated amount or stated amounts of a closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments that is not expected to be affected by prepayments, defaults, or other factors affecting the timing and amount of cash flows for the designated hedge period.") or layers that are designated under the portfolio layer method in accordance with paragraph [815-20-25-12A](https://asc.understandingaccounting.org/asc/815/20/#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. ##### [815-25-35-2](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:e4e4977ad082d824f078e4c150b5fe46dbf7ef636db49a4b76ebc363939370c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-12](https://asc.understandingaccounting.org/updates/asu-2017-12/). ##### [815-25-35-3](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:b04d4e9225f99b3c630134af06723031be0a8e6d8b93a9a5560cee93859ee582 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-12](https://asc.understandingaccounting.org/updates/asu-2017-12/). ##### [815-25-35-4](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:90f67798960dca5d3727ded757ec55423e40052834b3edf61fa2865e722f7c1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-75) 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](https://asc.understandingaccounting.org/asc/815/20/#815-20-45-1A). ##### [815-25-35-5](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:882c7535a4e53f0e3316db239cf331c45110190650f7f056e8b92ff9829dd62a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-12](https://asc.understandingaccounting.org/updates/asu-2017-12/). ##### [815-25-35-6](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:6ab5bcc15905a1168ce1ddaa2e32dd898646500a3baa9d570add6bc53d8cd2aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a hedged item is otherwise measured at fair value with changes in fair value reported in [other comprehensive income](https://asc.understandingaccounting.org/glossary/o/#other-comprehensive-income "Revenues, expenses, gains, and losses that under generally accepted accounting principles (GAAP) are included in comprehensive income but excluded from net 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)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) 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](https://asc.understandingaccounting.org/asc/815/20/#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)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1). ##### [815-25-35-7](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:4c010590b895ecb462e402e6a87370635b48e0c1dc2821c0f636aedb05606393 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-3),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. #### Existing Portfolio Layer Method Hedges ##### [815-25-35-7A](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-7A) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:e055a018868642c8b9a13702d987b26e32b36e507611f3d74c3b45f29f67859a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/815/20/#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)](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12A). #### Changes in Fair Value of Hedged Item ##### [815-25-35-8](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:e823956f7b63a3e6dfb4ad3259765ec656091476f83e74a564c8fdce0643169f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The adjustment of the carrying amount of a hedged asset or liability required by paragraph [815-25-35-1(b)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) 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. ##### [815-25-35-9](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:cda5a164d38564c64fb76204d960a8cd80e3895434ba4de183b3704bd6b8591b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An adjustment of the carrying amount of a hedged interest-bearing [financial instrument](https://asc.understandingaccounting.org/glossary/f/#financial-instrument "Cash, evidence of an ownership interest in an entity, or a contract that both: Imposes on one entity a contractual obligation either: To deliver cash or another financial instrument to a second entity To exchange other financial instruments on potentially unfavorable terms with the second entity. Conveys to that second entity a contractual right either: To receive cash or another financial instrument from the first entity To exchange other financial instruments on potentially favorable terms with the first entity. The use of the term financial instrument in this definition is recursive (because the term financial instrument is included in it), though it is not circular. The definition requires a chain of contractual obligations that ends with the delivery of cash or an ownership interest in an entity. Any number of obligations to deliver financial instruments can be links in a chain that qualifies a particular contract as a financial instrument. Contractual rights and contractual obligations encompass both those that are conditioned on the occurrence of a specified event and those that are not. All contractual rights (contractual obligations) that are financial instruments meet the definition of asset (liability) set forth in FASB Concepts Statement No. 6, Elements of Financial Statements, although some may not be recognized as assets (liabilities) in financial statements—that is, they may be off-balance-sheet—because they fail to meet some other criterion for recognition. For some financial instruments, the right is held by or the obligation is due from (or the obligation is owed to or by) a group of entities rather than a single entity. (P) December 16, 2024; (N) December 16, 2025105-10-65-9Cash, evidence of an ownership interest in an entity, or a contract that both: Imposes on one entity a contractual obligation either: To deliver cash or another financial instrument to a second entity To exchange other financial instruments on potentially unfavorable terms with the second entity. Conveys to that second entity a contractual right either: To receive cash or another financial instrument from the first entity To exchange other financial instruments on potentially favorable terms with the first entity. The use of the term financial instrument in this definition is recursive (because the term financial instrument is included in it), though it is not circular. The definition requires a chain of contractual obligations that ends with the delivery of cash or an ownership interest in an entity. Any number of obligations to deliver financial instruments can be links in a chain that qualifies a particular contract as a financial instrument. Contractual rights and contractual obligations encompass both those that are conditioned on the occurrence of a specified event and those that are not. Some contractual rights (contractual obligations) that are financial instruments may not be recognized in financial statements—that is, they may be off-balance-sheet—because they fail to meet some other criterion for recognition. For some financial instruments, the right is held by or the obligation is due from (or the obligation is owed to or by) a group of entities rather than a single entity.") that is required by paragraph [815-25-35-1(b)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) 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)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) 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. ##### [815-25-35-9A](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-9A) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:aeca00726b6bc90cb36a5147eccab0801d78ec5684623e557abde4f9d874b21d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, as permitted by paragraph [815-25-35-9](https://asc.understandingaccounting.org/asc/815/25/#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](https://asc.understandingaccounting.org/asc/815/25/#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](https://asc.understandingaccounting.org/asc/815/25/#815-25-40-9) for further guidance on accounting for a basis adjustment attributable to a discontinued portfolio layer method hedge. ##### [815-25-35-10](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:ce2041978dd2ff3d64d8905848243710f193db6ad16bf63bec5bff421ed562a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1). 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)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) 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. ##### [815-25-35-11](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:518d2e97c16328ca278b00c42762b206c4a967a30b615dc84fa2e275ae548841 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/326/20/#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](https://asc.understandingaccounting.org/asc/815/25/#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)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) 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. ##### [815-25-35-12](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:5ea1cc5ee72222df1f90cdd5d7458f3dac7d3d94caa6e36ef3f5706fef5d8520 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [815-25-35-13](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:2ce44de7714dcb20891fa58d9f8498f10071ac9144ce5c068abdbcbc2fdb7d6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In calculating the change in the hedged item's fair value attributable to changes in the [benchmark interest rate](https://asc.understandingaccounting.org/glossary/b/#benchmark-interest-rate "A widely recognized and quoted rate in an active financial market that is broadly indicative of the overall level of interest rates attributable to high-credit-quality obligors in that market. It is a rate that is widely used in a given financial market as an underlying basis for determining the interest rates of individual financial instruments and commonly referenced in interest-rate-related transactions. In theory, the benchmark interest rate should be a risk-free rate (that is, has no risk of default). In some markets, government borrowing rates may serve as a benchmark. In other markets, the benchmark interest rate may be an interbank offered rate.") (see paragraph [815-20-25-12(f)(2)](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12)), 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. ##### [815-25-35-13A](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-13A) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:39d759529bbc7cd499176c701ea7ed20c8021dead2b8690cde121a28d9feef65 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a hedge of interest rate risk in which the hedged item is a [prepayable](https://asc.understandingaccounting.org/glossary/p/#prepayable "Able to be settled by either party before its scheduled maturity.") instrument in accordance with paragraph [815-20-25-6](https://asc.understandingaccounting.org/asc/815/20/#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](https://asc.understandingaccounting.org/asc/815/20/#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](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-13). ##### [815-25-35-13B](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-13B) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:a87612c1e8f1cd67180c1e74aae5a4c685cef64a51efcb7906d46b515091941d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12), 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](https://asc.understandingaccounting.org/asc/815/25/#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). ##### [815-25-35-14](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:eb68e21aec56aa4db6e49280a659f76ac4fbca19958aea9a5fb562efaec9cd03 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-9), if an entity elects to begin amortization of those adjustments during the period in which interest is eligible for capitalization. ##### [815-25-35-15](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:16ec5da837fd0e1f33832d8920227b30117ec2cace8e49575f59100eff296b64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) . ##### [815-25-35-16](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:e9cd4838bfbee22116abf3f1ffe7595edbfdabeeb736e438754134beb40b9d12 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a nonderivative instrument qualifies as a hedging instrument under paragraph [815-20-25-58](https://asc.understandingaccounting.org/asc/815/20/#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](https://asc.understandingaccounting.org/asc/830/20/#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. ##### [815-25-35-17](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:1885250a4daf7a4c79c2c7d8f0860da3861fe17c93970891e38e23af2ffab933 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [815-25-35-18](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:1379f0e8583ba5abf3d80720e8c9f17ca30e4fc8d92b5b50e0304ca79c64db20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Entities That Do Not Report Earnings ##### [815-25-35-19](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:20.445Z to 2026-09-10T01:37:20.445Z Record version: sha256:c9cc0117d88d82147f0f35817dbc504dbd565f5b8b8a1a505cae5a650e7e64fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-66) and [815-35-35-1 through 35-2](https://asc.understandingaccounting.org/asc/815/35/#815-35-35-1) 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](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1) and [815-25-35-4](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-4) in a fair value hedge as a change in net assets in the period of change.