# ASC 815-30-40: Derivatives and Hedging — Cash Flow Hedges — 40 Derecognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/815/30/#40-derecognition) 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): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:039b5efa84d01c424fd62f742ba8dad32f82ea5dd92846c2f2cb29ace9037056 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 815-30-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/815/30/#40-derecognition) SEC content: no #### Discontinuing Hedge Accounting ##### [815-30-40-1](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:653ed19a13d605607788e55bc42ab6e28aa3eded301ee7d008eac350b18e4a47 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall discontinue prospectively the accounting specified in paragraphs [815-30-35-3](https://asc.understandingaccounting.org/asc/815/30/#815-30-35-3) and [815-30-35-38 through 35-41](https://asc.understandingaccounting.org/asc/815/30/#815-30-35-38) for an existing hedge if any one of the following occurs: 1. a Any criterion in Section 815-30-25 is no longer met. 2. b The [derivative instrument](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.") expires or is sold, terminated, or exercised. 3. c The entity removes the designation of the [cash flow hedge](https://asc.understandingaccounting.org/glossary/c/#cash-flow-hedge "A hedge of the exposure to variability in the cash flows of a recognized asset or liability, or of a forecasted transaction, that is attributable to a particular risk."). ##### [815-30-40-1A](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:8b4a0980084dfc3c2172a0f390e95153fc017b1e051653148e44a344b884c514 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the purposes of applying the guidance in paragraph [815-30-40-1](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-1), a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument. ##### [815-30-40-2](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:6c8e88291ae7057d6fc474fd809b4f4ae839e386808a156be4fd294a2bfda488 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the circumstances discussed in paragraph [815-30-40-1](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-1), the net gain or loss shall remain in accumulated other comprehensive income and be reclassified into earnings as specified in paragraphs  [815-30-35-38 through 35-41](https://asc.understandingaccounting.org/asc/815/30/#815-30-35-38) . Example 16 (see paragraph [815-30-55-94](https://asc.understandingaccounting.org/asc/815/30/#815-30-55-94)) illustrates the application of paragraph [815-30-35-3](https://asc.understandingaccounting.org/asc/815/30/#815-30-35-3) if a hedging relationship is terminated. ##### [815-30-40-3](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:44b6b8605764c87975bcfd34ccb8d145b81fa52006f0e01e01521ac3dc7745db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Furthermore, the entity may elect to designate prospectively a new hedging relationship with a different hedging instrument or, in the circumstances described in paragraph [815-30-40-1(a)](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-1) and [815-30-40-1(c)](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-1), a different hedged [transaction](https://asc.understandingaccounting.org/glossary/t/#transaction "An external event involving transfer of something of value (future economic benefit) between two (or more) entities. (See FASB Concepts Statement No. 6, Elements of Financial Statements.)(P) December 16, 2024; (N) December 16, 2025105-10-65-9An external event involving transfer of something of value (future economic benefit) between two (or more) entities.") or a hedged item if the hedging relationship meets the applicable criteria for a cash flow hedge or a [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."). ##### [815-30-40-4](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:c229d95cdda1414b3264a736e132d8f2e697c40df411ab22e34561a3175b972f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The net derivative instrument gain or loss related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive income unless it is probable that the [forecasted transaction](https://asc.understandingaccounting.org/glossary/f/#forecasted-transaction "A transaction that is expected to occur for which there is no firm commitment. Because no transaction or event has yet occurred and the transaction or event when it occurs will be at the prevailing market price, a forecasted transaction does not give an entity any present rights to future benefits or a present obligation for future sacrifices.") will not occur by the end of the originally specified time period (as documented at the inception of the hedging relationship) or within an additional two-month period of time thereafter, except as indicated in the following sentence. In rare cases, the existence of extenuating circumstances that are related to the nature of the forecasted transaction and are outside the control or influence of the reporting entity may cause the forecasted transaction to be probable of occurring on a date that is beyond the additional two-month period of time, in which case the net derivative instrument gain or loss related to the discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive income until it is reclassified into earnings pursuant to paragraphs [815-30-35-38 through 35-41](https://asc.understandingaccounting.org/asc/815/30/#815-30-35-38) . ##### [815-30-40-5](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:bae6d7ef6720e15301262c5e5ae0233d6a3e5c293078634aa611d908ad36a1bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If it is probable that the hedged forecasted transaction will not occur either by the end of the originally specified time period or within the additional two-month period of time and the hedged forecasted transaction also does not qualify for the exception described in the preceding paragraph, that derivative instrument gain or loss reported in accumulated other comprehensive income shall be reclassified into earnings immediately. A pattern of determining that hedged forecasted transactions are probable of not occurring would call into question both an entity's ability to accurately predict forecasted transactions and the propriety of using hedge accounting in the future for similar forecasted transactions. ##### [815-30-40-6](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:464e4fa47cfc19e2e9c20d0be6d36f53a5e76bbdb4437bdbd6b02c201f919d1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Derivative instrument gains and losses that had initially been reported in other comprehensive income as a result of a cash flow hedge and then reclassified to earnings (because the entity subsequently concluded that it was probable that the forecasted transaction would not occur within the originally specified time period or the additional period of time described in paragraph [815-30-40-4](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-4)) shall not later be reclassified out of earnings and back into accumulated other comprehensive income due to a reassessment of probabilities. ##### [815-30-40-6A](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-6A) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:d830b4d4cc0292398856d550d3d598748cd461e4396f3ec85965fb154a31963e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When applying the guidance in paragraph [815-20-25-83A](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-83A), if the hedged forecasted transaction is probable of not occurring, any amounts remaining in accumulated other comprehensive income related to amounts excluded from the assessment of effectiveness shall be recorded in earnings in the current period. For all other discontinued cash flow hedges, any amounts associated with the excluded component remaining in accumulated other comprehensive income shall be recorded in earnings when the hedged forecasted transaction affects earnings. #### Alterations or Terminations of Offsetting Third-Party Derivative Instruments ##### [815-30-40-7](https://asc.understandingaccounting.org/asc/815/30/#815-30-40-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:37:54.373Z to 2026-09-10T01:37:54.373Z Record version: sha256:ae92bee364a7726813e76f5a23b81a5bbeffa590b699be69e86778bf2bbb3235 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [815-20-25-62](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-62) provides guidance on [internal derivatives](https://asc.understandingaccounting.org/glossary/i/#internal-derivative "A foreign currency derivative instrument that has been entered into with another member of a consolidated group (such as a treasury center).") as hedging instruments in cash flow hedges of foreign exchange risk. Paragraph [815-20-25-63](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-63) states that, if an issuing affiliate alters or terminates any offsetting third-party derivative instrument (which should be rare), the hedging affiliate prospectively shall cease hedge accounting for the internal derivatives that are offset by that third-party derivative instrument.