# ASC 815-40-40: Derivatives and Hedging — Contracts in Entity's Own Equity — 40 Derecognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/815/40/#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): 2026-09-10T01:39:07.707Z to 2026-09-10T01:39:07.707Z

Record version: sha256:38394e5f45ecab0063a0766ad75b6b80dcca313ccd11fbd0272d8c34438d5547

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 815-40-40: 40 Derecognition

[Read section](https://asc.understandingaccounting.org/asc/815/40/#40-derecognition)

SEC content: no

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

Pending content: no

Source downloaded (UTC): 2026-09-10T01:39:07.707Z to 2026-09-10T01:39:07.707Z

Record version: sha256:d3dfe3a848f0155a37237dbf71132aeb6feea74e3c297b0965e4532212e0cc27

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


If contracts classified as permanent equity are ultimately settled in a manner that requires that the entity deliver cash, the amount of cash paid or received shall be reported as a reduction of, or an addition to, contributed capital.

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

Pending content: no

Source downloaded (UTC): 2026-09-10T01:39:07.707Z to 2026-09-10T01:39:07.707Z

Record version: sha256:f87359898369ff07df9ac0cdbc703d1ec5ec5d057e672ffb9287d0a12489312e

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


If contracts classified as assets or liabilities are ultimately settled in shares, any gains or losses on those contracts shall continue to be included in earnings.