# ASC 820-940: Fair Value Measurement — Financial Services—Brokers and Dealers Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/820/940/) 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): 2026-09-10T01:43:50.866Z to 2026-09-10T01:44:08.930Z Record version: sha256:f24efd92af5589737299dbc06fa2dafe8a050483129cfae65b6c77ec3aff6016 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-940: Fair Value Measurement — Financial Services—Brokers and Dealers ### Machine-generated study aids ```json { "summary": "This industry Subtopic supplements ASC 820 for brokers and dealers in securities. It lists non-exhaustive factors broker-dealers have considered in determining the fair value of a financial instrument (issuer's financial standing, market liquidity, restrictions on salability, pending offerings or reorganizations, dealer pricing, recent trades, etc.) and requires specific disclosure when an instrument is carried below its quoted price.", "key_points": [ "The Subtopic applies to brokers and dealers in securities and follows the scope of Section 940-10-15 (820-940-15-1).", "820-940-30-1 provides a nonexclusive list of factors broker-dealers consider in determining fair value, including the issuer's financial standing and business plan, cost at purchase date, market liquidity, restrictions on salability, pending public offerings, pending reorganization activity, reported prices of similar instruments, the issuer's access to financing, economic conditions, recent purchases or sales of the security, and pricing by other dealers.", "Restrictions on salability are evaluated by reference to paragraphs 820-10-35-6B and 820-10-35-36B (renumbered to 820-10-35-36BB under the amendments effective for fiscal years beginning after December 16, 2027, per 820-10-65-14).", "The listed factors do not purport to delineate all factors management may consider (820-940-30-1).", "If a financial instrument's fair value is measured at lower than quoted prices, 820-940-50-1 requires disclosure of a description of the instrument, its quoted price, the fair value reported in the statement of financial condition, and the methods and significant assumptions used.", "Paragraph 820-10-55-52 contains an illustrative example of the below-quoted-price disclosure." ], "categories": [ "Fair value", "Industry-specific", "Disclosure", "Financial instruments" ], "audience_level": "intermediate", "student_note": "Broker-dealers mark inventory to fair value, so this short Subtopic is mainly a checklist of judgment factors plus a disclosure trigger. A common misunderstanding is thinking a below-quoted-price measurement is prohibited — it is permitted, but it must be explained in the notes, and blockage-type discounts are still constrained by ASC 820-10's restrictions guidance.", "related_topics": [ "820-10", "940-10", "940-320", "825-10" ], "key_concepts": [ "broker-dealer fair value", "quoted price", "restrictions on salability", "market liquidity", "financial instrument valuation factors", "statement of financial condition", "significant assumptions disclosure" ] } ``` Source downloaded (UTC): 2026-09-10T01:43:50.866Z to 2026-09-10T01:43:50.866Z Record version: sha256:1604e22591cac066e4b0fa8813e1665e9f435e1ee8b9c1ee527fdfb7a51c47b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-940-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/820/940/#00-status) SEC content: no ##### [820-940-00-1](https://asc.understandingaccounting.org/asc/820/940/#820-940-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:50.866Z to 2026-09-10T01:43:50.866Z Record version: sha256:8b52da23ffd4a55af2099319b5340ca45668a014b17a27c0007ba98d739d137e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
940-820-30-1AmendedAccounting Standards Update No. 2026-0309/09/2026
940-820-30-1AmendedAccounting Standards Update No. 2022-0306/30/2022
940-820-30-1AmendedAccounting Standards Update No. 2012-0410/01/2012
940-820-50-1AmendedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T01:43:54.063Z to 2026-09-10T01:43:54.063Z Record version: sha256:e482772f246717fff5b9cb2b2bdcab94d070c808a2e6f3bb2e9f7c6a7fdd25e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-940-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/820/940/#05-overview-and-background) SEC content: no ##### [820-940-05-1](https://asc.understandingaccounting.org/asc/820/940/#820-940-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:54.063Z to 2026-09-10T01:43:54.063Z Record version: sha256:72604f6773f25f118f4619361b02f1c504f9bf1c3ea0ad431851db9393854842 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses [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.") measurements and disclosures for brokers and dealers in securities (broker-dealers). Source downloaded (UTC): 2026-09-10T01:43:56.463Z to 2026-09-10T01:43:56.463Z Record version: sha256:8f201b2f650cb81508ea1385fb34a90cfe112c0ae5ab1ebcc0cc6fd4184f40a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-940-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/820/940/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [820-940-15-1](https://asc.understandingaccounting.org/asc/820/940/#820-940-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:56.463Z to 2026-09-10T01:43:56.463Z Record version: sha256:8f99f86f081deae90bbfddb0ba86b76b258b1c79a07c871d49f4d8203208dd77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15. Source downloaded (UTC): 2026-09-10T01:44:03.324Z to 2026-09-10T01:44:03.324Z Record version: sha256:b734bdf59185efcb5146f8584dcee8d24fc880decf9605be6194338c5c93a77a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-940-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/820/940/#30-initial-measurement) SEC content: no ##### [820-940-30-1](https://asc.understandingaccounting.org/asc/820/940/#820-940-30-1) Pending content: yes Source downloaded (UTC): 2026-09-10T01:44:03.324Z to 2026-09-10T01:44:03.324Z Record version: sha256:c4f30d9dec48b5b4dd25f3892e5ae27e44675562b1276eb9a21988ede7038636 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section does not purport to delineate all factors that may be considered by management in determining the [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.") assigned to a particular financial instrument. However, the following is a list of certain factors that have been taken into consideration by broker-dealers as part of the determination of fair value: 1. a Financial standing of the issuer 2. b Business and financial plan of the issuer 3. c Cost at date of purchase 4. d The liquidity of the market 5. e Restrictions on salability (see paragraphs [820-10-35-6B](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-6B) and [820-10-35-36B](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-36B)) 6. f Pending public offering with respect to the financial instrument 7. g Pending reorganization activity affecting the financial instrument (such as merger proposals, tender offers, debt restructurings, and conversions) 8. h Reported prices and the extent of public trading in similar financial instruments of the issuer or comparable entities 9. i Ability of the issuer to obtain needed financing 10. j Changes in the economic conditions affecting the issuer 11. k A recent purchase or sale of a security of the entity 12. l Pricing by other dealers in similar securities. Transition date:(P) December 16, 2027; (N) December 16, 2027Transition guidance: [820-10-65-14](https://asc.understandingaccounting.org/asc/820/10/#820-10-65-14)This Section does not purport to delineate all factors that may be considered by management in determining the [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.") assigned to a particular financial instrument. However, the following is a list of certain factors that have been taken into consideration by broker-dealers as part of the determination of fair value: 1. a Financial standing of the issuer 2. b Business and financial plan of the issuer 3. c Cost at date of purchase 4. d The liquidity of the market 5. e Restrictions on salability (see paragraphs [820-10-35-6B](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-6B) and [820-10-35-36BB](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-36BB)) 6. f Pending public offering with respect to the financial instrument 7. g Pending reorganization activity affecting the financial instrument (such as merger proposals, tender offers, debt restructurings, and conversions) 8. h Reported prices and the extent of public trading in similar financial instruments of the issuer or comparable entities 9. i Ability of the issuer to obtain needed financing 10. j Changes in the economic conditions affecting the issuer 11. k A recent purchase or sale of a security of the entity 12. l Pricing by other dealers in similar securities. Source downloaded (UTC): 2026-09-10T01:44:05.647Z to 2026-09-10T01:44:05.647Z Record version: sha256:91ba14c2096d444a50644adfc525bee2f2656ecf9f69e750eb078acf82d2a6f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-940-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/820/940/#50-disclosure) SEC content: no ##### [820-940-50-1](https://asc.understandingaccounting.org/asc/820/940/#820-940-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:44:05.647Z to 2026-09-10T01:44:05.647Z Record version: sha256:827b6278c0fcde77c2589b3940aafe6a5fd3f301b22c2b27a7410f5ef7a0e6ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Notes to the financial statements shall disclose all of the following if financial instruments' [fair values](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.") are measured at lower than quoted prices (see Example in paragraph [820-10-55-52](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-52)): 1. a Description of the financial instrument 2. b The quoted price of the financial instrument 3. c Fair value reported in the statement of financial condition 4. d Methods and significant assumptions used to value the instrument at lower than the quoted price.