Upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred.
An entity may choose to elect the fair value option for an eligible item only on the date that one of the following occurs: - a
The entity first recognizes the eligible item.
- b
- c
Financial assets that have been reported at fair value with unrealized gains and losses included in earnings because of specialized accounting principles cease to qualify for that specialized accounting (for example, a transfer of assets from a subsidiary subject to Subtopic 946-10 to another entity within the consolidated reporting entity not subject to that Subtopic). - d
The accounting treatment for an investment in another entity changes because the investment becomes subject to the equity method of accounting.
- 1
- 2
- e
An event that requires an eligible item to be measured at fair value at the time of the event but does not require fair value measurement at each reporting date after that, excluding the recognition of impairment under lower-of-cost-or-market accounting or accounting for securities in accordance with either Topic 321 on investments—equity securities or Topic 326 on measurement of credit losses.
(P) December 16, 2026; (N) December 16, 2026
105-10-65-10An entity may choose to elect the fair value option for an eligible item only on the date that one of the following occurs: - a
The entity first recognizes the eligible item.
- b
- c
Financial assets that have been reported at fair value with unrealized gains and losses included in earnings because of specialized accounting principles cease to qualify for that specialized accounting (for example, a transfer of assets from a subsidiary subject to Subtopic 946-10 to another entity within the consolidated reporting entity not subject to that Subtopic). - d
The accounting treatment for an investment in another entity changes because the investment becomes subject to the equity method of accounting.
- 1
- 2
- e
An event that requires an eligible item to be measured at fair value at the time of the event but does not require fair value measurement at each reporting date after that, excluding the recognition of impairment under lower-of-cost-or-market accounting, the recognition of other-than-temporary impairment for equity method investments in accordance with Topic 323 on investments—equity method and joint ventures, or accounting for securities in accordance with either Topic 321 on investments—equity securities or Topic 326 on measurement of credit losses.
An acquirer, parent, or primary beneficiary decides whether to apply the fair value option to eligible items of an acquiree, subsidiary, or consolidated VIE, but that decision applies only in the consolidated financial statements. Fair value option choices made by an acquired entity, subsidiary, or VIE continue to apply in separate financial statements of those entities if they issue separate financial statements.
An investor in an equity security may elect the fair value option for its entire investment in that equity security, including any fractional shares issued by the investee (for example, fractional shares that are acquired in a dividend reinvestment program).