# ASC 825-944-05: Financial Instruments — Financial Services—Insurance — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/825/944/#05-overview-and-background)

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): 2026-09-10T01:45:30.017Z to 2026-09-10T01:45:30.017Z

Record version: sha256:6f7c0403e48a2f5032f988ffb828f9e392b26b829846a2eea217af3a9358e4c6

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 825-944-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/825/944/#05-overview-and-background)

SEC content: no

##### [825-944-05-1](https://asc.understandingaccounting.org/asc/825/944/#825-944-05-1)

Pending content: no

Source downloaded (UTC): 2026-09-10T01:45:30.017Z to 2026-09-10T01:45:30.017Z

Record version: sha256:3befa05a3f706fa92d1204bb478a38f770ec43de4433b3ee59e8c88c24262df5

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


This Subtopic provides guidance to insurance entities on accounting for and financial reporting of financial instruments, including guidance on [investment contracts](https://asc.understandingaccounting.org/glossary/i/#investment-contracts "Long-duration contracts that do not subject the insurance entity to risks arising from policyholder mortality or morbidity.") and implementation guidance on disclosures about concentrations of credit risk of [reinsurance](https://asc.understandingaccounting.org/glossary/r/#reinsurance "A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder.") contracts. The guidance in this Subtopic is provided in the following two Subsections:

1.  a
    
    General
    
2.  b
    
    Reinsurance contracts.

### Reinsurance Contracts

##### [825-944-05-2](https://asc.understandingaccounting.org/asc/825/944/#825-944-05-2)

Pending content: no

Source downloaded (UTC): 2026-09-10T01:45:30.017Z to 2026-09-10T01:45:30.017Z

Record version: sha256:36246bc22500972622739e786d48380e7e5b3d4322855e532a8aa153bebba010

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


The Reinsurance Contracts Subsections of this Subtopic provide guidance to insurance entities on disclosures about concentrations of credit risk of [reinsurance](https://asc.understandingaccounting.org/glossary/r/#reinsurance "A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder.") contracts.