# ASC 825-944: Financial Instruments — Financial Services—Insurance Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/825/944/) 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): 2026-09-10T01:45:26.659Z to 2026-09-10T01:45:54.729Z Record version: sha256:a31fb058f592e2e29a0b5f347e2305db248eade916c7368f7ac352e90f1b6ae9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 825-944: Financial Instruments — Financial Services—Insurance ### Machine-generated study aids ```json { "summary": "This subtopic applies the financial instruments guidance to insurance entities, covering investment contracts and disclosures about concentrations of credit risk arising from reinsurance contracts. Amounts received under investment contracts are not revenue; they are recorded as liabilities and accounted for like interest-bearing or other financial instruments, with related deferred acquisition costs reported as an asset. Ceding entities must disclose credit risk concentrations for reinsurance recoverables and prepaid reinsurance premiums, and must disclose the carrying amount of securities deposited with state regulatory authorities.", "key_points": [ "Amounts received as payments for an investment contract shall not be reported as revenues (825-944-25-1).", "Payments received from an investment contract are reported as liabilities and accounted for consistently with interest-bearing or other financial instruments (825-944-25-2).", "Deferred acquisition costs related to investment contracts are reported as an asset, consistent with Subtopic 944-30 (825-944-45-1).", "An entity shall disclose the carrying amount of securities deposited by insurance subsidiaries with state regulatory authorities (825-944-50-1A).", "Under Section 825-10-50, a ceding entity discloses concentrations of credit risk for both reinsurance recoverables and prepaid reinsurance premiums (825-944-50-1B).", "Concentration of credit risk disclosures may be required even absent a significant concentration with a single reinsurer (825-944-50-2).", "Retrocession of reinsured risks to a diverse group of retrocessionaires does not change the ceding entity's concentration of credit risk with the assuming entity, so disclosure is still required (825-944-50-3)." ], "categories": [ "Financial instruments", "Disclosure", "Industry-specific", "Revenue" ], "audience_level": "intermediate", "student_note": "The classic trap is treating investment-contract deposits as premium revenue: because these contracts lack significant insurance risk, the receipts are deposit liabilities, not revenue. Also remember that a ceding entity cannot look through to retrocessionaires to reduce its disclosed credit risk concentration with the assuming reinsurer.", "related_topics": [ "825-10", "944-20", "944-30", "944-10", "944-40", "944-605" ], "key_concepts": [ "investment contracts", "reinsurance contracts", "concentrations of credit risk", "reinsurance recoverables", "prepaid reinsurance premiums", "deferred acquisition costs", "ceding entity", "retrocession" ] } ``` Source downloaded (UTC): 2026-09-10T01:45:26.659Z to 2026-09-10T01:45:26.659Z Record version: sha256:c499d6fcd1a33c7a6e47049a2c33daa96e1e9824cb95f501bb71fde41c8739a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 825-944-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/825/944/#00-status) SEC content: no ##### [825-944-00-1](https://asc.understandingaccounting.org/asc/825/944/#825-944-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:26.659Z to 2026-09-10T01:45:26.659Z Record version: sha256:fc57fb403a8dbcecf6610821ab817cec3c3313ebe94288f12928da2dcedaeb69 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
Acquisition CostsAmendedAccounting Standards Update No. 2010-2610/13/2010
Reinsurance RecoverableAddedAccounting Standards Update No. 2016-1912/14/2016
944-825-45-1AmendedAccounting Standards Update No. 2018-1208/15/2018
944-825-50-1AmendedAccounting Standards Update No. 2016-1912/14/2016
944-825-50-1SupersededAccounting Standards Update No. 2016-0101/05/2016
944-825-50-1AAddedAccounting Standards Update No. 2016-0101/05/2016
944-825-50-1BAmendedAccounting Standards Update No. 2016-1912/14/2016
944-825-50-1BAddedAccounting Standards Update No. 2016-0101/05/2016
944-825-50-1 through 50-3
AddedAccounting Standards Update No. 2012-0410/01/2012
944-825-55-1 through 55-3SupersededAccounting Standards Update No. 2012-0410/01/2012
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. Source downloaded (UTC): 2026-09-10T01:45:34.039Z to 2026-09-10T01:45:34.039Z Record version: sha256:e5c729efaab89aa4340e89f32dd2ee4e12c3516887ba229c8f216ce62453053c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 825-944-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/825/944/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [825-944-15-1](https://asc.understandingaccounting.org/asc/825/944/#825-944-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:34.039Z to 2026-09-10T01:45:34.039Z Record version: sha256:df3bd2c7aca48937766d42ab761fd7cc3211327153ab018777ce8272dafdb03f 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 944-10-15, with specific instrument qualifications noted below. #### Instruments ##### [825-944-15-2](https://asc.understandingaccounting.org/asc/825/944/#825-944-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:34.039Z to 2026-09-10T01:45:34.039Z Record version: sha256:8f062b097fc830a574806e3fc07d4b73571b3e9cbcf3ad1c25397f35c39adc1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all financial instruments, including [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."). For a guidance on identifying investment contracts, see the discussion beginning in paragraph [944-20-15-16](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-16). ##### [825-944-15-3](https://asc.understandingaccounting.org/asc/825/944/#825-944-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:34.039Z to 2026-09-10T01:45:34.039Z Record version: sha256:a657c990e7388dbfb492248682c5e82553097daa9c0a1cd0ea85a11ac380ea8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ### Reinsurance Contracts #### Overall Guidance ##### [825-944-15-4](https://asc.understandingaccounting.org/asc/825/944/#825-944-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:34.039Z to 2026-09-10T01:45:34.039Z Record version: sha256:123b690c183c6e8954c3d6441398dfe6f8421393d763074a05d04cf15daa63ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Reinsurance Contracts Subsections of this Subtopic follow the same Scope and Scope Exceptions as outlined in the [General Subsection](https://asc.understandingaccounting.org/updates/page-2147479495/) of this Section, with specific instrument qualifications noted below. #### Instruments ##### [825-944-15-5](https://asc.understandingaccounting.org/asc/825/944/#825-944-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:34.039Z to 2026-09-10T01:45:34.039Z Record version: sha256:43b751b4101c396f1568f94166fca54fdd00fac984ed8a4bca97e6932cf642d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Reinsurance Contracts Subsections of this Subtopic applies only to [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. For guidance on identifying a reinsurance contract, see the [Reinsurance Contracts Subsection](https://asc.understandingaccounting.org/asc/944/20/#15-scope-and-scope-exceptions) of Section 944-20-15. Source downloaded (UTC): 2026-09-10T01:45:41.655Z to 2026-09-10T01:45:41.655Z Record version: sha256:7af562731ece9805ff0845363c34af215b2e75a0d9cef9bea73030e6a775ad22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 825-944-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/825/944/#25-recognition) SEC content: no #### Investment Contracts ##### [825-944-25-1](https://asc.understandingaccounting.org/asc/825/944/#825-944-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:41.655Z to 2026-09-10T01:45:41.655Z Record version: sha256:9178245612deb547ce39c92e8e9b96d55aade0e3d98a8c2b237e237ccf26651b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Amounts received as payments for an [investment contract](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.") shall not be reported as revenues. ##### [825-944-25-2](https://asc.understandingaccounting.org/asc/825/944/#825-944-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:41.655Z to 2026-09-10T01:45:41.655Z Record version: sha256:eb097ea01101da4ff1d9597658f6d13cc8c39f184d920d694e4c43b57e26cc87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Payments received by the insurance entity from an investment contract shall be reported as liabilities and accounted for in a manner consistent with the accounting for interest-bearing or other financial instruments. ##### [825-944-25-3](https://asc.understandingaccounting.org/asc/825/944/#825-944-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:41.655Z to 2026-09-10T01:45:41.655Z Record version: sha256:0dd8022c6fc8c40cca7ee1cd9da2cb0c7d0aa71f5f31f2ace18f01217fca038e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). Source downloaded (UTC): 2026-09-10T01:45:44.024Z to 2026-09-10T01:45:44.024Z Record version: sha256:b2315dd9c4dad1cf9e3f38c8118688ffa1ae48f32e9fec92e0c94ef06520bdba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 825-944-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/825/944/#45-other-presentation-matters) SEC content: no #### Investment Contracts ##### [825-944-45-1](https://asc.understandingaccounting.org/asc/825/944/#825-944-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:44.024Z to 2026-09-10T01:45:44.024Z Record version: sha256:177897567eef6f50a6684b4f79bca6329cd75a48782de22336eb7cdd9dff3931 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Deferred [acquisition costs](https://asc.understandingaccounting.org/glossary/a/#acquisition-costs "Costs that are related directly to the successful acquisition of new or renewal insurance contracts.") related to [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.") shall be reported as an asset to be consistent with the guidance in Subtopic 944-30. Source downloaded (UTC): 2026-09-10T01:45:48.092Z to 2026-09-10T01:45:48.092Z Record version: sha256:da4a8ea509dd4780334c234539b73dba993b511ff05ce2fc99cf9425bac7c5ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 825-944-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/825/944/#50-disclosure) SEC content: no #### Securities on Deposit ##### [825-944-50-1A](https://asc.understandingaccounting.org/asc/825/944/#825-944-50-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:48.092Z to 2026-09-10T01:45:48.092Z Record version: sha256:4d6199f72e538f9d9becfd976fa38633fb3623267b31a6374e74967ebe0546ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose the [carrying amount](https://asc.understandingaccounting.org/glossary/c/#carrying-amount "The amount of an item as displayed in the financial statements.") of securities deposited by insurance subsidiaries with state regulatory authorities. ### Reinsurance Contracts ##### [825-944-50-1](https://asc.understandingaccounting.org/asc/825/944/#825-944-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:48.092Z to 2026-09-10T01:45:48.092Z Record version: sha256:ec1e49a0543ed8fac32731ac0f10d67fe840a23cde57ab2d3ab9f3bcde373212 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). #### Disclosures about Concentrations of Credit Risk ##### [825-944-50-1B](https://asc.understandingaccounting.org/asc/825/944/#825-944-50-1B) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:48.092Z to 2026-09-10T01:45:48.092Z Record version: sha256:abe1b681a376b63a4b0e0255814180d643655e66841335b5520095d3a75b389b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the provisions of Section 825-10-50, a [ceding entity](https://asc.understandingaccounting.org/glossary/c/#ceding-entity "The party that pays a reinsurance premium in a reinsurance transaction. The ceding entity receives the right to reimbursement from the assuming entity under the terms of the reinsurance contract.") should disclose concentrations of credit risk associated with both of the following: 1. a [Reinsurance recoverables](https://asc.understandingaccounting.org/glossary/r/#reinsurance-recoverable "All amounts recoverable from reinsurers for paid and unpaid claims and claim settlement expenses, including estimated amounts receivable for unsettled claims, claims incurred but not reported, or policy benefits.") 2. b [Prepaid reinsurance premiums](https://asc.understandingaccounting.org/glossary/p/#prepaid-reinsurance-premiums "Amounts paid to the reinsurer relating to the unexpired portion of reinsured contracts."). ##### [825-944-50-2](https://asc.understandingaccounting.org/asc/825/944/#825-944-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:48.092Z to 2026-09-10T01:45:48.092Z Record version: sha256:49a029a35e98cae9e64a20055c572bc1503a1f19f7015eaf7f25f913cccc19ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Even if a ceding entity does not have a significant concentration of credit risk with a single [reinsurer](https://asc.understandingaccounting.org/glossary/r/#reinsurer "The assuming entity in a reinsurance transaction."), concentration of credit risk disclosures may be required under the provisions of Section 825-10-50. ##### [825-944-50-3](https://asc.understandingaccounting.org/asc/825/944/#825-944-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:48.092Z to 2026-09-10T01:45:48.092Z Record version: sha256:65fc1abaecb23ecb5f2e308db30ee6fc30638270a10ce28d013707f757fd368b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a ceding entity is aware that reinsured risks have been retroceded to a diverse group of retrocessionaires, disclosures about concentrations of credit risk still shall be made under Section 825-10-50 because the assuming entity's rights under the retrocessions generally are not available to the ceding entity to mitigate its credit risk. That is, the ceding entity's concentration of credit risk from the assuming entity is unchanged. Source downloaded (UTC): 2026-09-10T01:45:52.114Z to 2026-09-10T01:45:52.114Z Record version: sha256:73cb61c783f7dddd98f19ba65098074976e08ae130c84b49f1184b5316b5b7a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 825-944-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/825/944/#55-implementation-guidance-and-illustrations) SEC content: no ### Reinsurance Contracts ##### [825-944-55-1](https://asc.understandingaccounting.org/asc/825/944/#825-944-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:45:52.114Z to 2026-09-10T01:45:52.114Z Record version: sha256:36d655a8e3639f5eab7ca883e26ea8fba7668e0c4c46cff6aeb2b554242cd1f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 944-825-55-1 through 55-3 superseded by Accounting Standards Update No. 2012-04](https://asc.understandingaccounting.org/asc/825/944/#825-944-55-1).