{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/860/20/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"860","topic_title":"Transfers and Servicing","subtopic":"860-20","subtopic_title":"Sales of Financial Assets","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"860-20-35-1","para":"35-1","html":"
This Section is organized as follows:
  1. a
    Financial assets subject to prepayment
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2009-16.
  3. c
    Credit enhancements
  4. d
    Beneficial interests
  5. e
    Transaction costs.
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Financial assets, except for instruments that are within the scope of Subtopic 815-10, that can contractually be prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment shall be subsequently measured like investments in debt securities classified as available for sale or trading under Topic 320. Examples of such financial assets include, but are not limited to, interest-only strips, other beneficial interests, loans, or other receivables. Interest-only strips and similar interests that meet the definition of securities are included in the scope of that Topic. Therefore, all relevant provisions of that Topic (including the disclosure requirements) shall be applied. See related implementation guidance beginning in paragraph 860-20-55-33.
","snippet":"Financial assets, except for instruments that are within the scope of Subtopic 815-10, that can contractually be prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recor…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:350a23666ea7f2020097eecbd6301c8ba8e6b3924383975759d3326af4a6c0c9","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"citation":"860-20-35-3","para":"35-3","html":"
Interest-only strips and similar interests that are not in the form of securities are not within the scope of Topic 320 but shall be measured like investments in debt securities classified as available for sale or trading. In that circumstance, all of the measurement provisions of that Topic, as well as the provisions of Topic 326 on measurement of credit losses, shall be followed. However, other provisions of Topics 320 and 326, such as those addressing disclosures, are not required to be applied. Paragraph 320-10-15-9 explains that, for debt securities within its scope, Subtopic 325-40 provides incremental guidance on accounting for and reporting discount and credit losses.
","snippet":"Interest-only strips and similar interests that are not in the form of securities are not within the scope of Topic 320 but shall be measured like investments in debt securities classified as available for sale or tradin…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7b5ba859b5e1fa20c05d2fb25414594bc08730c451caee21d4113986c0916049","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"citation":"860-20-35-4","para":"35-4","html":"
The requirement in paragraph 860-20-35-2 does not apply to situations in which events that are not the result of contractual provisions, for example, borrower default or changes in the value of an instrument's denominated currency relative to the entity's functional currency, cause the holder not to recover substantially all of its recorded investment.
","snippet":"The requirement in paragraph 860-20-35-2 does not apply to situations in which events that are not the result of contractual provisions, for example, borrower default or changes in the value of an instrument's denominate…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:785f534dfc893f506eba690ed75c0a3936fb0dfb5d778e4178867ddd0c985f9a","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"citation":"860-20-35-5","para":"35-5","html":"
A financial asset that can be contractually prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment shall not be classified as held-to-maturity even if the investor concludes that prepayment or other forms of settlement are remote. The probability of prepayment or other forms of settlement that would result in the holder's not recovering substantially all of its recorded investment is not relevant in deciding whether the provisions of paragraph 860-20-35-2 apply to those financial assets.
","snippet":"A financial asset that can be contractually prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment shall not be classified as held-to-maturity even if th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5877804c1b4090b5034c3098100c66965b5e58b9e34c1b0eabac0ab2806d8f65","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"citation":"860-20-35-6","para":"35-6","html":"
The guidance in this Subtopic does not specifically address the subsequent measurement of a transferor's beneficial interests that cannot be contractually prepaid or settled in such a way that the owner would not recover substantially all of its recorded investment.
","snippet":"The guidance in this Subtopic does not specifically address the subsequent measurement of a transferor's beneficial interests that cannot be contractually prepaid or settled in such a way that the owner would not recover…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:50ced2ed1679d0cf9572a8060cec506a7e89d8eefa50503fcb2083ecdb36b4bc","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"citation":"860-20-35-7","para":"35-7","html":"
Paragraph superseded by Accounting Standards Update No. 2009-16.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2009-16.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ebb757474ccb7aa324077caff7d3c1c39821d76d4c5422142ece9e422369a3ca","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0b6be97ab19073bb16996c0485c40265e36afa7367bfc2165a94fa7f10d9c3e1","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"block":null,"heading":"Credit Enhancements","paragraphs":[{"citation":"860-20-35-8","para":"35-8","html":"
While this Subtopic does not specifically address the subsequent measurement of credit enhancements, there are some factors to consider. Factors such as how much cash the transferor will receive from, for example, a cash reserve account, and when it will receive cash inflows depend on the performance of the transferred financial assets. Entities shall regularly review those assets for impairment because of their nature. Entities shall look to other guidance for subsequent measurement including guidance for impairment based on the nature of the credit enhancement.
","snippet":"While this Subtopic does not specifically address the subsequent measurement of credit enhancements, there are some factors to consider. Factors such as how much cash the transferor will receive from, for example, a cash…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f2e2f5bd448937b0ce9a16c00fe3d76eb3aa58d7ca0029ffd1da63fe35d5a008","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ce2779523c628f88c944ea477978540c6222ce39f0fbcb983d8881e415b36db","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"block":null,"heading":"Beneficial Interests","paragraphs":[{"citation":"860-20-35-9","para":"35-9","html":"
Beneficial interests shall be evaluated for credit losses, including at the time paragraphs
860-20-25-8 through 25-10
are applied. See Section 325-40-35 for guidance on credit losses applicable to beneficial interests in securitized financial assets.
","snippet":"Beneficial interests shall be evaluated for credit losses, including at the time paragraphs 860-20-25-8 through 25-10 are applied. See Section 325-40-35 for guidance on credit losses applicable to beneficial interests in…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:666cc64e21605f3c5efa286ff5bd9d4d633990dc0c4269687117227b36c2690b","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:237677523ddaf8c827c94f93153b513a4f2f26ed7042e42c3f73c71fe7eb22aa","downloaded_from":"2026-09-10T02:06:35.142Z","last_downloaded_at":"2026-09-10T02:06:35.142Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481384","source_sha256":"da3deebacef27afe49b283d568fedc64ef37403fd9b323106190462bf3d0e278"}},{"block":null,"heading":"Transaction Costs","paragraphs":[{"citation":"860-20-35-10","para":"35-10","html":"
Transaction costs relating to a sale of the receivables may be recognized over the initial and reinvestment periods in a rational and systematic manner unless the transaction results in a loss. Transaction costs for a past sale are not an asset and thus are part of the gain or loss on sale. In a credit card securitization, however, some of the transaction costs incurred at the outset relate to the future sales that are to occur during the revolving period, and thus can qualify as an asset.
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