{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/860/20/#40-derecognition","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":"40","label":"40 Derecognition","anchor":"40-derecognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"860-20-40-1","para":"40-1","html":"
Paragraph superseded by Accounting Standards Update No. 2009-16.
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Upon completion of a transfer of a participating interest that satisfies the conditions in paragraph 860-10-40-5 to be accounted for as a sale, the transferor(seller) shall:
  1. a
    Allocate the previous carrying amount of the entire financial asset between both of the following on the basis of their relative fair values at the date of the transfer:
    1. 1
      The participating interest(s) sold
    2. 2
      The participating interest that continues to be held by the transferor.
  2. b
    Derecognize the participating interest(s) sold
  3. c
    Apply the guidance in paragraphs 860-20-25-1 and 860-20-30-1 on recognition and measurement of assets obtained and liabilities incurred in the sale
  4. d
    Recognize in earnings any gain or loss on the sale
  5. e
    Report any participating interest(s) that continue to be held by the transferor as the difference between the following amountsmeasured at the date of the transfer:
    1. 1
      The previous carrying amount of the entire financial asset
    2. 2
      The amount derecognized.
For the transfer of a participating interest in a financial asset included in a closed portfolio hedged in an existing portfolio layer method hedge in accordance with Topic 815 on derivatives and hedging, when applying the guidance in (a) through (e) an entity shall not include any portion of the hedge basis adjustment that is maintained on the closed portfolio basis in accordance with paragraphs 815-20-25-12A(b) and 815-25-35-1(c).
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Upon completion of a transfer of an entire financial asset or a group of entire financial assets that satisfies the conditions in paragraph 860-10-40-5 to be accounted for as a sale, the transferor (seller) shall:
  1. a
    Derecognize the transferred financial assets
  2. b
    Apply the guidance in paragraphs 860-20-25-1 and 860-20-30-1 on recognition and measurement of assets obtained and liabilities incurred in the sale
  3. c
    Recognize in earnings any gain or loss on the sale.
If the transferred financial asset was accounted for under Topic 320 as available for sale before the transfer, item (a) requires that the amount in other comprehensive income be recognized in earnings at the date of transfer. If the transferred financial asset was included in a closed portfolio hedged in an existing portfolio layer method hedge in accordance with Topic 815 before the transfer, when applying the guidance in (a) through (c) an entity shall not include any portion of the hedge basis adjustment that is maintained on the closed portfolio basis in accordance with paragraphs 815-20-25-12A(b) and 815-25-35-1(c).
","snippet":"Upon completion of a transfer of an entire financial asset or a group of entire financial assets that satisfies the conditions in paragraph 860-10-40-5 to be accounted for as a sale, the transferor (seller) shall:\n(a) De…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e07f5193692194f4d47d515e69ba6e90a403e5d28adc9f7ea22e56bce547402a","downloaded_from":"2026-09-10T02:06:38.468Z","last_downloaded_at":"2026-09-10T02:06:38.468Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481355","source_sha256":"da84a534f6d1c43809e645c3bf1f878f948e5b060c67660a95cf9b5e31390ec4"}},{"citation":"860-20-40-2","para":"40-2","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:da7b0c1a94558f2a40cd48828361ff3ef666aa9ca2b1e21e7c797c9db877c90c","downloaded_from":"2026-09-10T02:06:38.468Z","last_downloaded_at":"2026-09-10T02:06:38.468Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481355","source_sha256":"da84a534f6d1c43809e645c3bf1f878f948e5b060c67660a95cf9b5e31390ec4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a2fac1eb3bf9f2ca39b4a5670d3d31ccb6ea9ed42ebc948499926ff9d1e4e7ce","downloaded_from":"2026-09-10T02:06:38.468Z","last_downloaded_at":"2026-09-10T02:06:38.468Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481355","source_sha256":"da84a534f6d1c43809e645c3bf1f878f948e5b060c67660a95cf9b5e31390ec4"}},{"block":null,"heading":"Transferor and Transferee Accounting Circumstances upon Regaining Control","paragraphs":[{"citation":"860-20-40-3","para":"40-3","html":"
The guidance beginning in paragraph 860-20-25-8 discusses the transferor's accounting upon regaining control of financial assets sold. In such circumstances, the former transferee would derecognize the transferred financial assets on that date, as if it had sold the transferred financial assets in exchange for a receivable from the transferor.
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