# ASC 860-30-25: Transfers and Servicing — Secured Borrowing and Collateral — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/860/30/#25-recognition) 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): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:e4491bedb80a7f9c923b4369aba5181067ca9877abe84750d08811c1bb1dd369 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/860/30/#25-recognition) SEC content: no ##### [860-30-25-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:b29758202a38c380cd6eda4238cc65c2b06edc85a83ffea85973809c24202b6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section provides guidance on the recognition of [transfers](https://asc.understandingaccounting.org/glossary/t/#transfer "The conveyance of a noncash financial asset by and to someone other than the issuer of that financial asset. A transfer includes the following: Selling a receivable Putting a receivable into a securitization trust Posting a receivable as collateral. A transfer excludes the following: The origination of a receivable Settlement of a receivable The restructuring of a receivable into a security in a troubled debt restructuring.") of financial assets as secured borrowings with a pledge of [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."). It addresses the following areas: 1. a Cash collateral 2. b Noncash collateral 3. c Cash or securities received as proceeds 4. d Sales of collateral received. ##### [860-30-25-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:20cd86693870dbecb8d30f17843fbd0f5dbbf07b13a7dc47447364ab845f781e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [transferor](https://asc.understandingaccounting.org/glossary/t/#transferor "An entity that transfers a financial asset, an interest in a financial asset, or a group of financial assets that it controls to another entity.") and [transferee](https://asc.understandingaccounting.org/glossary/t/#transferee "An entity that receives a financial asset, an interest in a financial asset, or a group of financial assets from a transferor.") shall account for a transfer as a secured borrowing with pledge of collateral in either of the following circumstances: 1. a If a transfer of an entire financial asset, a group of entire financial assets, or a [participating interest](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest.") in an entire financial asset does not meet the conditions for a sale in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) 2. b If a transfer of a portion of an entire financial asset does not meet the definition of a participating interest. The transferor shall continue to report the transferred financial asset in its statement of financial position with no change in the asset's measurement (that is, basis of accounting). #### Cash Collateral ##### [860-30-25-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:dba8faa772c0e0e3e6cb14b14b3ff0541fc8c369ea33f779b894fdea1bdfecda Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transfers of financial assets in exchange for cash collateral cannot be distinguished from borrowing cash. Further, because cash is fungible, it is impossible to determine whether it has been used by the secured party. Accordingly, all cash collateral shall be recorded as an asset by the party receiving it (the secured party), together with a liability for the obligation to return it to the payer (obligor), whose asset is a receivable. ##### [860-30-25-4](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:eb73771b39c1ed584ce679f181965c453be7aa3a3e479096428599c1c2f5a71a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash collateral used, for example, in securities lending transactions (see paragraphs [860-10-05-16 through 05-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-16) ) shall be derecognized by the obligor and recognized by the secured party, not as collateral but rather as proceeds of either a sale or a borrowing. See paragraphs [860-30-25-6 through 25-9](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-6) for further discussion of recognition of cash and noncash collateral as proceeds of a transfer. #### Noncash Collateral ##### [860-30-25-5](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:783948140d3d6646d653e05fcda24b02db5c9fa5927340c94ad917b4c376585f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accounting for noncash collateral by the obligor (or debtor) and the secured party depends on whether the secured party has the right to sell or repledge the collateral and on whether the obligor has defaulted. Noncash collateral shall be accounted for as follows: 1. a If the secured party (transferee) has the right by contract or custom to sell or repledge the collateral, then paragraph [860-30-45-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-1) requires that the obligor (transferor) reclassify that asset and report that asset in its statement of financial position separately (for example, as security pledged to creditors) from other assets not so encumbered. 2. b If the secured party (transferee) sells collateral pledged to it, it shall recognize the proceeds from the sale and its obligation to return the collateral. The sale of the collateral is a transfer subject to the provisions of this Topic. 3. c If the obligor (transferor) defaults under the terms of the secured contract and is no longer entitled to redeem the pledged asset, it shall [derecognize](https://asc.understandingaccounting.org/glossary/d/#derecognize "Remove previously recognized assets or liabilities from the statement of financial position.") the pledged asset as required by paragraph [860-30-40-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-1) and the secured party (transferee) shall recognize the collateral as its asset. (See paragraph [860-30-30-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-30-1) for guidance on the secured party's initial measurement of collateral recognized. See paragraph [860-30-40-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-1) for further guidance if the debtor has sold the collateral.) 4. d Except as provided in paragraph [860-30-40-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-1) the obligor (transferor) shall continue to carry the collateral as its asset, and the secured party (transferee) shall not recognize the pledged asset. #### Cash or Securities Received as Proceeds ##### [860-30-25-6](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:fbe8bf1934dacebb60a9580358543464b3e8f13ffc0c8683b9dc503b75e50a6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-55-55A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-55A) discusses securities lending transactions in which the criteria in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) for a sale are met. The following guidance relates to securities lending or similar transactions in which a transferor (lender) transfers securities and receives either cash or securities as collateral and the transfer does not meet the sale criteria in that paragraph. ##### [860-30-25-7](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:25b41ccdea2547d0d9e4b7dbd68f9409fff59387bdecf12374f931ab5666f30c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many securities lending transactions are accompanied by an agreement that both entitles and obligates the transferor to repurchase or redeem the transferred financial assets before their maturity. Paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) states that an agreement that both entitles and obligates the transferor to repurchase or redeem transferred financial assets from the transferee maintains the transferor's effective control over those assets as described in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), if all of the conditions in paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) are met. Those transactions shall be accounted for as secured borrowings, in which either cash or securities that the holder is permitted by contract or custom to sell or repledge received as collateral are considered the amount borrowed, the securities loaned are considered pledged as collateral against the cash borrowed and reclassified as set forth in paragraph [860-30-25-5(a)](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5), and any rebate paid to the transferee of securities is interest on the cash the transferor is considered to have borrowed. ##### [860-30-25-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:39fc569fec07b098a3b67a0755a9ab84753c899be45dfc529c3aa96a4867e7f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a securities lending transaction, the transferor of securities being loaned accounts for cash received in the same way whether the transfer is accounted for as a sale or a secured borrowing. Cash collateral or securities received as collateral that a securities lender is permitted to sell or repledge are the proceeds of a borrowing secured by them. The cash received shall be recognized as the transferor's asset, as shall investments made with that cash, even if made by [agents](https://asc.understandingaccounting.org/glossary/a/#agent "A party that acts for and on behalf of another party. For example, a third-party intermediary is an agent of the transferor if it acts on behalf of the transferor.") or in pools with other securities lenders, along with the obligation to return the cash. If securities that may be sold or repledged are received, the transferor of the securities being loaned accounts for those securities in the same way as it would account for cash received. See Example 1 (paragraph [860-30-55-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-1)) for an illustration of a securities lending transaction that is accounted for as a secured borrowing in which cash collateral is transferred. ##### [860-30-25-9](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:14e8125386de18dff42c3bd538db66baeeda22a39f4239b586580977020650fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As noted in paragraphs [860-30-25-4](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-4) and [860-30-25-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-8), the collateral accounting provisions do not apply to cash, or securities that can be sold or pledged for cash, received as so-called collateral for noncash financial assets, for example, in certain securities lending transactions. Such cash or securities that can be sold or pledged for cash are accounted for as proceeds of either a sale or a borrowing. #### Sales of Collateral Held ##### [860-30-25-10](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:c0ea6f2210bdef167f2425a1a86fe426b6c7261d24ef38132bd3ebf9a4b5930a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Obligations to return to the transferor assets borrowed and then sold have sometimes been effectively recognized as part of a liability for securities sold but not yet purchased, and this Section does not require any change in that practice.