# ASC 860-30-55: Transfers and Servicing — Secured Borrowing and Collateral — 55 Implementation Guidance and Illustrations

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/860/30/#55-implementation-guidance-and-illustrations)

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## ASC 860-30-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/860/30/#55-implementation-guidance-and-illustrations)

SEC content: no

#### Illustrations

##### [860-30-55-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-1)

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This Example illustrates the guidance in paragraph [860-30-25-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-8) related to accounting for a securities lending transaction treated as a secured borrowing, in which the securities borrower sells the securities upon receipt and later buys similar securities to return to the securities lender. This Example has the following assumptions:

1.  a
    
    Transferor's carrying amount and fair value of security loaned: $1,000
    
2.  b
    
    Cash [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."): $1,020
    
3.  c
    
    Transferor's return from investing cash collateral at a 5 percent annual rate: $5
    
4.  d
    
    Transferor's rebate to the securities borrower at a 4 percent annual rate: $4.

##### [860-30-55-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-2)

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For simplicity, the fair value of the security is assumed not to change during the 35-day term of the transaction.

##### [860-30-55-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-3)

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The journal entries for 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 the [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.") are as follows.

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-063420BE-2842-4F17-A07C-D571EBEF15D6-low.gif)
    
    Journal Entries for the Transferor At inception: Cash " $1,020 " Payable under securities loan agreements " $1,020 " To record the receipt of cash collateral Securities pledged to creditors " 1,000 " Securities " 1,000 " To reclassify loaned securities that the secured party has the right to sell or repledge Money market instrument " 1,020 " Cash " 1,020 " To record investment of cash collateral At conclusion: Cash " 1,025 " Interest 5 Money market instrument " 1,020 " To record results of investment Securities " 1,000 " Securities pledged to creditors " 1,000 " To record return of security Payable under securities loan agreements " 1,020 " Interest (rebate) 4 Cash " 1,024 " To record repayment of cash collateral plus interest
    
-   ![](https://asc.understandingaccounting.org/asc-img/GUID-586DD8D3-89D1-4A89-9707-EA2236E8EE6E-low.gif)
    
    Journal Entries for the Transferee At inception: Receivable under securities loan agreements " $1,020 " Cash " $1,020 " To record transfer of cash collateral Cash " 1,000 " Obligation to return borrowed securities " 1,000 " To record sale of borrowed securities to a third party and the resulting obligation to return securities that it no longer holds At conclusion: Obligation to return borrowed securities " 1,000 " Cash " 1,000 " To record the repurchase of securities borrowed Cash " 1,024 " Receivable under securities loan agreements " 1,020 " Interest revenue (rebate) 4 To record the receipt of cash collateral and rebate interest

##### [860-30-55-4](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-4)

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This Example illustrates one approach for satisfying the quantitative disclosure requirements in paragraph [860-30-50-7](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-7).

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E31CF388-CBE0-422F-8A99-AEC1FCEC3FF3-low.gif)
    
    "Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings (Dollars in millions)" 20XX Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30-90 days Greater Than 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ XXX $ XXX $ XXX $ XXX $ XXX State and municipal securities XXX XXX XXX XXX XXX Asset-backed securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX 20XX Gross Obligations Overnight Up to 30 Days 30-90 Days Over 90 Days Securities lending transactions U.S. Treasury and agency securities XXX XXX XXX XXX XXX State and municipal securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX Total borrowings $ XXX $ XXX $ XXX $ XXX $ XXX Gross amount of recognized liabilities for repurchase agreements and securities lending in footnote X $ XXX Amounts related to agreements not included in offsetting disclosure in footnote X $ XXX
    

Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance:

[105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) This Example illustrates one approach for satisfying the quantitative disclosure requirements in paragraph [860-30-50-7(a) through (b)](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-7).

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E31CF388-CBE0-422F-8A99-AEC1FCEC3FF3-low.gif)
    
    "Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings (Dollars in millions)" 20XX Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30-90 days Greater Than 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ XXX $ XXX $ XXX $ XXX $ XXX State and municipal securities XXX XXX XXX XXX XXX Asset-backed securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX 20XX Gross Obligations Overnight Up to 30 Days 30-90 Days Over 90 Days Securities lending transactions U.S. Treasury and agency securities XXX XXX XXX XXX XXX State and municipal securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX Total borrowings $ XXX $ XXX $ XXX $ XXX $ XXX Gross amount of recognized liabilities for repurchase agreements and securities lending in footnote X $ XXX Amounts related to agreements not included in offsetting disclosure in footnote X $ XXX