{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/860/50/#25-recognition","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":"860-50","subtopic_title":"Servicing Assets and Liabilities","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"860-50-25-1","para":"25-1","html":"
An entity shall recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in any of the following situations:
  1. a
    A servicer's transfer of any of the following, if that transfer meets the requirements for sale accounting:
    1. 1
      An entire financial asset
    2. 2
      A group of entire financial assets
    3. 3
      A participating interest in an entire financial asset, in which circumstance the transferor shall recognize a servicing asset or a servicing liability only related to the participating interest sold.
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2009-16.
  3. c
    An acquisition or assumption of a servicing obligation that does not relate to financial assets of the servicer or its consolidated affiliates included in the financial statements being presented.
Example 1 (see paragraph 860-50-55-20) illustrates accounting for a sale of receivables with servicing obtained by the transferor.
","snippet":"An entity shall recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in any of the following situations:\n(a) A servic…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d4ce43cbc2f8775ed58fc0c98db664981a598bab95453bf62d6b66b7f876d8fe","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"citation":"860-50-25-2","para":"25-2","html":"
A servicer that transfers or securitizes financial assets in a transaction that does not meet the requirements for sale accounting and is accounted for as a secured borrowing with the underlying financial assets remaining on the transferor's balance sheet shall not recognize a servicing asset or a servicing liability.
","snippet":"A servicer that transfers or securitizes financial assets in a transaction that does not meet the requirements for sale accounting and is accounted for as a secured borrowing with the underlying financial assets remainin…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:46048b4a716d7d9c5c7ed72ad57ffefbc58cd80c40458b5d3597f3c5a2bcb835","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"citation":"860-50-25-3","para":"25-3","html":"
A servicer that recognizes a servicing asset or servicing liability shall account for the contract to service financial assets separately from those financial assets.
","snippet":"A servicer that recognizes a servicing asset or servicing liability shall account for the contract to service financial assets separately from those financial assets.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9f3a47553a008f343f86cab60c6935dee01a7b701167e77b4feb80664822f481","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"citation":"860-50-25-4","para":"25-4","html":"
An entity that transfers its financial assets to an unconsolidated entity in a transfer that qualifies as a sale in which the transferor obtains the resulting securities and classifies them as debt securities held to maturity in accordance with Topic 320 may either separately recognize its servicing assets or servicing liabilities or report those servicing assets or servicing liabilities together with the asset being serviced.
","snippet":"An entity that transfers its financial assets to an unconsolidated entity in a transfer that qualifies as a sale in which the transferor obtains the resulting securities and classifies them as debt securities held to mat…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:92d49fa84faf7d25869fb90e62e9b2dd76cc5ffdeb1d9e35ef10710d8b20f03d","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"citation":"860-50-25-5","para":"25-5","html":"
The guidance in this Section is organized as follows:
  1. a
    Distinguishing servicing from an interest-only strip
  2. b
    Revolving-period securitizations
  3. c
    Regaining control of previously transferred assets.
","snippet":"The guidance in this Section is organized as follows:\n(a) Distinguishing servicing from an interest-only strip\n(b) Revolving-period securitizations\n(c) Regaining control of previously transferred assets.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:20e2bdd9e6e22a8a1393eaec093aa87e18d9311b3d3f2099a7835a65253a8c62","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4e36ab98eecf1ac694485ed91187e1ba9a43946f01fba451d9c55deb2f3c00d","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"block":null,"heading":"Distinguishing Servicing from an Interest-Only Strip","paragraphs":[{"citation":"860-50-25-6","para":"25-6","html":"
A servicer shall account separately for rights to future interest income from the serviced assets that exceed contractually specified servicing fees. Those rights are not servicing assets; they are financial assets, effectively interest-only strips to be accounted for in accordance with paragraph 860-20-35-2.
","snippet":"A servicer shall account separately for rights to future interest income from the serviced assets that exceed contractually specified servicing fees. Those rights are not servicing assets; they are financial assets, effe…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7464b8ccfa9d66cbf4c40ec58cd3c2b22f3ae2ee09b6a53a3c0faaeb36b4c5f0","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"citation":"860-50-25-7","para":"25-7","html":"
Whether a right to future interest income from serviced assets should be accounted for as an interest-only strip, a servicing asset, or a combination thereof, depends on whether a servicer would continue to receive that amount (that is, the value of the right to future interest income) if a substitute servicer began servicing the assets. Therefore, any portion of the right to future interest income from the serviced assets that would continue to be received even if the servicing were shifted to another servicer would be reported separately as a financial asset in accordance with paragraph 860-20-35-2. For guidance on why an interest-only strip precludes a portion of a financial asset from meeting the definition of a participating interest, see paragraph 860-10-55-17K.
","snippet":"Whether a right to future interest income from serviced assets should be accounted for as an interest-only strip, a servicing asset, or a combination thereof, depends on whether a servicer would continue to receive that …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2bd1b72d28b7e47841046030e045c9292462e494a85efea90f97acfb5e350b0d","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"citation":"860-50-25-8","para":"25-8","html":"
The value of the right to receive future cash flows from ancillary sources such as late fees shall be included in the measurement of the servicing asset, not the interest-only strip, if retention of the right to receive the cash flows from those fees depends on servicing being performed satisfactorily, as is generally the case.
","snippet":"The value of the right to receive future cash flows from ancillary sources such as late fees shall be included in the measurement of the servicing asset, not the interest-only strip, if retention of the right to receive …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3a8f36c7f722fe71acd03db9ca3e910497e59b969b8a9541e467fec261b681be","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ef2ca85651fbe3f92bd0063c6d0233bdaeed89b2046d4f8a46951d3d1a3661c1","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"block":null,"heading":"Revolving-Period Securitizations","paragraphs":[{"citation":"860-50-25-9","para":"25-9","html":"
Recognition of servicing assets or servicing liabilities for revolving-period receivables shall be limited to the servicing for the receivables that exist and have been sold. As new receivables are sold, rights to service them may become assets or liabilities that are recognized. Therefore, additional transfers under revolving-period securitizations (for example, home equity loans or credit card receivables) may result in the recognition of additional servicing assets or servicing liabilities.
","snippet":"Recognition of servicing assets or servicing liabilities for revolving-period receivables shall be limited to the servicing for the receivables that exist and have been sold. As new receivables are sold, rights to servic…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:393e7cebc45202a029270ccb981fec27a82e67431cd1aa4c6e420ae0c10bffb7","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3e7c5793d700a337ef1d8b771521790fcb39e72938fd2e152ea199df56de8a1b","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},{"block":null,"heading":"Regaining Control of Financial Assets Sold","paragraphs":[{"citation":"860-50-25-10","para":"25-10","html":"
Paragraph 860-20-25-10(b) explains that, after a paragraph 860-10-40-41 change, the transferor shall not change, the accounting for the servicing asset related to the previously sold financial assets and provides related guidance.
","snippet":"Paragraph 860-20-25-10(b) explains that, after a paragraph 860-10-40-41 change, the transferor shall not change, the accounting for the servicing asset related to the previously sold financial assets and provides related…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:613e337275e24e63fe47566795964d03a3b7a2f9b41218dbee00703cad241296","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:29e70598729dddee1223b785cda441db541376a0dc98a58c11f79bf61ba5d8d5","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d779cb4178b0dde2be09340e525bb9fd5a373e8f8f754129bf2c3d3ccb7ee426","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d779cb4178b0dde2be09340e525bb9fd5a373e8f8f754129bf2c3d3ccb7ee426","downloaded_from":"2026-09-10T02:08:13.201Z","last_downloaded_at":"2026-09-10T02:08:13.201Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481376","source_sha256":"d91dd7b3e2ad647d38b449c2d47a5668cd7609537fc9dbd9468f9240f119f5e4"}}