# ASC 860-50-30: Transfers and Servicing — Servicing Assets and Liabilities — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/860/50/#30-initial-measurement) 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): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:c61935c797cfe44f951eb1c4a0bf02f5c42bbc876080aa06e832555ee46b589e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/860/50/#30-initial-measurement) SEC content: no ##### [860-50-30-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:b47e4e0df36a9734809fe82eca09c2fa0eeb49da953815940972a3ba67d4d9cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall initially measure at fair value, a [servicing asset](https://asc.understandingaccounting.org/glossary/s/#servicing-assets "A contract to service financial assets under which the benefits of servicing are expected to more than adequately compensate the servicer for performing the servicing. A servicing contract is either: Undertaken in conjunction with selling or securitizing the financial assets being serviced Purchased or assumed separately.") or [servicing liability](https://asc.understandingaccounting.org/glossary/s/#servicing-liabilities "A contract to service financial assets under which the estimated future revenues from contractually specified servicing fees, late charges, and other ancillary revenues (benefits of servicing) are not expected to adequately compensate the servicer for performing the servicing.") that qualifies for separate recognition regardless of whether explicit consideration was exchanged. ##### [860-50-30-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:59a67eb2de752b7ab2b760a5cda35f9d6e33b64e1a6e4021a17efbcd3e1d5cd5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Typically, the [benefits of servicing](https://asc.understandingaccounting.org/glossary/b/#benefits-of-servicing "Revenues from contractually specified servicing fees, late charges, and other ancillary sources, including float.") are expected to be more than [adequate compensation](https://asc.understandingaccounting.org/glossary/a/#adequate-compensation "The amount of benefits of servicing that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. It is the amount demanded by the marketplace to perform the specific type of servicing. Adequate compensation is determined by the marketplace; it does not vary according to the specific servicing costs of the servicer.") to a servicer for performing the servicing, and the contract results in a servicing asset. However, if the benefits of servicing are not expected to adequately compensate a servicer for performing the servicing, the contract results in a servicing liability. Paragraph [860-50-35-1A](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-1A) states that a servicing asset may become a servicing liability, or vice versa, if circumstances change. The initial measure for servicing may be zero if the benefits of servicing are just adequate to compensate the servicer for its servicing responsibilities. A servicing contract that entitles the servicer to receive benefits of servicing just equal to adequate compensation, regardless of the servicer's own servicing costs, does not result in recognizing a servicing asset or a servicing liability. A purchaser would neither pay nor receive payment to obtain the right to service for a rate just equal to adequate compensation. ##### [860-50-30-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:979e5b11df13a7c085f9dbada3d25cf3474dbdab32601117e7f4316436039f5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of whether the servicer is adequately compensated for servicing specified assets is based on the amount demanded by the marketplace, not the contractual amount to be paid to a replacement servicer. However, that contractual provision would be relevant for determining the amount of [contractually specified servicing fees](https://asc.understandingaccounting.org/glossary/c/#contractually-specified-servicing-fees "All amounts that, per contract, are due to the servicer in exchange for servicing the financial asset and would no longer be received by a servicer if the beneficial owners of the serviced assets (or their trustees or agents) were to exercise their actual or potential authority under the contract to shift the servicing to another servicer. Depending on the servicing contract, those fees may include some or all of the difference between the interest rate collectible on the financial asset being serviced and the rate to be paid to the beneficial owners of those financial assets."). Therefore, the amount that would be paid to a replacement servicer under the terms of the servicing contract can be more or less than adequate compensation. ##### [860-50-30-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:21a722a19f2f95048c6b362a8e862fa8d0309e4fb48468be3201253fb383bece Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether a servicing asset or servicing liability is recorded is a function of the marketplace, not the servicer's cost of servicing. For example, a loss shall not be recognized if a servicing fee that is equal to or greater than adequate compensation is to be received but the servicer's anticipated cost of servicing would exceed the fee. ##### [860-50-30-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:2deef7d892baf2d06e7ffc8a723a3ca6f95f4d87e82d9d703869d27e82e79102 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [860-50-30-6](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:77156ca6020b7d6eed569a06d513b4cd9d499bb94baac3046cff91d915dbaf8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When valuing the right to receive future cash flows from ancillary sources such as late fees, an entity shall estimate the value of the right to benefit from the cash flows of potential future transactions, not the value of the expected cash flows to be derived from future transactions. ##### [860-50-30-7](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:b63719e91e73e1986f5d2dc3c678ce674a7e341befcaa5bad2d7980e6e31d0d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities shall consider the nature of the assets being serviced as a factor in determining the fair value of a servicing asset or servicing liability. The types of assets being serviced affect the amount required to adequately compensate the servicer. Several variables, including the nature of the underlying assets, shall be considered in determining whether a servicer is adequately compensated. For example, the amount of effort required to service a home equity loan likely would be different from the amount of effort required to service a credit card receivable or a small business administration loan. ##### [860-50-30-8](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:aa044d8f269bd54521891b8602670d86ab71f032996cdf3163a0de04212f8c99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [860-50-30-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:14.915Z to 2026-09-10T02:08:14.915Z Record version: sha256:f81fd3ca11a9ecdeb7cce809ead4c5f211021949e1bd58b4a93a31c51b7a53bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/).