# ASC 860-50: Transfers and Servicing — Servicing Assets and Liabilities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/860/50/) 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): 2026-09-10T02:08:04.325Z to 2026-09-10T02:08:35.803Z Record version: sha256:466ab55182ae8ca3116870e0f009e33f55e1a1eded61feda7b63b74167048dc7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50: Transfers and Servicing — Servicing Assets and Liabilities ### Machine-generated study aids ```json { "summary": "ASC 860-50 governs when a servicer must separately recognize a servicing asset or servicing liability and how to measure it. A servicing contract is recognized separately each time an entity undertakes an obligation to service financial assets through a qualifying sale of an entire financial asset, group of entire financial assets, or participating interest, or through an acquisition/assumption of servicing for others' assets (860-50-25-1); it is initially measured at fair value (860-50-30-1) whether or not explicit consideration is exchanged. Subsequently, each class of servicing assets and liabilities is measured using either the amortization method (with impairment tested by stratum via a valuation allowance) or the irrevocable fair value measurement method (860-50-35-1).", "key_points": [ "Recognition is required each time an entity undertakes a servicing obligation via a transfer of an entire financial asset, group of entire financial assets, or participating interest that qualifies for sale accounting, or via acquisition/assumption of servicing for assets not its own (860-50-25-1); no servicing asset or liability is recognized when the transfer is accounted for as a secured borrowing (860-50-25-2).", "Servicing assets and liabilities are initially measured at fair value regardless of whether explicit consideration was exchanged; a servicing liability arises when benefits of servicing are not expected to be adequate compensation, and the initial measure may be zero when benefits just equal adequate compensation (860-50-30-1 through 30-2).", "Adequate compensation is determined by what the marketplace demands, not by the servicer's own cost of servicing or the contractual replacement-servicer fee (860-50-30-3 through 30-4).", "Rights to future interest income exceeding contractually specified servicing fees are not servicing assets but interest-only strips accounted for under 860-20-35-2; the test is whether the servicer would still receive the cash flows if a substitute servicer took over (860-50-25-6 through 25-7), while ancillary cash flows like late fees contingent on satisfactory servicing go into the servicing asset (860-50-25-8).", "Subsequent measurement is elected by class—amortization in proportion to and over estimated net servicing income/loss with impairment testing, or fair value through earnings; the fair value election is irrevocable and may be made at the beginning of any fiscal year with a cumulative-effect adjustment to retained earnings (860-50-35-1, 35-3).", "Under the amortization method, servicing assets are stratified within a class by predominant risk characteristics of the underlying financial assets and impairment is recognized through a valuation allowance per stratum, with no recognition of fair value in excess of carrying amount (860-50-35-9); increased servicing liabilities are recognized as a loss but not reduced below the amortized initial measurement (860-50-35-11).", "Fair-value-measured servicing must be presented separately on the face of the statement of financial position from amortization-method servicing, either as separate line items or parenthetically (860-50-45-1 through 45-2); a transfer of servicing rights qualifies as a sale only if title has passed, substantially all risks and rewards have irrevocably passed, and retained protection provisions are minor (no more than 10 percent of sales price and prepayment risk retained no longer than 120 days) (860-50-40-3 through 40-4)." ], "categories": [ "Recognition", "Initial measurement", "Subsequent measurement", "Financial instruments" ], "audience_level": "advanced", "student_note": "Mortgage servicing rights are a classic exam and practice trap: students often assume the servicer's own cost of servicing determines whether an asset or liability exists, but the test is marketplace \"adequate compensation,\" and excess interest that a substitute servicer would not receive is a servicing asset while excess interest that continues regardless of who services is an interest-only strip. Also remember the class-by-class election between amortization and fair value is irrevocable in the fair value direction only.", "related_topics": [ "860-10", "860-20", "948-340", "815-20", "320", "250-10" ], "key_concepts": [ "servicing asset", "servicing liability", "adequate compensation", "contractually specified servicing fee", "interest-only strip", "amortization method", "fair value measurement method", "stratification and valuation allowance" ] } ``` Source downloaded (UTC): 2026-09-10T02:08:04.325Z to 2026-09-10T02:08:04.325Z Record version: sha256:b02da5a836cc373878d1c4f21ea89096e7f6c46a793bebeffda7203e929808ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/860/50/#00-status) SEC content: no ##### [860-50-00-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:04.325Z to 2026-09-10T02:08:04.325Z Record version: sha256:be11fefc011e6f2becfa010080d38e48561cfe494759b8b9c28e70d64dc9dbe3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Beneficial InterestsAmendedAccounting Standards Update No. 2009-1612/23/2009
Consolidated AffiliateSupersededAccounting Standards Update No. 2009-1612/23/2009
Consolidated Affiliate of the TransferorAmendedAccounting Standards Update No. 2009-1612/23/2009
Contractually Specified Servicing FeesAmendedAccounting Standards Update No. 2009-1612/23/2009
Financial Asset (2nd def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Financial AssetAddedAccounting Standards Update No. 2009-1612/23/2009
Guaranteed Mortgage SecuritizationSupersededAccounting Standards Update No. 2009-1612/23/2009
TransfereeAmendedAccounting Standards Update No. 2009-1612/23/2009
TransferorAmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-05-3AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-05-4AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-15-3AmendedAccounting Standards Update No. 2016-1912/14/2016
860-50-25-1AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-25-2AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-25-4AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-25-7AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-25-9AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-25-10AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-30-1AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-30-5SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-30-6AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-30-7AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-30-8SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-30-9SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-35-8AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-35-15SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-35-16SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-40-6AmendedAccounting Standards Update No. 2016-1912/14/2016
860-50-50-1AmendedMaintenance Update No. 2025-05 (PDF)06/20/2025
860-50-50-1 through 50-5
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-50-2 through 50-5
AmendedAccounting Standards Update No. 2025-1112/08/2025
860-50-50-2AmendedAccounting Standards Update No. 2014-0905/28/2014
860-50-50-3AmendedMaintenance Update 2020-18 (PDF)11/25/2020
860-50-50-4AmendedMaintenance Update 2018-02 (PDF)02/02/2018
860-50-50-5AmendedMaintenance Update 2014-20 (PDF)09/29/2014
860-50-50-6 through 50-9SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-55-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-55-2SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-55-3 through 55-7
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-55-9SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-55-10AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-55-11AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-55-12 through 55-19SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-55-20 through 55-22
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-55-23SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-55-24SupersededAccounting Standards Update No. 2009-1612/23/2009
860-50-55-26AmendedAccounting Standards Update No. 2009-1612/23/2009
860-50-55-27SupersededAccounting Standards Update No. 2009-1612/23/2009
Source downloaded (UTC): 2026-09-10T02:08:06.276Z to 2026-09-10T02:08:06.276Z Record version: sha256:171e5f8d67c7d35734413555f497295657e03e1628580e6a03af580bf05cb83d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/860/50/#05-overview-and-background) SEC content: no ##### [860-50-05-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:06.276Z to 2026-09-10T02:08:06.276Z Record version: sha256:7bc6db6ffebfa53ceafc8efaf4bbea2454276ac4c5cf3db2b17f157ea0362911 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides accounting guidance for [servicing assets](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.") and [servicing liabilities](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."). ##### [860-50-05-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:06.276Z to 2026-09-10T02:08:06.276Z Record version: sha256:06b27962a24ebc84bc89d5f6039f938b7506fc039c59293cc1b981d12c59955d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Servicing is inherent in all [financial assets](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity."); it becomes a distinct asset or liability for accounting purposes only in the circumstances described in paragraph [860-50-25-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-1). ##### [860-50-05-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:06.276Z to 2026-09-10T02:08:06.276Z Record version: sha256:a3c5a4bd82e1df678a3fa41d9979719ffe6f02c4a85adca4a5b2a0c4b5c6da33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Servicing of mortgage loans, credit card receivables, or other financial assets commonly includes, but is not limited to, the following activities: 1. a Collecting principal, interest, and escrow payments from borrowers 2. b Paying taxes and insurance from escrowed funds 3. c Monitoring delinquencies 4. d Executing foreclosure if necessary 5. e Temporarily investing funds pending distribution 6. f Remitting fees to guarantors, trustees, and others providing services 7. g Accounting for and remitting principal and interest payments to the holders of [beneficial interests](https://asc.understandingaccounting.org/glossary/b/#beneficial-interests "Rights to receive all or portions of specified cash inflows received by a trust or other entity, including, but not limited to, all of the following: Senior and subordinated shares of interest, principal, or other cash inflows to be passed-through or paid-through Premiums due to guarantors Commercial paper obligations Residual interests, whether in the form of debt or equity.") or [participating interests](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest.") in the financial assets. ##### [860-50-05-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:06.276Z to 2026-09-10T02:08:06.276Z Record version: sha256:f2feeea66de130067758dfe9043dc0c9cd68d347536c83dc7e17015619377831 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A servicer of financial assets commonly receives the following [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."): 1. a Revenues from [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.") 2. b A portion of the interest from the financial assets 3. c Late charges 4. d Other ancillary sources, including float. A servicer is entitled to receive all of those benefits of servicing only if it performs the servicing and incurs the costs of servicing the financial assets. Source downloaded (UTC): 2026-09-10T02:08:08.417Z to 2026-09-10T02:08:08.417Z Record version: sha256:a7de36e5b0c892bda419ab990395d85252e59f61b1dbbe1f5bd53a218f7a7f73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/860/50/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [860-50-15-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:08.417Z to 2026-09-10T02:08:08.417Z Record version: sha256:f48868114803bd34abe950120001961bd28c678d15024ebad6160eb63a775751 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic has its own discrete scope, which is separate and distinct from the pervasive scope for this Topic as outlined in Section 860-10-15. #### Entities ##### [860-50-15-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:08.417Z to 2026-09-10T02:08:08.417Z Record version: sha256:cdf77a66f4bc65adb049918d539ebf18ef7a3fbcfb47ec5931251ed6b6c0aaee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities. #### Transactions ##### [860-50-15-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:08.417Z to 2026-09-10T02:08:08.417Z Record version: sha256:8a6d165631a41df6c053dcdc4dce9ac146ad70a231deb3f0d4ea4e3af66922b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to transactions in which [servicing assets](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.") are obtained and [servicing liabilities](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.") are incurred, including transactions in which loans are transferred with servicing retained by 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."). The guidance in this Subtopic also applies to transactions in which servicing assets are transferred with loans retained by the transferor. Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:d779cb4178b0dde2be09340e525bb9fd5a373e8f8f754129bf2c3d3ccb7ee426 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/860/50/#25-recognition) SEC content: no ##### [860-50-25-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:d4ce43cbc2f8775ed58fc0c98db664981a598bab95453bf62d6b66b7f876d8fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall recognize 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.") each time it undertakes an obligation to service a [financial asset](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity.") by entering into a servicing contract in any of the following situations: 1. a A servicer's [transfer](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 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](https://asc.understandingaccounting.org/updates/asu-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](https://asc.understandingaccounting.org/glossary/c/#consolidated-affiliate "An entity whose assets and liabilities are included in the consolidated, combined, or other financial statements being presented.") included in the financial statements being presented. Example 1 (see paragraph [860-50-55-20](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-20)) illustrates accounting for a sale of receivables with servicing obtained by the transferor. ##### [860-50-25-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:46048b4a716d7d9c5c7ed72ad57ffefbc58cd80c40458b5d3597f3c5a2bcb835 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [860-50-25-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:9f3a47553a008f343f86cab60c6935dee01a7b701167e77b4feb80664822f481 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A servicer that recognizes a servicing asset or servicing liability shall account for the contract to service financial assets separately from those financial assets. ##### [860-50-25-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:92d49fa84faf7d25869fb90e62e9b2dd76cc5ffdeb1d9e35ef10710d8b20f03d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [860-50-25-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:20e2bdd9e6e22a8a1393eaec093aa87e18d9311b3d3f2099a7835a65253a8c62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Section is organized as follows: 1. a Distinguishing servicing from an [interest-only strip](https://asc.understandingaccounting.org/glossary/i/#interest-only-strip "A contractual right to receive some or all of the interest due on a bond, mortgage loan, collateralized mortgage obligation, or other interest-bearing financial asset.") 2. b [Revolving-period securitizations](https://asc.understandingaccounting.org/glossary/r/#revolving-period-securitizations "Securitizations in which receivables are transferred at the inception and also periodically (daily or monthly) thereafter for a defined period (commonly three to eight years), referred to as the revolving period. During the revolving period, the special-purpose entity uses most of the cash collections to purchase additional receivables from the transferor on prearranged terms.") 3. c Regaining control of previously transferred assets. #### Distinguishing Servicing from an Interest-Only Strip ##### [860-50-25-6](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:7464b8ccfa9d66cbf4c40ec58cd3c2b22f3ae2ee09b6a53a3c0faaeb36b4c5f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A servicer shall account separately for rights to future interest income from the serviced assets that exceed [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."). 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](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2). ##### [860-50-25-7](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:2bd1b72d28b7e47841046030e045c9292462e494a85efea90f97acfb5e350b0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/860/20/#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](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17K). ##### [860-50-25-8](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:3a8f36c7f722fe71acd03db9ca3e910497e59b969b8a9541e467fec261b681be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Revolving-Period Securitizations ##### [860-50-25-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:393e7cebc45202a029270ccb981fec27a82e67431cd1aa4c6e420ae0c10bffb7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Regaining Control of Financial Assets Sold ##### [860-50-25-10](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:13.201Z to 2026-09-10T02:08:13.201Z Record version: sha256:613e337275e24e63fe47566795964d03a3b7a2f9b41218dbee00703cad241296 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-20-25-10(b)](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-10) explains that, after a paragraph [860-10-40-41](https://asc.understandingaccounting.org/asc/860/10/#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. 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/). Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:cc0e3b0a0ffd28f6dc04e162a9b304d518e862b00931df864c7aa735540ef04a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/860/50/#35-subsequent-measurement) SEC content: no ##### [860-50-35-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:fcdfeba73c648dd7528db27b6f1a78e7b26ebc0d6141039bf7c069c9a4329f81 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall subsequently measure each class of [servicing assets](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.") and [servicing liabilities](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.") using either of the following methods: 1. a Amortization method. Amortize servicing assets or servicing liabilities in proportion to and over the period of estimated net servicing income (if servicing revenues exceed servicing costs) or net servicing loss (if servicing costs exceed servicing revenues), and assess servicing assets or servicing liabilities for impairment or increased obligation based on fair value at each reporting date. 2. b Fair value measurement method. Measure servicing assets or servicing liabilities at fair value at each reporting date and report changes in fair value of servicing assets and servicing liabilities in earnings in the period in which the changes occur. ##### [860-50-35-1A](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-1A) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:53e57c32f6df2a72f3227678dcb28dbcb0c2b0f5b8ac05873cbddefd553fce42 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A servicing asset may become a servicing liability, or vice versa, if circumstances change. ##### [860-50-35-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:bb71724b052b71ce13fb763cae8ef85d7d63d5b9e35772d1e37f731043c8f4fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The election described in paragraphs [860-50-35-1 through 35-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-1) shall be made separately for each class of servicing assets and servicing liabilities. ##### [860-50-35-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:33d0c83d4c5990af64a52fc4b16f7c73ae8c60274b637844f75305d1b61b8524 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance applies to the election of a method for subsequent measurement of servicing assets and servicing liabilities: 1. a Once an entity elects the fair value measurement method for a class of servicing assets and servicing liabilities, that election shall not be reversed. 2. b Different elections can be made for different classes of servicing assets and servicing liabilities. 3. c Once a servicing asset or a servicing liability is reported in a class of servicing assets and servicing liabilities that an entity elects to subsequently measure at fair value, that servicing asset or servicing liability shall not be placed in a class of servicing assets and servicing liabilities that is subsequently measured using the amortization method. 4. d An entity may make an irrevocable decision to subsequently measure a class of servicing assets and servicing liabilities at fair value at the beginning of any fiscal year. 5. e Transferring servicing assets and servicing liabilities from a class subsequently measured using the amortization method to a class subsequently measured at fair value is permitted as of the beginning of any fiscal year. If an entity makes such a [transfer](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."), subsequent measurement of servicing assets and servicing liabilities at fair value shall be applied prospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year to reflect the difference between the fair value and the carrying amount, net of any related valuation allowance, of the servicing assets and servicing liabilities that exist at the beginning of the fiscal year in which the entity makes the fair value election. 6. f If an entity recognizes a new class of servicing assets and servicing liabilities, and no servicing assets and servicing liabilities that would belong to this class had previously been recognized by the entity, the entity may elect to subsequently measure that new class of servicing assets and servicing liabilities at fair value at the date of initial recognition of those servicing assets and servicing liabilities. ##### [860-50-35-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:0c0fdc1383529bd7d182983ed88d7625cb0a89d7b26724939db13f11c96b835a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall apply the same subsequent measurement method to each servicing asset and servicing liability in a class. ##### [860-50-35-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:c0f065d936faa11864a3837963b7864db640ebac25827776acc664525e9ac6a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Classes of servicing assets and servicing liabilities shall be identified based on any of the following: 1. a The availability of market inputs used in determining the fair value of servicing assets or servicing liabilities 2. b An entity's method for managing the risks of its servicing assets or servicing liabilities. ##### [860-50-35-6](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:c507341b6c3aa01702531d932cc53a3a19841640ff611a31f75c0f9f3586e12a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the approach in the preceding paragraph, a servicer may or may not consider the major asset type of the underlying [financial asset](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity.") being serviced when identifying its classes of separately recognized servicing assets and servicing liabilities. Further, this approach for defining classes of servicing assets and servicing liabilities is not analogous to the stratification guidance for determining impairment of servicing assets or servicing liabilities that are subsequently measured using the amortization method. ##### [860-50-35-7](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:84c11f6fa5c18146e214baeadf2843b1cdc2b664acc4f891bbaf086654875252 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall first identify its classes of separately recognized servicing assets and servicing liabilities under the approach in paragraph [860-50-35-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-5). For any class subsequently measured using the amortization method, an entity shall then stratify that class to determine if impairment has occurred, as discussed in paragraph [860-50-35-9(a)](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9). ##### [860-50-35-8](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:5568aab9f09e9a35ba05e812299b4aa5c63c6d36cb8b10597e88055a3d6740d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The remainder of this Section discusses the following matters: 1. a Amortization method—measurement of impairment or increased obligation 2. b [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 3. c Obligation to service refinanced financial assets. #### Amortization Method—Measurement of Impairment or Increased Obligation ##### [860-50-35-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:f0199f2e2308c06b03d2f16e55ed604cc6fe546dcae88f3c508ea63535ac4d50 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall evaluate and measure impairment of each class of separately recognized servicing assets that are subsequently measured using the amortization method described in paragraph [860-50-35-1(a)](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-1) as follows: 1. a Stratify servicing assets within a class based on one or more of the predominant risk characteristics of the underlying financial assets. Those characteristics may include financial asset type, size, interest rate, date of origination, term, and geographic location. For mortgage loans, financial asset type refers to the various conventional or government guaranteed or insured mortgage loans and adjustable-rate or fixed-rate mortgage loans. 2. b Recognize impairment through a valuation allowance for an individual stratum. The amount of impairment recognized separately shall be the amount by which the carrying amount of servicing assets for a stratum exceeds their fair value. The fair value of servicing assets that have not been recognized shall not be used in the evaluation of impairment. 3. c Adjust the valuation allowance to reflect changes in the measurement of impairment after the initial measurement of impairment. Fair value in excess of the carrying amount of servicing assets for that stratum, however, shall not be recognized. ##### [860-50-35-10](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:ac8239e50f5faf5f29290f151a6e908f59582d0d04784238312ccacf0bdccdc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic does not address when an entity should record a direct write-down of recognized servicing assets. ##### [860-50-35-11](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:38c4439cf70f630233876871fb54bb0eb96855cd788722badc2bcbadf3fd105f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For servicing liabilities subsequently measured using the amortization method, if subsequent events have increased the fair value of the liability above the carrying amount, for example, because of significant changes in the amount or timing of actual or expected future cash flows relative to the cash flows previously projected, the servicer shall revise its earlier estimates and recognize the increased obligation as a loss in earnings. That is, if subsequent events increase the fair value of a stratum of servicing liabilities within a class that an entity has elected to subsequently measure using the amortization method, that increase shall be recognized in earnings as a loss. Similar to the accounting for changes in a valuation allowance for an impaired asset, increases in the servicing obligation may be recovered, but the obligation shall not be reduced below the amortized measurement of the initially recognized servicing liability. ##### [860-50-35-12](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:6394775ac27a3a6cad1722b5cbf91dce229e62bc3469c6109d978df2655c0634 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The impairment provisions of paragraphs [860-50-35-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9) and [860-50-35-11](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-11) for classes of servicing assets and servicing liabilities subsequently measured using the amortization method are based on the fair value of the contract rather than the gain or loss from subsequently carrying out the terms of the contract. ##### [860-50-35-13](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:568d951273768333d1e20180e010dd5ddd67089436fb126a6de3ed6d80abe885 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity is not required to use either the most predominant risk characteristic or more than one predominant risk characteristic to stratify the servicing assets for purposes of evaluating and measuring impairment. An entity must exercise judgment when determining how to stratify servicing assets (that is, when selecting the most appropriate characteristic\[s\] for stratification). An entity may use different stratification criteria for the purposes of impairment testing under this Subtopic and for the purposes of grouping similar assets to be designated as a hedged portfolio in a fair value hedge under Subtopic 815-20. If an entity chooses not to restratify servicing assets for impairment testing under this Subtopic consistent with any restratification done for compliance with hedging criteria under Subtopic 815-20, the entity shall record any adjustments resulting from a fair value hedge to the risk strata used for impairment testing under paragraph [860-50-35-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9). ##### [860-50-35-14](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:0ddb681984ffc14ac0713dd14c2e266fa4a9a5be6c9c0ff2ee552ed499f98635 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once an entity has determined the predominant risk characteristics to be used in identifying the resulting stratums within each class of servicing assets subsequently measured using the amortization method, that decision shall be applied consistently unless significant changes in economic facts and circumstances clearly indicate that the predominant risk characteristics and resulting stratums should be changed. If a significant change in economic facts and circumstances occurs, that change shall be accounted for prospectively as a change in accounting estimate in accordance with paragraphs [250-10-45-17 through 45-19](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) and [250-10-50-4](https://asc.understandingaccounting.org/asc/250/10/#250-10-50-4). ##### [860-50-35-15](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:547579ba42972eb71f29864f815c736edf3ec01f9376be3c92e79ff12557eb69 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/). ##### [860-50-35-16](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:b2016dad68c703ee3f322ce5ff74bd65c635fe6a9f8d0e704803afab2d0f5173 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/). #### Obligation to Service Refinanced Mortgage Loans ##### [860-50-35-17](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:d98846a94f70284cd7c56d2404ace44541dddbef85224ff561ed51857a01f1ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an entity that is servicing mortgage loans refinances a mortgage loan that is being serviced (resulting in prepayment of the old mortgage loan and origination of a new mortgage loan), the entity shall not consider the estimated future net servicing income (that is, servicing revenue in excess of servicing costs) from the new mortgage loan in determining how to amortize any capitalized cost related to acquiring the mortgage servicing asset for the old mortgage loan. The mortgage servicing asset represents a contractual relationship between the servicer and the investor in the mortgage loan, not between the servicer and the borrower. ##### [860-50-35-18](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:18.331Z to 2026-09-10T02:08:18.331Z Record version: sha256:c8c53a45c9dfa10ebdfa88178a0cf38cba83dc04cf2e24a5b7a0aee23f7e41d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of a mortgage servicing asset that is subsequently measured using the amortization method may require adjustment as a result of the refinancing transaction depending on the servicer's assumptions in recording the servicing asset. If the refinancing transaction represents prepayment activity anticipated by the servicer when the servicing asset was recorded, an adjustment would not be necessary. However, if actual prepayments differ from anticipated prepayments, an adjustment to the servicing asset would be required. If the servicing assets or liabilities are subsequently measured using the fair value measurement method, the entity shall recognize any adjustment as a result of the refinancing transaction directly in earnings. Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:b78db759fdca47379130aeeea899ee8fa82d00d945281cbd29cc15a582a17fb4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/860/50/#40-derecognition) SEC content: no ##### [860-50-40-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:9d84e8f3350b0ddf04f88f4843096cd394b9c7164a79f3c543fa05c6fa097917 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section is organized as follows: 1. a Overall 2. b [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.") with a subservicing contract 3. c Transfers involving participation in an income stream. #### Overall ##### [860-50-40-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:c606d5c3b82815f41462b90d13f99c6bbfa310c3e2b5aa903f68c42e91ff2dad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following criteria shall be considered when evaluating whether a transfer of servicing rights qualifies as a sale: 1. a Whether 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.") has received written approval from the investor if required. 2. b Whether 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.") is a currently approved transferor-servicer and is not at risk of losing approved status. 3. c If the transferor finances a portion of the sales price, whether an adequate nonrefundable down payment has been received (necessary to demonstrate the transferee's commitment to pay the remaining sales price) and whether the note receivable from the transferee provides full [recourse](https://asc.understandingaccounting.org/glossary/r/#recourse "The right of a transferee of receivables to receive payment from the transferor of those receivables for any of the following: Failure of debtors to pay when due The effects of prepayments Adjustments resulting from defects in the eligibility of the transferred receivables.") to the transferee. Nonrecourse notes or notes with limited recourse (such as to the servicing) do not satisfy this criterion. 4. d Temporary servicing performed by the transferor for a short period of time shall be compensated in accordance with a subservicing contract that provides [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."). ##### [860-50-40-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:097b8438009077c2b91df9bdc4997b81a7667daa84dd2e83bae20f8cb4887874 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Also, the following additional criteria shall be considered when evaluating whether a transfer of servicing rights qualifies as a sale: 1. a Title has passed. 2. b Substantially all risks and rewards of ownership have irrevocably passed to the buyer. 3. c Any [protection provisions](https://asc.understandingaccounting.org/glossary/p/#protection-provisions "Provisions in some contracts to sell or transfer mortgage servicing rights that could affect the amount ultimately paid to the transferor. For example, the transferor may agree to adjust the sales price for loan prepayments, defaults, or foreclosures that occur within a specified period of time.") retained by the [seller](https://asc.understandingaccounting.org/glossary/s/#seller "A transferor that relinquishes control over financial assets by transferring them to a transferee in exchange for consideration.") are minor and can be reasonably estimated. ##### [860-50-40-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:b6dbb9eaa68fe8988ce92953bbfabd42492170b0bcd1f15a1f6dd7bb4ad67600 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a sale is recognized and minor protection provisions exist, a liability shall be accrued for the estimated obligation associated with those provisions. The seller retains only minor protection provisions if both of the following conditions are met: 1. a The obligation associated with those provisions is estimated to be no more than 10 percent of the sales price. 2. b Risk of prepayment is retained for no longer than 120 days. ##### [860-50-40-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:012883fd5e08da4a7c37ce9537226fe5f413de700fa6c34ec20d60b00c1693ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A temporary subservicing contract in which the subservicing will be performed by the transferor for a short period of time would not necessarily preclude recognizing a sale at the closing date. ##### [860-50-40-6](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:70f164e98f6fbafbea74ac95c293442cb98f6d2ac0f5da57a7ccd525ba18d016 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The criteria in paragraphs [860-50-40-2 through 40-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-2) apply to transfers of servicing rights relating to loans previously sold and to transfers of servicing rights relating to loans that are retained by the transferor. The carrying amount of servicing rights sold relating to loans that have been retained shall be allocated at the date of sale between the servicing rights and the loans retained using relative fair values. #### Sales of Servicing Rights with a Subservicing Contract ##### [860-50-40-7](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:6f1bcc83c6ae49510f04f9d4d7766cb7b719b9c357446b76f8e87646d371dbbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A sale of mortgage servicing rights with a subservicing contract shall be treated as a sale with gain deferred if substantially all the risks and rewards inherent in owning the mortgage servicing rights have been effectively transferred to the transferee, as discussed in paragraph [860-50-40-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-3). Attributes of the transferee (for example, ability to perform servicing) would not be significant to the accounting for the transaction. The risks and rewards associated with a transferor performing purely administrative functions under a subservicing contract would not necessarily preclude sales treatment. A loss shall be recognized currently if the transferor determines that prepayments of the underlying mortgage loans may result in performing the future servicing at a loss. ##### [860-50-40-8](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:4fa2f20b5343c768845d8f2470f73db6632983d5984363165f02fbd9b81a3f99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Substantially all the risks and rewards inherent in owning the mortgage servicing rights have not been transferred to the transferee and, therefore, the transaction shall be accounted for as a financing if any of the following factors are present: 1. a The transferor-subservicer directly or indirectly guarantees a yield to the transferee. For example, the transferor-subservicer guarantees prepayment speeds or maximum loan default ratios to the buyer. 2. b The transferor-subservicer is obligated to advance a portion or all of the servicing fees on a nonrecoverable basis to the transferee before receipt of the loan payment from the mortgagor. 3. c The transferor-subservicer indemnifies the transferee for damages due to causes other than failure to perform its duties under the terms of the subservicing contract. 4. d The transferor-subservicer absorbs losses on mortgage loan foreclosures not covered by the Federal Housing Administration, Department of Veterans Affairs, or other guarantors, if any, including absorption of foreclosure costs and costs of managing foreclosed property. 5. e Title to the servicing rights is retained by the transferor-subservicer. ##### [860-50-40-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:21f49e1090470d5a3a7a21c98e709519224c8fe17496fc7029b52eca636729bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The presence of any of the following factors creates a rebuttable presumption that substantially all the risks and rewards inherent in owning the mortgage servicing rights have not been transferred to the transferee and that the transaction shall be accounted for as a financing: 1. a The transferor-subservicer directly or indirectly provides financing or guarantees the transferee's financing. Nonrecourse financing, for example, would indicate that risks have not been transferred to the transferee. Topic 450 requires a guarantor to recognize, at inception of the guarantee, a liability for the obligation undertaken in issuing the guarantee. 2. b The terms of the subservicing contract unduly limit the transferee's ability to exercise ownership control over the servicing rights or result in the seller's retaining some of the risks and rewards of ownership. For example, if the transferee cannot cancel or decline to renew the subservicing contract after a reasonable period of time, the transferee is precluded from exercising certain rights of ownership. Conversely, if the transferor cannot cancel the subservicing contract after a reasonable period of time, the transferor has not transferred substantially all of the risks of ownership. 3. c The transferee is a special-purpose entity without substantive capital at risk. #### Sales of Servicing Rights for Participation in an Income Stream ##### [860-50-40-10](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:f191d9bf09eca3efb8798deefe4b0653629f7e272c6c1ceb95e3619e8b81db9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following addresses a situation in which an entity sells the right to service mortgage loans that are owned by other parties. The related mortgage loans have been previously sold, with servicing retained, in a separate transaction. Because of the ability to invest the float that results from payments received from borrowers but not yet passed to the owners of the mortgages, the mortgage servicing rights can be sold for immediate cash or for a participation in the future interest stream of the loans. ##### [860-50-40-11](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:20.155Z to 2026-09-10T02:08:20.155Z Record version: sha256:c33a69008a755e763020bb4a16eaa17c2e2904094e943d913da5d9b3b33954ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a transfer of mortgage servicing rights qualifies as a sale under the criteria beginning in paragraph [860-50-40-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-2) and the sale is for a participation in the future interest income stream, gain recognition is appropriate at the sale date. There are difficulties in measuring the amount of the gain if the sales price is based on a participation in future payments and there is no specified upper limit on the computed sales price. The transferor of mortgage servicing rights shall consider all available information, including the amount of gain that would be recognized if the servicing rights were to be sold outright for a fixed cash price. Source downloaded (UTC): 2026-09-10T02:08:23.522Z to 2026-09-10T02:08:23.522Z Record version: sha256:3f9dab319fac7c45d88fdb276a6cd9cf10de51903f1206ba7d4c2d12e21429e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/860/50/#45-other-presentation-matters) SEC content: no ##### [860-50-45-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:23.522Z to 2026-09-10T02:08:23.522Z Record version: sha256:2d6ac834e431065d8d49de2fa7c11334091bc7e251ca1de6d9ac6c8ec32256b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall report recognized [servicing assets](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.") and [servicing liabilities](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 are subsequently measured using the fair value measurement method in a manner that separates those carrying amounts on the face of the statement of financial position from the carrying amounts for separately recognized servicing assets and servicing liabilities that are subsequently measured using the amortization method. ##### [860-50-45-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:23.522Z to 2026-09-10T02:08:23.522Z Record version: sha256:c95f2e0e50ab2084ac50766862fe95e5daf5df710532d211998e6285f7a6d07a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To accomplish that separate reporting, an entity may do either of the following: 1. a Display separate line items for the amounts that are subsequently measured using the fair value measurement method and amounts that are subsequently measured using the amortization method 2. b Present the aggregate of those amounts that are subsequently measured at fair value and those amounts that are subsequently measured using the amortization method (see paragraphs [860-50-35-9 through 35-11](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9) ) and disclose parenthetically the amount that is subsequently measured at fair value that is included in the aggregate amount. Source downloaded (UTC): 2026-09-10T02:08:26.048Z to 2026-09-10T02:08:26.048Z Record version: sha256:500c5b26573631c8178a667c5415a07a91ebb5d61939e9aba514da89d97988e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/860/50/#50-disclosure) SEC content: no #### All Entities within the Scope of Subtopic ##### [860-50-50-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:26.048Z to 2026-09-10T02:08:26.048Z Record version: sha256:9e6277dee989a587db40972c6e3d3d425d7a729c465dde1db3c6ed78b88844e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section is organized as follows: 1. a All [servicing assets](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.") and [servicing liabilities](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.") 2. b Servicing assets and servicing liabilities subsequently measured at fair value 3. c Servicing assets and servicing liabilities subsequently amortized 4. d Servicing assets and servicing liabilities for which subsequent measurement at fair value is elected as of the beginning of the fiscal year. For overall guidance on Topic 860's disclosures, see Section 860-10-50. ##### [860-50-50-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-50-2) Pending content: yes Source downloaded (UTC): 2026-09-10T02:08:26.048Z to 2026-09-10T02:08:26.048Z Record version: sha256:8c1802b53954475590a04f040d1360010969a56fe3fc31760cd86e0e9ad0d144 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For all servicing assets and servicing liabilities, all of the following shall be disclosed: 1. a Management's basis for determining its classes of servicing assets and servicing liabilities. 2. b A description of the risks inherent in servicing assets and servicing liabilities and, if applicable, the instruments used to mitigate the income statement effect of changes in fair value of the servicing assets and servicing liabilities. 3. c 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."), late fees, and ancillary fees recognized for each period for which results of operations are presented, including a description of where each amount is reported in the statement of income. 4. d Quantitative and qualitative information about the assumptions used to estimate fair value (for example, discount rates, anticipated credit losses, and prepayment speeds). Disclosure of quantitative information about the instruments used to manage the risks inherent in servicing assets and servicing liabilities, including the fair value of those instruments at the beginning and end of the period, is encouraged but not required. An entity that provides such quantitative information is also encouraged, but not required, to disclose quantitative and qualitative information about the assumptions used to estimate the fair value of those instruments. Section 235-10-50 provides guidance on disclosures of accounting policies. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For all servicing assets and servicing liabilities, all of the following shall be disclosed in interim and annual reporting periods: 1. a Management's basis for determining its classes of servicing assets and servicing liabilities. 2. b A description of the risks inherent in servicing assets and servicing liabilities and, if applicable, the instruments used to mitigate the income statement effect of changes in fair value of the servicing assets and servicing liabilities. 3. c 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."), late fees, and ancillary fees recognized for each period for which results of operations are presented, including a description of where each amount is reported in the statement of income. 4. d Quantitative and qualitative information about the assumptions used to estimate fair value (for example, discount rates, anticipated credit losses, and prepayment speeds). Disclosure of quantitative information about the instruments used to manage the risks inherent in servicing assets and servicing liabilities, including the fair value of those instruments at the beginning and end of the period, is encouraged but not required. An entity that provides such quantitative information is also encouraged, but not required, to disclose quantitative and qualitative information about the assumptions used to estimate the fair value of those instruments. Section 235-10-50 provides guidance on disclosures of accounting policies. ##### [860-50-50-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-50-3) Pending content: yes Source downloaded (UTC): 2026-09-10T02:08:26.048Z to 2026-09-10T02:08:26.048Z Record version: sha256:817a424627529a65850ecbab0bf5802d1fd7758098e9ceab13e85445dc233a87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For servicing assets and servicing liabilities subsequently measured at fair value, the following shall be disclosed: 1. a For each class of servicing assets and servicing liabilities, the activity in the balance of servicing assets and the activity in the balance of servicing liabilities (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including, but not limited to, the following: 1. 1 The beginning and ending balances 2. 2 Additions through any of the following: 1. i Purchases of servicing assets 2. ii Assumptions of servicing obligations 3. iii Recognition of servicing obligations that result from [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](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity."). 3. 3 Disposals 4. 4 Changes in fair value during the period resulting from either of the following: 1. i Changes in valuation inputs or assumptions used in the valuation model 2. ii Other changes in fair value and a description of those changes. 5. 5 Other changes that affect the balance and a description of those changes. 2. b [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For servicing assets and servicing liabilities subsequently measured at fair value, the following shall be disclosed in interim and annual reporting periods: 1. a For each class of servicing assets and servicing liabilities, the activity in the balance of servicing assets and the activity in the balance of servicing liabilities (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including, but not limited to, the following: 1. 1 The beginning and ending balances 2. 2 Additions through any of the following: 1. i Purchases of servicing assets 2. ii Assumptions of servicing obligations 3. iii Recognition of servicing obligations that result from [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](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity."). 3. 3 Disposals 4. 4 Changes in fair value during the period resulting from either of the following: 1. i Changes in valuation inputs or assumptions used in the valuation model 2. ii Other changes in fair value and a description of those changes. 5. 5 Other changes that affect the balance and a description of those changes. 2. b [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [860-50-50-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-50-4) Pending content: yes Source downloaded (UTC): 2026-09-10T02:08:26.048Z to 2026-09-10T02:08:26.048Z Record version: sha256:74ca9b116a84dca503310cd61516a140962df15da82f08384d45a7ffb93f9161 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For servicing assets and servicing liabilities measured subsequently under the amortization method in paragraph [860-50-35-1(a)](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-1), all of the following shall be disclosed: 1. a For each class of servicing assets and servicing liabilities, the activity in the balance of servicing assets and the activity in the balance of servicing liabilities (including a description of where changes in the carrying amount are reported in the statement of income for each period for which results of operations are presented), including, but not limited to, the following: 1. 1 The beginning and ending balances 2. 2 Additions through any of the following: 1. i Purchases of servicing assets 2. ii Assumptions of servicing obligations 3. iii Recognition of servicing obligations that result from transfers of financial assets. 3. 3 Disposals 4. 4 Amortization 5. 5 Application of valuation allowance to adjust carrying value of servicing assets 6. 6 Other-than-temporary impairments 7. 7 Other changes that affect the balance and a description of those changes. 2. b For each class of servicing assets and servicing liabilities, the fair value of recognized servicing assets and servicing liabilities at the beginning and end of the period. 3. c [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 4. d The risk characteristics of the underlying financial assets used to stratify recognized servicing assets for purposes of measuring impairment in accordance with paragraph [860-50-35-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9). If the predominant risk characteristics and resulting stratums are changed, that fact and the reasons for those changes shall be included in the disclosures about the risk characteristics of the underlying financial assets used to stratify the recognized servicing assets in accordance with this paragraph. 5. e For each period for which results of operations are presented, the activity by class in any valuation allowance for impairment of recognized servicing assets, including all of the following: 1. 1 Beginning and ending balances 2. 2 Aggregate additions charged and recoveries credited to operations 3. 3 Aggregate write-downs charged against the allowance. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For servicing assets and servicing liabilities measured subsequently under the amortization method in paragraph [860-50-35-1(a)](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-1), all of the following shall be disclosed in interim and annual reporting periods: 1. a For each class of servicing assets and servicing liabilities, the activity in the balance of servicing assets and the activity in the balance of servicing liabilities (including a description of where changes in the carrying amount are reported in the statement of income for each period for which results of operations are presented), including, but not limited to, the following: 1. 1 The beginning and ending balances 2. 2 Additions through any of the following: 1. i Purchases of servicing assets 2. ii Assumptions of servicing obligations 3. iii Recognition of servicing obligations that result from transfers of financial assets. 3. 3 Disposals 4. 4 Amortization 5. 5 Application of valuation allowance to adjust carrying value of servicing assets 6. 6 Other-than-temporary impairments 7. 7 Other changes that affect the balance and a description of those changes. 2. b For each class of servicing assets and servicing liabilities, the fair value of recognized servicing assets and servicing liabilities at the beginning and end of the period. 3. c [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 4. d The risk characteristics of the underlying financial assets used to stratify recognized servicing assets for purposes of measuring impairment in accordance with paragraph [860-50-35-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9). If the predominant risk characteristics and resulting stratums are changed, that fact and the reasons for those changes shall be included in the disclosures about the risk characteristics of the underlying financial assets used to stratify the recognized servicing assets in accordance with this paragraph. 5. e For each period for which results of operations are presented, the activity by class in any valuation allowance for impairment of recognized servicing assets, including all of the following: 1. 1 Beginning and ending balances 2. 2 Aggregate additions charged and recoveries credited to operations 3. 3 Aggregate write-downs charged against the allowance. ##### [860-50-50-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-50-5) Pending content: yes Source downloaded (UTC): 2026-09-10T02:08:26.048Z to 2026-09-10T02:08:26.048Z Record version: sha256:fcc723dc64f2323e5308ebefda9c130a9f7116eb75b920a5bcc3104609464731 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity elects under paragraph [860-50-35-3(d)](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-3) to subsequently measure a class of servicing assets and servicing liabilities at fair value at the beginning of the fiscal year, the amount of the cumulative-effect adjustment to retained earnings shall be separately disclosed. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If an entity elects under paragraph [860-50-35-3(d)](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-3) to subsequently measure a class of servicing assets and servicing liabilities at fair value at the beginning of the fiscal year, the amount of the cumulative-effect adjustment to retained earnings shall be separately disclosed in the interim or annual reporting period in which the adjustment is recorded. ##### [860-50-50-6](https://asc.understandingaccounting.org/asc/860/50/#860-50-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:26.048Z to 2026-09-10T02:08:26.048Z Record version: sha256:419c3f98bf407ffdd69dc882a2f01c1a866d7d597154c3f4595f9b23f31d28b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-50-50-6 through 50-9 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/50/#860-50-50-6). Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:e3768fd5791d3d6374d16a5e516326ab607266f51fcbfcc51595188db7bd3ee0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/860/50/#55-implementation-guidance-and-illustrations) SEC content: no ##### [860-50-55-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:e6884591d86d21b009f9e0d9199b24a4353f4a2e7b460cee0d02ef3827e2e450 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/). ##### [860-50-55-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:cbd4178892ca8fdeeee73ddbaff284010fe682b528b0418549d5d7cd2f0a7439 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/). #### Implementation Guidance ##### [860-50-55-3](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:a11c262d8eae5da3003eecf7a02c3c5cc0e171b9db2e9926a41875242062bf1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance addresses the accounting for servicing assets and servicing liabilities in certain transactions, specifically: 1. a Recognition of servicing upon sale of a participating interest 2. b Servicer not entitled to receive a contractually specified servicing fee 3. c Servicing assets assumed without cash payment 4. d Subservicing contracts. ##### [860-50-55-4](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:cb12cb55e5f986f0d3c94faa5c360a716702ae4ad7065769ad2c110fe1bf0095 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the entity that transfers a portion of a loan under a participation agreement that meets the definition of a participating interest and qualifies for sale accounting under Subtopic 860-10 obtains the right to receive [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.") that more than adequately compensate it for servicing the loan, and the entity would continue to service the loan regardless of the [transfer](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.") because it retains part of the participated loan, the entity shall record a servicing asset for the portion of the loan it sold. The assumption that the entity would service the loan because it retains part of the participated loan does not affect the requirement to recognize a servicing asset. Conversely, an entity could not avoid recording a servicing liability if the benefits of servicing are not expected to adequately compensate the servicer for performing the servicing. However, if the benefits of servicing are significantly above an amount that would fairly compensate a substitute service provider, should one be required, the transferred portion does not meet the definition of a participating interest, and, therefore, the transfer does not qualify for sale accounting (see paragraph [860-10-40-6A(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A)). ##### [860-50-55-5](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:c37b54ee21b2ef33bc06a9a59b631d4b6ed2088c01bf57a5efdbe1d68939ab31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance addresses whether an entity should recognize a servicing liability if it transfers all or some of a [financial asset](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity.") that meets the definition of a participating interest that is accounted for as a sale and undertakes an obligation to service the asset but is not entitled to receive a contractually specified servicing fee. In the circumstances described, the transferor-servicer would be required to recognize a servicing liability at fair value if the benefits of servicing are less 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."). The requirements in paragraph [860-50-25-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-1) apply even if it is not customary to charge a contractually specified servicing fee. Example 1, Case C (paragraph [860-50-55-25](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-25)) illustrates a transaction in which a transferor agrees to service loans without explicit compensation. ##### [860-50-55-6](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:ea0dca900c4e39509c0bb9f2386ba0c3be90450372ca21a44a260c7167ee5570 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance addresses transactions in which servicing assets are assumed without cash payment, and the appropriate offsetting entry by 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."). ##### [860-50-55-7](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:cc5944e19ee9cfad3a8375f8b7c9f4eb76c198b7ab1684ed254997b19ffdd8de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The offsetting entry depends on whether an exchange or capital transaction has occurred. If an exchange has occurred, then the transaction should be recorded based on the facts and circumstances. For example, the servicing asset may represent consideration for goods or services provided by the transferee to 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.") of the servicing. In that case, the offsetting entry by the transferee would be the same as if cash was received in exchange for the goods and services (that is, revenue or a liability as appropriate). ##### [860-50-55-8](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:45603bd31fd8ed3749070fb73854dd6c5bd74a5235925a74adbbcafe0e6f3314 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The servicing assets also might be received in full or partial satisfaction of a receivable from the transferor of the servicing. In those cases, the offsetting entry by the transferee would be to [derecognize](https://asc.understandingaccounting.org/glossary/d/#derecognize "Remove previously recognized assets or liabilities from the statement of financial position.") all or part of the receivable satisfied in the exchange. Another possibility is that an investor is in substance making a capital contribution to the investee (the party receiving the servicing asset, that is, the transferee) in exchange for an increased ownership interest. In that case, the investee should recognize an increase in equity from a contribution by owner. ##### [860-50-55-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:5af448b1ed598385e43c4f80f4569e3214aff6690b4771008bad2be1bbf52354 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/). ##### [860-50-55-10](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:8508f7b3525af6457cc033b44823a4d3a2cec67f21559b47996a3f1f7cd1b7a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transferor may transfer mortgage loans in their entirety to a third party in a transfer that is accounted for as a sale and undertake an obligation to service the loans. After the transfer, the transferor enters into a subservicing arrangement with a third party. ##### [860-50-55-11](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:09e63e18b6b12d6b70955a9bf2b7e4a7c84916ffc53b566b777baf70ce32f45e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the transferor's benefits of servicing exceed its obligation under the subservicing contract, that differential shall not be accounted for as an interest-only strip. Rather, the transferor should account for the two transactions separately. First, the transferor should account for the transfer of mortgage loans in accordance with Subtopic 860-20. The obligation to service the loans should be initially recognized and measured at fair value according to paragraph [860-50-30-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-30-1) as proceeds obtained from the sale of the mortgage loans. Second, the transferor should account for the subcontract with the subservicer. ##### [860-50-55-12](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:7fb9101e85a9d74db0bb3f4d8ddb9678431c29f71b6c1d25b8089d3202f422fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-50-55-12 through 55-19 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-12). #### Illustrations ##### [860-50-55-20](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:f457adc3d2885b0d3d073a5475f96dd4d50f27bc0212140407a84a896190ed4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the guidance in paragraph [860-50-25-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-25-1): 1. a Transferor continues to service the loans (Case A). 2. b [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 3. c Future benefits of servicing do not provide adequate compensation (Case C). ##### [860-50-55-21](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:7dfa255033628f65d852999d8257d9b34657b9b65551beed4b48b4349269ec21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A originates $1,000 of loans that yield 10 percent interest income for their estimated lives of 9 years. Entity A transfers the entire loans to an unconsolidated entity and the transfer is accounted for as a sale. ##### [860-50-55-22](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:ba85dc746ecf830de7c7869ce50d17b6762d30d02457eb4b94d2ebf9ac880341 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A receives as proceeds $1,000 cash, a beneficial interest to receive 1 percent of the contractual interest on the loans (an interest-only strip receivable), and an additional 1 percent of the contractual interest as compensation for servicing the loans. The fair values of the servicing asset and the interest-only strip receivable are $40 and $60, respectively. This Case illustrates Entity A's (the transferor's) accounting for a sale with the servicing obtained by Entity A (the transferor), as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-95EEAD42-FE4D-4FFD-A2A4-816ABFE801DF-low.gif) Fair Values Cash proceeds " $1,000 " Servicing asset 40 Interest-only strip receivable 60 Net Proceeds Cash proceeds " $1,000 " Servicing asset 40 Interest-only strip receivable 60 Net proceeds " $1,100 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-85B70517-0F14-4D07-9CB6-E20D7D1DDF84-low.gif) Gain on Sale Net proceeds " $1,100" Less: Carrying amount of loans sold " (1,000)" Gain on sale $100 - ![](https://asc.understandingaccounting.org/asc-img/GUID-31E9A69F-B022-4522-B3B3-EC7223116D52-low.gif) Journal Entries Cash " $1,000 " Interest-only strip receivable 60 Servicing asset 40 Loans " $1,000 " Gain on sale 100 To record transfer and to recognize interest-only strip receivable and servicing asset ##### [860-50-55-23](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:5287f6b76f89b8b8bb130fa4f9994e7af0e4ab6081bf37b6efd710bea9beb923 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/). ##### [860-50-55-24](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:79260132896aa6d6232b4453921640a8b400e35deac1c16d5665611a8f45b44c 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/). ##### [860-50-55-25](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:0996a788c7fed0383d720efaa14ce6ef093a1de68d53800ca5186594c8cb4007 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transferors sometimes agree to take on servicing responsibilities when the future benefits of servicing are not expected to adequately compensate them for performing that servicing. In that circumstance, the result is a servicing liability rather than a servicing asset. ##### [860-50-55-26](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:f2b9fbd6ec7ab6d3ef70d85c29ea13145626d61cc8b8d56455a2a051794a0614 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if in the transaction illustrated in paragraphs [860-20-55-43 through 55-45](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-43) , the transferor (Entity A) had agreed to service the loans without explicit compensation and it estimated the fair value of that servicing obligation at $50, net proceeds would be reduced to $980, gain on sale would become a loss on sale of $20, and the transferor would report a servicing liability of $50. ##### [860-50-55-27](https://asc.understandingaccounting.org/asc/860/50/#860-50-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:28.630Z to 2026-09-10T02:08:28.630Z Record version: sha256:cb9386c68e1dfc0cf5838d408a93e0ea25f6580d91a1101d1646e665e7e7eb97 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/). Source downloaded (UTC): 2026-09-10T02:08:32.193Z to 2026-09-10T02:08:32.193Z Record version: sha256:aa16049bda38354a728c0842a2fed226ce427c5e2d0a5ae6c6eefce7860fcfbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-50-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/860/50/#60-relationships) SEC content: no #### Derivatives and Hedging ##### [860-50-60-1](https://asc.understandingaccounting.org/asc/860/50/#860-50-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:32.193Z to 2026-09-10T02:08:32.193Z Record version: sha256:820e6182d9f338b33daf25796369ca60827a41d6eb428784b655a5e9fb62d97c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on whether an entity may designate as the hedged item in a fair value hedge a portion of a recognized servicing right asset subsequently measured using the amortization method, see paragraph [815-20-55-65](https://asc.understandingaccounting.org/asc/815/20/#815-20-55-65). #### Financial Services—Mortgage Banking ##### [860-50-60-2](https://asc.understandingaccounting.org/asc/860/50/#860-50-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:32.193Z to 2026-09-10T02:08:32.193Z Record version: sha256:c2a3dabde23081fefe5c33578d0b2ea104faf52e344534e26648a5bddc978ac2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the capitalization of interest costs on certain Government National Mortgage Association (GNMA) securities, and the determination of net future servicing income for this purpose, see paragraph [948-340-30-1](https://asc.understandingaccounting.org/asc/340/948/#340-948-30-1).