# ASC Topic 860: Transfers and Servicing Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/860/) 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): 2026-09-10T02:05:26.374Z to 2026-09-10T02:08:35.803Z Record version: sha256:efb733a13481167d70aea3355dd9f2c86388d6ba217c1d31af99cd5226a2010f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 860 governs when a transferor may derecognize transferred financial assets (sale accounting) versus keep them on balance sheet (secured borrowing), plus the accounting for related servicing and collateral. The Overall subtopic, 860-10, supplies the controlling test: a transfer of an entire financial asset, group of entire financial assets, or a participating interest is a sale only if control is surrendered—legal isolation even in bankruptcy, the transferee's unconstrained ability to pledge or exchange, and no maintained effective control (860-10-40-5); failing any condition, 860-30 requires secured borrowing treatment with no change in the asset's measurement basis (860-30-25-2). If the test is met, 860-20 tells the transferor to derecognize, recognize all assets obtained and liabilities incurred at fair value, and record gain or loss immediately (860-20-40-1B), or, for a participating interest, allocate carrying amount on relative fair values (860-20-40-1A); 860-50 requires separate recognition of servicing assets/liabilities at fair value with an election by class between the amortization method and fair value measurement (860-50-25-1, 30-1, 35-1). ASC 860-40 (qualifying special-purpose entities) is now an empty shell—ASU 2009-16 eliminated the QSPE concept, so securitization vehicles are tested under 860-10-40 and consolidated (or not) under ASC 810-10. Source downloaded (UTC): 2026-09-10T02:05:26.374Z to 2026-09-10T02:06:11.378Z Record version: sha256:ac2c2f8125b3d34285fd4eb76cde302976e50947419e18f85f1be71290c0be39 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10: Transfers and Servicing — Overall ### Machine-generated study aids ```json { "summary": "ASC 860-10 is the Overall subtopic for Transfers and Servicing; it sets the scope for the whole topic and, critically, states the derecognition test for transferred financial assets. Under 860-10-40-5, a transfer of an entire financial asset, group of entire financial assets, or a participating interest is a sale if and only if (a) the assets are legally isolated from the transferor even in bankruptcy, (b) each transferee (or beneficial interest holder) can pledge or exchange what it received without a constraint that gives the transferor more than a trivial benefit, and (c) the transferor does not maintain effective control. If any condition fails, the transfer is accounted for as a secured borrowing under 860-30.", "key_points": [ "Sale accounting requires surrender of control, which exists only if all three conditions in 860-10-40-5 are met—legal isolation, the transferee's unconstrained right to pledge or exchange, and no maintained effective control—and the analysis must first ask whether the transferor would consolidate the transferee (860-10-40-4).", "An entire financial asset generally cannot be split before transfer unless every component is a participating interest, and a transfer may not be accounted for partly as a sale and partly as a secured borrowing (860-10-40-4D); non-participating portions are accounted for under 860-30-25-2 (860-10-40-4E).", "A participating interest requires pro rata ownership from the transfer date, proportionate sharing of all cash flows (excluding fair servicing compensation), equal priority with no subordination or recourse beyond standard reps and warranties, and no unilateral right to pledge or exchange the entire asset (860-10-40-6A).", "Effective control is maintained by, among other things, an agreement that both entitles and obligates the transferor to repurchase the same or substantially the same assets before maturity at a fixed or determinable price (860-10-40-24), a unilateral ability to reclaim specific assets that gives more than a trivial benefit (other than a cleanup call), or a put so favorable that exercise is probable (860-10-40-5(c)).", "A repurchase-to-maturity transaction must be accounted for as a secured borrowing as if the transferor maintained effective control (860-10-40-5A; 860-10-40-24A), and a transfer with a related repurchase financing is accounted for separately from the initial transfer (860-10-40-4C).", "Isolation must hold regardless of how remote bankruptcy is (860-10-40-11) and is typically supported by a true sale opinion and, for affiliated transfers, a nonconsolidation opinion (860-10-55-18A), though a legal opinion may be unnecessary for routine transfers with no continuing involvement (860-10-55-18B).", "The topic applies to all entities (860-10-15-2) but excludes transfers of nonfinancial assets, unrecognized financial assets, custody transfers for safekeeping, contributions, in substance nonfinancial assets, owner investments/distributions, and certain lease transactions (860-10-15-4)." ], "categories": [ "Derecognition", "Financial instruments", "Disclosure", "Consolidation" ], "audience_level": "advanced", "student_note": "This is the gatekeeper test for whether a securitization, factoring, repo, or loan participation is a sale (off-balance-sheet) or a financing; missing any one of the three conditions in 860-10-40-5 forces secured-borrowing treatment. The most common mistake is assuming a partial transfer qualifies for sale accounting—unless the piece transferred meets every element of the participating interest definition (pro rata, proportionate cash flows, equal priority, no recourse), the whole thing is a borrowing.", "related_topics": [ "860-20", "860-30", "860-50", "810-10", "405-20", "815-10" ], "key_concepts": [ "surrender of control", "participating interest", "legal isolation", "effective control", "secured borrowing", "securitization", "repurchase agreement", "continuing involvement" ] } ``` Source downloaded (UTC): 2026-09-10T02:05:26.374Z to 2026-09-10T02:05:26.374Z Record version: sha256:686fa7d2144ae8bd46ca6b349ccec7e1813cba4bda76137ed044aa571c98d5de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/860/10/#00-status) SEC content: no ##### [860-10-00-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:26.374Z to 2026-09-10T02:05:26.374Z Record version: sha256:36296259253e524bf43902634286512704063064c8c11dfc4883899002903dd8 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
AffiliateAmendedMaintenance Update 2018-12 (PDF)09/10/2018
Bankruptcy-Remote EntityAddedAccounting Standards Update No. 2009-1612/23/2009
Beneficial InterestsAmendedAccounting Standards Update No. 2009-1612/23/2009
Cleanup Call OptionAmendedAccounting 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
Continuing InvolvementAmendedAccounting Standards Update No. 2009-1612/23/2009
ContractAddedAccounting Standards Update No. 2016-0202/25/2016
Derivative Financial InstrumentAmendedAccounting Standards Update No. 2024-0203/29/2024
Derivative Financial InstrumentAmendedMaintenance Update 2014-20 (PDF)09/29/2014
Derivative Financial InstrumentAddedAccounting Standards Update No. 2009-1612/23/2009
Derivative InstrumentAddedMaintenance Update 2014-20 (PDF)09/29/2014
Direct Financing LeaseAmendedAccounting Standards Update No. 2021-0507/19/2021
Direct Financing LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Financial Asset (2nd def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Financial InstrumentAmendedAccounting Standards Update No. 2024-0203/29/2024
In Substance Nonfinancial AssetAddedAccounting Standards Update No. 2017-0502/22/2017
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
Lease ReceivableAddedAccounting Standards Update No. 2016-0202/25/2016
Lease TermAddedAccounting Standards Update No. 2016-0202/25/2016
LesseeAddedAccounting Standards Update No. 2016-0202/25/2016
LessorAddedAccounting Standards Update No. 2016-0202/25/2016
Loan Origination FeesAddedAccounting Standards Update No. 2009-1612/23/2009
Not-for-Profit EntityAddedAccounting Standards Update No. 2014-1106/12/2014
Participating InterestAddedAccounting Standards Update No. 2009-1612/23/2009
Public Business EntityAmendedMaintenance Update 2017-06 (PDF)04/07/2017
Public Business EntityAmendedMaintenance Update 2016-11 (PDF)06/27/2016
Public Business EntityAddedAccounting Standards Update No. 2014-1106/12/2014
Qualifying Special-Purpose EntitySupersededAccounting Standards Update No. 2009-1612/23/2009
RemoteAddedAccounting Standards Update No. 2009-1612/23/2009
Repurchase AgreementAmendedAccounting Standards Update No. 2014-1106/12/2014
Repurchase-to-Maturity TransactionAddedAccounting Standards Update No. 2014-1106/12/2014
Sales-Type LeaseAmendedAccounting Standards Update No. 2021-0507/19/2021
Sales-Type LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Set-off RightAddedAccounting Standards Update No. 2009-1612/23/2009
Standard Representations and WarrantiesAddedAccounting Standards Update No. 2009-1612/23/2009
TransfereeAmendedAccounting Standards Update No. 2009-1612/23/2009
TransferorAmendedAccounting Standards Update No. 2009-1612/23/2009
Transferred Financial AssetsAmendedAccounting Standards Update No. 2014-0603/14/2014
Transferred Financial AssetsAddedAccounting Standards Update No. 2009-1612/23/2009
Underlying AssetAddedAccounting Standards Update No. 2016-0202/25/2016
Undivided InterestSupersededAccounting Standards Update No. 2009-1612/23/2009
Unguaranteed Residual AssetAddedAccounting Standards Update No. 2016-0202/25/2016
860-10-05-2AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-4AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-5AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-7AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-8AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-9SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-05-10SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-05-14AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-15AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-21AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-05-21ASupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-05-21BSupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-10-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-10-2SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-15-4AmendedAccounting Standards Update No. 2017-0502/22/2017
860-10-15-4AmendedAccounting Standards Update No. 2016-0202/25/2016
860-10-15-4AmendedAccounting Standards Update No. 2014-0905/28/2014
860-10-30-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-35-1 through 35-12SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-40-1AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-40-1AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-2SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-40-3SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-40-4AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-4ASupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-40-4AAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-4BSupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-40-4BAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-4C through 40-4E
AddedAccounting Standards Update No. 2014-1106/12/2014
860-10-40-5AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-40-5AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-5AAddedAccounting Standards Update No. 2014-1106/12/2014
860-10-40-6AmendedMaintenance Update 2021-09 (PDF)08/20/2021
860-10-40-6AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-6AAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-7 through 40-16
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-16AAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-17 through 40-19
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-20SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-40-21AmendedAccounting Standards Update No. 2015-1006/12/2015
860-10-40-21AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-22AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-22AAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-23 through 40-28
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-24AmendedMaintenance Update 2014-20 (PDF)09/29/2014
860-10-40-24AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-40-24AmendedAccounting Standards Update No. 2011-0304/29/2011
860-10-40-24AAddedAccounting Standards Update No. 2014-1106/12/2014
860-10-40-25AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-40-26SupersededAccounting Standards Update No. 2011-0304/29/2011
860-10-40-27SupersededAccounting Standards Update No. 2011-0304/29/2011
860-10-40-28AAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-29SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-40-30 through 40-32
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-33SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-40-34 through 40-41
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-40-42 through 40-47
SupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-50-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-50-2AmendedAccounting Standards Update No. 2015-1006/12/2015
860-10-50-2 through 50-4
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-50-4AAmendedAccounting Standards Update No. 2025-1112/08/2025
860-10-50-4AAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-50-5 through 50-7
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-50-7AmendedAccounting Standards Update No. 2015-1006/12/2015
860-10-55-1AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-3AmendedAccounting Standards Update No. 2025-1212/17/2025
860-10-55-3AmendedAccounting Standards Update No. 2017-0502/22/2017
860-10-55-3AmendedAccounting Standards Update No. 2014-0905/28/2014
860-10-55-3AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-5AmendedAccounting Standards Update No. 2025-1212/17/2025
860-10-55-5AmendedAccounting Standards Update No. 2016-0202/25/2016
860-10-55-6AmendedAccounting Standards Update No. 2016-0202/25/2016
860-10-55-6AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-13AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-14AmendedAccounting Standards Update No. 2015-1006/12/2015
860-10-55-14AAddedAccounting Standards Update No. 2025-1212/17/2025
860-10-55-15AmendedAccounting Standards Update No. 2024-0203/29/2024
860-10-55-16AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-17A through 55-17C
AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-17D through 55-17N
AddedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-18AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-18A through 55-18C
AddedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-19 through 55-24
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-22AmendedMaintenance Update 2018-02 (PDF)02/02/2018
860-10-55-24AAmendedMaintenance Update 2017-06 (PDF)04/07/2017
860-10-55-24BAmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-25AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-25AAmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-26 through 55-35
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-34AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-34AmendedAccounting Standards Update No. 2011-0304/29/2011
860-10-55-35AmendedAccounting Standards Update No. 2011-0304/29/2011
860-10-55-36 through 55-38SupersededAccounting Standards Update No. 2011-0304/29/2011
860-10-55-38AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-39AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-40SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-55-41AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-42AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-42A through 55-42D
AddedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-42BAmendedAccounting Standards Update No. 2025-1212/17/2025
860-10-55-43 through 55-46
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-48 through 55-50
SupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-55-48AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-50AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-51AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-51AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-51AAddedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-51BAddedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-52SupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-55-53SupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-55-53AmendedAccounting Standards Update No. 2011-0304/29/2011
860-10-55-54AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-54AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-55AmendedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-55AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-55AmendedAccounting Standards Update No. 2011-0304/29/2011
860-10-55-55AAddedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-56ASupersededAccounting Standards Update No. 2014-1106/12/2014
860-10-55-56BAddedAccounting Standards Update No. 2014-1106/12/2014
860-10-55-57 through 55-59
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-61AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-62 through 55-64SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-55-66SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-55-67AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-68AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-68AAddedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-69SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-55-70AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-72AmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-74SupersededAccounting Standards Update No. 2009-1612/23/2009
860-10-55-75 through 55-79BAmendedAccounting Standards Update No. 2009-1612/23/2009
860-10-55-77AmendedAccounting Standards Update No. 2016-0101/05/2016
860-10-65-3AddedAccounting Standards Update No. 2009-1612/23/2009
860-10-65-4AddedAccounting Standards Update No. 2011-0304/29/2011
860-10-65-5AddedAccounting Standards Update No. 2014-1106/12/2014
Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:6ef43032be09e812405461c138830a3abc533690a979dbff389021ea259e4f37 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/860/10/#05-overview-and-background) SEC content: no ##### [860-10-05-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:63f0254b89b9e2bf3f0d324f5f414dbb85bbbd9b197f8e8463d17fe82dab88f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Transfers and Servicing Topic establishes accounting and reporting standards for [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.") and servicing 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."). It also establishes the accounting for transfers of servicing rights. ##### [860-10-05-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:6958c29b7ccb966b2326e436d4d73e8292db24c65c0be112f0623b49bc94f6e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Transfers and Servicing Topic includes the following four Subtopics: 1. a Overall 2. b Sales of Financial Assets 3. c Secured Borrowings and Collateral 4. d [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 5. e Servicing Assets and Liabilities. #### Transfers of Financial Assets ##### [860-10-05-3](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:3dac78028398dee2940db08fc6bba0d5cce5c315a3e4bd5ab8cd009c0de1e9e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic, together with the other Subtopics within this Topic, provides accounting and reporting standards for transfers and servicing of financial assets. It also addresses transfers of servicing rights. ##### [860-10-05-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:cd37559326ff0ebd789e0bf95891a72b7e2bb29976e8741ac1bb2b5adae07ea9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accounting for transfers in which 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 no [continuing involvement](https://asc.understandingaccounting.org/glossary/c/#continuing-involvement "Any involvement with the transferred financial assets that permits the transferor to receive cash flows or other benefits that arise from the transferred financial assets or that obligates the transferor to provide additional cash flows or other assets to any party related to the transfer. For related implementation guidance, see paragraph 860-10-55-79A.") with the [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") or with 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.") has not been controversial. However, transfers of financial assets often occur in which the transferor has some continuing involvement either with the assets transferred or with the transferee. Examples of continuing involvement with the transferred financial assets include, but are not limited to, any of the following: 1. a Servicing arrangements 2. aa [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.") arrangements 3. aaa Guarantee arrangements 4. b [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 5. c Agreements to purchase or redeem transferred financial assets 6. d Options written or held 7. dd [Derivative financial instruments](https://asc.understandingaccounting.org/glossary/d/#derivative-financial-instrument "A derivative instrument that is a financial instrument.") that are entered into contemporaneously with, or in contemplation of, the transfer 8. ddd Arrangements to provide financial support 9. e Pledges of [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given.") 10. f The transferor's [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.") in the transferred financial assets. Transfers of financial assets with continuing involvement raise issues about the circumstances under which the transfers should be considered as sales of all or part of the assets or as secured borrowings and about how transferors and transferees should account for sales and secured borrowings. This Topic establishes standards for resolving those issues. ##### [860-10-05-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:a26866c76649dc394e8a7a09b1968aa8f5255cdfe089a624b626e24231735ed8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Sales and other transfers may result in a disaggregation of financial assets and liabilities into components, which become separate assets and liabilities. This Subtopic provides guidance on accounting for such transfers and provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. #### Types of Transfers ##### [860-10-05-6](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:a3157f3025d02a858dd00c288a3852ae9bc24abdf970f6bdfb0c706ba70f2c70 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transfers of financial assets take many forms. This guidance provides an overview of the following types of transfers discussed in this Topic: 1. a [Securitizations](https://asc.understandingaccounting.org/glossary/s/#securitization "The process by which financial assets are transformed into securities.") 2. b Factoring 3. c Transfers of receivables with recourse 4. d Securities lending transactions 5. e [Repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred.") 6. f [Loan participations](https://asc.understandingaccounting.org/glossary/l/#loan-participation "A transaction in which a single lender makes a large loan to a borrower and subsequently transfers undivided interests in the loan to groups of banks or other entities.") 7. g Banker's acceptances. ##### [860-10-05-7](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:9b417275f50192b3ad0b9d45314de67436fe5cf284073b85d6ea985a05153ee8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An originator of a typical securitization (the transferor) transfers a portfolio of financial assets to a securitization entity, commonly a trust. Financial assets such as mortgage loans, automobile loans, trade receivables, credit card receivables, and other revolving charge accounts are financial assets commonly transferred in securitizations. Securitizations of mortgage loans may include pools of single-family residential mortgages or other types of real estate mortgage loans, for example, multifamily residential mortgages and commercial property mortgages. Securitizations of loans secured by chattel mortgages on automotive vehicles as well as other equipment (including direct financing or sales-type leases) also are common. ##### [860-10-05-8](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:50bbe54e00fbd596fc539e3780a6e5cf71a600fb1b48cb7f98acafc3b5531357 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Beneficial interests in the securitization entity are sold to investors and the proceeds are used to pay the transferor for the transferred financial assets. Those beneficial interests may comprise either a single class having equity characteristics or multiple classes of interests, some having debt characteristics and others having equity characteristics. The cash collected from the portfolio is distributed to the investors and others as specified by the legal documents that established the entity. ##### [860-10-05-9](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:e4309d53b818857fc966b155b87d255128018db2a63d786cf9a56d0153fa1504 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/). ##### [860-10-05-10](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:2fd304261e0e09f1d8d2fb653f70669dceac5f6d85e8db8fdff418bf4332716b 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/). ##### [860-10-05-11](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:22451042d7d2622445376f5c2388b9c152c6e4f3dafbe33ce08b404b3ca8608d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Securitizations of credit card and other receivable portfolios usually involve a specified reinvestment period (usually 18 to 36 months), during which the trust will purchase additional credit card receivables generated by the selected accounts. After the reinvestment period, a period of liquidation occurs during which the investors receive an allocated portion of principal payments relating to receivables in the trust. The [liquidation method](https://asc.understandingaccounting.org/glossary/l/#liquidation-method "The method used to allocate the principal payments on the receivables in a trust to the investors.") may vary depending on the terms of the agreement and may be a participation method (payout allocation rate may be fixed, preset, or variable) or a [controlled amortization method](https://asc.understandingaccounting.org/glossary/c/#controlled-amortization-method "Liquidation method used to allocate principal payments on the receivables in a trust to the investors, under which a predetermined monthly payment schedule is established so that payout to the investors will occur over a specified liquidation period. Principal payments are allocated to the investors based on their participation interests in the receivables in the trust, using one of the liquidation methods (fixed, preset, or floating). Principal payments in excess of the predetermined monthly payment, if any, are allocated to the transferor and increase the investors' ownership interests. If the principal payments allocated to the investors are insufficient to cover the predetermined monthly payment, that payment is reduced by the amount of the deficiency. If the principal payments allocated to the investors in subsequent months exceed the predetermined monthly payment, the deficiency is recovered.") (payout based on a predetermined schedule). Specific methods are as follows: 1. a [Fixed participation method](https://asc.understandingaccounting.org/glossary/f/#fixed-participation-method "Liquidation method used to allocate principal payments on the receivables in a trust to the investors, under which all principal payments on the receivables in the trust are allocated to the investors based on their respective participation interests in the credit card receivables in the trust at the end of the reinvestment period.") 2. b [Floating participation method](https://asc.understandingaccounting.org/glossary/f/#floating-participation-method "Liquidation method used to allocate principal payments on the receivables in a trust to the investors, under which principal payments allocated to the investors are based on the investors' actual participation interests in the receivables in the trust each month. Each month, investors' participation interests in the credit card receivables in the trust are redetermined for that month's allocation of principal payments.") 3. c [Preset participation method](https://asc.understandingaccounting.org/glossary/p/#preset-participation-method "Liquidation method used to allocate principal payments on receivables in a trust to investors. The preset participation method is similar to the fixed participation method except that the percentage used to determine the principal payments allocated to the investors is preset higher than the investors' expected participation interests in the receivables in the trust at the end of the reinvestment period. This method results in a faster payout to the investors than the fixed participation method because a higher percentage of the principal payments is allocated to the investors."). ##### [860-10-05-12](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:f9ac49fb45f77680fdc9f2a0c9a2a55b3f40e52d9c6f60e284514671af153486 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Credit card securitizations (and other types of securitizations) may include a removal-of-accounts provision that permits 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."), under certain conditions and with trustee approval, to withdraw receivables from the pool of securitized receivables. ##### [860-10-05-13](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:60a29b66bb762ab969ecc5d4c9af8219cecff2c2cb52fcd6ff8e0c9efa7bc3a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many securitization structures provide for a disproportionate distribution of cash flows to various classes of investors during the amortization period, which is referred to as a turbo provision. For example, a turbo provision might require the first $100 million of cash received during the amortization period of the securitization structure to be paid to one class of investors before any cash is available for repayment to other investors. Similarly, certain revolving-period securitizations use what is referred to as a bullet provision as a method of distributing cash to their investors. Under a bullet provision, during a specified period preceding liquidating distributions to investors, cash proceeds from the underlying assets are reinvested in short-term investments other than the underlying revolving-period receivables. Those investments mature or are otherwise liquidated to make a single bullet payment to certain classes of investors. ##### [860-10-05-14](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:a30539676f33a307e2c904b3b7d59b33ab4f9c6f33f1f58fe9ed5761403382b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Factoring arrangements are a means of discounting accounts receivable on a nonrecourse, notification basis. Accounts receivable in their entireties are sold outright, usually to a transferee (the factor) that assumes the full risk of collection, without recourse to the transferor in the event of a loss. Debtors are directed to send payments to the transferee. ##### [860-10-05-15](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:8167bf3a46a1346453f4ef6393e597c32ee5e0580455c3cbc24c4110045138ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a transfer of an entire receivable, a group of entire receivables, or a portion of an entire receivable with recourse, the transferor provides the transferee with full or limited recourse. The transferor is obligated under the terms of the recourse provision to make payments to the transferee or to repurchase receivables sold under certain circumstances, typically for defaults up to a specified percentage. ##### [860-10-05-16](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:4462009b54b7a0de32fb1dd8450cf24efde38d0cb492b0631d2d35883ed4c354 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Securities lending transactions are initiated by broker-dealers and other financial institutions that need specific securities to cover a short sale or a customer's failure to deliver securities sold. Securities custodians or other [agents](https://asc.understandingaccounting.org/glossary/a/#agent "A party that acts for and on behalf of another party. For example, a third-party intermediary is an agent of the transferor if it acts on behalf of the transferor.") commonly carry out securities lending activities on behalf of clients. ##### [860-10-05-17](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:b2c054b0b3401cfb827073d956956764a41f08d0b0631fab9c5cc04ddc7f0fe2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transferees (borrowers) of securities generally are required to provide collateral to the transferor (lender) of securities, commonly cash but sometimes other securities or standby letters of credit, with a value slightly higher than that of the securities borrowed. If the collateral is cash, the transferor typically earns a return by investing that cash at rates higher than the rate paid or rebated to the transferee. If the collateral is other than cash, the transferor typically receives a fee. ##### [860-10-05-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:8823f5ba24ef79b1e2d6c4e7cf302fe23adfa6022f9687efa73551705c9fd75c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because of the protection of collateral (typically valued daily and adjusted frequently for changes in the market price of the securities transferred) and the short terms of the transactions, most securities lending transactions in themselves do not impose significant credit risks on either party. Other risks arise from what the parties to the transaction do with the assets they receive. For example, investments made with cash collateral impose market and credit risks on the transferor. ##### [860-10-05-19](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-19) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:fd273c3aa1faef7796d20e51d9c2278283b39e60a5dee35bdac03d57a94627e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Government securities dealers, banks, other financial institutions, and corporate investors commonly use [repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred.") to obtain or use short-term funds. ##### [860-10-05-20](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-20) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:52c0f9145106e2b0ea8da50a84e345408cdf5fc8bf465a9c7b40d1e936aaf48c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Repurchase agreements can be effected in a variety of ways. Some repurchase agreements are similar to securities lending transactions in that the transferee has the right to sell or repledge the securities to a third party during the term of the repurchase agreement. In other repurchase agreements, the transferee does not have the right to sell or repledge the securities during the term of the repurchase agreement. For example, in a tri-party repurchase agreement, the transferor transfers securities to an independent third-party custodian that holds the securities during the term of the repurchase agreement. ##### [860-10-05-21](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-21) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:2f4e05b2697bbf352dd87a22a6e4626e9ebdd257840842a9b82d485287591720 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many repurchase agreements are for short terms, often overnight, or have indefinite terms that allow either party to terminate the arrangement on short notice. Other repurchase agreements are for longer terms, sometimes until the maturity of the transferred financial asset (repo to maturity). ##### [860-10-05-21A](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-21A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:c00f0f6bf79a795be836a8e18e9a858606e7158106b27d141a085beb4f48a998 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-05-21B](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-21B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:3c434918724dd640b69ceeff1e507cfd374d246cb1100cdbad91c5196a779d2c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-05-22](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-22) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:ff01368910a0d0c6f11a1340f86bbb4101b44e52486373849a4f5a70eb9b6025 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In certain industries, a typical customer's borrowing needs often exceed its bank's legal lending limits. To accommodate the customer, the bank may participate the loan to other banks (that is, transfer under a participation agreement a portion of the customer's loan to one or more participating banks). ##### [860-10-05-23](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-23) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:6a4fe366978dd97c5e4c13d4807ee4f3a1b92830726f5dcf7026dc56bcb5ca5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transfers by the originating lender may take the legal form of either assignments or participations. The transfers are usually on a nonrecourse basis, and the transferor (originating lender) continues to service the loan. The transferee (participating entity) may or may not have the right to sell or transfer its participation during the term of the loan, depending on the terms of the participation agreement. ##### [860-10-05-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-24) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:724f0a7ff5e477e721b2096a43016f53ed09454279f0830942f449fb2b6ff20f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Banker's acceptances provide a way for a bank to finance a customer's purchase of goods from a vendor for periods usually not exceeding six months. Under an agreement between the bank, the customer, and the vendor, the bank agrees to pay the customer's liability to the vendor upon presentation of specified documents that provide evidence of delivery and acceptance of the purchased goods. The principal document is a draft or bill of exchange drawn by the customer that the bank stamps to signify its acceptance of the liability to make payment on the draft on its due date. ##### [860-10-05-25](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-25) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:667e103d14cb9f2cafb7bfb952f01d762a47462cd3c808a2cb7cf2c9186a13ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once the bank accepts a draft, the customer is liable to repay the bank at the time the draft matures. The bank recognizes a receivable from the customer and a liability for the acceptance it has issued to the vendor. The accepted draft becomes a negotiable financial instrument. The vendor typically sells the accepted draft at a discount either to the accepting bank or in the marketplace. ##### [860-10-05-26](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-26) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:28.589Z to 2026-09-10T02:05:28.589Z Record version: sha256:4b0303219383f61cc088c47deab95ce234d4e02beb62850b435f0474cb67c50e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A risk participation is a contract between the accepting bank and a participating bank in which the participating bank agrees, in exchange for a fee, to reimburse the accepting bank in the event that the accepting bank's customer fails to honor its liability to the accepting bank in connection with the banker's acceptance. The participating bank becomes a guarantor of the credit of the accepting bank's customer. Source downloaded (UTC): 2026-09-10T02:05:30.514Z to 2026-09-10T02:05:30.514Z Record version: sha256:9bffe57e18338bc567c7e6561914700bed39ffb9847271fd3a9fae196b58cd7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/860/10/#10-objectives) SEC content: no ##### [860-10-10-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:30.514Z to 2026-09-10T02:05:30.514Z Record version: sha256:c4a6f359faeefad9549e05d921d146b7d67d14a648b5a281d5ed974699408351 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/). ##### [860-10-10-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-10-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:30.514Z to 2026-09-10T02:05:30.514Z Record version: sha256:cda7388ad86754692a35b1d1fea650837f696f7629ba7a368dd5c5256d23c8f5 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): 2026-09-10T02:05:34.073Z to 2026-09-10T02:05:34.073Z Record version: sha256:621a9cd006200513528164c0698a78c1b9fb3e5849f21190c64831c147ae60b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/860/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [860-10-15-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:34.073Z to 2026-09-10T02:05:34.073Z Record version: sha256:51699230a24ebfd4812b235eae0bb852e1414a19d196f583e0872c2f0aa6ba5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of the Transfers and Servicing Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Transfers and Servicing Topic, with the exception of Subtopic 860-50, which has its own discrete scope. #### Entities ##### [860-10-15-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:34.073Z to 2026-09-10T02:05:34.073Z Record version: sha256:4346e6ac7842a672d16d417ddb5bc22808c3984659e5afe7e0dcd2a350c47f0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Transfers and Servicing Topic applies to all entities. #### Transactions ##### [860-10-15-3](https://asc.understandingaccounting.org/asc/860/10/#860-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:34.073Z to 2026-09-10T02:05:34.073Z Record version: sha256:69656195f6886d8362e008f3f4e7c276410c1e9550bba1ca2cf9201093dc336b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Transfers and Servicing Topic applies to the issues of accounting for [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.") and servicing 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."). ##### [860-10-15-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:34.073Z to 2026-09-10T02:05:34.073Z Record version: sha256:598f0162a5f8ecc714aeb838f96b19e75a170703fc387bb08e03f4dd52db3fa4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic does not apply to the following transactions and activities: 1. a Except for transfers of servicing assets (see Section 860-50-40) and for the transfers noted in the following paragraph, transfers of nonfinancial assets 2. b Transfers of unrecognized financial assets, for example, lease payments to be received under operating leases 3. c Transfers of custody of financial assets for safekeeping 4. d Contributions (for guidance on accounting for contributions, see Subtopic 958-605) 5. e Transfers of [in substance nonfinancial assets](https://asc.understandingaccounting.org/glossary/i/#in-substance-nonfinancial-asset "Paragraphs 610-20-15-5610-20-15-6610-20-15-7610-20-15-8 define an in substance nonfinancial asset."), see Subtopic 610-20 6. f Investments by owners or distributions to owners of a business entity 7. g Employee benefits subject to the provisions of Topic 712 8. h Leveraged leases subject to Topic 842 9. i [Money-over-money](https://asc.understandingaccounting.org/glossary/m/#money-over-money-lease "A transaction in which an entity manufactures or purchases an asset, leases the asset to a lessee, and obtains nonrecourse financing in excess of the asset's cost using the leased asset and the future lease rentals as collateral.") and wrap lease transactions involving nonrecourse debt subject to Topic 842. ##### [860-10-15-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:34.073Z to 2026-09-10T02:05:34.073Z Record version: sha256:9e5479ad1eb9b6c7730f492e9017c11b445846da2ff8cf5308a2ca9ac55c9a35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [815-10-40-2](https://asc.understandingaccounting.org/asc/815/10/#815-10-40-2) states that transfers of assets that are derivative instruments and subject to the requirements of Subtopic 815-10 but that are not financial assets shall be accounted for by analogy to this Topic. ##### [860-10-15-6](https://asc.understandingaccounting.org/asc/860/10/#860-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:34.073Z to 2026-09-10T02:05:34.073Z Record version: sha256:1f116a2c69d2ae1f1ea4aa70f524a3d64c3758bf6ab35af8ca0478873a028fe0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-55-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-2) provides further guidance on the application of the scope of this Topic to specific transactions. Source downloaded (UTC): 2026-09-10T02:05:39.279Z to 2026-09-10T02:05:39.279Z Record version: sha256:5894b05b1c391e8ee3fc6f2552006ca0bb11a1d87a94a3f95758ce2cc8164499 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/860/10/#30-initial-measurement) SEC content: no ##### [860-10-30-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:39.279Z to 2026-09-10T02:05:39.279Z Record version: sha256:8ad62fee591cf1deed17914b9c6eea8a06ce248053c095a041af53333607a3ec 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): 2026-09-10T02:05:41.898Z to 2026-09-10T02:05:41.898Z Record version: sha256:756310bc47634ce3ad9b555a2b9840f1a73ae6d5c17dc169dbbbfa7f60aaca2b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/860/10/#35-subsequent-measurement) SEC content: no ##### [860-10-35-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:41.898Z to 2026-09-10T02:05:41.898Z Record version: sha256:baeea8b55f1675fb248f4b2701c5269045bf00d1de16ab4230281de497061c16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-10-35-1 through 35-12 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/10/#860-10-35-1). Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:b423dbec59fe6e952298230ee25365e16936f3a2eccc56a67dd3886838a6dd16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/860/10/#40-derecognition) SEC content: no ##### [860-10-40-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:d1ef2fdfd46d009213a88138d3a804356e3854e659c93a962afaef08159fd2a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section sets forth the conditions for derecognition of a [transferred financial asset](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") and is organized as follows: 1. a [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 2. b Conditions for a sale 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. c Application of the sale criteria to instruments that have the potential to be assets or liabilities 4. d Circumstances that result in a [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.") regaining control of assets previously sold 5. e [Subparagraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:7494fe3bc9709b1676e5b6b99a3232fa42c3aa6d3bb2ee853bab4ca2ac6db9fd 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/). ##### [860-10-40-3](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:763bb828c12dd45ca9a0c47d842f2aedd8925fc3a2a1670b25af3a0094898d03 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/). #### Conditions for a Sale of Financial Assets ##### [860-10-40-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:d18eb62f6bbcad4d1755ee26d12db15ad7b4389d5675a4fdda79c7fee3a9bdf2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) and related implementation guidance is to determine whether a transferor and 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 have surrendered control over [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") or third-party [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."). This determination: 1. a Shall first consider 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.") would be consolidated by the transferor (for implementation guidance, see paragraph [860-10-55-17D](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17D)) 2. b Shall consider the transferor's continuing involvement in the transferred financial assets 3. c Requires the use of judgment that shall consider all arrangements or agreements made contemporaneously with, or in contemplation 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."), even if they were not entered into at the time of the transfer. With respect to item (b), all continuing involvement by the transferor, its consolidated affiliates included in the financial statements being presented, or its [agents](https://asc.understandingaccounting.org/glossary/a/#agent "A party that acts for and on behalf of another party. For example, a third-party intermediary is an agent of the transferor if it acts on behalf of the transferor.") shall be considered continuing involvement by the transferor. In a transfer between two subsidiaries of a common parent, the transferor-subsidiary shall not consider parent involvements with the transferred financial assets in applying paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). ##### [860-10-40-4A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:9d076e2ff458d8442bbca4968dcb375dc4c54058c5d31d6e42ba280c1c5bc749 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-4B](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:d2b0d4f5375055103952ce5c99eb0cf51b495293482f31eba2ecb8adff1b31e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-4C](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4C) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:ab5f4975c4cde79dda89004e8ceba23621812085be27c7b001efbbbc40a639a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Items (b) through (c) in paragraph [860-10-40-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4) do not apply to a transfer 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.") and a related [repurchase financing](https://asc.understandingaccounting.org/glossary/r/#repurchase-financing "A repurchase agreement that relates to a previously transferred financial asset between the same counterparties (or consolidated affiliates of either counterparty) that is entered into contemporaneously with, or in contemplation of, the initial transfer."). In transactions involving a contemporaneous transfer of a financial asset and a repurchase financing of that transferred financial asset with the same counterparty, a transferor and transferee shall separately account for the initial transfer of the financial asset and the related repurchase agreement. Paragraphs [860-10-55-17A through 55-17C](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17A) provide implementation guidance related to repurchase financings. ##### [860-10-40-4D](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4D) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:7a62074e98090f24f9c77197f32829e9fb6fe3b46a60e43fe3b88c11f47c7907 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To be eligible for sale accounting, an entire financial asset cannot be divided into components before a transfer unless all of the components meet the definition of a [participating interest](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest."). The legal form of the asset and what the asset conveys to its holders shall be considered in determining what constitutes an entire financial asset (for implementation guidance, see paragraph [860-10-55-17E](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17E)). An entity shall not account for a transfer of an entire financial asset or a participating interest in an entire financial asset partially as a sale and partially as a secured borrowing. ##### [860-10-40-4E](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4E) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:c8ee51ce43e2444122c699d0663ac1d4cd4d8fb40280365b100d418eba0e1f56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a transfer of a portion of an entire financial asset meets the definition of a participating interest, the transferor shall apply the guidance in the following paragraph. If a transfer of a portion of a financial asset does not meet the definition of a participating interest, the transferor and transferee shall account for the transfer in accordance with the guidance in paragraph [860-30-25-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-2). However, if the transferor transfers an entire financial asset in portions that do not individually meet the participating interest definition, the following paragraph shall be applied to the entire financial asset once all portions have been transferred. ##### [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:fc3bdd68f431e3133b0814d36c411fd6a2c2fee9c5adb3e0a2f3bfd8163ea6ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transfer of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset in which the transferor surrenders control over those financial assets shall be accounted for as a sale if and only if all of the following conditions are met: 1. a Isolation of transferred financial assets. The transferred financial assets have been isolated from the transferor—put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership. Transferred financial assets are isolated in bankruptcy or other receivership only if the transferred financial assets would be beyond the reach of the powers of a bankruptcy trustee or other receiver for the transferor or any of its consolidated affiliates included in the financial statements being presented. For multiple step transfers, a [bankruptcy-remote entity](https://asc.understandingaccounting.org/glossary/b/#bankruptcy-remote-entity "An entity that is designed to make remote the possibility that it would enter bankruptcy or other receivership.") is not considered a consolidated affiliate for purposes of performing the isolation analysis. Notwithstanding the isolation analysis, each entity involved in the transfer is subject to the applicable guidance on whether it shall be consolidated (see paragraphs [860-10-40-7 through 40-14](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-7) and the guidance beginning in paragraph [860-10-55-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18)). A [set-off right](https://asc.understandingaccounting.org/glossary/s/#set-off-right "A common law right of a party that is both a debtor and a creditor to the same counterparty to reduce its obligation to that counterparty if that counterparty fails to pay its obligation.") is not an impediment to meeting the isolation condition. 2. b Transferee's rights to pledge or exchange. This condition is met if both of the following conditions are met: 1. 1 Each transferee (or, if the transferee is an entity whose sole purpose is to engage in [securitization](https://asc.understandingaccounting.org/glossary/s/#securitization "The process by which financial assets are transformed into securities.") or asset-backed financing activities and that entity is constrained from pledging or exchanging the assets it receives, each third-party holder of its beneficial interests) has the right to pledge or exchange the assets (or beneficial interests) it received. 2. 2 No condition does both of the following: 1. i Constrains the transferee (or third-party holder of its beneficial interests) from taking advantage of its right to pledge or exchange 2. ii Provides more than a trivial benefit to the transferor (see paragraphs [860-10-40-15 through 40-21](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-15) ). If the transferor, its consolidated affiliates included in the financial statements being presented, and its agents have no continuing involvement with the transferred financial assets, the condition under paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) is met. 3. c Effective control. The transferor, its consolidated affiliates included in the financial statements being presented, or its agents do not maintain effective control over the transferred financial assets or third-party beneficial interests related to those transferred assets (see paragraph [860-10-40-22A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-22A)). A transferor's effective control over the transferred financial assets includes, but is not limited to, any of the following: 1. 1 An agreement that both entitles and obligates the transferor to repurchase or redeem the transferred financial assets before their maturity (see paragraphs [860-10-40-23 through 40-25](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-23) ) 2. 2 An agreement, other than through a [cleanup call](https://asc.understandingaccounting.org/glossary/c/#cleanup-call-option "An option held by the servicer or its affiliate, which may be the transferor, to purchase the remaining transferred financial assets, or the remaining beneficial interests not held by the transferor, its affiliates, or its agents in an entity (or in a series of beneficial interests in transferred financial assets within an entity) if the amount of outstanding financial assets or beneficial interests falls to a level at which the cost of servicing those assets or beneficial interests becomes burdensome in relation to the benefits of servicing.") (see paragraphs [860-10-40-28 through 40-39](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-28) ), that provides the transferor with both of the following: 1. i The [unilateral ability](https://asc.understandingaccounting.org/glossary/u/#unilateral-ability "A capacity for action not dependent on the actions (or failure to act) of any other party.") to cause the holder to return specific financial assets 2. ii A more-than-trivial benefit attributable to that ability. 3. 3 An agreement that permits the transferee to require the transferor to repurchase the transferred financial assets at a price that is so favorable to the transferee that it is probable that the transferee will require the transferor to repurchase them (see paragraph [860-10-55-42D](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-42D)). ##### [860-10-40-5A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:4079c5ebf6bd84709ee611cbee241996ec9549b8987a4e1f54174a04291debf7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [repurchase-to-maturity transaction](https://asc.understandingaccounting.org/glossary/r/#repurchase-to-maturity-transaction "A repurchase agreement in which the settlement date of the agreement to repurchase a transferred financial asset is at the maturity date of that financial asset and the agreement would not require the transferor to reacquire the financial asset.") shall be accounted for as a secured borrowing as if the transferor maintains effective control (see paragraphs [860-10-40-24 through 40-24A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)). ##### [860-10-40-6](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:13298649afdc125e5936b1d4b2b91b0d5e63783f1bd44bb1a4c4107373e7e5cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on accounting for a transfer that satisfies the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), see Subtopic 860-20, including Section 860-20-40's derecognition guidance and Section 860-20-25's guidance on recognition of new assets obtained and new liabilities. For guidance on accounting for a transfer that does not satisfy the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), see Subtopic 860-30. ##### [860-10-40-6A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:4c748408a629bd17283d2bd55c1a6e69d106da9b9bfe1bfa1f160693e5b194a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A participating interest has all of the following characteristics: 1. a From the date of the transfer, it represents a proportionate (pro rata) ownership interest in an entire financial asset. The percentage of ownership interests held by the transferor in the entire financial asset may vary over time, while the entire financial asset remains outstanding as long as the resulting portions held by the transferor (including any participating interest retained by the transferor, its consolidated affiliates included in the financial statements being presented, or its agents) and the transferee(s) meet the other characteristics of a participating interest. For example, if the transferor's interest in an entire financial asset changes because it subsequently sells another interest in the entire financial asset, the interest held initially and subsequently by the transferor must meet the definition of a participating interest. 2. b From the date of the transfer, all cash flows received from the entire financial asset are divided proportionately among the participating interest holders (including any interest retained by the transferor, its consolidated affiliates included in the financial statements being presented, or its agents) in an amount equal to their share of ownership. An allocation of specified cash flows is not an allowed characteristic of a participating interest unless each cash flow is proportionately allocated to the participating interest holders. In determining proportionate cash flows: 1. 1 Cash flows allocated as compensation for services performed, if any, shall not be included provided those cash flows meet both of the following conditions: 1. i They are not subordinate to the proportionate cash flows of the participating interest. 2. ii They are not significantly above an amount that would fairly compensate a substitute service provider, should one be required, which includes the profit that would be demanded in the marketplace. 2. 2 Any cash flows received by the transferor as proceeds of the transfer of the participating interest shall be excluded provided that the transfer does not result in the transferor receiving an ownership interest in the financial asset that permits it to receive disproportionate cash flows. 3. c The priority of cash flows has all of the following characteristics: 1. 1 The rights of each participating interest holder (including the transferor in its role as a participating interest holder) have the same priority. 2. 2 No participating interest holder's interest is subordinated to the interest of another participating interest holder. 3. 3 The priority does not change in the event of bankruptcy or other receivership of the transferor, the original debtor, or any other participating interest holder. 4. 4 Participating interest holders have no recourse to the transferor (or its consolidated affiliates included in the financial statements being presented or its agents) or to each other, other than any of the following: 1. i [Standard representations and warranties](https://asc.understandingaccounting.org/glossary/s/#standard-representations-and-warranties "Representations and warranties that assert the financial asset being transferred is what it is purported to be at the transfer date.") 2. ii Ongoing contractual obligations to service the entire financial asset and administer the transfer contract 3. iii Contractual obligations to share in any set-off benefits received by any participating interest holder. That is, no participating interest holder is entitled to receive cash before any other participating interest holder under its contractual rights as a participating interest holder. For example, if a participating interest holder also is the servicer of the entire financial asset and receives cash in its role as servicer, that arrangement would not violate this requirement. 4. d No party has the right to pledge or exchange the entire financial asset unless all participating interest holders agree to pledge or exchange the entire financial asset. A set-off right is not an impediment to meeting the participating interest definition. For implementation guidance on the application of the term _participating interest,_ see paragraphs [860-10-55-17I through 55-17N](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17I) . ##### [860-10-40-7](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:c883de82fcfca30112ea93258cb6f9f3e76e0fe4681123ddb07a868a0f084f00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the following paragraphs and the related implementation guidance beginning in paragraph [860-10-55-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18) applies to transfers by all entities, including institutions for which the Federal Deposit Insurance Corporation (FDIC) would be the receiver. ##### [860-10-40-8](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:3424cc73c2d526fbb2751cb9e86eb72470f9ae59adaf20c9c2f02b20c825a53b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Derecognition of transferred financial assets is appropriate only if the available evidence provides reasonable assurance that the transferred financial assets would be beyond the reach of the powers of a bankruptcy trustee or other receiver for the transferor or any of its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented and its creditors (see paragraph [860-10-55-23(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-23)). ##### [860-10-40-9](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:9e7d637e7227e2d2fbd17a74e8741fa212b18546b2bbb3dcf76900d7346071f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The nature and extent of supporting evidence required for an assertion in financial statements that transferred financial assets have been isolated—put presumptively beyond the reach of the transferor, any of its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, and its creditors, either by a single transaction or a series of transactions taken as a whole—depend on the facts and circumstances. ##### [860-10-40-10](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:eb69d8be43b2eae688fa69ee23cdc0d2237dd67490b8fc20704148faa5b48edc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All available evidence that either supports or questions an assertion shall be considered, including whether the contract or circumstances permit the transferor to revoke the transfer. It also may include consideration of the legal consequences of the transfer in the jurisdiction in which bankruptcy or other receivership would take place, including all of the following: 1. a Whether a transfer of financial assets would likely be deemed a true sale at law (see paragraph [860-10-55-18A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18A)) or otherwise isolated (see paragraph [860-10-55-18C](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18C)) 2. b Whether the transferor is [affiliated](https://asc.understandingaccounting.org/glossary/a/#affiliate "A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control.") with the transferee 3. c Other factors pertinent under applicable law. ##### [860-10-40-11](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:9243118ba75e183afa1d5aab76819ed279a43ecb6c43f8a0517e9e646181b63f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The requirement of paragraph [860-10-40-5(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) that transferred financial assets be isolated focuses on whether transferred financial assets would be isolated from the transferor in the event of bankruptcy or other receivership regardless of how remote or probable bankruptcy or other receivership is at the date of transfer. That is, the requirement would not be satisfied simply because the likelihood of bankruptcy of the transferor is determined to be remote. ##### [860-10-40-12](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:9aa3bec0a021b934a070c30586d8c47335603f3cf27cb115245eac4ac147d151 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transferor's power to require the return of the transferred financial assets arising solely from a contract with the transferee, for example, a call option or removal-of-accounts provision, would not necessarily preclude a conclusion that transferred financial assets have been isolated from the transferor. However, such a power might preclude sale treatment if through it the transferor maintains effective control over the transferred financial assets. Some common financial transactions, for example, typical [repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred.") and securities lending transactions, may isolate transferred financial assets from the transferor, although they may not meet the other conditions for surrender of control (see paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)). ##### [860-10-40-13](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:6d92f6fcaa2d7a2ef9e789e4bfc30c5cdc74190c1e7a50d46464c4e05f3511a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether securitizations isolate transferred financial assets may depend on such factors as whether the securitization is accomplished in one-step or multiple-step transfers. That is, the condition can be satisfied either by a single transaction or by a series of transactions considered as a whole. A securitization carried out in one transfer or a series of transfers may or may not isolate the transferred financial assets beyond the reach of the transferor, its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, and its creditors. Whether it does depends on the structure of the securitization transaction taken as a whole, considering such factors as the type and extent of further involvement in arrangements to protect investors from credit, interest rate, and other risks, the availability of other financial assets, and the powers of bankruptcy courts or other receivers. ##### [860-10-40-14](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:326d3858553c49c9eb043584ad9c9cdd545bffe91972732459936c785f96de86 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [860-10-55-18 through 55-23](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18) clarify the requirements for transfers by entities subject to the U.S. Bankruptcy Code to meet the condition in paragraph [860-10-40-5(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) that the transferred financial assets have been put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy. Paragraphs [860-10-55-24 through 55-25](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-24) provide related guidance for entities not subject to the U.S. Bankruptcy Code. The discussion in paragraphs [860-10-55-18 through 55-25](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18) relates only to the isolation condition in paragraph [860-10-40-5(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). The conditions in paragraph [860-10-40-5(b) through (c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) also shall be considered to determine whether a transferor has surrendered control over the transferred financial assets. ##### [860-10-40-15](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:f185da830dbd6fe6cac5652b1a5612aa5e46b95e5e4cdcd3fdca7d17a647fb07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many transferor-imposed or other conditions on a transferee's right to pledge or exchange both constrain a transferee from pledging or exchanging and, through that constraint, provide more than a trivial benefit to the transferor. Judgment is required to assess whether a particular condition results in a constraint. Judgment also is required to assess whether a constraint provides a more-than-trivial benefit to the transferor. If the transferee is an entity whose sole purpose is to engage in securitization or asset-backed financing activities, that entity may be constrained from pledging or exchanging the transferred financial assets to protect the rights of beneficial interest holders in the financial assets of the entity. Paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) requires that the transferor look through the constrained entity to determine whether each third-party holder of its beneficial interests has the right to pledge or exchange the beneficial interests that it holds. The considerations in paragraphs [860-10-40-16 through 40-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-16) apply to the transferee or the third-party holders of its beneficial interests in an entity that is constrained from pledging or exchanging the assets it receives and whose sole purpose is to engage in securitization or asset-backed financing activities. ##### [860-10-40-16](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:67c128604b598c4c28af1a0b8a446d7b53ccff620ef1296a5cb467f79b0802b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A condition imposed by a transferor that constrains the transferee presumptively provides more than a trivial benefit to the transferor. A condition not imposed by the transferor that constrains the transferee may or may not provide more than a trivial benefit to the transferor. For example, if the transferor refrains from imposing its usual contractual constraint on a specific transfer because it knows an equivalent constraint is already imposed on the transferee by a third party, it presumptively benefits more than trivially from that constraint. However, the transferor cannot benefit from a constraint if it is unaware at the time of the transfer that the transferee is constrained. ##### [860-10-40-16A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-16A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:0f8bced03387511a708bb25af9f60a68278c6b730231f6aaadfe6a2d67c1324a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some circumstances in which the transferor has no continuing involvement with the transferred financial assets, some conditions may constrain a transferee from pledging or exchanging the financial assets. Paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) states that if the transferor, its consolidated affiliates included in the financial statements being presented, and its agents have no continuing involvement with the transferred financial assets, the condition under paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) is met. For example, if a transferor receives only cash in return for the transferred financial assets and the transferor, its consolidated affiliates included in the financial statements being presented, and its agents have no continuing involvement with the transferred financial assets, sale accounting is allowed under paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) even if the transferee entity is significantly limited in its ability to pledge or exchange the transferred assets. ##### [860-10-40-17](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:6d89323b221e03f0226a9b685ba1f23f58938b115f5bac0bf008ebe197fa83c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are examples of conditions that both constrain the transferee and presumptively provide the transferor with more than trivial benefits: 1. a A provision that prohibits selling or pledging a transferred loan receivable. This condition not only constrains the transferee but also provides the transferor with the more-than-trivial benefit of knowing who holds the financial asset (a prerequisite to repurchasing the financial asset) and of being able to block the financial asset from being transferred to a competitor for the loan customer's business. 2. b Transferor-imposed contractual constraints that narrowly limit timing or terms, for example, allowing a transferee to pledge only on the day assets are obtained or only on terms agreed to with the transferor. 3. c Some rights or obligations to reacquire transferred financial assets or beneficial interests, including all of the following: 1. 1 A [freestanding call option](https://asc.understandingaccounting.org/glossary/f/#freestanding-call-option "A call option that is neither embedded in nor attached to an asset subject to that call option.") written by a transferee to the transferor. Such an option may benefit the transferor and, if the transferred financial assets are not readily obtainable in the marketplace, is likely to constrain a transferee because the transferee might have to default if the call option was exercised and the transferee had pledged or exchanged the financial assets. 2. 1a A call option to repurchase third-party beneficial interests at the price paid plus a stated return if the third-party holders of its beneficial interests are constrained from pledging or exchanging their beneficial interests due to that call option. 3. 2 A call option written by a transferee to the transferor that is sufficiently deep-in-the-money, if the transferred financial assets are not readily obtainable in the marketplace, because the transferee would be more likely to have to hold the assets to comply with a potential exercise of the call option. 4. 3 A freestanding forward purchase-sale contract between the transferor and the transferee on transferred financial assets not readily obtainable in the marketplace would benefit the transferor and is likely to constrain a transferee. 5. 4 [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [860-10-40-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:2786c17c9de320a7a190854f3d7d71a723e0b12a066c5da3f164894e0726ae76 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are examples of conditions that presumptively would not constrain a transferee from pledging or exchanging the transferred financial asset: 1. a A transferor's right of first refusal on the occurrence of a bona fide offer to the transferee from a third party, because the right in itself does not enable the transferor to compel the transferee to sell the financial asset and the transferee would be in a position to receive the sum offered by exchanging the financial asset, albeit possibly from the transferor rather than the third party 2. b A requirement to obtain the transferor's permission to sell or pledge that is not to be unreasonably withheld 3. c A prohibition on sale to the transferor's competitor if other potential willing buyers exist 4. d A regulatory limitation such as on the number or nature of eligible transferees (as in the circumstance of securities issued under Securities Act Rule 144A or debt placed privately) 5. e Illiquidity, for example, the absence of an active market 6. f [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 7. g Freestanding rights to reacquire transferred assets that are readily obtainable. ##### [860-10-40-19](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-19) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:52d4faee98ab357ab36ec0a4ad6de6966a365a4fd3ba5aac5a037947d249a9b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Judgment is required to assess the significance of some conditions. For example, a prohibition on sale to the transferor's competitor would be a constraint if that competitor were the only potential willing buyer other than the transferor. ##### [860-10-40-20](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-20) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:0412b7bbe27f4e232441bb0b72406052d53ed312974cffe565fc7ef8ecdc3c80 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/). ##### [860-10-40-21](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-21) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:cb1e3330e687a48f8981c7f16b5e55989079bf1737b4c1712721e8d179d3ff9d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As discussed in paragraphs [860-10-40-22 through 40-39](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-22) , some rights or obligations to reacquire transferred financial assets, regardless of whether they constrain the transferee, may result in the transferor's maintaining effective control over the transferred financial assets, thus precluding sale accounting under paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). For example, an [attached call option](https://asc.understandingaccounting.org/glossary/a/#attached-call-option "A call option held by the transferor of a financial asset that becomes part of and is traded with the underlying instrument. Rather than being an obligation of the transferee, an attached call option is traded with and diminishes the value of the underlying instrument transferred subject to that call option.") in itself would not constrain a transferee who is able, by exchanging or pledging the asset subject to that call, to obtain substantially all of its economic benefits. However, an attached call option could result in the transferor's maintaining effective control over the transferred asset(s) because the attached call option gives the transferor the unilateral ability to cause whoever holds that specific asset to return it. ##### [860-10-40-22](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-22) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:1ac8096367b45e36a9492b889dc452eac4b7f8492a2d87a118760e2e7e5fb624 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance discusses the condition in paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) that the transferor, its consolidated affiliates included in the financial statements being presented, or its agents do not maintain effective control over the transferred financial assets or third-party beneficial interests related to those transferred financial assets. ##### [860-10-40-22A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-22A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:d39f474c63b8dffdc03b6a02579bcc80752d6a65daa2ba5bad3322bfae59c686 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-40-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4) states that, to assess whether the transferor maintains effective control over the transferred financial assets, all continuing involvement by the transferor, its consolidated affiliates included in the financial statements being presented, or its agents shall be considered continuing involvement by the transferor. When assessing effective control, the transferor only considers the involvements of an agent when the agent acts for and on behalf of the transferor. If the transferor and transferee have the same agent, the agent's activities on behalf of the transferee shall not be considered in the transferor's evaluation of whether it has effective control over a transferred financial asset. For example, an investment manager may act as a fiduciary (agent) for both the transferor and the transferee; therefore, the transferor need only consider the involvements of the investment manager if it is acting on its behalf. ##### [860-10-40-23](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-23) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:204bca6408c9413d085b86d3fb2fc4c4ae34bb76bdda95a1be426054edd6c2d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) sets forth criteria that must be met to achieve sale accounting, this guidance addresses criteria that must be met for a transfer to fail the condition in paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) through an agreement of the type described in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) and thus preclude sale accounting and result in accounting for the transfer as a secured borrowing. ##### [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:4e8fe1923eec7120891726606d11dc083383d3e8758581428d0aafb23ae3464b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An agreement that both entitles and obligates the transferor to repurchase or redeem transferred [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.") from the transferee maintains the transferor's effective control over those assets as described in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), if all of the following conditions are met: 1. a The financial assets to be repurchased or redeemed are the same or substantially the same as those transferred. To be substantially the same, the financial asset that was transferred and the financial asset that is to be repurchased or redeemed need to have all of the following characteristics: 1. 1 The same primary obligor (except for debt guaranteed by a sovereign government, central bank, government-sponsored enterprise or agency thereof, in which circumstance the guarantor and the terms of the guarantee must be the same) 2. 2 Identical form and type so as to provide the same risks and rights 3. 3 The same maturity (or in the circumstance of mortgage-backed pass-through and pay-through securities, similar remaining weighted-average maturities that result in approximately the same market yield) 4. 4 Identical contractual interest rates 5. 5 Similar assets as collateral 6. 6 The same aggregate unpaid principal amount or principal amounts within accepted good delivery standards for the type of security involved. Participants in the mortgage-backed securities market have established parameters for what is considered acceptable delivery. These specific standards are defined by the Securities Industry and Financial Markets Association and can be found in Uniform Practices for the Clearance and Settlement of Mortgage-Backed Securities and Other Related Securities, which is published by the Securities Industry and Financial Markets Association. See paragraph [860-10-55-35](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-35) for implementation guidance related to these conditions. 2. b [Subparagraph superseded by Accounting Standards Update No. 2011-03](https://asc.understandingaccounting.org/updates/asu-2011-03/). 3. c The agreement is to repurchase or redeem the financial assets before maturity, at a fixed or determinable price. 4. d The agreement is entered into contemporaneously with, or in contemplation of, the transfer. ##### [860-10-40-24A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:c40198ab3f079b7f4cd25cfcd9eac10a0fb03610b4522f0164e1cf1e97b81df7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Notwithstanding the characteristic in paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) that refers to a repurchase of the same (or substantially-the-same) financial asset, a [repurchase-to-maturity transaction](https://asc.understandingaccounting.org/glossary/r/#repurchase-to-maturity-transaction "A repurchase agreement in which the settlement date of the agreement to repurchase a transferred financial asset is at the maturity date of that financial asset and the agreement would not require the transferor to reacquire the financial asset.") shall be accounted for as a secured borrowing as if the transferor maintains effective control. ##### [860-10-40-25](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-25) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:c503a2bce90b18177c1b14dee7bcccb312ee683312489bca175972303be7872b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. With respect to the condition in (a) in paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) to maintain effective control under the condition in paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) as illustrated in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), the transferor must have both the contractual right and the contractual obligation to repurchase or redeem [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.") that are identical to those transferred or substantially the same as those concurrently transferred. Transfers that include only the right to reacquire, at the option of the transferor or upon certain conditions, or only the obligation to reacquire, at the option of the transferee or upon certain conditions, may not maintain the transferor's control, because the option might not be exercised or the conditions might not occur. Similarly, expectations of reacquiring the same securities without any contractual commitments (for example, as in wash sales) provide no control over the transferred securities. ##### [860-10-40-26](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-26) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:853a557c3111d560214882565b069f93345ccb5c6d0d3465a1907bf5ada1ee9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2011-03](https://asc.understandingaccounting.org/updates/asu-2011-03/). ##### [860-10-40-27](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-27) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:d3be04ce0722b96c4642762d98eab55b8ad5b0333603e1f1ab7057d2bc0de5ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2011-03](https://asc.understandingaccounting.org/updates/asu-2011-03/). ##### [860-10-40-28](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-28) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:b9e18baa06b9c3e24b71ce2d31478c32bb74f78db9d15e70ba3287692a3cfae2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses whether any of the following agreements maintain effective control under paragraph [860-10-40-5(c)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5): 1. a A call option or other right conveys more than a trivial benefit (that is, fails the condition in paragraph [860-10-40-5(c)(2)(ii)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)) if the price to be paid is fixed, determinable, or otherwise potentially advantageous, unless because that price is so far out of the money or for other reasons it is probable when the option is written that the transferor will not exercise it. 2. b A transferor's unilateral ability to cause a securitization entity to return to the transferor or otherwise dispose of specific transferred financial assets, for example, in response to its decision to exit a market or a particular activity, has the characteristic in paragraph [860-10-40-5(c)(2)(i)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) and, thus, would provide the transferor with effective control over the transferred financial assets if it also has the characteristic in paragraph [860-10-40-5(c)(2)(ii)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)—that is, if it also provides more than a trivial benefit to the transferor. 3. c A call option on readily obtainable assets at fair value may not provide the transferor with more than a trivial benefit. Paragraph [860-10-40-35](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-35) provides an example in which, due to the combination of arrangements, the transferor would maintain effective control. ##### [860-10-40-28A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-28A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:c195f6eb067fd89e4043a58c86cdac6794897e5e1ffcb630d4200ca17bda3b7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Effective control over transferred financial assets can be present even if the right to reclaim is indirect. For example, if a call allows a transferor to buy back the beneficial interests at a fixed price, the transferor may maintain effective control of the financial assets underlying those beneficial interests. If the transferee is an entity whose sole purpose is to engage in securitization or asset-backed financing activities, that entity may be constrained from choosing to pledge or exchange the transferred financial assets. In that circumstance, any call held by the transferor on third-party beneficial interests is effectively an attached call on the transferred financial assets. Depending on the price and other terms of the call, the transferor may maintain effective control over the transferred financial assets. ##### [860-10-40-29](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-29) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:ec00f60576887ef577c5dc4313f7d43b6238e32fdfc7af2e43deb6058255d515 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/). ##### [860-10-40-30](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-30) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:06c5af5b9cec40155c7894c33f9cf828100c033f072eb24e40623e317daffd44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [860-10-55-39 through 55-42C](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-39) for implementation guidance addressing how different types of rights of a transferor to reacquire (call) transferred financial assets affect sale accounting under this Subtopic. ##### [860-10-40-31](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-31) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:6ccc8c259397f0f70400ff22ff0c65db4b9f2c4a453801cccbaadd4e3543d0c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash-settled call options do not constrain the transferee, nor do they result in the transferor maintaining effective control because they do not provide the transferor with an opportunity to reclaim the transferred financial assets. Therefore, this guidance addresses call options that can be physically settled. ##### [860-10-40-32](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-32) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:33647a76d046dcbc81ecbc7f1b747f5de839bd2bb7b2536390681d7e994f5b4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An [embedded call option](https://asc.understandingaccounting.org/glossary/e/#embedded-call-option "A call option held by the issuer of a financial instrument that is part of and trades with the underlying instrument. For example, a bond may allow the issuer to call it by posting a public notice well before its stated maturity that asks the current holder to submit it for early redemption and provides that interest ceases to accrue on the bond after the early redemption date. Rather than being an obligation of the initial purchaser of the bond, an embedded call option trades with and diminishes the value of the underlying bond.") would not result in the transferor's maintaining effective control because it is the issuer rather than the transferor who holds the call option and the call option does not provide more than a trivial benefit to the transferor. For example, a call embedded by the issuer of a callable bond or the borrower of a prepayable mortgage loan would not provide the transferor with effective control over the transferred financial asset. ##### [860-10-40-33](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-33) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:38fec3cd13461da629b57b32cefc74e4b6c5a0eee618671b25059dc62083d325 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/). ##### [860-10-40-34](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-34) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:97405dec39a9c06ee9a6a99cd77a42e64d7b1b2313723041a56ae9a7754d6189 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-40-5(c)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) excludes a cleanup call from the general principle that a transferor maintains effective control over transferred financial assets if the transferor has the unilateral ability to cause the holder to return specific financial assets and that ability provides more than a trivial benefit to the transferor. A cleanup call on beneficial interests in the transferred financial assets is permitted because burdensome costs in relation to benefits may arise when the remaining financial assets or beneficial interests fall to a small portion of their original level. Parties other than the servicer cannot hold the option, because only the servicer is burdened when the amount of outstanding financial assets falls to a level at which the cost of servicing the financial assets becomes burdensome—the defining condition of a cleanup call—and any other party would be motivated by some other incentive in exercising a call. ##### [860-10-40-35](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-35) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:7fbdcb3c0e74c6f5e47c0d4c0dfb73661113f64dda56d2b7bc70136ef0028883 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A right to reclaim specific transferred financial assets by paying their fair value when reclaimed generally does not maintain effective control if it does not convey a more-than-trivial benefit to the transferor. However, a transferor has maintained effective control if it has such a right and also holds the residual interest in the transferred financial assets. See paragraph [860-10-55-42A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-42A) for discussion of a related example. ##### [860-10-40-36](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-36) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:1da096bece97f4f14f2d428c953608bdff406a505fe16c3a1ecb69ebbc016ee9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many transfers of financial assets that involve transfers of a group of entire financial assets to an entity whose sole purpose is to engage in securitization or asset-backed financing activities empower the transferor to reclaim assets subject to certain restrictions. Such a power is sometimes called a removal-of-accounts provision. Whether a removal-of-accounts provision precludes sale accounting depends on whether the removal-of-accounts provision results in the transferor's maintaining effective control over transferred financial assets. ##### [860-10-40-37](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-37) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:8de2590fe6cd1dcbe3ea6ca5419a03321fdee49e9f07f798d677adbdd03985aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of removal-of-accounts provisions that preclude transfers from being accounted for as sales: 1. a An unconditional removal-of-accounts provision or repurchase agreement that allows the transferor to specify the financial assets that may be removed and that provides a more-than-trivial benefit to the transferor, because such a provision allows the transferor unilaterally to remove specific financial assets 2. b A removal-of-accounts provision conditioned on a transferor's decision to exit some portion of its business that provides a more-than-trivial benefit to the transferor, because whether it can be triggered by canceling an affinity relationship, spinning off a business segment, or accepting a third party's bid to purchase a specified (for example, geographic) portion of the transferor's business, such a provision allows the transferor unilaterally to remove specific financial assets. ##### [860-10-40-38](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-38) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:ddc09934dc9e42c3e392616ecc9501f5342f6265adf0da9d9e70de03cfa3c46c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of removal-of-accounts provisions that do not preclude transfers from being accounted for as sales: 1. a A removal-of-accounts provision for random removal of excess financial assets, if the provision is sufficiently limited so that the transferor cannot remove specific transferred financial assets, for example, by limiting removals to the amount of the transferor's interests and to one removal per month 2. b A removal-of-accounts provision for defaulted receivables, because the removal would be allowed only after a third party's action (default) and could not be caused unilaterally by the transferor 3. c A removal-of-accounts provision conditioned on a third-party cancellation, or expiration without renewal, of an affinity or private-label arrangement, because the removal would be allowed only after a third party's action (cancellation) or decision not to act (expiration) and could not be caused unilaterally by the transferor 4. d A removal-of-accounts provision that does not allow the transferor to unilaterally reclaim specific financial assets from the transferee.For related implementation guidance, see paragraph [860-10-55-41](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-41). ##### [860-10-40-39](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-39) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:0649798de3559da5a1ea2b1070fc1f633088cc5b1fbdabde9a8d9c1f4312c08d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A removal-of-accounts provision that can be exercised only in response to a third party's action that has not yet occurred does not maintain the transferor's effective control over financial assets potentially subject to that removal-of-accounts provision. #### Application of the Sale Criteria for Financial Instruments That Have the Potential to Be Assets or Liabilities ##### [860-10-40-40](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-40) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:fd9052cb6674cd01d27f86ba9571625136fa57c679f36150af3f3faca7206b66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain recognized financial instruments, such as forward contracts and swaps, have the potential to be financial assets or financial liabilities. Accordingly, transfers of those financial instruments must meet the conditions of both paragraphs [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1) and [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) to be derecognized. Paragraph [815-10-40-2](https://asc.understandingaccounting.org/asc/815/10/#815-10-40-2) states that transfers of assets that are derivative instruments and subject to the requirements of Subtopic 815-10 but that are not financial assets shall be accounted for by analogy to this Subtopic. The same criteria shall be applied to transfers of nonfinancial derivative instruments that have the potential to become either assets or liabilities (for example, forward contracts and swaps). #### Circumstances That Result in a Transferor Regaining Control of Financial Assets Previously Sold ##### [860-10-40-41](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-41) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:f64919caf723d882932426437bc4ebf832470e6b473b74f913462dfe7fe18108 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A change in law or other circumstance may result in a transferred portion of an entire financial asset no longer meeting the conditions of a participating interest (see paragraph [860-10-40-6A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A)) or the transferor's regaining control of transferred financial assets after a transfer that was previously accounted for as a sale, because one or more of the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are no longer met. See the related guidance beginning in paragraph [860-20-25-8](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-8). ##### [860-10-40-42](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-42) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:bced7c205b7bbd5941c887851fc9aa1ce292e374ecba132562d37202480160eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-43](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-43) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:3ce49c400aca5cab24b6dd798c596d8d91be20e29924399cc782871eca97367f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-44](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-44) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:7675a9ace9b00dc8eebee9421dfb1c6424c4ea9efc35f2075381bed94be99ca6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-45](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-45) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:55d58bce8a4d5b7155b5fa60e3bf536e30bb7ecaf836b0d0e7459561f4e071f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-46](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-46) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:ee6e238969c3f74d00d22b37a1505371c5f8fcc07756eb3742a2bbfe0df6882a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-40-47](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-47) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:45.595Z to 2026-09-10T02:05:45.595Z Record version: sha256:eed27b728ab9e8af5ddc3bffdecb9f4f0f474cc3e04c491104ac55bcfc1c7be9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:6df4aa25e2dc7cf410a203a7ce037b1b526c2bcd88a87d8c187eb2879d4c6e70 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/860/10/#50-disclosure) SEC content: no ##### [860-10-50-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:fa54b347c98d87df0b5f5fd2c36186cf6c00513ccc89167366b7646b8ded6a40 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/). ##### [860-10-50-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:e9ac5db5b40f385f73f581b3870fc44acdd0e352329daa82b52fbf5c376a20ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Overall guidance on Topic 860 disclosures is organized as follows: 1. a Disclosure objectives 2. b Aggregation of certain disclosures 3. c Involvements by others. ##### [860-10-50-3](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:54923794e8ccb2bbf3553decf5df79fe3bc85c5b0a22a41f597f1f45fc725a18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The principal objectives of the disclosure requirements of this Topic are to provide financial statement users with an understanding of all of the following: 1. a A transferor's [continuing involvement](https://asc.understandingaccounting.org/glossary/c/#continuing-involvement "Any involvement with the transferred financial assets that permits the transferor to receive cash flows or other benefits that arise from the transferred financial assets or that obligates the transferor to provide additional cash flows or other assets to any party related to the transfer. For related implementation guidance, see paragraph 860-10-55-79A."), if any, with [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") 2. b The nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred [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."), including the carrying amounts of those assets 3. c How servicing assets and servicing liabilities are reported under Subtopic 860-50 4. d For both of the following, how 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.") of financial assets affects an entity's financial position, financial performance, and cash flows: 1. 1 Transfers accounted for as sales, if a transferor has continuing involvement with the transferred financial assets 2. 2 Transfers of financial assets accounted for as secured borrowings. ##### [860-10-50-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:75aa4a001dabf546c2da8932c9f7efedc3e305dc2279323d463c2bd7ed4576fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objectives in the preceding paragraph apply regardless of whether this Topic requires specific disclosures. The specific disclosures required by this Topic are minimum requirements, and an entity may need to supplement the required disclosures depending on any of the following: 1. a The facts and circumstances of a transfer 2. b The nature of an entity's continuing involvement with the transferred financial assets 3. c The effect of an entity's continuing involvement on the transferor's financial position, financial performance, and cash flows. Disclosures required for a particular form of continuing involvement shall be considered when determining whether the disclosure objectives of this Topic have been met. ##### [860-10-50-4A](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-4A) Pending content: yes Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:2049e7e0a63d6cd8bfe5a9a9f3030c376fb79a11b4b38b15a31c4895bfdfd5a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosures required by this Topic may be reported in the aggregate for similar transfers if separate reporting of each transfer would not provide more useful information to financial statement users. A transferor shall both: 1. a Disclose how similar transfers are aggregated 2. b Distinguish between transfers that are accounted for as secured borrowings and transfers that are accounted for as sales. 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)Disclosures required by this Topic may be reported in the aggregate for similar transfers if separate reporting of each transfer would not provide more useful information to financial statement users. For interim and annual reporting periods, a transferor shall both: 1. a Disclose how similar transfers are aggregated 2. b Distinguish between transfers that are accounted for as secured borrowings and transfers that are accounted for as sales. ##### [860-10-50-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:cface7184d6215a891f3101daa4f1b50f2e50bd595bba34199fa5e77d972560a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining whether to aggregate the disclosures for multiple transfers, the reporting entity shall consider quantitative and qualitative information about the characteristics of the transferred financial assets, including all of the following: 1. a The nature of the transferor's continuing involvement 2. b The types of financial assets transferred 3. c Risks related to the transferred financial assets to which the transferor continues to be exposed after the transfer and the change in the transferor's risk profile as a result of the transfer 4. d The guidance in paragraph [310-10-50-25](https://asc.understandingaccounting.org/asc/310/10/#310-10-50-25) (for risks and uncertainties) and paragraphs [825-10-55-1 through 55-2](https://asc.understandingaccounting.org/asc/825/10/#825-10-55-1) (for concentrations involving loan product terms). ##### [860-10-50-6](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:de485cb50b05ac540fbd490264833fe835ebd6f71ef299e7af1b7f7482796ff4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosures shall be presented in a manner that clearly and fully explains to financial statement users the transferor's risk exposure related to the transferred financial assets and any restrictions on the assets of the entity. An entity shall determine, in light of the facts and circumstances, how much detail it must provide to satisfy disclosure requirements of this Topic and how it aggregates information for assets with different risk characteristics. The entity shall strike a balance between obscuring important information as a result of too much aggregation and excessive detail that may not assist financial statement users to understand the entity's financial position. For example, an entity shall not obscure important information by including it with a large amount of insignificant detail. Similarly, an entity shall not disclose information that is so aggregated that it obscures important differences between the different types of involvement or associated risks. #### Involvements by Others ##### [860-10-50-7](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:49.057Z to 2026-09-10T02:05:49.057Z Record version: sha256:71af608ec4f121e2f44c7712814eb56f53b812a356bd14b316a7ee31be40c5ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To apply the disclosures required in this Topic, an entity shall consider all involvements by the transferor, 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, or its [agents](https://asc.understandingaccounting.org/glossary/a/#agent "A party that acts for and on behalf of another party. For example, a third-party intermediary is an agent of the transferor if it acts on behalf of the transferor.") to be involvements by the transferor. Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:9cff3536c3d1523de6cf529a5eb8c2edb9e7bb9a563fbe7c99136a524b77a96e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/860/10/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [860-10-55-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:3c8d28b61544b921a55da110e33ab61f21604d3b8b885ec504a859b02a453162 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section is organized as follows: 1. a Scope 2. aa Consolidation of transferee by transferor 3. aaa Application of the term [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") 4. b Isolation of transferred [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.") 5. c [Transferee's](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.") right to pledge or exchange transferred financial assets 6. d Effective control 7. e Application of sale conditions to specific transactions 8. f Classification of transferred debt securities 9. g Recognition of a sale in separate-entity financial statements. 10. h [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [860-10-55-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:5153e3be144ef816eb3b3bbdf0edce67f2016f9a5332405919eeda140ef7e8ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance addresses whether certain instruments and transactions are subject to the scope of this Subtopic (see Section 860-10-15), specifically: 1. a Examples of transactions and activities that are included in the scope 2. b Application of the term [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.") 3. c Application of the term financial asset 4. d Reacquisition by an entity of its own securities 5. e Exchange of one form of [beneficial interest](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.") for another 6. f Dollar-roll repurchase transactions 7. g [Repurchase financing](https://asc.understandingaccounting.org/glossary/r/#repurchase-financing "A repurchase agreement that relates to a previously transferred financial asset between the same counterparties (or consolidated affiliates of either counterparty) that is entered into contemporaneously with, or in contemplation of, the initial transfer."). ##### [860-10-55-3](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-3) Pending content: yes Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:e5e4462dcb9a511df68290382d6a10bc8a7a396a758672e2d72afe291f35bdbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic applies to the following transactions and activities, among others: 1. a All [loan participations](https://asc.understandingaccounting.org/glossary/l/#loan-participation "A transaction in which a single lender makes a large loan to a borrower and subsequently transfers undivided interests in the loan to groups of banks or other entities.") 2. b Transfers of equity method investments 3. c Transfers of cost-method investments 4. d With respect to the guidance in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) only, transfers of financial assets in desecuritization transactions. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)The guidance in this Topic applies to the following transactions and activities, among others: 1. a All [loan participations](https://asc.understandingaccounting.org/glossary/l/#loan-participation "A transaction in which a single lender makes a large loan to a borrower and subsequently transfers undivided interests in the loan to groups of banks or other entities.") 2. b Transfers of equity method investments 3. c Transfers of investments accounted for in accordance with Topic 321 on investments—equity securities 4. d With respect to the guidance in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) only, transfers of financial assets in desecuritization transactions. ##### [860-10-55-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:b528149d7280b34029c97219de7beb5944080c9db8b8b180b263386767323e56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A payment of cash or a conveyance of noncash financial assets to the holder of a loan or other receivable in full or partial settlement of an obligation is not a transfer under this Subtopic. In addition, a [loan syndication](https://asc.understandingaccounting.org/glossary/l/#loan-syndication "A transaction in which several lenders share in lending to a single borrower. Each lender loans a specific amount to the borrower and has the right to repayment from the borrower. It is common for groups of lenders to jointly fund those loans when the amount borrowed is greater than any one lender is willing to lend.") is not a transfer of financial assets. See paragraph [310-10-25-4](https://asc.understandingaccounting.org/asc/310/10/#310-10-25-4) for further guidance on a loan syndication. ##### [860-10-55-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-5) Pending content: yes Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ccf0d874de76b3290f6ce8397ad4170bfea1da4b977365c3d981734f9f7c66e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following implementation guidance addresses whether certain instruments are financial assets, the transfer of which is subject to the guidance in this Subtopic, specifically: 1. a [Lease receivables](https://asc.understandingaccounting.org/glossary/l/#lease-receivable "A lessor's right to receive lease payments arising from a sales-type lease or a direct financing lease plus any amount that a lessor expects to derive from the underlying asset following the end of the lease term to the extent that it is guaranteed by the lessee or any other third party unrelated to the lessor, measured on a discounted basis.") from [sales-type leases](https://asc.understandingaccounting.org/glossary/s/#sales-type-lease "From the perspective of a lessor, a lease that meets one or more of the criteria in paragraph 842-10-25-2 and is not an operating lease in accordance with paragraph 842-10-25-3A.") and [direct financing leases](https://asc.understandingaccounting.org/glossary/d/#direct-financing-lease "From the perspective of a lessor, a lease that meets none of the criteria in paragraph 842-10-25-2 but meets the criteria in paragraph 842-10-25-3(b)and is not an operating lease in accordance with paragraph 842-10-25-3A.") 2. b Securitized stranded costs 3. c Judgment from litigation 4. d Forward contract on a financial instrument 5. e Ownership interest in a consolidated subsidiary by its parent if the subsidiary holds nonfinancial assets 6. f Investment in a nonconsolidated investee. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)The following implementation guidance addresses whether certain instruments are financial assets, the transfer of which is subject to the guidance in this Subtopic, specifically: 1. a [Lease receivables](https://asc.understandingaccounting.org/glossary/l/#lease-receivable "A lessor's right to receive lease payments arising from a sales-type lease or a direct financing lease plus any amount that a lessor expects to derive from the underlying asset following the end of the lease term to the extent that it is guaranteed by the lessee or any other third party unrelated to the lessor, measured on a discounted basis.") from [sales-type leases](https://asc.understandingaccounting.org/glossary/s/#sales-type-lease "From the perspective of a lessor, a lease that meets one or more of the criteria in paragraph 842-10-25-2 and is not an operating lease in accordance with paragraph 842-10-25-3A.") and [direct financing leases](https://asc.understandingaccounting.org/glossary/d/#direct-financing-lease "From the perspective of a lessor, a lease that meets none of the criteria in paragraph 842-10-25-2 but meets the criteria in paragraph 842-10-25-3(b)and is not an operating lease in accordance with paragraph 842-10-25-3A.") 2. b Securitized stranded costs 3. c Judgment from litigation 4. d Forward contract on a financial instrument 5. e Ownership interest in a consolidated subsidiary by its parent if the subsidiary holds nonfinancial assets 6. f Investment in a nonconsolidated investee. 7. g Receivables from [contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with [customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."). ##### [860-10-55-6](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:13756d4916126ff29f15991451f9d0a2cec45bd4dd6fc3742049ebb25ab1d916 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Lease receivables from sales-type and direct financing leases are made up of two components: the right to receive lease payments and guaranteed residual values. Lease payments for sales-type and direct financing leases involve requirements for lessees to pay cash to lessors and meet the definition of a financial asset. Residual values represent the lessor's estimate of the salvage value of the underlying asset at the end of the lease term and may be either guaranteed or unguaranteed. Residual values meet the definition of financial assets to the extent that they are guaranteed at the commencement of the lease. Thus, transfers of lease receivables from sales-type and direct financing leases are subject to the requirements of this Subtopic. [Unguaranteed residual assets](https://asc.understandingaccounting.org/glossary/u/#unguaranteed-residual-asset "The amount that a lessor expects to derive from the underlying asset following the end of the lease term that is not guaranteed by the lessee or any other third party unrelated to the lessor, measured on a discounted basis.") do not meet the definition of financial assets, nor do residual values guaranteed after commencement, and transfers of them are not subject to the requirements of this Subtopic. ##### [860-10-55-7](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:9ab9a6b7fb9afcd49feea5ccabe0dfd3500f1d61c36cf77e1e91d1b257487bd6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The deregulation of utility rates charged for electric power generation has caused electricity-producing entities (utilities) to identify some of their electric power generation operations as stranded costs. Before deregulation, utilities typically expected to be reimbursed for costs through regulation of rates charged to customers. After deregulation, some of these costs may no longer be recoverable through unregulated rates. Hence, such potentially unrecoverable costs often are referred to as stranded costs. However, some of those stranded costs may be recovered through a surcharge or tariff imposed on rate-regulated goods or services provided by another portion of the entity whose pricing remains regulated. Some entities have securitized their enforceable rights to impose that tariff (often referred to as securitized stranded costs), thereby obtaining cash from investors in exchange for the future cash flows to be realized from collecting surcharges imposed on customers of the rate-regulated goods or services. ##### [860-10-55-8](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:5a19b004f0100c7e3775bb6db9b6cd52353c72f5f05c6ebf1804d5f13a04cddb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Securitized stranded costs are not financial assets, and therefore transfers of securitized stranded costs are not within the scope of this Subtopic. Securitized stranded costs are not financial assets because they are imposed on ratepayers by a state government or its regulatory commission and, thus, while an enforceable right for the utility, they are not a contractual right to receive payments from another party. To elaborate, while a right to collect cash flows exists, it is not the result of a contract and, thus, not a financial asset. ##### [860-10-55-9](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:43723e93d945c1c969c4a8b0b387b3e4866dca8982d5596a63d9e57f3b1107d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, [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.") in a [securitization](https://asc.understandingaccounting.org/glossary/s/#securitization "The process by which financial assets are transformed into securities.") trust that holds nonfinancial assets such as securitized stranded costs or other similar imposed rights would be considered financial assets by the third-party investors, unless that third party must consolidate the trust. The Variable Interest Entities Subsections of Subtopic 810-10 should be applied, together with other guidance on consolidation policy, as appropriate, to determine whether such a special-purpose entity should be consolidated by a third-party investor. ##### [860-10-55-10](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:95e4ab38cc1e7cce3018846c8b721283d5a302f4bf3fadc46ce76fb7d844c164 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A judgment from litigation is generally not a financial asset. However, the determination depends on the facts and circumstances. A contingent receivable that ultimately may require the payment of cash but does not as yet arise from a contract (such as a contingent receivable for a tort judgment) is not a financial asset. However, when that judgment becomes enforceable by a government or a court of law and is thereby contractually reduced to a fixed payment schedule, the judgment would be a financial asset. ##### [860-10-55-11](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:83c313576119b6621fcffd377037b0cc7dad8f735074ea816b0e7f9872e61fb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A judgment from litigation is a financial asset if it is transferred to an unrelated third party and would be within the scope of this Subtopic only if that judgment is enforceable by a government or a court of law and has been contractually reduced to a fixed payment schedule. ##### [860-10-55-12](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:6cfcc5feab9405bfaf82e148c24ac95e0fe96772afa15167c30bd1f6ef30137e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A forward contract to purchase or sell a financial instrument that must be (or may be) net settled or physically settled by exchanging that financial instrument for cash (or some other financial asset) is a financial asset or [financial liability](https://asc.understandingaccounting.org/glossary/f/#financial-liability "A contract that imposes on one entity an obligation to do either of the following:Deliver cash or another financial instrument to a second entity Exchange other financial instruments on potentially unfavorable terms with the second entity."). Therefore, because a forward contract on a financial instrument that must be (or may be) physically settled by the delivery of that financial instrument in exchange for cash is a financial asset or financial liability, the transfer of such a financial asset is within the scope of this Subtopic (see paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1) for guidance on extinguishments of liabilities). ##### [860-10-55-13](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:913536682fbeda80e11e55255c47ebebbd6059c7b5bd05d30d51dea86e820f89 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An ownership interest in a consolidated subsidiary is evidence of control of the entity's individual assets and liabilities, not all of which are financial assets, and this guidance only applies to transfers of financial assets. (Note that in the parent's \[transferor's\] consolidated financial statements, the subsidiary's holdings are reported as individual assets and liabilities instead of as a single investment.) The guidance in this Subtopic does not apply to a transfer of an ownership interest in a consolidated subsidiary by its parent if that consolidated subsidiary holds nonfinancial assets. ##### [860-10-55-14](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:a3dbd097283f169e21b1dcfa1095d634aaf5267526611c26f3def1d2bd5bf2cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity (for example, a broker-dealer or an investment company) that carries an investment in a subsidiary at fair value will realize its investment by disposing of it rather than by realizing the values of the underlying assets through operations. Therefore, a transfer of an investment in a subsidiary by that entity is a transfer of the investment (a financial asset), not the underlying assets and liabilities (which might include nonfinancial assets). Generally, the guidance in this Subtopic applies to a transfer of an investment in a controlled entity that has not been consolidated by an entity because that entity accounts for its investment in the controlled entity at fair value. ##### [860-10-55-14A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-14A) Pending content: yes Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:a6ac3c10e73c50c35196a7ab5641ac9b376ddc409b7921c67bbf2f581b643d63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)An entity may have an unconditional right to consideration from a customer that gives rise to a receivable before the entity transfers control of a good or service to the customer. A receivable recognized in accordance with paragraph [606-10-45-4](https://asc.understandingaccounting.org/asc/606/10/#606-10-45-4) that meets the definition of a financial asset is subject to the requirements of this Subtopic. ##### [860-10-55-15](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-15) Pending content: yes Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:841baadc5dd18b46eb13ce7eee90ff4c4f87d072a7ff06d2a937fecd3decbf36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A reacquisition by an entity of its own securities by exchanging noncash financial assets (for example, U.S. Treasury bonds or shares of an unconsolidated investee) for its common shares constitutes a distribution by an entity to its owners, as defined in FASB Concepts Statement No. 6, Elements of Financial Statements, and, therefore, is excluded from the scope of this Subtopic. Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [105-10-65-9](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-9)A reacquisition by an entity of its own securities by exchanging noncash financial assets (for example, U.S. Treasury bonds or shares of an unconsolidated investee) for its common shares constitutes a distribution by an entity to its owners and, therefore, is excluded from the scope of this Subtopic. ##### [860-10-55-16](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:7e048c26bcd9cbb94ccfe9047ddd9006a5171c367654ae1a88a586bbd803f8d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [transferor's](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.") exchange of one form of beneficial interests in financial assets that have been transferred into a trust that is consolidated by the transferor for an equivalent, but different, form of beneficial interests in the same transferred financial assets would not be a transfer under this Subtopic if the exchange is with the trust that initially issued the beneficial interests. If the exchange is not a transfer, then the provisions of paragraph [860-20-40-1B](https://asc.understandingaccounting.org/asc/860/20/#860-20-40-1B) would not be applied to the transaction. ##### [860-10-55-17](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:685d4d53592fd9d1820eac4dc5e5cedb332b8b1c421df3e30255c582db07e0d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transfer of financial assets under a [dollar-roll repurchase agreement](https://asc.understandingaccounting.org/glossary/d/#dollar-roll-repurchase-agreement "An agreement to sell and repurchase similar but not identical securities. The securities sold and repurchased are usually of the same issuer. Dollar rolls differ from regular repurchase agreements in that the securities sold and repurchased have all of the following characteristics: They are represented by different certificates. They are collateralized by different but similar mortgage pools (for example, conforming single-family residential mortgages). They generally have different principal amounts. Fixed coupon and yield maintenance dollar agreements comprise the most common agreement variations. In a fixed coupon agreement, the seller and buyer agree that delivery will be made with securities having the same stated interest rate as the interest rate stated on the securities sold. In a yield maintenance agreement, the parties agree that delivery will be made with securities that will provide the seller a yield that is specified in the agreement.") is within the scope of this Subtopic if that agreement arises in connection with a transfer of existing securities. In contrast, dollar-roll repurchase agreements for which the underlying securities being sold do not yet exist or are to be announced (for example, to-be-announced [Government National Mortgage Association \[GNMA\] rolls](https://asc.understandingaccounting.org/glossary/g/#government-national-mortgage-association-rolls "The term Government National Mortgage Association (GNMA) rolls has been used broadly to refer to a variety of transactions involving mortgage-backed securities, frequently those issued by the GNMA. There are four basic types of transactions: Type 1. Reverse repurchase agreements for which the exact same security is received at the end of the repurchase period (vanilla repo) Type 2. Fixed coupon dollar reverse repurchase agreements (dollar repo) Type 3. Fixed coupon dollar reverse repurchase agreements that are rolled at their maturities, that is, renewed in lieu of taking delivery of an underlying security (GNMA roll) Type 4. Forward commitment dollar rolls (also referred to as to-be-announced GNMA forward contracts or to-be-announced GNMA rolls), for which the underlying security does not yet exist.")) are outside the scope of this Subtopic because those transactions do not arise in connection with a transfer of recognized financial assets. See paragraph [860-10-55-60](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-60) for related guidance. ##### [860-10-55-17A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:53c8fa4007921643a69ead82e6dfdef6db44299095f6ce6c541275ab9f189a1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose of this implementation guidance is to illustrate the characteristics of a transaction comprising an initial transfer and a [repurchase financing](https://asc.understandingaccounting.org/glossary/r/#repurchase-financing "A repurchase agreement that relates to a previously transferred financial asset between the same counterparties (or consolidated affiliates of either counterparty) that is entered into contemporaneously with, or in contemplation of, the initial transfer.") and to preclude an analogy to other financing transactions that are outside the scope of the guidance in paragraph [860-10-40-4C](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4C), which states that items (b) through (c) in paragraph [860-10-40-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4) do not apply to a transfer of financial assets and a related repurchase financing. - ![](https://asc.understandingaccounting.org/asc-img/GUID-B42CBD2A-E4B0-4767-841E-F86D4DA7906C-low.gif) Transfer of a Financial Asset Initial Transferor a Cash Initial transferee Transfer of a Financial Asset b (as collateral) Cash c Return of Financial Asset Cash ##### [860-10-55-17B](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:45a3c88496d2722c68685386ae39b46a3701d74eea486b6cd316898413cb9f98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The diagram in the preceding paragraph depicts the following three transfers of a financial asset that typically occur in the transactions within the scope of the guidance in paragraph [860-10-40-4C](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4C): 1. a The initial transferor transfers a financial asset to the initial transferee in return for cash. 2. b The initial transferee enters into a repurchase financing with the initial transferor. The initial transferee transfers the previously transferred financial asset to the initial transferor as collateral for the financing. The initial transferee receives cash from the initial transferor. As part of the repurchase financing, the initial transferee is obligated to repurchase the financial asset (or substantially the same financial asset) at a fixed price within a prescribed time period. 3. c The initial transferee makes the required payment to the initial transferor under the terms of the repurchase financing. Upon receipt of payment, the initial transferor returns the transferred asset (or substantially the same asset) to the initial transferee. ##### [860-10-55-17C](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17C) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:fbaa0c13173a724be532c85d1e350b2725a6f0807c0772871455416d1935cfb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether or not the parties agree to net settle the steps in items (a) and (b) of the preceding paragraph shall not affect whether the transactions are within the scope of the guidance for repurchase financings in paragraph [860-10-40-4C](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4C). ##### [860-10-55-17D](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17D) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:e283c34c83303a3beda33dbfd6d3c0d52285e9c16ae5dc41ad6f536bf5cb6892 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-40-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4) states that the determination of whether a transferor and 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 have surrendered control over transferred financial assets shall first consider whether the transferee would be consolidated by the transferor.If all other provisions of this Topic are met with respect to a particular transfer, and the transferee would be consolidated by the transferor, then the transferred financial assets would not be treated as having been sold in the financial statements being presented. However, if the transferee is a consolidated subsidiary of the transferor (its parent), the transferee shall recognize the transferred financial assets in its separate entity financial statements, unless the nature of the transfer is a secured borrowing with a pledge of collateral (for example, a repurchase agreement that would not be accounted for as a sale under the provisions of paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)). ##### [860-10-55-17E](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17E) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:89dd66a9cec0b53bef2575eb93926f97ac0c92d7d81fa6618e28df5547a5b694 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses the application of what constitutes an entire financial asset. ##### [860-10-55-17F](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17F) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:a2d49855ba983b1e6435e9decf985251918820131e5c1462c9351469517126de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A loan to one borrower in accordance with a single contract that is transferred to a securitization entity before securitization shall be considered an entire financial asset. Similarly, a beneficial interest in securitized financial assets after the securitization process has been completed shall be considered an entire financial asset. In contrast, a transferred interest in an individual loan shall not be considered an entire financial asset; however, if the transferred interest meets the definition of a [participating interest](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest."), the participating interest would be eligible for sale accounting. ##### [860-10-55-17G](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17G) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:b5db0cff23f0ac1921ca12342c42a9ce736b6fde1f9704522e22271f908765b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a transaction in which the transferor creates an interest-only strip from a loan and transfers the interest-only strip, the interest-only strip does not meet the definition of an entire financial asset (and an interest-only strip does not meet the definition of a participating interest; therefore, sale accounting would be precluded). In contrast, if an entire financial asset is transferred to a securitization entity that it does not consolidate and the transfer meets the conditions for sale accounting, the transferor may obtain an interest-only strip as proceeds from the sale. An interest-only strip received as proceeds of a sale is an entire financial asset for purposes of evaluating any future transfers that could then be eligible for sale accounting. ##### [860-10-55-17H](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17H) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:66cf2233ab0a4b579a351f0c547a2eca307d1424df8b820be86dc48063769cdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If multiple advances are made to one borrower in accordance with a single contract (such as a line of credit, credit card loan, or a construction loan), an advance on that contract would be a separate unit of account if the advance retains its identity, does not become part of a larger loan balance, and is transferred in its entirety. However, if the transferor transfers an advance in its entirety and the advance loses its identity and becomes part of a larger loan balance, the transfer would be eligible for sale accounting only if the transfer of the advance does not result in the transferor retaining any interest in the larger balance or if the transfer results in the transferor's interest in the larger balance meeting the definition of a participating interest. Similarly, if the transferor transfers an interest in an advance that has lost its identity, the interest must be a participating interest in the larger balance to be eligible for sale accounting. ##### [860-10-55-17I](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17I) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:95b403b1d2585463483e36c244d317e9aa14a47e22af444c517dcab15291abb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-40-6A(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A) states that an allocation of specified cash flows precludes a portion from meeting the definition of a participating interest unless each cash flow is proportionately allocated to the participating interest holders. Following are several examples implementing that guidance: 1. a In the circumstance of an individual loan in which the borrower is required to make a contractual payment that consists of a principal amount and interest amount on the loan, the transferor and transferee shall share in the principal and interest payments on the basis of their proportionate ownership interest in the loan. 2. b In contrast, if the transferor is entitled to receive an amount that represents the principal payments and the transferee is entitled to receive an amount that represents the interest payments on the loan, that arrangement would not be consistent with the participating interest definition because the transferor and transferee do not share proportionately in the cash flows received from the loan. 3. c In other circumstances, a transferor may transfer a portion of an individual loan that represents either a senior interest or a junior interest in an individual loan. In both of those circumstances, the transferor would account for the transfer as a secured borrowing because the senior interest or junior interest in the loan do not meet the requirements to be participating interests (see paragraph [860-10-40-6A(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A)). ##### [860-10-55-17J](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17J) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:6d66f4e3623ce27e87ffef88d6ab8b9a548f0c9d90015068e6486efef09c11aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Given the conditions in paragraph [860-10-40-6A(b)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A), cash flows allocated as compensation for services performed that are significantly above an amount that would fairly compensate a substitute service provider would result in a disproportionate division of cash flows of the entire financial asset among the participating interest holders and, therefore, would preclude the portion of a transferred financial asset from meeting the definition of a participating interest. Examples of cash flows that are compensation for services performed include all of the following: 1. a [Loan origination fees](https://asc.understandingaccounting.org/glossary/l/#loan-origination-fees "Origination fees consist of all of the following: Fees that are being charged to the borrower as prepaid interest or to reduce the loan's nominal interest rate, such as interest buy-downs (explicit yield adjustments) Fees to reimburse the lender for origination activities Other fees charged to the borrower that relate directly to making the loan (for example, fees that are paid to the lender as compensation for granting a complex loan or agreeing to lend quickly) Fees that are not conditional on a loan being granted by the lender that receives the fee but are, in substance, implicit yield adjustments because a loan is granted at rates or terms that would not have otherwise been considered absent the fee (for example, certain syndication fees addressed in paragraph 310-20-25-19) Fees charged to the borrower in connection with the process of originating, refinancing, or restructuring a loan. This term includes, but is not limited to, points, management, arrangement, placement, application, underwriting, and other fees pursuant to a lending or leasing transaction and also includes syndication and participation fees to the extent they are associated with the portion of the loan retained by the lender.") paid by the borrower to the transferor 2. b Fees necessary to arrange and complete the transfer paid by the transferee to the transferor 3. c Fees for servicing the financial asset. ##### [860-10-55-17K](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17K) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:e28318fb7274c8d45ed0452c8dc5fd481e5e66a17a3d121a10037c3bd1348631 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The transfer of a portion of an entire financial asset may result in a gain or loss on the transfer if the contractual interest rate on the entire financial asset differs from the market rate at the time of transfer. Paragraph [860-10-40-6A(b)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A) precludes a portion from meeting the definition of a participating interest if the transfer results in the transferor receiving an ownership interest in the financial asset that permits it to receive disproportionate cash flows. For example, if the transferor transfers an interest in an entire financial asset and the transferee agrees to incorporate the excess interest (between the contractual interest rate on the financial asset and the market interest rate at the date of transfer) into the contractually specified servicing fee, the excess interest would likely result in the conveyance of an interest-only strip to the transferor from the transferee. An interest-only strip would result in a disproportionate division of cash flows of the financial asset among the participating interest holders and would preclude the portion from meeting the definition of a participating interest. ##### [860-10-55-17L](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17L) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:d785ca929cfae397267c40eda91bd13414dffaf5c164b6f3fed9175c5d31aaf4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-40-6A(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A) addresses the priority of cash flows. In certain transfers, recourse is provided to the transferee that requires the transferor to reimburse any premium paid by the transferee if the underlying financial asset is prepaid within a defined time frame of the transfer date. Such recourse would preclude the transferred portion from meeting the definition of a participating interest. However, once the recourse provision expires, the transferred portion shall be reevaluated to determine if it meets the participating interest definition. ##### [860-10-55-17M](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17M) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:d54613075f804cc70c59790e8c81f1d5f6d1f6b265a385d77b16e183260947d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-40-6A(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A) addresses recourse in a participating interest. Recourse in the form of an independent third-party guarantee shall be excluded from the evaluation of whether the participating interest definition is met. Similarly, cash flows allocated to a third-party guarantor for the guarantee fee shall be excluded from the determination of whether the cash flows are divided proportionately among the participating interest holders. ##### [860-10-55-17N](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-17N) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:cff20c3420bd9ef4a1c0cc5c064b77ec459acca75de45a5a8c26f138fa0fdc53 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of [standard representations and warranties](https://asc.understandingaccounting.org/glossary/s/#standard-representations-and-warranties "Representations and warranties that assert the financial asset being transferred is what it is purported to be at the transfer date.") (as used in paragraph [860-10-40-6A(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A)) include representations and warranties about any of the following: 1. a The characteristics, nature, and quality of the underlying financial asset, including any of the following: 1. 1 Characteristics of the underlying borrower 2. 2 The type and nature of the collateral securing the underlying financial asset. 2. b The quality, accuracy, and delivery of documentation relating to the transfer and the underlying financial asset 3. c The accuracy of the transferor's representations in relation to the underlying financial asset. ##### [860-10-55-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:07bb545d582d285f7de113138a10e0bac8efa5b1504f38a38a57ba530ca77d20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses the isolation condition in paragraph [860-10-40-5(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)and applies to transfers of all entities, including institutions for which the FDIC would be the receiver. ##### [860-10-55-18A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:16a1ca037cf8de76007d38d3cdf72e9177709a5ba8c9b660b024b771aece55ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the context of U.S. bankruptcy laws, a true sale opinion from an attorney is often required to support a conclusion that transferred financial assets are isolated from the transferor, any of its consolidated affiliates included in the financial statements being presented, and its creditors. In addition, a nonconsolidation opinion is often required if the transfer is to an affiliated entity. In the context of U.S. bankruptcy laws: 1. a A true sale opinion is an attorney's conclusion that the transferred financial assets have been sold and are beyond the reach of the transferor's creditors and that a court would conclude that the transferred financial assets would not be included in the transferor's bankruptcy estate. 2. b A nonconsolidation opinion is an attorney's conclusion that a court would recognize that an entity holding the transferred financial assets exists separately from the transferor. Additionally, a nonconsolidation opinion is an attorney's conclusion that a court would not order the substantive consolidation of the assets and liabilities of the entity holding the transferred financial assets and the assets and liabilities of the transferor (and its consolidated affiliates included in the financial statements being presented) in the event of the transferor's bankruptcy or receivership. ##### [860-10-55-18B](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:26a12135a29611e09ffb2aa0395c5401ff1fa36a51edfde119b6571d0b841339 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A legal opinion may not be required if a transferor has a reasonable basis to conclude that the appropriate legal opinion(s) would be given if requested. For example, the transferor might reach a conclusion without consulting an attorney if either of the following conditions exists: 1. a The transfer is a routine transfer of financial assets that does not result in any continuing involvement by the transferor. 2. b The transferor had experience with other transfers with similar facts and circumstances under the same applicable laws and regulations. ##### [860-10-55-18C](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-18C) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:29eb5d941008b604311b4a363fee5227457b8d6d81a58a0fc2786ec6a25d7c30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For entities that are subject to other possible bankruptcy, conservatorship, or other receivership procedures (for example, banks subject to receivership by the Federal Deposit Insurance Corporation \[FDIC\]) in the United States or other jurisdictions, judgments about whether transferred financial assets have been isolated shall be made in relation to the powers of bankruptcy courts or trustees, conservators, or receivers in those jurisdictions. ##### [860-10-55-19](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:26b5eacc03b6e429e66df72a8e00776ba07ec4f4ccd28a986a8ce22b38241b9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In certain securitizations, a corporation that, if it failed, would be subject to the U.S. Bankruptcy Code transfers financial assets to a securitization entity in exchange for cash. The entity raises that cash by issuing to investors beneficial interests that pass through all cash received from the financial assets, and the transferor has no further involvement with the trust or the transferred financial assets. Those securitizations generally would be judged as having isolated the assets because, in the absence of any continuing involvement there would be reasonable assurance that the transfer would be found to be a true sale at law that places the assets beyond the reach of the transferor, its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, and its creditors, even in bankruptcy or other receivership. ##### [860-10-55-20](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:91516751e5369ec087ffcf5c348e45acdea56c1994535d1c83715ee37f5a320e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In other securitizations, a similar corporation transfers financial assets to a securitization entity in exchange for cash and beneficial interests in the transferred financial assets. That entity raises the cash by issuing to investors commercial paper that gives them a senior beneficial interest in cash received from the financial assets. The beneficial interests obtained by the transferring corporation represent a junior interest to be reduced by any credit losses on the financial assets in the entity. The senior beneficial interests (commercial paper) are highly rated by credit rating agencies only if both the credit enhancement from the junior interest is sufficient and the transferor is highly rated. ##### [860-10-55-21](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:dc677eef9066cfcca83ce0e722036e84a17add187c684f01562f5ea8273748e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depending on facts and circumstances, those single-step securitizations often would be judged in the United States as not having isolated the financial assets, because the nature of the continuing involvement may make it difficult to obtain reasonable assurance that the transfer would be found to be a true sale at law that places the financial assets beyond the reach of the transferor, its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, and its creditors in U.S. bankruptcy (see paragraph [860-10-55-46](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-46)). If the transferor fell into bankruptcy and the transfer was found not to be a true sale at law, investors in the transferred financial assets might be subjected to an automatic stay that would delay payments due them, and they might have to share in bankruptcy expenses and suffer further losses if the transfer was recharacterized as a secured loan. ##### [860-10-55-22](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:195476b4f98504ce3360652a93b2a8fac2da007a5cb97f1388b2ce4730cbe2f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other securitizations use multiple transfers intended to isolate transferred financial assets beyond the reach of the transferor, its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, and its creditors, even in bankruptcy. The series of transactions in a typical two-tier structure taken as a whole may satisfy the isolation test because the design of the structure achieves isolation. The two-step securitizations, taken as a whole, generally would be judged under present U.S. law as having isolated the financial assets beyond the reach of the transferor, its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, and its creditors, even in bankruptcy or other receivership. However, each entity involved in a transfer should be evaluated under the consolidation guidance in Topic 810. Accordingly, a transferor could be required to consolidate the trust or other legal vehicle used in the second step of the securitization, notwithstanding the isolation analysis of the transfer. ##### [860-10-55-23](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:b4ee665d5f95bd1611f5071690cdb59b0c40e49c48386a7976aafbd2c4e522e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, two-step structures involve the following: 1. a First, the corporation transfers a group of financial assets to a special-purpose corporation that, although wholly owned, is so designed that the possibility is remote that the transferor, its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, or its creditors could reclaim the financial assets. This first transfer is designed to be judged to be a true sale at law, in part because the transferor does not provide excessive credit or yield protection to the special-purpose corporation, and the transferred financial assets are likely to be judged beyond the reach of the transferor, its consolidated affiliates (that are not bankruptcy-remote entities) included in the financial statements being presented, or the transferor's creditors even in bankruptcy or other receivership. 2. b Second, the special-purpose corporation transfers a group of financial assets to a trust or other legal vehicle with a sufficient increase in the credit or yield protection on the second transfer (provided by a transferor's junior beneficial interest or other means) to merit the high credit rating sought by third-party investors who buy senior beneficial interests in the trust. Because of that aspect of its design, that second transfer might not be judged to be a true sale at law and, thus, the transferred financial assets could at least in theory be reached by a bankruptcy trustee for the special-purpose corporation. 3. c However, the special-purpose corporation is designed to make remote the possibility that it would enter bankruptcy, either by itself or by substantive consolidation into a bankruptcy of its parent should that occur. For example, its charter forbids it from undertaking any other business or incurring any liabilities, so that there can be no creditors to petition to place it in bankruptcy. Furthermore, its dedication to a single purpose is intended to make it extremely unlikely, even if it somehow entered bankruptcy, that a receiver under the U.S. Bankruptcy Code could reclaim the transferred financial assets because it has no other assets to substitute for the transferred financial assets. ##### [860-10-55-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:6dfb827d1698eca1f40d74d32dcb559dd8d0fc8b72a45be7eccfb5d62fd94ceb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The powers of receivers for entities not subject to the U.S. Bankruptcy Code (for example, banks subject to receivership by the Federal Deposit Insurance Corporation \[FDIC\]) vary considerably, and therefore some receivers may be able to reach financial assets transferred under a particular arrangement and others may not. A securitization may isolate transferred financial assets from a transferor subject to such a receiver and its creditors even though it is accomplished by only one transfer directly to a securitization entity that issues beneficial interests to investors and the transferor provides credit or yield protection. For entities that are subject to other possible bankruptcy, conservatorship, or other receivership procedures in the United States or other jurisdictions, judgments about whether transferred financial assets have been isolated need to be made in relation to the powers of bankruptcy courts or trustees, conservators, or receivers in those jurisdictions. ##### [860-10-55-24A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-24A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:4c44cebe1143fbffe4a28f216c0d11a274057e3fea38ad895ecc47601b8f3a85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Depending on the facts and circumstances, transferred financial assets can be isolated from the transferor if the Federal Deposit Insurance Corporation (FDIC) would be the receiver should the transferor fail. In July 2000, the FDIC adopted a final rule (subsequently amended), _Treatment by the Federal Deposit Insurance Corporation as Conservator or Receiver of Financial Assets Transferred by an Insured Depository Institution in Connection with a Securitization or Participation._ The final amended rule modifies the FDIC's receivership powers so that, subject to certain conditions, it shall not recover, reclaim, or recharacterize as property of the institution or the receivership any financial assets transferred by an insured depository institution that meet all conditions for sale accounting treatment under GAAP, other than the _legal isolation_ condition in connection with a securitization or participation. ##### [860-10-55-24B](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-24B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:7f74b7c60d5bd6ad67f23d94697ccfb8853511c3289547855d67bbc930e9fbda Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial assets transferred by an entity subject to possible receivership by the FDIC are isolated from the transferor if the FDIC or another creditor either cannot require return of the transferred financial assets or can only require return in receivership, after a default, and in exchange for payment of, at a minimum, principal and interest earned (at the contractual yield) to the date investors are paid. ##### [860-10-55-25](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:40ef39df11abae4c4afe35c4bb7884e3e198d49bae8781adc1413cd6232a6419 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Conversely, financial assets transferred by an entity shall not be considered isolated from the transferor if circumstances can arise under which the transferor can require their return, but only in exchange for payment of principal and interest earned (at the contractual yield) to the date investors are paid, unless the transferor's power to require the return of the transferred financial assets arises solely from a contract with the transferee. A noncontractual power to require the return of transferred assets is inconsistent with the limitations in paragraph [860-10-40-5(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) that, to be accounted for as having been sold, transferred financial assets shall be isolated from the transferor. That is the circumstance even if the noncontractual power appears unlikely to be exercised or is dependent on the uncertain future actions of other entities (for example, insufficiency of collections on underlying transferred financial assets or determinations by court of law). Under that guidance, a single-step securitization commonly used by financial institutions subject to receivership by the FDIC and sometimes used by other entities is likely not to be judged as having isolated the assets. One reason for that is because it would be difficult to obtain reasonable assurance that the transferor would be unable to recover the transferred financial assets under the [equitable right of redemption](https://asc.understandingaccounting.org/glossary/e/#equitable-right-of-redemption "The right of a property owner who has defaulted on a secured obligation to recover the securing property before its sale by paying the amounts due and any appropriate fees and charges. Other creditors of or a receiver for the property owner also may be able to exercise that right. After a transfer of a financial asset, a right of redemption may allow the transferor to buy back the transferred asset.") available to secured debtors, after default, under U.S. law. ##### [860-10-55-25A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-25A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:6c827e454018f842504c0e005f0625c04278cf6194e3982ba6eae2c0593d1f2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For entities that are subject to possible receivership under jurisdictions other than the FDIC or the U.S. Bankruptcy Code, whether assets transferred by an entity can be considered isolated from the transferor depends on the circumstances that apply to those types of entities. As discussed in paragraph [860-10-55-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-24), for entities that are subject to other possible bankruptcy, conservatorship, or other receivership procedures in the United States or other jurisdictions, judgments about whether transferred financial assets have been isolated need to be made in relation to the powers of bankruptcy courts or trustees, conservators, or receivers in those jurisdictions. The same sorts of judgments may need to be made in relation to powers of the transferor or its creditors. ##### [860-10-55-26](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:1bfcba900f8b345a06053067072e99d730d1149860ea7407091f946099a7f0bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance on the application of the condition in paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) related to the transferee's right to pledge or exchange transferred assets in certain circumstances and transactions, specifically: 1. a Transferee is precluded from exchanging the transferred financial assets but has the unconstrained right to pledge them. 2. b Transferee is significantly limited in its ability to pledge or exchange the transferred financial assets. 3. c Transferor's approval is required for transferee's subsequent transfers or pledges. 4. d Transactions involving Rule 144A securities. ##### [860-10-55-27](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:0f32c6d387bab29653f641191971aec5242a61352487f3a1da36ba4851522adf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a transaction in which a transferee (that is not an entity whose sole purpose is to engage in securitization or asset-backed financing activities) is precluded from exchanging the transferred financial assets but obtains the unconstrained right to pledge them, the determination of whether the sale condition in paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) is met depends on the facts and circumstances. In a transfer of financial assets, a transferee's right to both pledge and exchange transferred financial assets suggests that the transferor has surrendered its control over those financial assets. However, more careful analysis is warranted if the transferee may only pledge the transferred financial assets. ##### [860-10-55-28](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:b6f553b9d52d0a4864d6d76b9ea0b72a4786ae612f60a26adb02cbb70ab157a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity transfers financial assets to a transferee that is significantly limited in its ability to pledge or exchange the transferred financial assets (the transferee is not an entity whose sole purpose is to engage in securitization or asset-backed financing activities). The transferor receives cash in return for the transferred financial assets, and has no [continuing involvement](https://asc.understandingaccounting.org/glossary/c/#continuing-involvement "Any involvement with the transferred financial assets that permits the transferor to receive cash flows or other benefits that arise from the transferred financial assets or that obligates the transferor to provide additional cash flows or other assets to any party related to the transfer. For related implementation guidance, see paragraph 860-10-55-79A.") with the transferred assets. The transfer described in this example meets the condition in paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). ##### [860-10-55-29](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:feef0aeda7dd39c3ddd2c3ca3ea60ba5e0f41ba5110590a98571220d41657802 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. While the condition in paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) is met in the example described in the previous paragraph, in general, for transfers in which the transferor does have any continuing involvement, an evaluation shall be made as to whether the condition in paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) has been met. ##### [860-10-55-30](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:9d071860107920d78e2d66c5b099cb9c898b8cf33e6ff91d169cf9cbc8c3f53d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a transfer to fail to meet the condition in paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), the transferee must be constrained from pledging or exchanging the transferred financial asset and the transferor must receive more than a trivial benefit as a result of the constraint. ##### [860-10-55-31](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:211e1ba9627cfcbf891a0094472dbd1054349e3e1074285d04f842527e637bb4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Judgment is necessary to determine whether a requirement to obtain the transferor's permission to sell or exchange should preclude sale accounting. For example, in certain [loan participation](https://asc.understandingaccounting.org/glossary/l/#loan-participation "A transaction in which a single lender makes a large loan to a borrower and subsequently transfers undivided interests in the loan to groups of banks or other entities.") agreements involving transfers of participating interests, the transferor is required to approve any subsequent transfers or pledges of the interests in the loans held by the transferee. Whether that requirement would be a constraint that would prevent the transferee from taking advantage of its right to pledge or to exchange the transferred financial asset and, therefore, accounting for the transfer as a sale, depends on the nature of the requirement for approval. ##### [860-10-55-32](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:cf0d63a9c00f964cdf49921d570c07dffc04c3605aed43a7de3844aca9190675 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A prohibition on sale to the transferor's competitor may or may not constrain a transferee from pledging or exchanging the financial asset, depending on how many other potential buyers exist. If there are many other potential willing buyers, the prohibition would not be constraining. In contrast, if that competitor were the only potential willing buyer (other than the transferor), then the condition would be constraining. ##### [860-10-55-33](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:fc976222fc7e07dc297ec65a0ae12ab9a4ab24ae1156b4c915f26113825c2d9d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Issuing beneficial interests in the form of securities issued under Rule 144A presumptively would not constrain a transferee's ability to transfer those beneficial interests for purposes of this Subtopic. The primary limitation imposed by Rule 144A is that a potential buyer must be a sophisticated investor. If a large number of qualified buyers exist, the holder could transfer those securities to many potential buyers and, thereby, realize the full economic benefit of the assets. In such circumstances, the requirements of Rule 144A would not be a constraint that precludes sale accounting under paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). ##### [860-10-55-34](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:7a6b1a71ad9f6de80906022c68e3d971fad1a139602dd333363fcbb5d24321d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance related to the effective control condition and related examples in paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), specifically: 1. a An agreement that both entitles and obligates the transferor to repurchase or redeem the transferred financial assets before their maturity (see paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)): 1. 1 Whether [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.") exchanged are substantially the same 2. 2 [Subparagraph superseded by Accounting Standards Update No. 2011-03](https://asc.understandingaccounting.org/updates/asu-2011-03/). 2. b An agreement that provides the transferor with the [unilateral ability](https://asc.understandingaccounting.org/glossary/u/#unilateral-ability "A capacity for action not dependent on the actions (or failure to act) of any other party.") to cause the holder to return specific financial assets, other than through a cleanup call (see paragraph [860-10-40-5(c)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)): 1. 1 Rights to reacquire (call) transferred assets. 3. c An agreement that permits the transferee to require the transferor to repurchase the transferred financial asset at a price that is so favorable to the transferee that it is probable that the transferee will require the transferor to repurchase the transferred financial asset. ##### [860-10-55-35](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ee52829acf3ad9594a7a57ecd561c87008002326bd565f2b184e16724f190a91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses criteria that must be met for a transfer to fail the condition in paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) through an agreement of the type described in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), precluding sale accounting and resulting, instead, in secured-borrowing accounting. The following are examples of whether securities exchanged are substantially the same as discussed in paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24): 1. a The same primary obligor (see paragraph [860-10-40-24(a)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)). The exchange of pools of single-family loans would not meet this criterion because the mortgages comprising the pool do not have the same primary obligor, and would therefore not be considered substantially the same. 2. b Identical form and type (see paragraph [860-10-40-24(a)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)). The following exchanges would not meet this criterion: 1. 1 GNMA I securities for GNMA II securities 2. 2 Loans to foreign debtors that are otherwise the same except for different U.S. foreign tax credit benefits (because such differences in the tax receipts associated with the loans result in instruments that vary in form and type) 3. 3 Commercial paper for redeemable preferred stock. 3. c The same maturity (or in the case of mortgage-backed pass-through and pay-through securities, similar remaining weighted-average maturities that result in approximately the same market yield) (see paragraph [860-10-40-24(a)(3)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)). The exchange of a fast-pay GNMA certificate (that is, a certificate with underlying mortgage loans that have a high prepayment record) for a slow-pay GNMA certificate would not meet this criterion because differences in the expected remaining lives of the certificates result in different market yields. 4. d Similar assets as [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given.") (see paragraph [860-10-40-24(a)(5)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)). Mortgage-backed pass-through and pay-through securities must be collateralized by a similar pool of mortgages, such as single-family residential mortgages, to meet this characteristic. ##### [860-10-55-36](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:89f3a6870bc97ab742d0190848ba5f9d345c49d0671b475cc22bae8e6b989ada Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-10-55-36 through 55-38 superseded by Accounting Standards Update No. 2011-03](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-36). ##### [860-10-55-39](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:6ab7ea54b91909e02ac697e38f052b5236c3d29fbefc69b1f76056240a0e2a1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Rights or obligations to reacquire transferred financial assets may result in the transferor's maintaining effective control over the transferred assets, therefore precluding sale accounting under paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). The following guidance addresses how different types of rights of a transferor to reacquire (call) transferred assets affect sale accounting, specifically: 1. a Removal-of-accounts provisions (see paragraphs [860-10-40-36 through 40-39](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-36) ) 2. b Call options (see paragraphs [860-10-40-28](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-28) and [860-10-40-34](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-34)) 3. c Other arrangements. ##### [860-10-55-40](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:1ea6cfd3a8d0437f379b2d80abc18cb0d7a7609b5cb610deb4dcd0026c293869 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/). ##### [860-10-55-41](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:c6d6effc7edfc08e23d36bdd3c9c4d772ce157a6788a5da00775a5ac16f83a88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of application of effective control principles to removal-of-accounts provisions: 1. a An unconditional removal-of-accounts provision that allows the transferor to specify the financial assets that may be removed from a group of financial assets precludes sale accounting for all financial assets in the group that might be specified if such a provision allows the transferor unilaterally to remove specific financial assets and provides a more-than-trivial benefit to the transferor (see paragraph [860-10-40-37(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-37)), even if the transferor's right to remove specific financial assets from a group of transferred financial assets is limited, for example, to 10 percent of the fair value of the financial assets transferred and all of the financial assets are smaller than that 10 percent. In that circumstance, none of the transferred financial assets would be derecognized at the time of transfer because no transferred financial asset is beyond the reach of the transferor. If the transferor reclaims all the financial assets it can and thereby extinguishes its option, its control has expired and the rest of the financial assets have been sold at that time. 2. b A removal-of-accounts provision that provides the right to random removal of excess financial assets from a group of transferred financial assets up to 10 percent of the fair value of the financial assets transferred (all financial assets in the group are less than this 10 percent of the fair value of transferred financial assets) does not preclude sale accounting if the transferor has no other interest in the group. The transferor has, in essence, obtained a 10 percent beneficial interest in the group and should account for it as such. This treatment is permitted because the removal-of-accounts provision is sufficiently limited and the transferor cannot unilaterally remove specific transferred financial assets, because the timing of the removal (when the excess develops) and the assets being removed (which are randomly determined) are not under the control of the transferor (see paragraph [860-10-40-38](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-38)). 3. c A removal-of-accounts provision conditioned on a transferor's decision to exit some portion of its business precludes sale accounting for all financial assets that might be affected, because it permits the transferor unilaterally to remove specific financial assets and provides a more-than-trivial-benefit to the transferor (see paragraph [860-10-40-37(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-37)). 4. d A removal-of-accounts provision for defaulted receivables does not preclude sale accounting at the time of transfer, because the removal would be allowed only after a third party's action (default) and could not be caused unilaterally by the transferor (see paragraph [860-10-40-38(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-38)). However, once the default has occurred, the transferor would have the unilateral ability to remove those specific financial assets and would need to recognize the defaulted receivable if that ability provides a more-than-trivial benefit to the transferor. 5. e A removal-of-accounts provision conditioned on a third-party cancellation, or expiration without renewal, of an affinity or private-label arrangement does not preclude sale accounting at the time of transfer, because the removal would be allowed only after a third party's action (cancellation) or decision not to act (expiration) and could not be caused unilaterally by the transferor (see paragraph [860-10-40-38(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-38)). However, once the cancellation or expiration has occurred, the transferor would have the unilateral ability to remove specific financial assets and would need to recognize those financial assets if that ability provides a more-than-trivial benefit to the transferor. 6. f Because the transferor could not cause the reacquisition unilaterally a transferor does not maintain effective control through a removal-of-accounts provision that obligates the transferor to reacquire transferred financial assets from a securitization entity only after either: 1. 1 A specified failure of the servicer to properly service the transferred financial assets that could result in the loss of a third-party guarantee 2. 2 Third-party beneficial interest holders require a securitization entity to repurchase that beneficial interest. ##### [860-10-55-42](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:1a3d513dc5861bf38ecac8e4528a8973a21a76f5aa8471bf2799061fd22a9b76 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are other examples of the application of effective control principles: 1. a In a loan participation, the lead bank (that is also the transferor) allows the participating bank to resell but reserves the right to call at any time from whoever holds it and can enforce the call option by cutting off the flow of interest at the call date; such a call option precludes sale accounting. 2. b In a securitization, a call option permits the transferor to reclaim all of the transferred financial assets from the securitization entity at any time; such a call option precludes sale accounting unless both of the following conditions exist: 1. 1 The call option is an option to call, at fair value, a financial asset that is readily obtainable in the marketplace. 2. 2 The transferor does not hold a residual beneficial interest in the transferred financial assets (see paragraph [860-10-40-35](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-35)). 3. c A transferor-servicer transfers a group of entire financial assets to a securitization entity and has the right to call all of the financial assets when the group amortizes to 20 percent of its value (determined at the date of transfer). The transferor-servicer determines that at that level of financial assets, its cost of servicing them would not be burdensome in relation to the benefits of servicing, and therefore that the call option is not a cleanup call. Such a call option precludes sale accounting for the entire group of transferred financial assets (see paragraph [860-10-55-70](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-70)). 4. d If the third-party beneficial interests contain an embedded option and the transferor holds the residual interest in the securitization entity, the combination has the same kind of effective control as a scheduled auction provision if the transferor holds a residual beneficial interest. Sale accounting would be precluded for all of the transferred financial assets affected by the call option. 5. e If the third-party beneficial interests in a securitization entity pay off first (a so-called turbo structure, where principal payments and prepayments are allocated on a non-pro rata basis, as discussed in paragraph [860-10-05-13](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-13)), the transferor may not maintain effective control over transferred financial assets (see paragraph [860-10-40-32](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-32)). To some extent, these repayments are contractual cash flows of the underlying assets, but repayments also result from prepayments in the underlying assets (that is, the prepayment options in the underlying assets are mirrored in the third-party beneficial interests). In this circumstance, call options embedded in the third-party beneficial interests result from the options embedded in the underlying assets (that is, they are held by the underlying borrowers rather than the transferor), and thus do not preclude sale accounting. 6. f A transferor's contractual right to repurchase, at any time, a loan that is not a readily obtainable financial asset would preclude sale accounting, because the transferor's contractual right to repurchase is effectively a call option of the type described in paragraph [860-10-40-17(c)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-17). ##### [860-10-55-42A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-42A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ff41e87194b98a50f4db41d316195e170b62b891d709b9acfceb4d16a1fa0088 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance illustrates the concept in paragraph [860-10-40-35](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-35) that a transferor maintains effective control if it has a right to reclaim specific transferred assets by paying fair value and also holds the residual interest in the transferred financial assets.If a transferor holds the residual interest in securitized financial assets and can reclaim the transferred financial assets at termination of the securitization entity by purchasing them in an auction, and thus at what might appear to be fair value, then sale accounting for the transfer of those financial assets it can reclaim would be precluded. Such circumstances provide the transferor with a more-than-trivial benefit and effective control over the financial assets, because it can pay any price it chooses in the auction and recover any excess paid over fair value through its residual interest in the transferred financial assets. ##### [860-10-55-42B](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-42B) Pending content: yes Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:23151e947d2d9457460f50cf695b265fc3a735d0510e3b91f1360df0a13e037c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Sale accounting is not appropriate if a cleanup call on a group of financial assets in a securitization entity is held by a party other than the servicer. A transferor's call option on the transferred financial assets in the securitization entity is not a cleanup call for accounting purposes because it is not the servicer or an affiliate of the servicer. in which the fair value of beneficial interests obtained by a transferor of financial assets that is not the servicer or an affiliate of the servicer is adversely affected by the amount of transferred financial assets declining to a low level. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)Sale accounting is not appropriate if a cleanup call on a group of financial assets in a securitization entity is held by a party other than the servicer. A transferor's call option on the transferred financial assets in the securitization entity is not a cleanup call for accounting purposes because it is not the servicer or an affiliate of the servicer. This is the case even when the fair value of beneficial interests obtained by a transferor of financial assets that is not the servicer or an affiliate of the servicer is adversely affected by the amount of transferred financial assets declining to a low level. ##### [860-10-55-42C](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-42C) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:38dd1692b310ccad7ef65a1da89dcc85cddb96278263b445c10a66bf06e25e54 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a securitization transaction involving not-readily-obtainable financial assets, a transferor that is also the servicer may hold a cleanup call if it enters into a subservicing arrangement with a third party without precluding sale accounting. Under a subservicing arrangement, the transferor remains the servicer from the perspective of the securitization entity because the securitization entity does not have an agreement with the subservicer (that is, the transferor remains liable if the subservicer fails to perform under the subservicing arrangement). However, if the transferor sells the servicing rights to a third party (that is, the agreement for servicing is between the securitization entity and the third party after the sale of the servicing rights), then the transferor could not hold a cleanup call without precluding sale accounting. ##### [860-10-55-42D](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-42D) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:6636912e0e8c675136cfbd104568d0a287f7635a265c5156dfa78c7f0e1100bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses the application of paragraph [860-10-40-5(c)(3)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) through the following examples: 1. a A put option written to the transferee generally does not provide the transferor with effective control over the transferred financial asset under paragraph [860-10-40-5(c)(3)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). 2. b A put option that is sufficiently deep in the money when it is written would, under that paragraph, provide the transferor effective control over the transferred financial asset because it is probable that the transferee will exercise the option and the transferor will be required to repurchase the transferred financial asset. 3. c A sufficiently out-of-the-money put option held by the transferee would not provide the transferor with effective control over the transferred financial asset if it is probable when the option is written that the option will not be exercised. 4. d A put option held by the transferee at fair value would not provide the transferor with effective control over the transferred financial asset. ##### [860-10-55-43](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:91b940353a7fc50ac555c1d9b48d9e5f5bf06791e5fae959882fb638c5fce151 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance regarding the application of the sale conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) to certain transactions, specifically: 1. a Pass-through, pay-through, and [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.") 2. b Factoring arrangements 3. c Transfers of receivables with recourse 4. d Securities lending transactions 5. e Repurchase agreements 6. f Wash sales 7. g Dollar rolls 8. h Loan participations 9. i Banker's acceptances and risk participations in them 10. j [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 11. k Transfers involving certain transferor powers 12. l Transferor option to repurchase individual financial assets 13. m Transfer of a short-term loan made under a long-term credit commitment 14. n Transfer of bad-debt recovery rights. 15. o [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). ##### [860-10-55-44](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:48de452a3c39c792d9f0554a52a4025cad33beeabcf3b2eb928c9e153fe81c6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [860-10-05-7 through 05-13](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-7) provide background on securitization transactions. In pass-through and pay-through securitizations, receivables are transferred to the entity at the inception of the securitization, and no further transfers are made; all cash collections are paid to the holders of beneficial interests in the entity. Pass-through, pay-through, and revolving-period securitizations that meet the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) qualify for sale accounting under this Subtopic, provided the securitization entity is not consolidated by the transferor or its consolidated affiliates in the financial statements being presented. ##### [860-10-55-45](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:b791ca1c618598fb231dc2e70103c8ab933669942f50a55a28e961b9ea5b09e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-05-14](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-14) provides background on factoring arrangements. Factoring arrangements that meet the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) shall be accounted for as sales of financial assets because the transferor surrenders control over the receivables to the factor. ##### [860-10-55-46](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:f4f2d6d3170cab1a63caea22ef766e84379097142dace71b153f883f4ae2e9f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-05-15](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-15) provides background on transfers of receivables with recourse. The effect of a recourse provision on the application of paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) may vary by jurisdiction. In some jurisdictions, transfers with full recourse may not place transferred financial assets beyond the reach of the transferor, its consolidated affiliates (that are not entities designed to make remote the possibility that it would enter bankruptcy or other receivership) included in the financial statements being presented, and its creditors, but transfers with limited recourse may. 1. a Transfer consists of an entire financial asset or a group of entire financial assets. Before the method of recourse can be evaluated to determine the appropriate accounting treatment, the entity shall first determine whether a sale has occurred because in some jurisdictions recourse might mean that the transferred financial assets have not been isolated beyond the reach of the transferor, its consolidated affiliates (that are not entities designed to make remote the possibility that it would enter bankruptcy or other receivership) included in the financial statements being presented, and its creditors. A transfer of receivables in their entireties with recourse shall be accounted for as a sale, with the proceeds of the sale reduced by the fair value of the recourse obligation, if the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met. Otherwise, a transfer of receivables with recourse shall be accounted for as a secured borrowing. 2. b Transfer does not consist of an entire financial asset or a group of entire financial assets. The transferred financial asset must meet the definition of a [participating interest](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest.").A transfer of a portion of a receivable with recourse, other than that permitted in paragraph [860-10-40-6A(c)(4)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A), does not meet the requirements of a participating interest and shall be accounted for as a secured borrowing. ##### [860-10-55-47](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ba0d94a005b997df094f78ab789d993f21a4e53c578d07460085b87c40858f2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [860-20-55-24](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-24) for further guidance on accounting for transfers of receivables with recourse. ##### [860-10-55-48](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ac399d15c385d66b3117c4c3d79d8839c78efc3acf171f2a7b5762c1e65e8188 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-55-49](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:7b961fbb9563d2e4a585f7c42eabe357f98cb8dfa3810100a915bf6fcb9add24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-55-50](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:efd31c9592847f7708b169101a2d19f64d49ab129f3945e1476dadd30052f1e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-55-51](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:5b06a3df03cde1d96fd85064bf7ab17fe03840a665b79d6e7958d0c2e82fc783 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [860-10-05-19 through 05-21](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-19) provide background on repurchase agreements. Paragraphs [860-10-05-16 through 05-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-16) provide background on securities lending transactions. Repurchase agreements and securities lending transactions are required to be evaluated under each of the following conditions for derecognition in accordance with paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5): 1. a Isolation. Paragraph [860-10-40-5(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) requires an assessment of whether the transferred [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.") are isolated from the transferor. Paragraphs [860-10-40-5(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) and [860-10-40-8](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-8) require that the transferred financial assets be placed beyond the reach of all consolidated affiliates, except for certain bankruptcy-remote entities, included in the financial statements being presented. 2. b Transferee's rights to pledge or exchange. Paragraph [860-10-40-5(b)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) requires an assessment of the transferee's rights to pledge or exchange the transferred financial assets. If a transferor has transferred financial assets to an independent third-party custodian, or to a transferee, under conditions that preclude the transferee from selling or repledging the assets during the term of the repurchase agreement, the transferor has not surrendered control over those assets. In a securities lending transaction, to the extent that the collateral consists of letters of credit or other financial instruments that the holder is not permitted by contract or custom to sell or repledge, the transaction does not satisfy the sale conditions and is accounted for as a loan of securities by the transferor to the transferee. 3. c Effective control. Paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) requires an assessment of whether the transferor maintains effective control over transferred financial assets. An agreement that both entitles and obligates the transferor to repurchase transferred financial assets from the transferee in accordance with paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) that meets the criteria in paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) maintains the transferor's effective control over transferred financial assets. Therefore, transfers with agreements to repurchase transferred financial assets that either meet the effective control criteria or qualify for the [repurchase-to-maturity transaction](https://asc.understandingaccounting.org/glossary/r/#repurchase-to-maturity-transaction "A repurchase agreement in which the settlement date of the agreement to repurchase a transferred financial asset is at the maturity date of that financial asset and the agreement would not require the transferor to reacquire the financial asset.") exception need not be assessed under the remaining conditions for derecognition and should be accounted for as a secured borrowing. Paragraph [860-10-55-51A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-51A) illustrates the application of the effective control condition in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). Repurchase agreements and securities lending transactions that do not meet all the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) should be treated as secured borrowings. ##### [860-10-55-51A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-51A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:492a2a7f76fdd541dad63d572485105add8a3f6d59c78a487078cd6ceefcc761 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under certain agreements to repurchase transferred financial assets before their maturity, the transferor maintains effective control over the transferred financial assets. If effective control is maintained or the transaction qualifies for the [repurchase-to-maturity transaction](https://asc.understandingaccounting.org/glossary/r/#repurchase-to-maturity-transaction "A repurchase agreement in which the settlement date of the agreement to repurchase a transferred financial asset is at the maturity date of that financial asset and the agreement would not require the transferor to reacquire the financial asset.") exception, the agreement is accounted for as a secured borrowing. If effective control is not maintained or the repurchase-to-maturity transaction exception is not met, the transaction would be assessed under the other derecognition conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) to determine if the transferred financial asset should be derecognized and accounted for as a sale. ##### [860-10-55-51B](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-51B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:6053f99eb1e2def795928daa06e263b3a3f2cda2644a905fb7d4c88c21fb3bb2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the application of the derecognition guidance in paragraphs [860-10-40-24 through 40-24A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24): 1. a Repurchase agreements and securities lending transactions—assets that are identical. The following illustrates agreements for which the transferor maintains effective control over the transferred financial asset: 1. 1 A financial asset is transferred under a contemporaneous agreement with the same counterparty that requires the transferor to repurchase or redeem it before its maturity at a fixed price or at the sale price plus or minus a lender's return. 2. 2 A financial asset is transferred under a securities lending transaction that requires the transferee to return to the transferor the identical asset before its maturity at a fixed price. 2. b Repurchase agreements and securities lending transactions—assets that are substantially the same. The following illustrates agreements for which the transferor maintains effective control over the transferred financial asset: 1. 1 A financial asset is transferred under a contemporaneous agreement with the same counterparty to repurchase or redeem an asset that is substantially the same as the initially transferred asset (in accordance with paragraph [860-10-40-24(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)) before its maturity at a fixed price or at the sale price plus or minus a lender's return. 2. 2 A financial asset is transferred under a securities lending transaction that requires the transferee to return to the transferor an asset that is substantially the same as the initially transferred financial asset (in accordance with paragraph [860-10-40-24(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)) before its maturity at a fixed price. 3. 3 Fixed-coupon and dollar-roll repurchase agreements, and other contracts under which the securities to be repurchased are substantially the same in accordance with paragraph [860-10-40-24(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) as the securities initially transferred. 3. c Repurchase-to-maturity transactions. A repurchase-to-maturity transaction is accounted for as a secured borrowing as if it maintains the transferor's effective control over the transferred financial asset. A transfer of a financial asset with a contemporaneous total return swap to maturity does not meet the definition of _repurchase-to-maturity transaction_. 4. d Cash-settled repurchase agreements. If a financial asset is transferred under a contemporaneous agreement with the same counterparty to repurchase or redeem it before its maturity at a fixed repurchase price or a price equal to the sale price plus or minus a lender's return and the agreement requires the transferee to settle the agreement in cash, the agreement does not maintain the transferor's effective control over the transferred financial assets. An exception is a repurchase-to-maturity transaction as discussed in (c). ##### [860-10-55-52](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-52) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:3b34f1b87d38be68fe752ccb16d59d945295136c4ee5bf42ee57f49c1820046b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-55-53](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-53) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:c194a2bb33ab24acfc29776d54053cf37e1b590e6cfc61e6f3612befba8d47f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-55-54](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-54) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:2fc55e54f993ff16a106d9028612414afdaf12b171502d4dc90ecebad796e6b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In repurchase agreements and securities lending transactions involving readily obtainable held-to-maturity debt securities, the conditions set forth in paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) should be carefully evaluated to determine whether the transaction should be accounted for as a sale or secured borrowing. For example, if the security that is required to be returned has a different maturity or has a different contractual interest rate from the transferred security, the substantially-the-same criterion would not be met. In that circumstance, effective control would not be maintained under the condition in paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) and the transfer would be accounted for as a sale if the other conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met. ##### [860-10-55-55](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-55) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:edd8e843af2d1914c50ad289e83601976f3b740caa7319d2c84a2c7413b3f549 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met, the transferor should account for the repurchase agreement as a sale of financial assets and a forward repurchase commitment, and the transferee should account for the agreement as a purchase of financial assets and a forward resale commitment. ##### [860-10-55-55A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-55A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:e8046420ca06076f11ad0a6c80092f87f672263ab9ecbbe6d1209c49e894b564 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met, a securities lending transaction should be accounted for as follows: 1. a By the transferor as a sale of the loaned securities for proceeds consisting of the cash collateral and a forward repurchase commitment. If the collateral in a transaction that meets the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) is a financial asset that the holder is permitted by contract or custom to sell or repledge, that financial asset is proceeds of the sale of the loaned securities. 2. b By the transferee as a purchase of the borrowed securities in exchange for the collateral and a forward resale commitment. During the term of that agreement, the transferor has surrendered control over the securities transferred and the transferee has obtained control over those securities with the ability to sell or transfer them at will. In that circumstance, creditors of the transferor have a claim only to the collateral and the forward repurchase commitment. ##### [860-10-55-56](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-56) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ddc1e88625d97bb05204a031e6a41575c1d4287ac71f10945cddebe4152e1432 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Repurchase agreements that involve an exchange of securities or letters of credit are accounted for in the same manner as securities lending transactions (see paragraphs [860-30-25-7 through 25-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-7) ). ##### [860-10-55-56A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-56A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:1992d55980f0de6ef1203c41ca684294583a421ef86f29046196a612c6f18a6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). ##### [860-10-55-56B](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-56B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:3280d7b2d595dc2ea6b1a88b5b27fdfbaac4b2543d5493bb005c3348a75db88b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In repurchase agreements and securities lending transactions in which the transferor does not derecognize the transferred financial asset, if the transferee obtains the right to sell or pledge the asset, the transferor reclassifies the asset in its statement of financial position separately from other assets not so encumbered in accordance with paragraph [860-30-45-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-1). ##### [860-10-55-57](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-57) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:a6981a043851fa617dcf25fe47f5e62b92709585b695ab626d630bd411a6f982 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Wash sales shall be accounted for as sales under this Subtopic. Unless there is a concurrent contract to repurchase or redeem the transferred financial assets from the transferee, the transferor does not maintain effective control over the transferred financial assets. ##### [860-10-55-58](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-58) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:2c2e38d7cd1cd6ff1e28c061384f7987fc0a846beab53cb4e48785b1a32e1198 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) precludes sale accounting for a dollar-roll transaction depends on the facts and circumstances. Paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) states the conditions under which an agreement that both entitles and obligates the transferor to repurchase or redeem transferred financial assets from the transferee maintains the transferor's effective control over those assets as described in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). The condition in paragraph [860-10-40-24(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) requires that the financial assets to be repurchased or redeemed are the same or substantially the same as those transferred. Paragraph [860-10-40-24(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) describes six characteristics that must all exist for a transfer to meet the substantially-the-same requirement. Paragraph [860-10-40-24(a)(6)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) requires (as one of those six characteristics) that the financial asset that was transferred and the financial asset that is to be repurchased or redeemed have the same aggregate unpaid principal amount or principal amounts within accepted good delivery standards for the type of security involved. ##### [860-10-55-59](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-59) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:1c662ac4f530d756cba45a9a4f174590f2cea03f4aeb82888bc67178b3a52350 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For transfers of existing securities under a dollar-roll repurchase agreement, the transferee must be committed to return substantially-the-same securities to the transferor, which would indicate that the transferor has maintained effective control. In a transfer of existing securities under a dollar-roll repurchase agreement, if the transferee is committed to return substantially-the-same securities to the transferor but that transferee's securities at the time of the transfer were to-be-announced securities, the transferor would not be precluded from accounting for the transfer as a secured borrowing. The transferor is only required to obtain a commitment from the transferee to return substantially-the-same securities and is not required to determine that the transferee holds the securities that it has committed to return. Therefore, the financial asset to be returned may be a to-be-announced asset at the time of the transfer because the transferor would have no way of knowing whether the transferee held the security to be returned. ##### [860-10-55-60](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-60) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:fda9dfa2bd76b354e9d74cf275cc9e4d2890914d4f91066fcd2bda0e9c0fd563 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As illustrated by the following, whether a GNMA roll is accounted for as a secured borrowing or a sale affects the evaluation of the forward contract embedded in the securities subject to the agreement: 1. a Types 1-3 of dollar rolls would qualify for secured borrowing treatment if the redemption of securities on substantially the same terms is assured (see paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24)). In that circumstance, the forward contracts embedded in the Types 1-3 securities are outside the scope of Topic 815 because of the scope exception provided in paragraph [815-10-15-63](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-63) for derivative instruments that serve as impediments to sale accounting. 2. b Types 2 and 3 securities that involve repurchase of other than substantially-the-same securities are considered sales of securities and forward contracts. The forward contract would need to be evaluated under Subtopic 815-10 because it has terms that would generally meet the definition of a derivative instrument. If the dollar-roll repurchase agreement is accounted for as a sale under this Subtopic, Subtopic 815-10 provides guidance on the subsequent accounting for the forward contract. ##### [860-10-55-61](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-61) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:34102eda751d2c795c806b58cf88fb3c4b641f32f44fa8a264aafbe768d32158 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-05-23](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-23) provides background on loan participations. If a loan participation agreement transfers a participating interest in an entire financial asset (as described in paragraph [860-10-40-6A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A)) and the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met, the transfers shall be accounted for by the transferor as a sale of a participating interest. However, if the loan participation agreement constrains the transferee from pledging or exchanging its participating interest and that constraint provides a more-than-trivial benefit to the transferor, the transferor has not relinquished control and shall account for the transfer as a secured borrowing. ##### [860-10-55-62](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-62) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:e30a3a922bdc0ede9a296bda642bd5ff1395456110bf6ee60f633575d7de79c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-10-55-62 through 55-64 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-62). ##### [860-10-55-65](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-65) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:18f2db0b161a1148d8238a6501ed91948cd1ede9a2251bbd07f97ebc6ed29fa4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [860-10-05-24 through 05-26](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-24) provide background on banker's acceptances and risk participations in them. An accepting bank that obtains a risk participation shall not [derecognize](https://asc.understandingaccounting.org/glossary/d/#derecognize "Remove previously recognized assets or liabilities from the statement of financial position.") the liability for the banker's acceptance, because the accepting bank is still primarily liable to the holder of the banker's acceptance even though it benefits from a guarantee of reimbursement by a participating bank. The accepting bank shall not derecognize the receivable from the customer because it has not transferred the receivable. Rather, it controls the benefits inherent in that receivable and it is still entitled to receive payment from the customer. The accepting bank shall, however, record the guarantee purchased, and the participating bank shall record a liability for the guarantee issued. For an illustration of this guidance, see Example 1 (paragraph [860-10-55-80](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-80)). ##### [860-10-55-66](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-66) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:00fb6b13591e86d5f940fa05b2f637325e6afb2e0425282548d9eac9330beabc 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/). ##### [860-10-55-67](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-67) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:0b1038fde7dc27795ba641758e2e0d6f9e0219644b2a9fd2371488b5aa62e923 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the transferor has the ability to dissolve a securitization entity (for example, through the beneficial interests that it holds) and reassume control of the financial assets at any time, the transferor is precluded from accounting for the transfer as a sale for the following reason: 1. a [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 2. b The transferor's current ability to dissolve the securitization entity and reassume control of the transferred financial assets entitles it to unilaterally cause the return of the transferred financial assets, indicating that the transferor has maintained control over the transferred financial assets which precludes sale accounting under paragraph [860-10-40-5(c)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). ##### [860-10-55-68](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-68) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:9aaf916bec4b12b8f439fa913b39d0f374884c16b9cd25ac9c2b321e6a53a8f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In certain transactions, the transferor is entitled to repurchase a transferred amortizing, individual (specific) financial asset when its remaining principal balance reaches some specified amount, for example, 30 percent of the original balance. To exercise that call option, the transferor would pay the remaining principal balance. Paragraph [860-10-40-5(c)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) states that a transferor maintains effective control through a call option,other than through a cleanup call, that provides the transferor with both: 1. a The unilateral ability to cause the holder to return specific financial assets 2. b A more-than-trivial-benefit attributable to that ability. ##### [860-10-55-68A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-68A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:59d2eb4983a038de7e99ee400de4f53929c09e1ff0b8bd8578bb5fc006bc2cd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Such a call option on the remaining portion of an entire financial asset precludes sale accounting for the entire financial asset. Paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) applies to an entire financial asset, a group of entire financial assets, or a participating interest. Paragraph [860-10-40-4A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4A) states that, to be eligible for sale accounting, an entire financial asset cannot be divided into components before a transfer unless all of the components meet the definition of a participating interest. That paragraph states also that an entity shall not account for a transfer of an entire financial asset or a participating interest in an entire financial asset partially as a sale and partially as a secured borrowing. ##### [860-10-55-69](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-69) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:fd1770573960c4dcd8a227ca60489b3adbcaa853220af76dc5ebba960fca0e6b 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/). ##### [860-10-55-70](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-70) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:7595966e59227611a0e121b486b461c71337cc5836f258e095d7164b35d3371c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a transferor holds a call option to repurchase at any time a few specified, individual loans from an entire group of loans transferred in a securitization transaction, then sale accounting is precluded only for the specified loans subject to the call option, not the whole group of loans. In contrast, if the transferor holds a call option to repurchase from the group any loans it chooses, up to some specified limit, then sale accounting is precluded for the transfer of the entire group while that option remains outstanding. See paragraphs [860-10-55-39 through 55-42](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-39) for related guidance. ##### [860-10-55-71](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-71) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:c738e8d5c62f0d35c297c647cf440de9bdd2050381ee3f056f078bf2309150e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A financial institution involved in commercial lending makes a short-term loan (for example, 90 days) to a borrower under a long-term credit commitment (for example, 5 years). The financial institution transfers the short-term loan, without recourse, to a third-party purchaser for the remaining term of the loan. The risk of loss relating to the short-term loan is legally transferred to the purchaser, and the financial institution has no contractual obligation to repurchase the short-term loan. Under the long-term credit commitment, the financial institution may, at the maturity of the short-term loan, relend to the borrower. However, the financial institution may refuse to relend to the borrower based on a current credit evaluation or if any covenant under the long-term commitment is not satisfied. ##### [860-10-55-72](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-72) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:d6fa54cf40583651b42fd96fdb76d71d73046f8e6d30176fccf33c3b1b4d9a16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To the extent that the transfer of the short-term loan made under a long-term credit commitment as described above is accounted for as the transfer of a receivable with a put option, it would be required to be accounted for as a sale if the conditions of paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met. The terms of the put option should be analyzed to determine whether it meets the definition of a derivative instrument under Subtopic 815-10. ##### [860-10-55-73](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-73) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:aee0ecf7d0196b9dd2581d48cf94dbf2c760622438c2c799061c1f87eb955362 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A financial institution (transferor) transfers to a third-party transferee the right to an amount of future recoveries from loans previously written off by the transferor as uncollectible. The transferee is entitled to recoveries equal to the purchase price plus a market rate of interest on the unrecovered purchase price. There is no recourse to the transferor. The transferee can initiate its own collection efforts if dissatisfied with the transferor's recovery efforts. The transaction is a secured borrowing (that is, a borrowing secured by the transferred rights). ##### [860-10-55-74](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-74) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:5204f431f68ac005e279a06d52b7ece24d3e51e1304cbb547f8e4f9002f77b51 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/). ##### [860-10-55-75](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-75) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:351937fb41228c65b3e8aced8fda3869c2482971aa1bfd54e57f2fdfca7656e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity may transfer debt securities to an unconsolidated entity that has a predetermined life in exchange for cash and the right to receive proceeds from the eventual sale of the securities. For example, a third party holds a beneficial interest that is initially worth 25 percent of the fair value of the assets of the entity at the date of transfer. The entity is required to sell the transferred securities at a predetermined date and liquidate the entity at that time. Assume the facts in that example and the following additional facts: 1. a The beneficial interests are issued in the form of debt securities. 2. b Before the transfer, the debt securities were accounted for as available-for-sale securities in accordance with Topic 320. ##### [860-10-55-76](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-76) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:791932aad8e901ca2cdbe3bcfe41d77a4d8ede924e98bc78018a787ef8df7352 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In that example, whether the transferor may classify the debt securities as trading at the time of the transfer depends on whether the transfer is accounted for as a sale or as a secured borrowing: 1. a Sale. If a transfer of a group of entire financial assets satisfies the conditions to be accounted for as a sale, Subtopic 860-20 requires that any assets obtained or liabilities incurred in the transfer be recognized (see paragraph [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1)) and initially measured at fair value (see paragraph [860-20-30-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-1)). If the transfer in the example is accounted for as a sale, the transferor would account for the debt securities received as new assets and would have the option to classify the debt securities received as trading securities. 2. b Secured borrowing. If the transfer is accounted for as a secured borrowing, paragraph [860-30-25-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-2) requires the transferor to continue to report the transferred debt securities in its statement of financial position with no change in their measurement (that is, basis of accounting). Paragraph [320-10-35-12](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-12), which explains that transfers into or from the trading category should be rare, would continue to apply. ##### [860-10-55-77](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-77) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ec8820e12a0bd3a856bfb4fd2b905125a727bdfdcb751a4c6c9dfb10ba6ee64b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the transferred financial assets were not securities subject to the guidance in Topic 320 before the transfer that was accounted for as a sale but the beneficial interests were issued in the form of debt securities, then the transferor would have the opportunity to decide the appropriate classification of the beneficial interests received as proceeds from the sale. ##### [860-10-55-78](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-78) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:9a2d397b45913f857a51514339d134050e4985d4c99558174885db0d0492eee7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transfer from one subsidiary (the transferor) to another subsidiary (the transferee) of a common parent would be accounted for as a sale in each subsidiary's separate-entity financial statements if both of the following requirements are met: 1. a All of the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) (including the condition on isolation of the transferred financial assets) are met. 2. b The transferee's assets and liabilities are not consolidated into the separate-entity financial statements of the transferor. Paragraph [860-10-40-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-4) states that, in a transfer between two subsidiaries of a common parent, the transferor-subsidiary shall not consider parent involvements with the transferred financial assets in applying paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). ##### [860-10-55-79](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-79) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:b93b4c2f07661f9117f5f35819be8b3217d6a5b6eefcbf7e3200b3bfd2a41746 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the transferee was an equity method investee of the transferor, only the investment and not the investee's assets and liabilities would be reported in the transferor subsidiary's separate-entity financial statements. Therefore, the transferee would not be a consolidated affiliate of the transferor, and such a transfer could isolate the transferred financial assets and be accounted for as a sale if all other conditions of paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met. ##### [860-10-55-79A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-79A) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:d39d2df9c6328e2e5fb559bf68b10933a10c40c08af4f35837083820f156055a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance addresses the application of the glossary term _continuing involvement_. All available evidence shall be considered, including, but not limited to, all of the following: 1. a Explicit written arrangements 2. b Communications between the transferor and the transferee or its beneficial interest holders 3. c Unwritten arrangements customary in similar transfers. ##### [860-10-55-79B](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-79B) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:01a0aa3acfc41e23903524859acf35e26201c19342696d4a67cbae5a010c8941 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of continuing involvement include, but are not limited to, all of the following: 1. a Servicing arrangements 2. b Recourse or guarantee arrangements 3. c Agreements to purchase or redeem transferred financial assets 4. cc Options written or held 5. d Derivative instruments that are entered into contemporaneously with, or in contemplation of, the transfer 6. e Arrangements to provide financial support 7. f Pledges of collateral 8. g The transferor's beneficial interests in the transferred financial assets. #### Illustrations ##### [860-10-55-80](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-80) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:ec7400e8457e639b5b3b8ca0ed6390a808a22116a7dcadf59e20b6e1ad01d54b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [860-10-55-65](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-65). This Example has the following assumption. ##### [860-10-55-81](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-81) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:24ebc4fc0ce950a6b5a62c60448b1f096042b219bee54623f438a2ead4c9d22e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An accepting bank assumes a liability to pay a customer's vendor and obtains a risk participation from another bank. The details of the banker's acceptance are as follows: 1. a Face value of the draft provided to the vendor: $1,000 2. b Term of the draft provided to the vendor: 90 days 3. c Commission with an annual rate of 10 percent: 25 4. d Fee paid for risk participation: 10. ##### [860-10-55-82](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-82) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:52.081Z to 2026-09-10T02:05:52.081Z Record version: sha256:4c16cab4a83a45c70337e32643b7f7ad4978019bea6a8533f8ae79826d5b6abe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accepting bank would make the following journal entries. - ![](https://asc.understandingaccounting.org/asc-img/GUID-6CA956C0-D33C-4127-82F2-22D70187CFF6-low.gif) Journal Entries for Accepting Bank At issuance of acceptance: Receivable from customer " $1,000 " Cash 25 Time draft payable to vendor " $1,000 " Deferred acceptance commission revenue 25 At purchase of risk participation from a participating bank: Guarantee purchased 10 Cash 10 Upon presentation of the accepted time draft: Time draft payable to vendor " 1,000 " Deferred acceptance commission revenue 25 Cash " 1,000 " Acceptance commission revenue 25 "Upon collection from the customer (or the participating bank, if the customer defaults):" Cash " 1,000 " Guarantee expense 10 Receivable from customer " 1,000 " Guarantee purchased 10 - ![](https://asc.understandingaccounting.org/asc-img/GUID-CEE22628-84CA-4D17-B90C-954D9AABB5C0-low.gif) Journal Entries for Participating Bank Upon issuing the risk participation: Cash $10 Guarantee liability $10 Upon payment by the customer to the accepting bank: Guarantee liability 10 Guarantee revenue 10 OR: In the event of total default by the customer: Guarantee loss 990 Guarantee liability 10 Cash (paid to accepting bank) " 1,000 " Source downloaded (UTC): 2026-09-10T02:05:54.756Z to 2026-09-10T02:05:54.756Z Record version: sha256:eb35e473abc3fea6997ad1c8a62add6abaaff30384e70ce2a3bd5c3d0f3727d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/860/10/#60-relationships) SEC content: no #### Consolidation ##### [860-10-60-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:54.756Z to 2026-09-10T02:05:54.756Z Record version: sha256:17e032b1d430413da0f4ab6c0f4c43cd332f72a93d9080344a37241b528acabf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the requirements for preparation of consolidated financial statements, see the General Subsections of Subtopic 810-10. ##### [860-10-60-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:54.756Z to 2026-09-10T02:05:54.756Z Record version: sha256:33ae42ae4827e59dca3fe1be7a8e3c2ed1a2f1e4e90f3fad8ca2e43d5e85d318 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on consolidation of variable interest entities (VIEs), see the Variable Interest Entities Subsections of Subtopic 810-10, which clarify the application of the General Subsections of that Subtopic to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. Source downloaded (UTC): 2026-09-10T02:05:58.508Z to 2026-09-10T02:05:58.508Z Record version: sha256:23dfbe5ca75409c75a3df8133d4f80f0652810c4812ab10ef9dc1ead858457b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/860/10/#65-transition-and-open-effective-date-information) SEC content: no ##### [860-10-65-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:58.508Z to 2026-09-10T02:05:58.508Z Record version: sha256:008a7748019e6fca1d3c745e7cb7e59446172f0bfa12c177d4845a77811d1610 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 05/20/2010 after the end of the transition period stated in FASB Staff Position FAS 140-3, _Accounting for Transfers of Financial Assets and Repurchase Financing Transactions_. ##### [860-10-65-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-65-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:58.508Z to 2026-09-10T02:05:58.508Z Record version: sha256:297b66dd1af33172bb1bbb8403dd37f36a31215756a509fa0e78db06eeca4bcf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 03/23/2010 after the end of the transition period stated in FSP FAS 140-4 and FIN 46(R)-8, _Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities_. ##### [860-10-65-3](https://asc.understandingaccounting.org/asc/860/10/#860-10-65-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:58.508Z to 2026-09-10T02:05:58.508Z Record version: sha256:b955db2b0a90f79695ec655bf8ef90c86e97982aeaa17deec715627fd9a2bfab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 05/18/2011 after the end of the transition period stated in FASB Statement No. 166, _Accounting for Transfers of Financial Assets_. ##### [860-10-65-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-65-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:58.508Z to 2026-09-10T02:05:58.508Z Record version: sha256:dd8a0c65021872b22fbb343c72d113f55117adaace72fb6ba42ac9ad090f7d84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 06/17/2013 after the end of the transition period stated in Accounting Standards Update No. 2011-03, _Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements_. ##### [860-10-65-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-65-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:05:58.508Z to 2026-09-10T02:05:58.508Z Record version: sha256:ee96713c49ef1cb54cbbe2d93146cab9bc155ccb159c1784c7cfa9cec467362d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/05/2017 after the end of the transition period stated in Accounting Standards Update No. 2014-11, _Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures_. Source downloaded (UTC): 2026-09-10T02:06:04.593Z to 2026-09-10T02:06:04.593Z Record version: sha256:0c791085e34a73d86ba188b4ebfca94b0796ca07843473eb4f2a7afad307fcee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-S40: SEC 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/860/10/#sec-40-derecognition) SEC content: yes #### Sale of Mortgage Servicing Rights with a Subservicing Agreement ##### [860-10-S40-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-S40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:04.593Z to 2026-09-10T02:06:04.593Z Record version: sha256:2844772b93aa0c531621cc4174d9e51c2e24d82967387ecd197f6da7d7847d14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [860-10-S99-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-S99-1), SEC Observer Comment: Treatment of a Sale of Mortgage Servicing Rights with a Subservicing Agreement, for SEC Staff views on such transactions. #### Transfer of Certain Nonperforming Assets by Distribution to Shareholders or a Contribution of Assets to Unrelated Third Parties ##### [860-10-S40-2](https://asc.understandingaccounting.org/asc/860/10/#860-10-S40-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:04.593Z to 2026-09-10T02:06:04.593Z Record version: sha256:69d00c075836c67e5a96bfc0f4cc9bc725a8f3eac5d2616e71870983cbb4eb18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [942-810-S99-1](https://asc.understandingaccounting.org/asc/810/942/#810-942-S99-1), SAB Topic 5.V, for SEC Staff views on accounting and disclosure for certain transfers of financial assets that do not fall within the scope of Topic 860. Source downloaded (UTC): 2026-09-10T02:06:08.120Z to 2026-09-10T02:06:08.120Z Record version: sha256:2156bfdc1dc56c282b912552198b3595098e81b8c420925d435681bf6eb26a6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/860/10/#sec-50-disclosure) SEC content: yes #### Repurchase and Reverse Repurchase Agreements ##### [860-10-S50-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:08.120Z to 2026-09-10T02:06:08.120Z Record version: sha256:bc1231e3474cb87de4d1a11229c95f03f10591564e9f977b88f718004d948ef4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [235-10-S99-1](https://asc.understandingaccounting.org/asc/235/10/#235-10-S99-1), Regulation S-X Rule 4-08(m), for disclosure requirements for repurchase and reverse repurchase agreements. Source downloaded (UTC): 2026-09-10T02:06:11.378Z to 2026-09-10T02:06:11.378Z Record version: sha256:369e4f3f261ee625ecdd991cc72a8f4a057a141fc58c2acfde2049fc6076a8a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-10-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/860/10/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [860-10-S99-1](https://asc.understandingaccounting.org/asc/860/10/#860-10-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:11.378Z to 2026-09-10T02:06:11.378Z Record version: sha256:9ac2a5b17e1c9ea59300b3201014739c748b2b4033690b5bced0dfa698efd10c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SEC Observer Comment: Balance Sheet Treatment of a Sale of Mortgage Servicing Rights with a Subservicing Agreement. - In accordance with paragraph [860-50-40-7](https://asc.understandingaccounting.org/asc/860/50/#860-50-40-7), a sale of mortgage servicing rights with a subservicing contract could be treated as a sale with the gain deferred if substantially all of the risks and rewards have been transferred to the transferree. In the view of the SEC staff, a transaction that, in substance, transfers only a portion of the servicing revenues does not result in transfer of substantially all of the risks and rewards of ownership and the accounting for those transactions should be guided by the guidance in paragraph [470-10-25-1](https://asc.understandingaccounting.org/asc/470/10/#470-10-25-1). Source downloaded (UTC): 2026-09-10T02:06:13.207Z to 2026-09-10T02:06:48.464Z Record version: sha256:3ad7b9d92f7626e9f2d100380ffee3772570971732261c93eba5cb2f726a3276 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20: Transfers and Servicing — Sales of Financial Assets ### Machine-generated study aids ```json { "summary": "ASC 860-20 tells a transferor what to record once a transfer of financial assets qualifies as a sale under 860-10-40-5, and what happens if the transferor later regains control. For a sale of entire financial assets, the transferor derecognizes the assets, recognizes at fair value all assets obtained and liabilities incurred (cash, servicing assets/liabilities, beneficial interests, options, forwards, swaps), and books the gain or loss in earnings; for a participating interest, the prior carrying amount is allocated between the interest sold and the interest retained on relative fair values. If a change in law or circumstance causes the transferor to regain control, it rerecognizes the assets and related liabilities at fair value as if it purchased them, with no gain or loss on its beneficial interests.", "key_points": [ "On a sale of an entire financial asset or group, the transferor derecognizes the transferred assets, recognizes assets obtained/liabilities incurred, and recognizes gain or loss in earnings (860-20-40-1B); any amount in AOCI for an available-for-sale asset is recognized in earnings at the transfer date.", "On a sale of a participating interest, the previous carrying amount of the entire financial asset is allocated between the participating interest sold and the interest retained based on relative fair values at the transfer date; the retained interest equals the carrying amount less the amount derecognized (860-20-40-1A).", "Assets obtained and liabilities incurred by the transferor (cash, servicing assets and liabilities, beneficial interests, puts/calls including recourse obligations, forwards, swaps) are recognized (860-20-25-1) and initially measured at fair value (860-20-30-1); the transferee recognizes all assets obtained and liabilities incurred (860-20-25-3) at fair value, except PCD assets and 325-40-30-1A beneficial interests (860-20-30-2).", "Proceeds equal cash and other assets obtained (including beneficial interests and separately recognized servicing assets) less liabilities incurred, with concurrent derivatives part of the proceeds (860-20-25-4); no portion of the resulting gain or loss may be deferred (860-20-25-6).", "Retained credit risk is a separate liability only if the transferor could be required to pay more than the cash flows of the interest it obtained; otherwise it is reflected in measuring the beneficial interest (860-20-25-6; 860-20-55-24).", "If the transferor regains control, it accounts for the change as a purchase of the assets in exchange for liabilities assumed, rerecognizing them at fair value on that date (860-20-25-9 through 25-10; 860-20-30-3), with no gain or loss on its beneficial interests (860-20-25-12), no change to the servicing asset (860-20-25-10(b)), and an allowance for credit losses under Topic 326 (860-20-25-13).", "Financial assets (other than those within Subtopic 815-10) that can contractually be prepaid or settled such that the holder would not recover substantially all of its recorded investment must be measured like available-for-sale or trading debt securities and can never be held-to-maturity, however remote prepayment is (860-20-35-2; 860-20-35-5)." ], "categories": [ "Derecognition", "Financial instruments", "Initial measurement", "Disclosure" ], "audience_level": "advanced", "student_note": "This is the \"what do I book after the sale test is passed\" half of Topic 860 — the sale/secured-borrowing test itself lives in 860-10-40-5. A common misunderstanding is thinking retained recourse or credit risk lets you defer part of the gain: 860-20-25-6 expressly forbids deferring gain, requiring instead a separately recognized liability at fair value (or reflection in the beneficial interest's measurement).", "related_topics": [ "860-10", "860-30", "860-50", "325-40", "326", "320" ], "key_concepts": [ "sale accounting for transfers", "participating interest", "beneficial interest", "servicing asset and liability", "proceeds and gain or loss on sale", "regaining control / rerecognition", "removal-of-accounts provision", "continuing involvement disclosures" ] } ``` Source downloaded (UTC): 2026-09-10T02:06:13.207Z to 2026-09-10T02:06:13.207Z Record version: sha256:7355df9f94d118b62c736db47d8c24cf17ff2227bb83a634369f39ec516bc600 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/860/20/#00-status) SEC content: no ##### [860-20-00-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:13.207Z to 2026-09-10T02:06:13.207Z Record version: sha256:e581f81a62461bc21cfc38f53073f340d952c4a4e229e15b065b861b67c89e5b 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
AffiliateRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
Beneficial InterestsAmendedAccounting Standards Update No. 2009-1612/23/2009
CashAddedAccounting Standards Update No. 2009-1612/23/2009
Continuing InvolvementAmendedAccounting Standards Update No. 2009-1612/23/2009
ContractAddedAccounting Standards Update No. 2016-0202/25/2016
Derivative Financial InstrumentAmendedAccounting Standards Update No. 2024-0203/29/2024
Derivative InstrumentAddedAccounting Standards Update No. 2009-1612/23/2009
Financial Asset (1st def.)SupersededAccounting Standards Update No. 2016-1912/14/2016
Financial Asset (1st def.)AddedAccounting Standards Update No. 2016-1306/16/2016
Financial Asset (2nd def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Financial AssetAddedAccounting Standards Update No. 2009-1612/23/2009
Financial InstrumentAmendedAccounting Standards Update No. 2024-0203/29/2024
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
LesseeAddedAccounting Standards Update No. 2016-0202/25/2016
LessorAddedAccounting Standards Update No. 2016-0202/25/2016
Participating InterestAddedAccounting Standards Update No. 2009-1612/23/2009
ProceedsAmendedAccounting Standards Update No. 2009-1612/23/2009
Purchased Financial Assets with Credit DeteriorationAmendedAccounting Standards Update No. 2016-1912/14/2016
Purchased Financial Assets with Credit DeteriorationAddedAccounting Standards Update No. 2016-1306/16/2016
Repurchase AgreementAddedAccounting Standards Update No. 2014-1106/12/2014
Servicing AssetsAddedAccounting Standards Update No. 2009-1612/23/2009
TransfereeAmendedAccounting Standards Update No. 2009-1612/23/2009
TransferorAmendedAccounting Standards Update No. 2009-1612/23/2009
Transferred Financial AssetsAmendedAccounting Standards Update No. 2014-0603/14/2014
Transferred Financial AssetsAddedAccounting Standards Update No. 2009-1612/23/2009
Underlying AssetAddedAccounting Standards Update No. 2016-0202/25/2016
860-20-10-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-25-1AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-25-3AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-25-4AmendedAccounting Standards Update No. 2015-1006/12/2015
860-20-25-4AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-25-5SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-25-6AmendedAccounting Standards Update No. 2012-0410/01/2012
860-20-25-6AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-25-7SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-25-8 through 25-12
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-25-9AmendedMaintenance Update 2016-05 (PDF)04/12/2016
860-20-25-13AmendedAccounting Standards Update No. 2020-0303/09/2020
860-20-30-1 through 30-3
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-30-2AmendedAccounting Standards Update No. 2016-1306/16/2016
860-20-30-4SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-35-1 through 35-3
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-35-3AmendedAccounting Standards Update No. 2016-1306/16/2016
860-20-35-5AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-35-6AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-35-7SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-35-8AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-35-9AmendedAccounting Standards Update No. 2016-1306/16/2016
860-20-40-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-40-1AAmendedAccounting Standards Update No. 2022-0103/28/2022
860-20-40-1AAddedAccounting Standards Update No. 2009-1612/23/2009
860-20-40-1BAmendedAccounting Standards Update No. 2022-0103/28/2022
860-20-40-1BAddedAccounting Standards Update No. 2009-1612/23/2009
860-20-40-2SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-40-3AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-50-1AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-50-2AddedAccounting Standards Update No. 2009-1612/23/2009
860-20-50-2A through 50-4
AmendedAccounting Standards Update No. 2025-1112/08/2025
860-20-50-2AAddedAccounting Standards Update No. 2016-1912/14/2016
860-20-50-3 through 50-5
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-50-4A through 50-4D
AddedAccounting Standards Update No. 2014-1106/12/2014
860-20-50-4DAmendedAccounting Standards Update No. 2025-1112/08/2025
860-20-50-5AmendedAccounting Standards Update No. 2025-1112/08/2025
860-20-50-5AmendedAccounting Standards Update No. 2016-1306/16/2016
860-20-50-6 through 50-9SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-55-1AmendedAccounting Standards Update No. 2016-0202/25/2016
860-20-55-1AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-2 through 55-15SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-55-16AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-18AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-19AmendedAccounting Standards Update No. 2016-1306/16/2016
860-20-55-19AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-24AmendedMaintenance Update 2014-07 (PDF)03/17/2014
860-20-55-24AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-24AAddedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-25AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-26AmendedAccounting Standards Update No. 2016-0202/25/2016
860-20-55-26AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-27AmendedAccounting Standards Update No. 2016-0202/25/2016
860-20-55-28SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-55-29AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-31AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-32AmendedAccounting Standards Update No. 2012-0410/01/2012
860-20-55-33AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-38 through 55-41
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-41AmendedAccounting Standards Update No. 2016-1912/14/2016
860-20-55-43 through 55-47
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-49 through 55-57SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-55-58AmendedAccounting Standards Update No. 2016-0202/25/2016
860-20-55-58AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-59AmendedAccounting Standards Update No. 2016-0202/25/2016
860-20-55-60 through 55-82SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-55-83AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-85 through 55-88
AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-89SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-55-90AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-91AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-92AmendedAccounting Standards Update No. 2009-1612/23/2009
860-20-55-93 through 55-107SupersededAccounting Standards Update No. 2009-1612/23/2009
860-20-55-108AmendedMaintenance Update 2016-11 (PDF)06/27/2016
860-20-55-108AddedAccounting Standards Update No. 2014-1106/12/2014
Source downloaded (UTC): 2026-09-10T02:06:15.692Z to 2026-09-10T02:06:15.692Z Record version: sha256:aa120b68f5648b8e098acd55ca68ec37dbdb06b4e3240d735f51cdc6ef1a59e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/860/20/#05-overview-and-background) SEC content: no ##### [860-20-05-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:15.692Z to 2026-09-10T02:06:15.692Z Record version: sha256:5c5bc79d2d5841fadacfb2ed7d28fbe780f79b186b295ebcb82beefbf363fee2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the accounting for 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.") 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.") that satisfies the conditions for sale accounting in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) and the accounting if a [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.") regains control of assets previously sold. Source downloaded (UTC): 2026-09-10T02:06:19.355Z to 2026-09-10T02:06:19.355Z Record version: sha256:3a503de32a32973b3e43ac128ae5fb2c6a0bc618965908b89f8769134827d079 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/860/20/#10-objectives) SEC content: no ##### [860-20-10-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:19.355Z to 2026-09-10T02:06:19.355Z Record version: sha256:ca2e31c35a810e38c0fdd7f47cc7490c59cbd4b1eec488dece33aa242bf04030 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): 2026-09-10T02:06:22.795Z to 2026-09-10T02:06:22.795Z Record version: sha256:31de706e1e4f95200916eff95240abc9a6fc4525bf8947fddcccd326dac0722c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/860/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [860-20-15-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:22.795Z to 2026-09-10T02:06:22.795Z Record version: sha256:8bf1ba147ee782269216a5c8533f9869989a4e0f1eae200ff0818e5cf5796a68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 860-10-15. Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:3e91504ff564cbd0279e32a941332f29cfd5605abd633ccc225226eeeaf83d96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/860/20/#25-recognition) SEC content: no ##### [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:fc52af69548b7078cf8547a29b7c224936068d4b6a8f838e28996542a9fd3ec4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Section 860-20-40 provides derecognition guidance a [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.") ([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.")) applies upon completion of 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.") 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.") that satisfies paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)'s conditions to be accounted for as a sale. Upon completion of such a transfer, the transferor (seller) shall also recognize any assets obtained or liabilities incurred in the sale, including, but not limited to, any of the following: 1. a Cash 2. b Servicing assets 3. c Servicing liabilities 4. d In a sale of an entire financial asset or a group of entire financial assets, any of the following: 1. 1 The transferor's beneficial interest in the [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") 2. 2 Put or call options held or written (for example, guarantee or recourse obligations) 3. 3 Forward commitments (for example, commitments to deliver additional receivables during the revolving periods of some [securitizations](https://asc.understandingaccounting.org/glossary/s/#securitization "The process by which financial assets are transformed into securities.")) 4. 4 Swaps (for example, provisions that convert interest rates from fixed to variable). See Examples 1, 2, and 5 (paragraphs [860-20-55-43 through 55-59](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-43) ) for illustration of this guidance. ##### [860-20-25-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:98ba35ff80103998e1faf4a423bcb499cd447cf01ad508d0ece20af1046b1054 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although a transfer of securities may not be considered to have reached completion until the settlement date, this Subtopic does not modify other generally accepted accounting principles (GAAP) that require accounting at the trade date for certain contracts to purchase or sell securities. ##### [860-20-25-3](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:8e2d3ee42fb339c5550fab93b8df4b068c3280a9e917550671ff3438d128b1ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.") shall recognize all assets obtained (including any [participating interest(s)](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest.") obtained) and any liabilities incurred. #### Assets Obtained and Liabilities Incurred as Proceeds ##### [860-20-25-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:ae722494bc438693db45e2b246b2458204e94d7444b16700543f4d06dc6b1647 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The proceeds from a sale of financial assets consist of the cash and any other assets obtained, including beneficial interests and separately recognized servicing assets, in the transfer less any liabilities incurred, including separately recognized servicing liabilities. Any asset obtained is part of the proceeds from the sale. Any liability incurred, even if it is related to the transferred financial assets, is a reduction of the proceeds. Any [derivative financial instrument](https://asc.understandingaccounting.org/glossary/d/#derivative-financial-instrument "A derivative instrument that is a financial instrument.") entered into concurrently with a transfer of financial assets is either an asset obtained or a liability incurred and part of the proceeds received in the transfer. ##### [860-20-25-5](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:1693a078159ee7e4f9788c7e7da429597f71d625a97d23e566939905da2c4482 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/). #### Distinguishing New Interests Obtained from Part of a Beneficial Interest Obtained ##### [860-20-25-6](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:92e8d128f23347e60e52bbbe8e9d78704babc6abcecb605f0651eb0b8eecb9a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining whether credit risk is a separate liability or part of a beneficial interest that has been obtained by the transferor, the transferor should focus on the source of cash flows in the event of a claim by the transferee. If the transferee can only look to cash flows from the underlying financial assets, the transferor has obtained a portion of the credit risk only through the interest it obtained and a separate obligation shall not be recognized. Credit losses from the underlying assets would affect the measurement of the interest that the transferor obtained. In contrast, if the transferor could be obligated for more than the cash flows provided by the interest it obtained and, therefore, could be required to reimburse the transferee for credit-related losses on the underlying assets, the transferor shall record a separate liability. It is not appropriate for the transferor to defer any portion of a resulting gain or loss (or to eliminate gain on sale accounting, as it is sometimes described in practice). ##### [860-20-25-7](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:73f991aed7733806814ab0a2a6a2b4c1d0a75d0b6f3f0a9d5eae5ac3c86dc6f2 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/). #### Regaining Control of Financial Assets Sold ##### [860-20-25-8](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:6c698b8b05fcf8fa77a32e689a9d30cf2b924ab966ca6dee5d7351bb41814bab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-40-41](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-41) explains that a change in law or other circumstance may result in a transferred portion of an entire financial asset no longer meeting the conditions of a participating interest (see paragraph [860-10-40-6A](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A)) or the transferor's regaining control of transferred financial assets after a transfer that was previously accounted for as a sale, because one or more of the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are no longer met. ##### [860-20-25-9](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:269ff6f800a6e9e964b43dec28fe13254ecf7677ae0a77862e471ce56271449b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Such changes shall be accounted for in the same manner as a purchase of the transferred financial assets from the former transferee(s) in exchange for liabilities assumed unless they arise solely from either: 1. a Consolidation of an entity involved in the transfer at a subsequent date (see paragraph [860-20-25-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-10)) 2. b A change in market prices (for example, an increase in price that moves into the money a [freestanding call option](https://asc.understandingaccounting.org/glossary/f/#freestanding-call-option "A call option that is neither embedded in nor attached to an asset subject to that call option.") on a non-readily-obtainable, transferred financial asset that was originally sufficiently out of the money that it was judged not to constrain the transferee). See the related guidance beginning in paragraph [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1). ##### [860-20-25-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:95e198bdf09f1abec42f815199ef6373544683ff995655425aee28baf43b1cfe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. After that change, the transferor shall do all of the following: 1. a Recognize in its financial statements those transferred financial assets together with liabilities to the former transferee(s) or beneficial interest holders of the former transferee(s). 2. b Not change the accounting for the servicing asset related to the previously sold financial assets. That is, even though the transferor has regained control over the previously sold assets, the cash flows from those assets will contractually be paid to the special-purpose entity, which will then distribute the proceeds to satisfy its contractual obligations (including obligations to the beneficial interest holders). Because the transferor, as servicer, is still contractually required to collect the asset's cash flows for the benefit of the special-purpose entity and otherwise service the assets, it shall continue to recognize the servicing asset and assess the asset for impairment if subsequently measured using the amortization method, as required by paragraph [860-50-35-9](https://asc.understandingaccounting.org/asc/860/50/#860-50-35-9). Once a servicing asset is recognized it shall not be added back to the underlying asset. Even when the transferor has regained control over the underlying assets through an event that triggers a transferor to rerecognize previously transferred assets that were accounted for as having been sold, the related servicing asset shall continue to be separately recognized. 3. c Continue to account for the transferor's interests in those underlying financial assets apart from any rerecognized financial assets. That is, the transferor's interests shall not be combined with and accounted for with the rerecognized financial assets. Example 10 (see paragraph [860-20-55-83](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-83)) illustrates this guidance. However, a subsequent event that results in the transferor reclaiming those financial assets from the transferee, for example, the exercise of a removal-of-accounts provision or the consolidation by the transferor of the securitization entity in accordance with applicable GAAP, including the Variable Interest Entities Subsections of Subtopic 810-10, would result in a recombination of the transferor's interests with the underlying financial assets. For guidance on consolidation, which is relevant to determining whether a transferor must consolidate an entity involved in a transfer that was accounted for as a sale, see Topic 810. ##### [860-20-25-11](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:ffc6d93864f9640615a3503f021d706f1a15d7beae95767c1430dbcc75e978dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether the removal-of-accounts provision is exercised or not, the transferor shall recognize any financial assets subject to the removal-of-accounts provision if all of the following conditions are met: 1. a A third party's action (such as default or cancellation) or decision not to act (expiration) occurs. 2. b The occurrence allows removal of assets to be initiated solely by the transferor. 3. c The provision provides a more-than-trivial benefit to the transferor. For example, once a contingency is met (such as when a given loan goes into default), the call option on that asset (loan) is no longer contingent. ##### [860-20-25-12](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:1dfa7963d7555f5fda90c5e07023cf98004ce8c2fa88abc2c65f0ca313462f5f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon application of paragraph [860-20-25-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-10), no gain or loss shall be recognized in earnings with respect to any of the transferor's [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."). A gain or loss may be recognized upon the exercise of a removal-of-accounts provision or similar contingent right with respect to the repurchased transferred financial assets that were sold if the removal-of-accounts provision or similar contingent right held by the transferor is not accounted for as a derivative instrument under Subtopic 815-10 and is not at the money, resulting in the fair value of those repurchased financial assets being greater or less than the related obligation to the transferee. ##### [860-20-25-13](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-13) Pending content: yes Source downloaded (UTC): 2026-09-10T02:06:28.412Z to 2026-09-10T02:06:28.412Z Record version: sha256:ede16de8b0dd3c9fb42f51b4b5f20a2ad8837c5c413c3caa2a667897432be36f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For financial assets rerecognized in accordance with paragraph [860-20-25-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-10), an entity shall initially recognize a financial asset at fair value. An entity shall then apply relevant guidance, including this Topic, Topic 310 on receivables, Topic 320 on investments—debt securities, Topic 321 on investments—equity securities, Topic 323 on investments—equity method and joint ventures, and Topic 325 on investments—other. In addition, an entity shall measure an allowance for credit losses in accordance with Topic 326, if applicable. 1. a For those financial assets that are not [purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.") within the scope of Topic 326, an entity shall recognize an allowance for credit losses with a corresponding charge to credit loss expense as of the reporting date. 2. b For those financial assets that are purchased financial assets with credit deterioration (which includes beneficial interest that meets the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)) within the scope of Topic 326, an entity shall recognize an allowance for credit losses in accordance with Topic 326 with a corresponding increase to the amortized cost basis of the financial asset(s) as of the recognition date. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [326-10-65-7](https://asc.understandingaccounting.org/asc/326/10/#326-10-65-7)For financial assets rerecognized in accordance with paragraph [860-20-25-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-10), an entity shall initially recognize a financial asset at fair value. An entity shall then apply relevant guidance, including this Topic, Topic 310 on receivables, Topic 320 on investments—debt securities, Topic 321 on investments—equity securities, Topic 323 on investments—equity method and joint ventures, and Topic 325 on investments—other. In addition, an entity shall measure an allowance for credit losses in accordance with Topic 326, if applicable. 1. a For those financial assets that are not [purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.")or [purchased seasoned loans](https://asc.understandingaccounting.org/glossary/p/#purchased-seasoned-loans "(P) December 16, 2026; (N) December 16, 2026 326-10-65-7 Paragraphs 326-20-30-16326-20-30-17326-20-30-18 define the term purchased seasoned loans.")within the scope of Topic 326, an entity shall recognize an allowance for credit losses with a corresponding charge to credit loss expense as of the reporting date. 2. b For those financial assets that are purchased financial assets with credit deterioration (which includes beneficial interest that meets the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)) and purchased seasoned loans within the scope of Topic 326, an entity shall recognize an allowance for credit losses in accordance with Topic 326 with a corresponding increase to the amortized cost basis of the financial asset(s) as of the recognition date. Source downloaded (UTC): 2026-09-10T02:06:31.009Z to 2026-09-10T02:06:31.009Z Record version: sha256:9461de76621084096b569effeb6e1c8db083589ecdd43ff15f5fa44b301c9317 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/860/20/#30-initial-measurement) SEC content: no ##### [860-20-30-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:31.009Z to 2026-09-10T02:06:31.009Z Record version: sha256:25256a755c64d9370d5d1885589d85c87c630f2cf2a649bcbd607d7f2fbe29f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [transferor](https://asc.understandingaccounting.org/glossary/t/#transferor "An entity that transfers a financial asset, an interest in a financial asset, or a group of financial assets that it controls to another entity.") shall initially measure at fair value any asset obtained (or liability incurred) and recognized under paragraph [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1). ##### [860-20-30-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-2) Pending content: yes Source downloaded (UTC): 2026-09-10T02:06:31.009Z to 2026-09-10T02:06:31.009Z Record version: sha256:4e92b463735ff53af85f3e36197d5a9498ce0db5da0c8aaa76cf40a8a740740b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.") shall initially measure, at fair value, any asset or liability recognized under paragraph [860-20-25-3](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-3), unless it is a [purchased financial asset with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.") or is a beneficial interest that meets the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A), in which case the transferee shall apply the guidance in Topic 326 on measurement of credit losses to determine the initial amortized cost basis. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [326-10-65-7](https://asc.understandingaccounting.org/asc/326/10/#326-10-65-7)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.") shall initially measure, at fair value, any asset or liability recognized under paragraph [860-20-25-3](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-3), unless it is a [purchased financial asset with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis."), a beneficial interest that meets the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A), or a [purchased seasoned loan](https://asc.understandingaccounting.org/glossary/p/#purchased-seasoned-loans "(P) December 16, 2026; (N) December 16, 2026 326-10-65-7 Paragraphs 326-20-30-16326-20-30-17326-20-30-18 define the term purchased seasoned loans."), in which case the transferee shall apply the guidance in Topic 326 on measurement of credit losses to determine the initial amortized cost basis. #### Regaining Control of Financial Assets Sold ##### [860-20-30-3](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:31.009Z to 2026-09-10T02:06:31.009Z Record version: sha256:c12624b8cc4c8961c6fa2bdee7ce6141e226e789095eb0f79d64d09b629aa6db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The transferor shall initially measure [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") and liabilities that are rerecognized under paragraph [860-20-25-10(a)](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-10) as a result of regaining control of the [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.") sold at fair value on the date of the change as if the transferor purchased the transferred financial assets and assumed the liabilities on that date. ##### [860-20-30-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:31.009Z to 2026-09-10T02:06:31.009Z Record version: sha256:3122e8e00f84b293b1f30a29461822532b4934368655c6cf48999745d03aaeb9 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): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:e575a4420b1e1ae2dfb312c509cd80db8f78c30b00ba46bb3f43988402b8df68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/860/20/#35-subsequent-measurement) SEC content: no ##### [860-20-35-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:4d2dfa50960bb3f8665c214a26ee086a1e3fb70342e387a4b9df2d930722c8e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section is organized as follows: 1. a [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.") subject to prepayment 2. b [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 3. c Credit enhancements 4. d [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.") 5. e Transaction costs. #### Financial Assets Subject to Prepayment ##### [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:350a23666ea7f2020097eecbd6301c8ba8e6b3924383975759d3326af4a6c0c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial assets, except for instruments that are within the scope of Subtopic 815-10, that can contractually be prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment shall be subsequently measured like investments in debt securities classified as available for sale or trading under Topic 320. Examples of such financial assets include, but are not limited to, [interest-only strips](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."), other beneficial interests, loans, or other receivables. Interest-only strips and similar interests that meet the definition of [securities](https://asc.understandingaccounting.org/glossary/s/#security "A share, participation, or other interest in property or in an entity of the issuer or an obligation of the issuer that has all of the following characteristics: It is either represented by an instrument issued in bearer or registered form or, if not represented by an instrument, is registered in books maintained to record transfers by or on behalf of the issuer. It is of a type commonly dealt in on securities exchanges or markets or, when represented by an instrument, is commonly recognized in any area in which it is issued or dealt in as a medium for investment. It either is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests, or obligations.") are included in the scope of that Topic. Therefore, all relevant provisions of that Topic (including the disclosure requirements) shall be applied. See related implementation guidance beginning in paragraph [860-20-55-33](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-33). ##### [860-20-35-3](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:7b5ba859b5e1fa20c05d2fb25414594bc08730c451caee21d4113986c0916049 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Interest-only strips and similar interests that are not in the form of securities are not within the scope of Topic 320 but shall be measured like investments in debt securities classified as available for sale or trading. In that circumstance, all of the measurement provisions of that Topic, as well as the provisions of Topic 326 on measurement of credit losses, shall be followed. However, other provisions of Topics 320 and 326, such as those addressing disclosures, are not required to be applied. Paragraph [320-10-15-9](https://asc.understandingaccounting.org/asc/320/10/#320-10-15-9) explains that, for debt securities within its scope, Subtopic 325-40 provides incremental guidance on accounting for and reporting discount and credit losses. ##### [860-20-35-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:785f534dfc893f506eba690ed75c0a3936fb0dfb5d778e4178867ddd0c985f9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The requirement in paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) does not apply to situations in which events that are not the result of contractual provisions, for example, borrower default or changes in the value of an instrument's denominated currency relative to the entity's functional currency, cause the holder not to recover substantially all of its recorded investment. ##### [860-20-35-5](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:5877804c1b4090b5034c3098100c66965b5e58b9e34c1b0eabac0ab2806d8f65 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A financial asset that can be contractually prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment shall not be classified as held-to-maturity even if the investor concludes that prepayment or other forms of settlement are remote. The probability of prepayment or other forms of settlement that would result in the holder's not recovering substantially all of its recorded investment is not relevant in deciding whether the provisions of paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) apply to those financial assets. ##### [860-20-35-6](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:50ced2ed1679d0cf9572a8060cec506a7e89d8eefa50503fcb2083ecdb36b4bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not specifically address the subsequent measurement of a transferor's beneficial interests that cannot be contractually prepaid or settled in such a way that the owner would not recover substantially all of its recorded investment. ##### [860-20-35-7](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:ebb757474ccb7aa324077caff7d3c1c39821d76d4c5422142ece9e422369a3ca 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/). #### Credit Enhancements ##### [860-20-35-8](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:f2e2f5bd448937b0ce9a16c00fe3d76eb3aa58d7ca0029ffd1da63fe35d5a008 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. While this Subtopic does not specifically address the subsequent measurement of credit enhancements, there are some factors to consider. Factors such as how much cash the transferor will receive from, for example, a cash reserve account, and when it will receive cash inflows depend on the performance of the transferred financial assets. Entities shall regularly review those assets for impairment because of their nature. Entities shall look to other guidance for subsequent measurement including guidance for impairment based on the nature of the credit enhancement. #### Beneficial Interests ##### [860-20-35-9](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:666cc64e21605f3c5efa286ff5bd9d4d633990dc0c4269687117227b36c2690b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Beneficial interests shall be evaluated for credit losses, including at the time paragraphs [860-20-25-8 through 25-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-8) are applied. See Section 325-40-35 for guidance on credit losses applicable to beneficial interests in securitized financial assets. #### Transaction Costs ##### [860-20-35-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:35.142Z to 2026-09-10T02:06:35.142Z Record version: sha256:803b755d8d6666762408e0ad69daf8bc83ab8fb37b84abfe23748bd3ca9afca3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transaction costs relating to a sale of the receivables may be recognized over the initial and reinvestment periods in a rational and systematic manner unless the transaction results in a loss. Transaction costs for a past sale are not an asset and thus are part of the gain or loss on sale. In a credit card [securitization](https://asc.understandingaccounting.org/glossary/s/#securitization "The process by which financial assets are transformed into securities."), however, some of the transaction costs incurred at the outset relate to the future sales that are to occur during the revolving period, and thus can qualify as an asset. Source downloaded (UTC): 2026-09-10T02:06:38.468Z to 2026-09-10T02:06:38.468Z Record version: sha256:924e7935f59482248838a8ac2c86df84458b77900a459b52c4bfe25b6ea60264 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/860/20/#40-derecognition) SEC content: no ##### [860-20-40-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:38.468Z to 2026-09-10T02:06:38.468Z Record version: sha256:fa9dcdddea8dc4277e190d534586b7f646030244f0bb04ad38faf0b12a379f09 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/). #### Sale of a Participating Interest ##### [860-20-40-1A](https://asc.understandingaccounting.org/asc/860/20/#860-20-40-1A) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:38.468Z to 2026-09-10T02:06:38.468Z Record version: sha256:e4eb79b1374f35733f3e5c1368e08aaa80f6b5879fa6154ea6d7a0cedf0efddf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon completion of 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.") of a [participating interest](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest.") that satisfies the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) to be accounted for as a sale, 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.")[(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.") shall: 1. a Allocate the previous carrying amount of the entire [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.") between both of the following on the basis of their relative fair values at the date of the transfer: 1. 1 The participating interest(s) sold 2. 2 The participating interest that continues to be held by the transferor. 2. b [Derecognize](https://asc.understandingaccounting.org/glossary/d/#derecognize "Remove previously recognized assets or liabilities from the statement of financial position.") the participating interest(s) sold 3. c Apply the guidance in paragraphs [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1) and [860-20-30-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-1) on recognition and measurement of assets obtained and liabilities incurred in the sale 4. d Recognize in earnings any gain or loss on the sale 5. e Report any participating interest(s) that continue to be held by the transferor as the difference between the following amountsmeasured at the date of the transfer: 1. 1 The previous carrying amount of the entire financial asset 2. 2 The amount derecognized. For the transfer of a participating interest in a financial asset included in a closed portfolio hedged in an existing portfolio layer method hedge in accordance with Topic 815 on derivatives and hedging, when applying the guidance in (a) through (e) an entity shall not include any portion of the hedge basis adjustment that is maintained on the closed portfolio basis in accordance with paragraphs [815-20-25-12A(b)](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12A) and [815-25-35-1(c)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1). #### Sale of an Entire Financial Asset or Group of Entire Financial Assets ##### [860-20-40-1B](https://asc.understandingaccounting.org/asc/860/20/#860-20-40-1B) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:38.468Z to 2026-09-10T02:06:38.468Z Record version: sha256:e07f5193692194f4d47d515e69ba6e90a403e5d28adc9f7ea22e56bce547402a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon completion of a transfer of an entire financial asset or a group of entire financial assets that satisfies the conditions in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) to be accounted for as a sale, the transferor (seller) shall: 1. a Derecognize the [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") 2. b Apply the guidance in paragraphs [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1) and [860-20-30-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-1) on recognition and measurement of assets obtained and liabilities incurred in the sale 3. c Recognize in earnings any gain or loss on the sale. If the transferred financial asset was accounted for under Topic 320 as available for sale before the transfer, item (a) requires that the amount in other comprehensive income be recognized in earnings at the date of transfer. If the transferred financial asset was included in a closed portfolio hedged in an existing portfolio layer method hedge in accordance with Topic 815 before the transfer, when applying the guidance in (a) through (c) an entity shall not include any portion of the hedge basis adjustment that is maintained on the closed portfolio basis in accordance with paragraphs [815-20-25-12A(b)](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-12A) and [815-25-35-1(c)](https://asc.understandingaccounting.org/asc/815/25/#815-25-35-1). ##### [860-20-40-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:38.468Z to 2026-09-10T02:06:38.468Z Record version: sha256:da7b0c1a94558f2a40cd48828361ff3ef666aa9ca2b1e21e7c797c9db877c90c 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/). #### Transferor and Transferee Accounting Circumstances upon Regaining Control ##### [860-20-40-3](https://asc.understandingaccounting.org/asc/860/20/#860-20-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:38.468Z to 2026-09-10T02:06:38.468Z Record version: sha256:fbdacba323fc5fd8754d97937fbeb277d98375847ea7abdfe210cbf2b96329f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance beginning in paragraph [860-20-25-8](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-8) discusses the transferor's accounting upon regaining control of financial assets sold. In such circumstances, the former transferee would derecognize the transferred financial assets on that date, as if it had sold the transferred financial assets in exchange for a receivable from the transferor. Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:d350e577c5f8f96b80fe874d865b5da97df301117cd778622dd4d503a63e9a1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/860/20/#50-disclosure) SEC content: no #### All Entities within Scope of Subtopic ##### [860-20-50-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:ba89ef5dfc6a62bb04ecb1b6a257f2435fe2f076f7d64258e2b064edde28cc94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section is organized as follows: 1. a Disclosures for each income statement presented 2. b Disclosures for each statement of financial position presented 3. c Sales of loans and trade receivables. For overall guidance on Topic 860's disclosures, see Section 860-10-50. ##### [860-20-50-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:3d8c8049a43e0795a184cd871d1c98d0aaf57547034bb28175f7ce7634260013 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [860-20-50-3 through 50-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) address disclosures for [securitizations](https://asc.understandingaccounting.org/glossary/s/#securitization "The process by which financial assets are transformed into securities."), asset-backed financing arrangements, and similar [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.") that have both of the following characteristics: 1. a The transfer is accounted for as a sale 2. b The transferor has continuing involvement with the [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset."). ##### [860-20-50-2A](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-2A) Pending content: yes Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:111590e3987ca5cc9f5f47c3ebce037c8d4e11fb02e680a549b0a41f62053e29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If specific disclosures are required for a particular form of a transferor's continuing involvement by other Topics, the transferor shall provide the information required in paragraphs [860-20-50-3(b) through (cc)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) and [860-20-50-4(a)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4) with a cross-reference to the separate notes to financial statements so a financial statement user can understand the risks retained in the transfer. The entity does not need to provide each specific disclosure required in paragraphs [860-20-50-3(d)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) and [860-20-50-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4) if the disclosure is not required by other Topics and the objectives of paragraphs [860-10-50-3 through 50-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-3) are met. For example, if the transferor's only form of continuing involvement is a derivative, the entity shall provide the disclosures required in paragraphs [860-20-50-3(b) through (cc)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) and [860-20-50-4(a)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4) and the disclosures about derivatives required by applicable Topics. In addition, the entity shall evaluate whether the other disclosures in paragraphs [860-20-50-3 through 50-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) are necessary for the entity to meet the objectives in those paragraphs. 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 specific disclosures are required for a particular form of a transferor's continuing involvement by other Topics, the transferor shall provide the information required in paragraphs [860-20-50-3(b) through (cc)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) and [860-20-50-4(a)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4) with a cross-reference to the separate notes to financial statements in interim and annual reporting periods so a financial statement user can understand the risks retained in the transfer. The entity does not need to provide each specific disclosure required in paragraphs [860-20-50-3(d)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) and [860-20-50-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4) if the disclosure is not required by other Topics and the objectives of paragraphs [860-10-50-3 through 50-4](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-3) are met. For example, if the transferor's only form of continuing involvement is a derivative, the entity shall provide the disclosures required in paragraphs [860-20-50-3(b) through (cc)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) and [860-20-50-4(a)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4) and the disclosures about derivatives required by applicable Topics. In addition, the entity shall evaluate whether the other disclosures in paragraphs [860-20-50-3 through 50-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) are necessary for the entity to meet the objectives in those paragraphs. ##### [860-20-50-3](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) Pending content: yes Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:4fa74bd3d7143da9528149d1d04c027abc424def7dfd45054d0622e3a274ef3c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For each income statement presented, the entity shall disclose all of the following: 1. a [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 2. b The characteristics 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.") including all of the following: 1. 1 A description of the transferor's [continuing involvement](https://asc.understandingaccounting.org/glossary/c/#continuing-involvement "Any involvement with the transferred financial assets that permits the transferor to receive cash flows or other benefits that arise from the transferred financial assets or that obligates the transferor to provide additional cash flows or other assets to any party related to the transfer. For related implementation guidance, see paragraph 860-10-55-79A.") with the transferred financial assets 2. 2 The nature and initial fair value of both of the following: 1. i The asset obtained as proceeds 2. ii The liabilities incurred in the transfer. 3. 3 The gain or loss from sale of transferred financial assets. 3. bb For the initial fair value measurements in item (b)(2), the level within the fair value hierarchy in Topic 820 in which the fair value measurements fall, segregating fair value measurements using each of the following: 1. 1 Quoted prices in active markets for identical assets or liabilities (Level 1) 2. 2 Significant other observable inputs (Level 2) 3. 3 Significant unobservable inputs (Level 3). 4. c For the initial fair value measurements in item (b)(2), the key inputs and assumptions used in measuring the fair value of assets obtained and liabilities incurred as a result of the sale that relate to the transferor's continuing involvement, including quantitative information about all of the following: 1. 1 Discount rates. 2. 2 Expected prepayments including the expected weighted-average life of prepayable financial assets. The weighted-average life of prepayable assets in periods (for example, months or years) can be calculated by multiplying the principal collections expected in each future period by the number of periods until that future period, summing those products, and dividing the sum by the initial principal balance. 3. 3 Anticipated credit losses, including expected static pool losses. If an entity has aggregated transfers during a period in accordance with the guidance beginning in paragraph [860-10-50-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-5), it may disclose the range of assumptions. 5. cc For the initial fair value measurements in item (b)(2), the valuation technique(s) used to measure fair value. 6. d Cash flows between a transferor and transferee, including all of the following: 1. 1 [Proceeds](https://asc.understandingaccounting.org/glossary/p/#proceeds "Cash, beneficial interests, servicing assets, derivative instruments, or other assets that are obtained in a transfer of financial assets, less any liabilities incurred.") from new transfers 2. 2 Proceeds from collections reinvested in revolving-period transfers 3. 3 Purchases of previously transferred financial assets 4. 4 Servicing fees 5. 5 Cash flows received from a transferor's interests. 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 each interim and annual income statement presented, the entity shall disclose all of the following: 1. a [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 2. b The characteristics 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.") including all of the following: 1. 1 A description of the transferor's [continuing involvement](https://asc.understandingaccounting.org/glossary/c/#continuing-involvement "Any involvement with the transferred financial assets that permits the transferor to receive cash flows or other benefits that arise from the transferred financial assets or that obligates the transferor to provide additional cash flows or other assets to any party related to the transfer. For related implementation guidance, see paragraph 860-10-55-79A.") with the transferred financial assets 2. 2 The nature and initial fair value of both of the following: 1. i The asset obtained as proceeds 2. ii The liabilities incurred in the transfer. 3. 3 The gain or loss from sale of transferred financial assets. 3. bb For the initial fair value measurements in item (b)(2), the level within the fair value hierarchy in Topic 820 in which the fair value measurements fall, segregating fair value measurements using each of the following: 1. 1 Quoted prices in active markets for identical assets or liabilities (Level 1) 2. 2 Significant other observable inputs (Level 2) 3. 3 Significant unobservable inputs (Level 3). 4. c For the initial fair value measurements in item (b)(2), the key inputs and assumptions used in measuring the fair value of assets obtained and liabilities incurred as a result of the sale that relate to the transferor's continuing involvement, including quantitative information about all of the following: 1. 1 Discount rates. 2. 2 Expected prepayments including the expected weighted-average life of prepayable financial assets. The weighted-average life of prepayable assets in periods (for example, months or years) can be calculated by multiplying the principal collections expected in each future period by the number of periods until that future period, summing those products, and dividing the sum by the initial principal balance. 3. 3 Anticipated credit losses, including expected static pool losses. If an entity has aggregated transfers during a period in accordance with the guidance beginning in paragraph [860-10-50-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-5), it may disclose the range of assumptions. 5. cc For the initial fair value measurements in item (b)(2), the valuation technique(s) used to measure fair value. 6. d Cash flows between a transferor and transferee, including all of the following: 1. 1 [Proceeds](https://asc.understandingaccounting.org/glossary/p/#proceeds "Cash, beneficial interests, servicing assets, derivative instruments, or other assets that are obtained in a transfer of financial assets, less any liabilities incurred.") from new transfers 2. 2 Proceeds from collections reinvested in revolving-period transfers 3. 3 Purchases of previously transferred financial assets 4. 4 Servicing fees 5. 5 Cash flows received from a transferor's interests. ##### [860-20-50-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4) Pending content: yes Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:4a737a59d82eed1501298b67326b0c1390fe19433ed94344e374ebf9b2b7295f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For each statement of financial position presented, regardless of when the transfer occurred, an entity shall disclose all of the following: 1. a Qualitative and quantitative information about the transferor's continuing involvement with transferred financial assets that provides financial statement users with sufficient information to assess the reasons for the continuing involvement and the risks related to the transferred financial assets to which the transferor continues to be exposed after the transfer and the extent that the transferor's risk profile has changed as a result of the transfer (including, but not limited to, credit risk, interest rate risk, and other risks), including all of the following: 1. 1 The total principal amount outstanding 2. 2 The amount that has been derecognized 3. 3 The amount that continues to be recognized in the statement of financial position 4. 4 The terms of any arrangements that could require the transferor to provide financial support (for example, liquidity arrangements and obligations to purchase assets) to the transferee or its beneficial interest holders, including both of the following: 1. i A description of any events or circumstances that could expose the transferor to loss 2. ii The amount of the maximum exposure to loss. 5. 5 Whether the transferor has provided financial or other support during the periods presented that it was not previously contractually required to provide to the transferee or its beneficial interest holders, including—when the transferor assisted the transferee or its beneficial interest holders in obtaining support—both of the following: 1. i The type and amount of support 2. ii The primary reasons for providing the support. An entity also is encouraged to disclose information about any liquidity arrangements, guarantees, or other commitments by third parties related to the transferred financial assets that may affect the fair value or risk of the related transferor's interest. 2. aa The entity's accounting policies for subsequently measuring assets or liabilities that relate to the continuing involvement with the transferred financial assets. 3. b The key inputs and assumptions used in measuring the fair value of assets or liabilities that relate to the transferor's continuing involvement including, at a minimum, but not limited to, quantitative information about all of the following: 1. 1 Discount rates 2. 2 Expected prepayments including the expected weighted-average life of prepayable financial assets (see paragraph [860-20-50-3(c)(2)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3)) 3. 3 Anticipated credit losses, including expected static pool losses, if applicable. Expected static pool losses can be calculated by summing the actual and projected future credit losses and dividing the sum by the original balance of the pool of assets. If an entity has aggregated transfers during a period in accordance with the guidance beginning in paragraph [860-10-50-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-5), it may disclose the range of assumptions. 4. c For the transferor's interest in the transferred financial assets, a sensitivity analysis or stress test showing the hypothetical effect on the fair value of those interests (including any servicing assets or servicing liabilities) of two or more unfavorable variations from the expected levels for each key assumption that is reported under item (b) of this paragraph independently from any change in another key assumption. 5. d A description of the objectives, methodology, and limitations of the sensitivity analysis or stress test. 6. e Information about the asset quality of transferred financial assets and any other financial assets that it manages together with them. This information shall be separated between assets that have been derecognized and assets that continue to be recognized in the statement of financial position. This information is intended to provide financial statement users with an understanding of the risks inherent in the transferred financial assets as well as in other financial assets and liabilities that it manages together with transferred financial assets. For example, information for receivables shall include, but is not limited to both of the following: 1. 1 [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 2. 2 [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 3. 3 [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 4. 4 Delinquencies at the end of the period 5. 5 Credit losses, net of recoveries, during the period. 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 each interim and annual statement of financial position presented, regardless of when the transfer occurred, an entity shall disclose all of the following: 1. a Qualitative and quantitative information about the transferor's continuing involvement with transferred financial assets that provides financial statement users with sufficient information to assess the reasons for the continuing involvement and the risks related to the transferred financial assets to which the transferor continues to be exposed after the transfer and the extent that the transferor's risk profile has changed as a result of the transfer (including, but not limited to, credit risk, interest rate risk, and other risks), including all of the following: 1. 1 The total principal amount outstanding 2. 2 The amount that has been derecognized 3. 3 The amount that continues to be recognized in the statement of financial position 4. 4 The terms of any arrangements that could require the transferor to provide financial support (for example, liquidity arrangements and obligations to purchase assets) to the transferee or its beneficial interest holders, including both of the following: 1. i A description of any events or circumstances that could expose the transferor to loss 2. ii The amount of the maximum exposure to loss. 5. 5 Whether the transferor has provided financial or other support during the periods presented that it was not previously contractually required to provide to the transferee or its beneficial interest holders, including—when the transferor assisted the transferee or its beneficial interest holders in obtaining support—both of the following: 1. i The type and amount of support 2. ii The primary reasons for providing the support. An entity also is encouraged to disclose information about any liquidity arrangements, guarantees, or other commitments by third parties related to the transferred financial assets that may affect the fair value or risk of the related transferor's interest. 2. aa The entity's accounting policies for subsequently measuring assets or liabilities that relate to the continuing involvement with the transferred financial assets. 3. b The key inputs and assumptions used in measuring the fair value of assets or liabilities that relate to the transferor's continuing involvement including, at a minimum, but not limited to, quantitative information about all of the following: 1. 1 Discount rates 2. 2 Expected prepayments including the expected weighted-average life of prepayable financial assets (see paragraph [860-20-50-3(c)(2)](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3)) 3. 3 Anticipated credit losses, including expected static pool losses, if applicable. Expected static pool losses can be calculated by summing the actual and projected future credit losses and dividing the sum by the original balance of the pool of assets. If an entity has aggregated transfers during a period in accordance with the guidance beginning in paragraph [860-10-50-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-50-5), it may disclose the range of assumptions. 4. c For the transferor's interest in the transferred financial assets, a sensitivity analysis or stress test showing the hypothetical effect on the fair value of those interests (including any servicing assets or servicing liabilities) of two or more unfavorable variations from the expected levels for each key assumption that is reported under item (b) of this paragraph independently from any change in another key assumption. 5. d A description of the objectives, methodology, and limitations of the sensitivity analysis or stress test. 6. e Information about the asset quality of transferred financial assets and any other financial assets that it manages together with them. This information shall be separated between assets that have been derecognized and assets that continue to be recognized in the statement of financial position. This information is intended to provide financial statement users with an understanding of the risks inherent in the transferred financial assets as well as in other financial assets and liabilities that it manages together with transferred financial assets. For example, information for receivables shall include, but is not limited to both of the following: 1. 1 [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 2. 2 [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 3. 3 [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 4. 4 Delinquencies at the end of the period 5. 5 Credit losses, net of recoveries, during the period. ##### [860-20-50-4A](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4A) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:151ecc406f92cbbe2f05b1546f68e99599313238eef822de015da163813acc06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure requirement in paragraph [860-20-50-4D](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4D) applies to transactions accounted for as a sale that comprise both of the following: 1. a A transfer of financial assets to a transferee 2. b An agreement entered into in contemplation of the initial transfer with the transferee that results in the transferor retaining substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. For purposes of this paragraph, an agreement entered into in contemplation of the initial transfer refers to transactions that depend on the execution of one another and that are entered into for the same business purpose. ##### [860-20-50-4B](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4B) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:33badc795e48e0d812e5437d6be8e33963d7fe75e4b396ca33271729f9b0f26d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The transactions described in paragraph [860-20-50-4A](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4A) include both of the following types: 1. a Transfers of financial assets with an agreement to repurchase the transferred financial asset (or a substantially-the-same financial asset) before maturity at a fixed or determinable price that will be settled in a form other than the return of the transferred financial asset (for example, the transaction is cash-settled) 2. b Transfers of financial assets with an agreement that requires that the transferor retain substantially all of the exposure to the economic return on the transferred financial asset (for example, a sale with a total return swap). ##### [860-20-50-4C](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4C) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:1e5db2913e460a346b5388ec0cfa925da117f454c5319504575efadc4b7adbec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following items are not subject to the requirements in paragraph [860-20-50-4D](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4D): 1. a Transfers of financial assets with an agreement to purchase another financial asset that is not substantially the same as the initial transferred financial asset in accordance with paragraph [860-10-40-24(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24), for example, a dollar roll transaction accounted for as a sale because the financial asset to be purchased is not substantially the same as the initially transferred financial asset in accordance with paragraph [860-10-40-24(a)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) 2. b Transactions described in paragraph [860-20-50-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-2) that are subject to the disclosures in paragraphs [860-20-50-3 through 50-4](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-3) . ##### [860-20-50-4D](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4D) Pending content: yes Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:c5be989f206ef2152e41773cd7a6ff7a1f4592cb5237e378ec8821af34ac6460 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To provide an understanding of the nature of the transactions, the transferor's continuing exposure to the transferred financial assets, and the presentation of the components of the transaction in the financial statements, an entity shall disclose the following for outstanding transactions at the reporting date that meet the scope guidance in paragraphs [860-20-50-4A through 50-4B](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4A) by type of transaction (for example, [repurchase agreement](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred."), securities lending transaction, and sale and total return swap) (except for those transactions that are excluded from the scope, as described in paragraph [860-20-50-4C](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4C)): 1. a The carrying amount of assets derecognized as of the date of derecognition: 1. 1 If the amounts that have been derecognized have changed significantly from the amounts that have been derecognized in prior periods or are not representative of the activity throughout the period, a discussion of the reasons for the change shall be disclosed. 2. b The amount of gross cash proceeds received by the transferor for the assets derecognized as of the date of derecognition. 3. c Information about the transferor's ongoing exposure to the economic return on the transferred financial assets: 1. 1 As of the reporting date, the fair value of assets derecognized by the transferor. 2. 2 Amounts reported in the statement of financial position arising from the transaction (for example, the carrying value or fair value of forward repurchase agreements or swap contracts). To the extent that those amounts are captured in the derivative disclosures presented in accordance with paragraph [815-10-50-4B](https://asc.understandingaccounting.org/asc/815/10/#815-10-50-4B), an entity shall provide a cross-reference to the appropriate line item in that disclosure. 3. 3 A description of the arrangements that result in the transferor retaining substantially all of the exposure to the economic return on the transferred financial assets and the risks related to those arrangements. 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)To provide an understanding of the nature of the transactions, the transferor's continuing exposure to the transferred financial assets, and the presentation of the components of the transaction in the financial statements, an entity shall disclose the following for outstanding transactions at the interim and annual reporting dates that meet the scope guidance in paragraphs [860-20-50-4A through 50-4B](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4A) by type of transaction (for example, [repurchase agreement](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred."), securities lending transaction, and sale and total return swap) (except for those transactions that are excluded from the scope, as described in paragraph [860-20-50-4C](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4C)): 1. a The carrying amount of assets derecognized as of the date of derecognition: 1. 1 If the amounts that have been derecognized have changed significantly from the amounts that have been derecognized in prior periods or are not representative of the activity throughout the period, a discussion of the reasons for the change shall be disclosed. 2. b The amount of gross cash proceeds received by the transferor for the assets derecognized as of the date of derecognition. 3. c Information about the transferor's ongoing exposure to the economic return on the transferred financial assets: 1. 1 As of the reporting date, the fair value of assets derecognized by the transferor. 2. 2 Amounts reported in the statement of financial position arising from the transaction (for example, the carrying value or fair value of forward repurchase agreements or swap contracts). To the extent that those amounts are captured in the derivative disclosures presented in accordance with paragraph [815-10-50-4B](https://asc.understandingaccounting.org/asc/815/10/#815-10-50-4B), an entity shall provide a cross-reference to the appropriate line item in that disclosure. 3. 3 A description of the arrangements that result in the transferor retaining substantially all of the exposure to the economic return on the transferred financial assets and the risks related to those arrangements. ##### [860-20-50-5](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-5) Pending content: yes Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:9a3c2bdfa177662cdf798c77bd32af1fd6b83308ab7d0ad06684ca082a9b3974 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The aggregate amount of gains or losses on sales of loans or trade receivables (including adjustments to record loans held for sale at the lower of amortized cost basis or fair value) shall be presented separately in the financial statements or disclosed in the notes to financial statements. See Topic 310 on receivables and Topic 326 on measurement of credit losses for a full discussion of disclosure requirements for loans and trade receivables. 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 interim and annual reporting periods, the aggregate amount of gains or losses on sales of loans or trade receivables (including adjustments to record loans held for sale at the lower of amortized cost basis or fair value) shall be presented separately in the financial statements or disclosed in the notes to financial statements. See Topic 310 on receivables and Topic 326 on measurement of credit losses for a full discussion of disclosure requirements for loans and trade receivables. ##### [860-20-50-6](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:42.500Z to 2026-09-10T02:06:42.500Z Record version: sha256:84920fd220d62dab80b00f42cc199933208a837906de22d1089f8ba00911848d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-20-50-6 through 50-9 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-6). Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:8e864779a0c6656a18094dc6023ddb9f355ce5ae485dcf3bff6a62eae347fe13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/860/20/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [860-20-55-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:19a8e1a7e1979a9fc1fdccf26c4daf450e815049ab3a5195771f51bfa63a5e63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is implementation guidance related to the guidance in this Subtopic, specifically: 1. a [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 2. b Estimating the fair value of certain beneficial interests 3. c Accrued interest receivable 4. d Options embedded in transferred securities 5. e Credit risk associated with transferred assets 6. f [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 a bond purchased at a premium 7. g Sales or [securitizations](https://asc.understandingaccounting.org/glossary/s/#securitization "The process by which financial assets are transformed into securities.") of lease receivables 8. h [Subparagraph superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/updates/asu-2009-16/). 9. i Forward contracts in [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.") 10. j Subsequent measurement of interests issued in securitization transactions 11. k [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.") regains control of assets through a removal-of-accounts provision. ##### [860-20-55-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:07260ef8a8ea607f07bfbd4b48db420e005133f5e542136cd75aec75e30b0db5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-20-55-2 through 55-15 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-2). ##### [860-20-55-16](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:9363053b852705354dc1fae1519b063a61007481f72d5347e5527ebfa08da75d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Trust liquidation methods that allocate receipts of principal or interest between beneficial interest holders and transferors in proportions different from their stated percentage of ownership interests do not affect whether the transferor should obtain sale accounting and [derecognize](https://asc.understandingaccounting.org/glossary/d/#derecognize "Remove previously recognized assets or liabilities from the statement of financial position.") those transferred assets, assuming the trust is not required to be consolidated by the transferor. However, both turbo and bullet provisions in securitization structures (as discussed in paragraph [860-10-05-3](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-3)) should be taken into consideration in determining the fair values of assets obtained by the transferor and transferee. ##### [860-20-55-17](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:abe79b4fa9f1090a2ee6ef0f51c10f2dbd28fe922867d2c8a9d0f088a1853f69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The receivables for accrued fee and finance charge income on an investors' portion of the transferred credit card receivables, whether billed but uncollected or accrued but unbilled, are commonly referred to as accrued interest receivable. The following addresses how the accrued interest receivable related to securitized and sold receivables should be accounted for and reported under this Subtopic. This guidance applies to credit card securitizations as well as other kinds of securitizations. ##### [860-20-55-18](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:3c3afdbb99b573bdb2bdcafda337b1dfacdbfe2386027014332f8c0892aa9521 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The right to receive the accrued interest receivable, if and when collected, is transferred to the securitization trust. Generally, if a securitization transaction meets the criteria for sale treatment and the accrued interest receivable is subordinated either because the asset has been isolated from the transferor (see paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5)) or because of the operation of the cash flow distribution (or waterfall) through the securitization trust, the total accrued interest receivable should be considered to be one of the components of the sale transaction. Therefore, under the circumstances described, the accrued interest receivable asset should be accounted for as a transferor's interest.It is inappropriate to report the accrued interest receivable related to securitized and sold receivables as loans receivable or other terminology implying that it has not been subordinated to the senior interests in the securitization. ##### [860-20-55-19](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:a74876a4fbdbf0a060ee5054723477b5bf3ac607d5324050d01d4019d9fd3237 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. While, under the circumstances described, the accrued interest receivable is a transferor's interest, it is not required to be subsequently measured like an investment in debt securities classified as available for sale or trading under Topic 320 or the Transfers and Servicing Topic because the accrued interest receivable cannot be contractually prepaid or settled in such a way that the owner would not recover substantially all of its recorded investment. Entities should follow existing applicable accounting standards, including Topic 326 on measurement of credit losses, in subsequent accounting for the accrued interest receivable asset. ##### [860-20-55-20](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:cb77561fc1357055aea5c08943c9e049e4906d0dd7a11672ea04b4ccdb1feb6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses transactions that involve the sale of a marketable security to a third-party buyer, with the buyer's having an option to put the security back to the seller at a specified future date or dates for a fixed price. Because of the put option, the seller generally receives a premium price for the security. ##### [860-20-55-21](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:ee183c12568c1cf0a08a2cc72aa8dd7fc5ae4e910a93bbc6a621f7b2527ac1f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the transfer is accounted for as a sale, a put option that enables the holder to require the writer of the option to reacquire for cash or other assets a marketable security or an equity instrument issued by a third party should be accounted for as a derivative by both the holder and the writer, provided the put option meets the definition of a derivative in paragraph [815-10-15-83](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-83) (including meeting the net settlement requirement, which may be met if the option can be net settled in cash or other assets or if the asset required to be delivered is readily convertible to cash). If multiple put options exist, recognition of the multiple put options as liabilities, and initial measurement at fair value, are required. ##### [860-20-55-22](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:980421ec86cf12e7c917835f7c0164dd4a40f83e5e88b18e13ad6c42c8952321 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A put option that is issued as part of a transfer being accounted for as a sale that is not accounted for as a derivative under Subtopic 815-10 would be considered a guarantee under paragraph [460-10-55-2(b)](https://asc.understandingaccounting.org/asc/460/10/#460-10-55-2) and would be subject to its initial recognition, initial measurement, and disclosure requirements. If the written put option is accounted for as a derivative under Subtopic 815-10 by the seller-transferor, then the put option would be subject to only the disclosure requirements of Topic 460. ##### [860-20-55-23](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:df50740d6973301050fe0e10a0d62a4f05065410eeddef39be9d1d552c1e23e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the transaction is accounted for as a secured borrowing under Subtopic 860-30, any difference between the sale proceeds and the put price shall be accrued as interest expense, and any impairment of the underlying security would generally not be recognized. The difference between the original sale price and the put price should be amortized over the period to the first date the securities are eligible to be put back. If the transfer is accounted for as a secured borrowing, the put option falls under paragraph [815-10-15-63](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-63), which provides a scope exception for a derivative instrument (such as the put option) that serves as an impediment to sale accounting under Subtopic 860-10. The guidance in paragraph [815-10-55-41](https://asc.understandingaccounting.org/asc/815/10/#815-10-55-41) may also be relevant. ##### [860-20-55-24](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:420f45e27e6da8023d925b930274855aaf488f340655dcdf71de3511d50834a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transferor may hold some portion of the credit risk associated with a transfer of an entire [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.") or group of entire financial assets. For example, a transferor may incur a liability to reimburse 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."), up to a certain limit, for a failure of debtors to pay when due (a recourse liability). In that circumstance, a liability should be separately recognized and initially measured at fair value. That liability should be subsequently measured according to guidance in other Topics for measuring similar liabilities. In other circumstances, a transferor may provide credit enhancement through its ownership of a beneficial interest in the [transferred financial assets](https://asc.understandingaccounting.org/glossary/t/#transferred-financial-assets "Transfers of any of the following: An entire financial asset A group of entire financial assets A participating interest in an entire financial asset.") if that beneficial interest is not paid until the other investors in the transferred financial assets are paid, thereby resulting in the transferor absorbing much of the related credit risk. As a result, the beneficial interests that are obtained by the transferor should be initially recognized according to paragraph [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1). ##### [860-20-55-24A](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-24A) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:c424b0fde532c176267845e5a019c6770f65f43bbf4948c22b56a7a523b94c3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the transfer does not consist of an entire financial asset or group of entire financial assets, the transferred financial asset must meet the definition of a [participating interest](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest."). Paragraph [860-10-40-6A(c)(4)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-6A) states that, to meet that definition, participating interest holders shall have no recourse to the transferor (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 or its [agents](https://asc.understandingaccounting.org/glossary/a/#agent "A party that acts for and on behalf of another party. For example, a third-party intermediary is an agent of the transferor if it acts on behalf of the transferor.")) or to each other, other than any of the following: 1. a Standard representations and warranties 2. b Ongoing contractual obligations to service the entire financial asset and administer the transfer contract 3. c Contractual obligations to share in any set-off benefits received by any participating interest holder. That recourse would result in the transfer being accounted for as a secured borrowing under Subtopic 860-30. ##### [860-20-55-25](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:d37a51a389cbd5cd4449090e3807786783426f91d9924d1e5d23db291a928729 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume an entity transfers a bond to an unconsolidated entity for cash and beneficial interests. When the transferor purchased the bond, it paid a premium for it (or bought it at a discount), and that premium (or discount) was not fully amortized (or accreted) at the date of the transfer. In other words, the carrying amount of the bond included a premium (or discount) at the date of the transfer. If the transfer of the bond is accounted for as a secured borrowing under Subtopic 860-30, the transferor would continue to amortize (or accrete) the premium (or discount) because paragraph [860-30-25-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-2) requires that the transferor continue to report the transferred financial assets in its statement of financial position with no change in their measurement (that is, basis of accounting). If the transfer of the bond satisfies the conditions to be accounted for as a sale, any beneficial interests received as proceeds would be initially recognized at fair value. As a result, the previously existing premium (or discount) would not continue to be amortized (or accreted); rather, the unamortized (or nonaccreted) amount would be included in the calculation of the gain (or loss) as of the transfer date. ##### [860-20-55-26](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:63b8e6c8df93cfa3c1c4b6719569ecdf7c6ae3fa80d48ca6e6ddcc7d3dd73697 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transferor of lease receivables shall allocate the gross investment in receivables between [lease payments](https://asc.understandingaccounting.org/glossary/l/#lease-payments "See paragraph 842-10-30-5 for what constitutes lease payments from the perspective of a lessee and a lessor."), residual values guaranteed at commencement, and residual values not guaranteed at commencement using the individual carrying amounts of those components at the date of transfer. Those transferors also shall record a servicing asset or liability in accordance with Subtopic 860-50, if appropriate. ##### [860-20-55-27](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:30a070285d87e8844759742e2a31750ffaa3158d72bb756c53be95a34e0a3d21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [860-10-55-6](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-6) for further discussion of lease receivables. ##### [860-20-55-28](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:3dc246ace89043d72096fcf8a1f74631a5c0691c724e791247bc6f0a6a43768c 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/). ##### [860-20-55-29](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:ade6ca33ec77152c6fc9ac404ca568bf71ef316e007af679fa4caf892fbbed91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The requirement that all financial assets obtained and liabilities incurred by the transferor of a securitization that qualifies as a sale shall be recognized and measured as provided in this Subtopic includes the implicit forward contract to sell additional financial assets during a revolving period. Such a forward contract may become valuable or onerous to the transferor as interest rates and other market conditions change. ##### [860-20-55-30](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:08306cfa03b2bec7707fa2e9a494f253895e62f5c3b67bf965c06050963b058e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The value of the forward contract implicit in a revolving-period securitization arises from the difference between the agreed-upon rate of return to investors on their beneficial interests in the trust and current market rates of return on similar investments. For example, if the agreed-upon annual rate of return to investors in a trust is 6 percent, and later market rates of return for those investments increased to 7 percent, the forward contract's value to the transferor (and burden to the investors) would approximate the present value of 1 percent of the amount of the investment for each year remaining in the revolving structure after the receivables already transferred have been collected. If a forward contract to sell receivables is entered into at the market rate, its value at inception may be zero. Changes in the fair value of the forward contract are likely to be greater if the investors receive a fixed rate than if the investors receive a rate that varies based on changes in market rates. ##### [860-20-55-31](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:cff29a4b290e129408e07abb1d2eb011cd5ac7acae14145bdb2ec24f62ecf075 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Gain or loss recognition for revolving-period receivables sold to a securitization trust is limited to receivables that exist and have been sold. ##### [860-20-55-32](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:539cadac1bd379bd9abf052710d4fcb9780a1d491b22f540f504dfec8497839e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is implementation guidance related to the subsequent measurement of various types of financial assets subject to prepayment, specifically: 1. a Instruments that can be prepaid or otherwise settled in such a way that the holder would not recover substantially all of the recorded investment 2. b Loan that can be prepaid or otherwise settled in such a way that the holder would not recover substantially all of the recorded investment at initial acquisition 3. c Classification of a residual tranche in a securitization as held to maturity. ##### [860-20-55-33](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:c8abbf304c8223c89aaa4ffff4ed58a2510f6a188bee75726bbfdb8cab47ec03 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following discusses whether the following types of instruments are subject to the subsequent measurement guidance in paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2): 1. a 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 is not a debt security denominated in a foreign currency 2. b A note for which the repayment amount is indexed to the creditworthiness of a party other than the issuer. ##### [860-20-55-34](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:ced6ce616dbbf8ce0d64871349cc90ac30dbea7ea37586f9b68feaa46c0964ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investing in a financial asset that is denominated in a foreign currency often exposes an entity to foreign currency exchange rate risk; however, that risk is not addressed in paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2). ##### [860-20-55-35](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:b035c83f8150c340cb4ab939104e63e62df7c1aee040bd18e9949df59e6c7843 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A financial asset that is not a debt security under Topic 320 is not subject to the requirements of paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) because it is denominated in a foreign currency. ##### [860-20-55-36](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:74dcf89731e5b14a57f3bf681c68ba871880d4d62ff5d84361ab24896ebfeb8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity is not required to measure such an investment like a debt security under paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) unless it has provisions that allow it to be contractually prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment, as denominated in the foreign currency. For example, an investment denominated in deutsche marks by an entity with a U.S. dollar functional currency would not be subject to that paragraph if the contract requires that substantially all of the invested deutsche marks be repaid. ##### [860-20-55-37](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:e802bf02fb6f867ae589d5a0cd2869f177ea61f695c7a412b1eef758e63ed44b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A note for which the repayment amount is indexed to the creditworthiness of a party other than the issuer is subject to the provisions of paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) because the event that might cause the holder to receive less than substantially all of its recorded investment is based on a contractual provision, not on a default by the borrower (that is, the issuer of the note). That contractual provision indexes the payment terms of the note to a default by a third party unrelated to the issuer of the note. If that note is within the scope of Subtopic 815-10 the guidance of paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) would not apply. ##### [860-20-55-38](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:ba145bdaa2882c31cac0c9b027fdd7aac216aca32fab5cc8e29896163db96036 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A loan (that is not a debt security) that when initially obtained could be contractually prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment may be reclassified as held for investment later in its life (that is, at a date that is so close to the financial asset's maturity that the holder would recover substantially all of its recorded investment even if it was prepaid). That is, the loan would no longer be required to be measured in accordance with the guidance in paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2)if both of the following conditions are met: 1. a It would no longer be possible for the holder not to recover substantially all of its recorded investment upon contractual prepayment or settlement. 2. b The conditions for amortized cost accounting are met (for example, paragraphs [310-10-35-47](https://asc.understandingaccounting.org/asc/310/10/#310-10-35-47) and [948-310-25-1](https://asc.understandingaccounting.org/asc/310/948/#310-948-25-1)). However, any unrealized holding gain or loss arising under the available-for-sale classification that exists at the date of the reclassification would continue to be reported in other comprehensive income but should be amortized over the remaining life of the loan as an adjustment of yield. (The loan would not be classified as held to maturity because under Topic 320 only debt securities may be classified as held to maturity.) ##### [860-20-55-39](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:d29f1d5b648249fe8501061e3cea1cdc57293e157dcf71902301da8eeaf5e210 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether a residual tranche debt security in a securitization of financial assets (for example, receivables) using a securitization entity can be classified as held to maturity depends on the facts and circumstances. If the contractual provisions of the residual tranche debt security provide that the residual tranche can contractually be prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment, paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2) precludes the residual tranche debt security from being accounted for as held to maturity. In contrast, if the only way that the holder of the residual tranche would not recover substantially all of its recorded investment would be in response to a default by the borrower (debtor), then a held-to-maturity classification is acceptable if the conditions specified for a held-to-maturity classification in paragraphs [320-10-25-1(c)](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-1) and [320-10-25-5(a)](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-5) have been met. ##### [860-20-55-40](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:d02a33ec74001178ab3f24eac6a63516bed70a3c1988fbf99aa6305e31bb67ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses implementation of paragraph [860-20-25-11](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-11). Under that paragraph's guidance, if the removal-of-accounts provision is not exercised, the financial assets are recognized because the transferor now can unilaterally cause the transferee to return those specific financial assets and, therefore, the transferor once again has effective control over those transferred financial assets (see paragraphs [860-20-25-8 through 25-10](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-8) ). ##### [860-20-55-41](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:70e315870cfeb6469170413bdcb748823060f3179997f517352c0394e9b3d02e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Similarly, when a contingency related to a transferor's contingent right has been met, the transferor generally must account for the repurchase of a specific subset of the financial assets transferred to and held by the entity. When the contingency has been met, the transferor has a unilateral right to purchase a specific transferred financial asset. At that point, the transferor must determine whether the unilateral right to purchase a specific transferred financial asset provides the transferor with a more-than-trivial benefit. If the unilateral right to purchase a specific transferred financial asset provides the transferor with a more-than-trivial benefit, the transfer fails the criterion in paragraph [860-10-40-5(c)(2)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5). The transferor must perform this analysis regardless of whether it intends to exercise its call option. ##### [860-20-55-42](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:f26c779a5fe5f965f3b9edad59392ed0fda7fd8f227d7e601e2c9be335dbaf06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although this guidance uses removal-of-accounts provisions as an example, the guidance is not limited to removal-of-accounts provisions. Contingent rights can arise in many other situations. See paragraphs [860-10-55-39 through 55-42](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-39) for more information. #### Illustrations ##### [860-20-55-43](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:d5e0c921525caaf9865d8596ab0fe5453877a2dc14c9d4c39c460d8746bcda9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1) and [860-20-30-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-30-1). Entity A transfers entire loans with a carrying amount of $1,000 to an unconsolidated securitization entity and receives proceeds with a fair value of $1,030, and the transfer is accounted for as a sale. Entity A undertakes no obligation to service and assumes a limited recourse obligation to repurchase delinquent loans. Entity A agrees to provide the transferee a return at a variable rate of interest even though the contractual terms of the loan are fixed rate in nature (that provision is effectively an interest rate swap). ##### [860-20-55-44](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:101f900423cde2a7a5315dd77b1e43f88f9631399491c7a80ee99ba4381976a1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example has the following assumptions. - ![](https://asc.understandingaccounting.org/asc-img/GUID-303D7D6C-1FF0-4687-A95F-7AB67EA5ABE2-low.gif) Fair Values Cash proceeds " $1,050 " Interest rate swap asset 40 Recourse obligation 60 Net Proceeds Cash received " $1,050 " Plus: Interest rate swap asset 40 Less: Recourse obligation (60) Net proceeds " $1,030 " Gain on Sale Net proceeds " $1,030 " Less: Carrying amount of loans sold " (1,000)" Gain on sale $30 ##### [860-20-55-45](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:bcdc68b259520559b16a2f67d77fed227394f631013351dc71a5af9a5581615e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following journal entry is made by Entity A. - ![](https://asc.understandingaccounting.org/asc-img/GUID-5E5C4FFE-2512-462B-804B-0D750D74D2EF-low.gif) Journal Entry Cash " $1,050 " Interest rate swap asset 40 Loans " $1,000 " Recourse obligation 60 Gain on sale 30 To record transfer ##### [860-20-55-46](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:b288a693094932b06fa437a944ce4e51c38c31cc3b57217e16ca94cdf95f18bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1). This Example assumes the conditions for a sale in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) are met. Entity B transfers a nine-tenths participating interest in a loan with a fair value of $1,100 and a carrying amount of $1,000, and the transfer is accounted for as a sale. The servicing contract has a fair value of zero because Entity B estimates that the benefits of servicing are just adequate to compensate it for its servicing responsibilities. ##### [860-20-55-47](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:87dfa873ee20d0894893954941f16ea3e4a8083db7fc7a8766dfa5033d719ec0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example has the following assumptions. - ![](https://asc.understandingaccounting.org/asc-img/GUID-5DE2DCDA-CE45-48B8-A48C-267EB6A60E22-low.gif) Fair Values "Cash proceeds for nine-tenths participating interest sold ($1,100 x 9/10) " $990 "One-tenth participating interest that continues to be held by the transferor ($1,100 x 1/10) " 110 - ![](https://asc.understandingaccounting.org/asc-img/GUID-D72C8C1B-E90B-4CD2-AAB5-62933372D724-low.gif) Allocated Carrying Amount Based on Relative Fair Values Fair Value Percentage of Total Fair Value Allocated Carrying Amount Nine-tenths participating interest sold $990 90 $900 One-tenth participating interest that continues to be held by the transferor 110 10 100 Total $1,100 100 $1,000 - ![](https://asc.understandingaccounting.org/asc-img/GUID-CE8E7541-34B8-4F4A-A0F3-4CF5F12B43CF-low.gif) Gain on Sale Net proceeds $990 Less: Carrying amount of loans sold (900) Gain on sale $90 ##### [860-20-55-48](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:3f1277e74ef3bcfd7a536594c90c5f81e452563b4a33d4428028f054f6e2247b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following journal entry is made by Entity B. - ![](https://asc.understandingaccounting.org/asc-img/GUID-9C1EBA41-258D-4725-B617-FB414FC5F0BD-low.gif) Journal Entry Cash $990 Loans $900 Gain on sale 90 To record transfer ##### [860-20-55-49](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:2a7f82dae7666020268de7467c19695fe115a4768030ddef01e46df84e1dfb5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-20-55-49 through 55-57 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-49). ##### [860-20-55-58](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-58) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:9988b489e2a265df132953f1dfe0a7f9662779461f629e5fd193872ab6ec5af9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [860-20-25-1](https://asc.understandingaccounting.org/asc/860/20/#860-20-25-1)At the beginning of the second year in a 10-year sales-type lease, Entity E transfers for $505 a nine-tenths participating interest in the lease receivable to an independent third party, and the transfer is accounted for as a sale. Entity E retains a one-tenth participating interest in the lease receivable and a 100 percent interest in the unguaranteed residual asset, which is not subject to the requirements of this Subtopic as discussed in paragraph [860-10-55-6](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-6) because it is not a financial asset and, therefore, is excluded from the analysis of whether the transfer of the nine-tenths participating interest in the lease receivable meets the definition of a participating interest. The servicing asset has a fair value of zero because Entity E estimates that the benefits of servicing are just adequate to compensate it for its servicing responsibilities. The carrying amounts and related gain computation are as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-FB58F22A-04AB-412A-A671-C72142061BEA-low.gif) Carrying Amounts Lease receivable $540 Unearned income related to lease receivable 370 Gross investment in lease receivable 910 Unguaranteed residual asset $30 Unearned income related to unguaranteed residual asset 60 Gross investment in unguaranteed residual asset 90 Total gross investment in lease receivable " $1,000 " Gain on Sale Cash received $505 Nine-tenths of carrying amount of gross investment in lease receivable $819 Nine-tenths of carrying amount of unearned income related to lease receivable 333 Net carrying amount of lease receivable sold 486 Gain on sale $19 ##### [860-20-55-59](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-59) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:a1507049ef3c0d82b440107e2e26b355349e6a2694670bb25d31a694f3692805 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following journal entry is made by Entity E. - ![](https://asc.understandingaccounting.org/asc-img/GUID-FF66109F-F224-46F2-92D2-9C62F4FB3BDC-low.gif) Journal Entry Cash $505 Unearned income 333 Lease receivable $819 Gain on sale 19 To record sale of nine-tenths of the lease receivable at the beginning of Year 2 ##### [860-20-55-60](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-60) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:102c012c0cdcbe898391834a04d010dff590eda099c8af90b4d2e622794db7ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-20-55-60 through 55-82 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-60). ##### [860-20-55-83](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-83) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:e41f36a0fc429352644b1a5d084e449423c68489f372f405798e0ae2b1eb0060 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the accounting for a sale of loans in their entirety by a transferor to an unconsolidated entity and the subsequent accounting for the transferor's interest and a servicing asset. In this Example, the transferor's interest is 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.") that is accounted for at fair value in the same manner as an available-for-sale security under paragraph [860-20-35-2](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2). ##### [860-20-55-84](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-84) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:bebfe3f58af1b799a515ba71fdabc4966a6a6fdb1fa4a5a2788bc156c1880bb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example has the following assumptions. ##### [860-20-55-85](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-85) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:c2b7f59115eef41747dc4fc156651d9457ddb1630744a5feb2d5170ffeedaa04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On January 2, 20X1, Entity I (the transferor) originates $1,000 of loans, yielding 10.5 percent interest income for their estimated life of 9 years. Entity I later transfers the loans in their entirety to an unconsolidated entity and accounts for the transfer as a sale. Entity I receives as proceeds $1,000 cash plus a beneficial interest that entitles it to receive 1 percent of the contractual interest (an interest-only strip receivable). Entity I will continue to service the loans for a fee of 100 basis points. The guarantor, a third party, receives 50 basis points as a guarantee fee. ##### [860-20-55-86](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-86) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:20d61847941cfde82c77102b00e986cc7df9942cfaab6b262e182bfd32d4e95a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date of transfer, the following facts are assumed. 1. a The fair value of the servicing asset is $40. 2. b The total fair value of the loans including servicing is $1,040. 3. c The fair value of the interest-income strip receivable is $60. ##### [860-20-55-87](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-87) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:19ed2e4da05e9d122418fb933c8ab74636bc8f35892b687b0c51a61aca3c08a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 1, 20X1, an event occurs that results in the transfer not meeting the conditions for sale accounting. The fair value of the originally transferred financial assets that remain outstanding in the entity on that date is $929. The fair value of Entity I's interest (in the form of an interest-only strip) on that date is $58. The fair value of the servicing asset on that date is $38. The guarantee that was entered into by the entity does not trade with the underlying financial assets. The fees on this guarantee will be paid as part of the cash waterfall. ##### [860-20-55-88](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-88) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:954adb7bc7911bf490dd9bd717e3e9ebe2c9bd0da6a68eacb81f07e42f6d360a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All cash flows from the financial assets transferred to the trust are initially sent directly to the trust and then distributed in order of priority. The priority of payments in the cash waterfall is as follows: servicing fees, guarantees, amounts due to outside beneficial interest holders, and amounts due to Transferor's beneficial interest. ##### [860-20-55-89](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-89) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:e8f8cfa3393887c917e67dcf16e60aae572e510033b91cdfba3c0a96ee29a5b2 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/). ##### [860-20-55-90](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-90) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:73438457e03d17eab636a398af3b1a168eb76b96c21f429fc70ecc405d0bc965 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following journal entries would be made. - January 2, 20X1 - ![](https://asc.understandingaccounting.org/asc-img/GUID-9704F8AD-DE2B-407C-B6F0-F6AE0A3F1B9D-low.gif) Cash $1000 Transferor's interest (available for sale) 60 Servicing asset 40 Loans $1000 Gain on sale 100 To record the sale of the assets and to recognize Entity I's interest and a servicing asset at fair value. - December 1, 20X1 - ![](https://asc.understandingaccounting.org/asc-img/GUID-283BCED7-C67C-4DA4-A1BC-9507C3B8B0A3-low.gif) Other comprehensive income $2 Entity I's interest (available for sale) $2 To subsequently measure Entity I's interest in the same manner as an available-for-sale security. ##### [860-20-55-91](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-91) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:6c4280b330a3a7bd2b69e698c49151126e3568e0de02f8b0bec185f25c089ae6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the accounting entry to be made after the event occurs that results in the transfer not meeting the conditions for sale accounting. - December 1, 20X1 - ![](https://asc.understandingaccounting.org/asc-img/GUID-F9E2AD18-1682-44E0-A2F8-D699AB17ADF2-low.gif) Loans $929 Due to Securitization Entity $929 To recognize the previously sold loans on Entity I's books along with the obligation to pass the cash flows associated with those loans to Securitization Entity. ##### [860-20-55-92](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-92) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:b27a1f67f733858a67684faf663ba1b42b8ef28978827f65dca8b26851b3d74b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity I would account for the rerecognized financial assets and transferor's interests as follows: 1. a Entity I would continue to account for transferor's interests (in accordance with paragraph [320-10-35-1](https://asc.understandingaccounting.org/asc/320/10/#320-10-35-1)) at fair value with changes in fair value recognized in other comprehensive income. 2. b Entity I would account for the loans at cost plus accrued interest in accordance with Subtopic 310-20. ##### [860-20-55-93](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-93) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:0b0244cb0e62f4919594ddd2b63ff595d2e5d9d680986622ca92649611fde823 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-20-55-93 through 55-107 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-93). ##### [860-20-55-108](https://asc.understandingaccounting.org/asc/860/20/#860-20-55-108) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:46.480Z to 2026-09-10T02:06:46.480Z Record version: sha256:4a2aa404a742f05596e9c262a1976f4ebf3496748ac20db42dc90b992a5fedae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates one approach for satisfying the quantitative disclosure requirements in paragraph [860-20-50-4D](https://asc.understandingaccounting.org/asc/860/20/#860-20-50-4D). - ![](https://asc.understandingaccounting.org/asc-img/GUID-C2B8A55A-CAA2-4A63-B4D9-413313C75D08-low.gif) "Transfers of Financial Assets Accounted for as Sales (Dollars in millions)" At the Date of Derecognition for Transactions Outstanding At the Reporting Date " Type of Transaction" Carrying Amount Derecognized Gross Cash Proceeds Received for Assets Derecognized Fair Value of Transferred Assets Gross Derivative Assets Recorded (a) (b) Gross Derivative Liabilities Recorded (a) (b) Repurchase agreements $ XX $ XX $ XX $ XX $ XX Repo financings xx xx xx xx xx Sale and a total return swap XX XX XX XX XX Securities lending XX XX XX XX XX Total $ XX $ XX $ XX $ XX $ XX (a) "Balances are presented on a gross basis, before the application of counterparty and cash collateral offsetting." (b) "$XX of gross derivative assets and $XX of gross derivative liabilities are included as interest rate contracts in footnote X on derivative disclosures. $XX of gross derivative assets and $XX of gross derivative liabilities are included as credit risk contracts in footnote X on derivative disclosures. " Source downloaded (UTC): 2026-09-10T02:06:50.852Z to 2026-09-10T02:07:35.766Z Record version: sha256:df3992702252c3d0123e92117ba00f6581e3898ed9121853c4faab39a4410f2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30: Transfers and Servicing — Secured Borrowing and Collateral ### Machine-generated study aids ```json { "summary": "ASC 860-30 governs transfers of financial assets that fail the sale conditions and therefore must be accounted for as secured borrowings, plus the accounting for collateral pledged in such transactions. The transferor keeps the transferred asset on its balance sheet with no change in measurement basis (860-30-25-2), reclassifying it separately (e.g., \"securities pledged to creditors\") if the secured party may sell or repledge it (860-30-45-1). Cash collateral — and securities collateral the holder may sell or repledge — is treated as proceeds of a borrowing rather than as collateral, and is recognized as an asset by the recipient with a corresponding obligation to return it (860-30-25-3, 25-8).", "key_points": [ "A transfer is accounted for as a secured borrowing with pledge of collateral if it fails the sale conditions of 860-10-40-5, or if a transfer of a portion of an entire financial asset does not meet the participating interest definition; the transferor continues to report the asset with no change in its basis of accounting (860-30-25-2).", "All cash collateral is recorded as an asset by the secured party receiving it with a liability to return it, and as a receivable by the obligor, because cash transfers cannot be distinguished from borrowing cash (860-30-25-3).", "Cash, or securities the holder may sell or repledge, received as 'collateral' for noncash financial assets (e.g., securities lending) is not collateral accounting but proceeds of a sale or borrowing (860-30-25-4, 25-8, 25-9).", "Noncash collateral accounting depends on the secured party's right to sell or repledge and on default: if that right exists the obligor reclassifies and separately reports the asset (860-30-25-5(a), 860-30-45-1); if the secured party sells the collateral it recognizes the proceeds and an obligation to return the collateral (860-30-25-5(b)); otherwise the obligor keeps the asset and the secured party recognizes nothing (860-30-25-5(d)).", "On the obligor's default with no right of redemption, the obligor derecognizes the pledged asset and the secured party recognizes it, initially measured at fair value if not already sold; a secured party that already sold the collateral derecognizes its return obligation (860-30-25-5(c), 860-30-30-1, 860-30-40-1).", "Reclassified pledged collateral continues to be measured under the same principles as before the transfer (e.g., AFS at fair value through OCI, HTM at amortized cost) (860-30-35-2), while the obligation to return collateral is measured under other guidance (banks selling collateral measure it like a short sale at fair value per 942-405-35-1).", "Required disclosures include collateral policies, carrying amounts of pledged assets not reclassified and associated liabilities, fair value of accepted collateral permitted to be sold or repledged and the portion sold or repledged (860-30-50-1A), and for repos, securities lending, and repurchase-to-maturity transactions, disaggregation of the gross obligation by class of collateral, remaining contractual maturity, and risk discussion (860-30-50-7)." ], "categories": [ "Financial instruments", "Recognition", "Derecognition", "Disclosure" ], "audience_level": "intermediate", "student_note": "This is the default landing spot whenever a transfer fails sale accounting under 860-10-40-5 — repos, dollar rolls, and securities lending — so know that the transferor keeps the asset at its old measurement basis and simply books a borrowing. The classic trap is applying \"collateral\" accounting to cash received in a securities lending deal: cash (and securities that can be sold or repledged) is proceeds of a borrowing, not collateral.", "related_topics": [ "860-10", "860-20", "210-20", "320", "942-405", "405" ], "key_concepts": [ "secured borrowing", "collateral pledged", "right to sell or repledge", "repurchase agreement", "securities lending transaction", "failed sale treatment", "obligation to return collateral", "amount at risk" ] } ``` Source downloaded (UTC): 2026-09-10T02:06:50.852Z to 2026-09-10T02:06:50.852Z Record version: sha256:12afe4575ebadeaba234c4b82902d7d343deb1e19e248e143885131ac47e1ebb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/860/30/#00-status) SEC content: no ##### [860-30-00-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:50.852Z to 2026-09-10T02:06:50.852Z Record version: sha256:79f627156406ad42a071ae5d613e9f4d655aa089b26e0a7b2375d027bfa45ebf 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
Financial Asset (2nd def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Not-for-Profit EntityAddedAccounting Standards Update No. 2023-0610/09/2023
Public Business EntityAddedAccounting Standards Update No. 2023-0610/09/2023
Repurchase AgreementAddedAccounting Standards Update No. 2014-1106/12/2014
Repurchase Agreement Accounted for as a Collateralized BorrowingAddedAccounting Standards Update No. 2014-1106/12/2014
Repurchase-to-Maturity TransactionAddedAccounting Standards Update No. 2014-1106/12/2014
Reverse Repurchase Agreement Accounted for as a Collateralized BorrowingAddedAccounting Standards Update No. 2014-1106/12/2014
SecurityAddedAccounting Standards Update No. 2023-0610/09/2023
TransfereeAmendedAccounting Standards Update No. 2009-1612/23/2009
TransferorAmendedAccounting Standards Update No. 2009-1612/23/2009
860-30-10-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-30-15-1AmendedAccounting Standards Update No. 2023-0610/09/2023
860-30-25-2AmendedAccounting Standards Update No. 2009-1612/23/2009
860-30-25-6AmendedAccounting Standards Update No. 2014-1106/12/2014
860-30-25-7AmendedAccounting Standards Update No. 2009-1612/23/2009
860-30-45-2AmendedAccounting Standards Update No. 2023-0610/09/2023
860-30-45-2AAddedAccounting Standards Update No. 2023-0610/09/2023
860-30-45-3AmendedAccounting Standards Update No. 2023-0610/09/2023
860-30-45-3AmendedMaintenance Update 2015-11 (PDF)06/19/2015
860-30-50-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-30-50-1AAmendedAccounting Standards Update No. 2025-1112/08/2025
860-30-50-1AAmendedAccounting Standards Update No. 2009-1612/23/2009
860-30-50-2 through 50-5SupersededAccounting Standards Update No. 2009-1612/23/2009
860-30-50-6SupersededAccounting Standards Update No. 2014-1106/12/2014
860-30-50-6AddedAccounting Standards Update No. 2013-0101/31/2013
860-30-50-7AmendedAccounting Standards Update No. 2023-0610/09/2023
860-30-50-7AddedAccounting Standards Update No. 2014-1106/12/2014
860-30-50-8AddedAccounting Standards Update No. 2014-1106/12/2014
860-30-50-9 through 50-12AddedAccounting Standards Update No. 2023-0610/09/2023
860-30-55-4AmendedAccounting Standards Update No. 2023-0610/09/2023
860-30-55-4AmendedMaintenance Update 2016-11 (PDF)06/27/2016
860-30-55-4AddedAccounting Standards Update No. 2014-1106/12/2014
860-30-60-1AmendedAccounting Standards Update No. 2014-1106/12/2014
Source downloaded (UTC): 2026-09-10T02:06:53.375Z to 2026-09-10T02:06:53.375Z Record version: sha256:d6cba50b3f07951d52b18a53e64c6105c1636fc6d1457c2d78ce7774b5eb49a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/860/30/#05-overview-and-background) SEC content: no ##### [860-30-05-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:53.375Z to 2026-09-10T02:06:53.375Z Record version: sha256:1533d8e48df0f15ecbf043ab83485bd7c0a2f5a490d04679ec90ec364af11dd6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on transactions that are accounted for as secured borrowings with 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.") of [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."). ##### [860-30-05-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:53.375Z to 2026-09-10T02:06:53.375Z Record version: sha256:de2493b040fe7435ba279b8f211ce3572a332336423b7536accf18fe7d72483e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A debtor (obligor) may grant a [security interest](https://asc.understandingaccounting.org/glossary/s/#security-interest "A form of interest in property that provides that upon default of the obligation for which the security interest is given, the property may be sold to satisfy that obligation.") in certain assets to a lender (the secured party) to serve as collateral for its obligation under a borrowing, with or without [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 other assets of the obligor. An obligor under other kinds of current or potential obligations, for example, interest rate swaps, also may grant a security interest in certain assets to a secured party. ##### [860-30-05-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:53.375Z to 2026-09-10T02:06:53.375Z Record version: sha256:270cff9329762dd94844d64183dddb27d2b84d57e2e8fbac893a5509e437f789 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If collateral is transferred to the secured party, the custodial arrangement is commonly referred to as a pledge. Secured parties sometimes are permitted to sell or repledge (or otherwise transfer) collateral held under a pledge. The same relationships occur, under different names, in transfers documented as sales that are accounted for as secured borrowings (see paragraph [860-30-25-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-2)). Source downloaded (UTC): 2026-09-10T02:06:56.336Z to 2026-09-10T02:06:56.336Z Record version: sha256:232ac3262ec5a76e60aa60df25e18cf9cdcd4b7db0f20971e5c0ef90a20d249d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/860/30/#10-objectives) SEC content: no ##### [860-30-10-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:06:56.336Z to 2026-09-10T02:06:56.336Z Record version: sha256:9aa67e128cc466f156e30f2563a07b5c64664cccf2e0846254c6598e938afb73 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): 2026-09-10T02:07:00.073Z to 2026-09-10T02:07:00.073Z Record version: sha256:37aa8e224309372b75cca3de674801293c5d9d05ccd7d8f2f2f25b75bfc0464f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/860/30/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [860-30-15-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-15-1) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:00.073Z to 2026-09-10T02:07:00.073Z Record version: sha256:d9a8576d9fcb16ba3d4818d5e436385845670381397c55d347b2dfcce536bb11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 860-10-15, with specific transaction qualifications noted below. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 860-10-15, with specific transaction qualifications noted below. Paragraph [860-30-50-7(d)](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-7) applies to [public business entities](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC.") only. #### Transactions ##### [860-30-15-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:00.073Z to 2026-09-10T02:07:00.073Z Record version: sha256:5f67dd489d5b0f1563fd989ffc48e8284d0499ba12ba649af686c5f2b625c50d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given.") accounting provisions of paragraphs [860-30-25-5](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5), [860-30-30-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-30-1), and [860-30-45-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-1) apply to all [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 pledged as collateral in a transaction accounted for as a secured borrowing. ##### [860-30-15-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:00.073Z to 2026-09-10T02:07:00.073Z Record version: sha256:a036eb64b0deb801d5f72e1df9af71ab9e4518a6f5eabd72432b529c9dfef39e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to many types of transactions in which cash is obtained in exchange for financial assets with an obligation for an opposite exchange later. For example, that guidance may apply to any of the following types of transactions with those characteristics: 1. a [Repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred.") 2. b Dollar rolls 3. c Securities lending transactions. Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:e4491bedb80a7f9c923b4369aba5181067ca9877abe84750d08811c1bb1dd369 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/860/30/#25-recognition) SEC content: no ##### [860-30-25-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:b29758202a38c380cd6eda4238cc65c2b06edc85a83ffea85973809c24202b6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section provides guidance on the recognition of [transfers](https://asc.understandingaccounting.org/glossary/t/#transfer "The conveyance of a noncash financial asset by and to someone other than the issuer of that financial asset. A transfer includes the following: Selling a receivable Putting a receivable into a securitization trust Posting a receivable as collateral. A transfer excludes the following: The origination of a receivable Settlement of a receivable The restructuring of a receivable into a security in a troubled debt restructuring.") of financial assets as secured borrowings with a pledge of [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."). It addresses the following areas: 1. a Cash collateral 2. b Noncash collateral 3. c Cash or securities received as proceeds 4. d Sales of collateral received. ##### [860-30-25-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:20cd86693870dbecb8d30f17843fbd0f5dbbf07b13a7dc47447364ab845f781e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [transferor](https://asc.understandingaccounting.org/glossary/t/#transferor "An entity that transfers a financial asset, an interest in a financial asset, or a group of financial assets that it controls to another entity.") and [transferee](https://asc.understandingaccounting.org/glossary/t/#transferee "An entity that receives a financial asset, an interest in a financial asset, or a group of financial assets from a transferor.") shall account for a transfer as a secured borrowing with pledge of collateral in either of the following circumstances: 1. a If a transfer of an entire financial asset, a group of entire financial assets, or a [participating interest](https://asc.understandingaccounting.org/glossary/p/#participating-interest "Paragraph 860-10-40-6A defines the term participating interest.") in an entire financial asset does not meet the conditions for a sale in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) 2. b If a transfer of a portion of an entire financial asset does not meet the definition of a participating interest. The transferor shall continue to report the transferred financial asset in its statement of financial position with no change in the asset's measurement (that is, basis of accounting). #### Cash Collateral ##### [860-30-25-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:dba8faa772c0e0e3e6cb14b14b3ff0541fc8c369ea33f779b894fdea1bdfecda Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transfers of financial assets in exchange for cash collateral cannot be distinguished from borrowing cash. Further, because cash is fungible, it is impossible to determine whether it has been used by the secured party. Accordingly, all cash collateral shall be recorded as an asset by the party receiving it (the secured party), together with a liability for the obligation to return it to the payer (obligor), whose asset is a receivable. ##### [860-30-25-4](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:eb73771b39c1ed584ce679f181965c453be7aa3a3e479096428599c1c2f5a71a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash collateral used, for example, in securities lending transactions (see paragraphs [860-10-05-16 through 05-18](https://asc.understandingaccounting.org/asc/860/10/#860-10-05-16) ) shall be derecognized by the obligor and recognized by the secured party, not as collateral but rather as proceeds of either a sale or a borrowing. See paragraphs [860-30-25-6 through 25-9](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-6) for further discussion of recognition of cash and noncash collateral as proceeds of a transfer. #### Noncash Collateral ##### [860-30-25-5](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:783948140d3d6646d653e05fcda24b02db5c9fa5927340c94ad917b4c376585f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accounting for noncash collateral by the obligor (or debtor) and the secured party depends on whether the secured party has the right to sell or repledge the collateral and on whether the obligor has defaulted. Noncash collateral shall be accounted for as follows: 1. a If the secured party (transferee) has the right by contract or custom to sell or repledge the collateral, then paragraph [860-30-45-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-1) requires that the obligor (transferor) reclassify that asset and report that asset in its statement of financial position separately (for example, as security pledged to creditors) from other assets not so encumbered. 2. b If the secured party (transferee) sells collateral pledged to it, it shall recognize the proceeds from the sale and its obligation to return the collateral. The sale of the collateral is a transfer subject to the provisions of this Topic. 3. c If the obligor (transferor) defaults under the terms of the secured contract and is no longer entitled to redeem the pledged asset, it shall [derecognize](https://asc.understandingaccounting.org/glossary/d/#derecognize "Remove previously recognized assets or liabilities from the statement of financial position.") the pledged asset as required by paragraph [860-30-40-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-1) and the secured party (transferee) shall recognize the collateral as its asset. (See paragraph [860-30-30-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-30-1) for guidance on the secured party's initial measurement of collateral recognized. See paragraph [860-30-40-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-1) for further guidance if the debtor has sold the collateral.) 4. d Except as provided in paragraph [860-30-40-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-1) the obligor (transferor) shall continue to carry the collateral as its asset, and the secured party (transferee) shall not recognize the pledged asset. #### Cash or Securities Received as Proceeds ##### [860-30-25-6](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:fbe8bf1934dacebb60a9580358543464b3e8f13ffc0c8683b9dc503b75e50a6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [860-10-55-55A](https://asc.understandingaccounting.org/asc/860/10/#860-10-55-55A) discusses securities lending transactions in which the criteria in paragraph [860-10-40-5](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5) for a sale are met. The following guidance relates to securities lending or similar transactions in which a transferor (lender) transfers securities and receives either cash or securities as collateral and the transfer does not meet the sale criteria in that paragraph. ##### [860-30-25-7](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:25b41ccdea2547d0d9e4b7dbd68f9409fff59387bdecf12374f931ab5666f30c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many securities lending transactions are accompanied by an agreement that both entitles and obligates the transferor to repurchase or redeem the transferred financial assets before their maturity. Paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) states that an agreement that both entitles and obligates the transferor to repurchase or redeem transferred financial assets from the transferee maintains the transferor's effective control over those assets as described in paragraph [860-10-40-5(c)(1)](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-5), if all of the conditions in paragraph [860-10-40-24](https://asc.understandingaccounting.org/asc/860/10/#860-10-40-24) are met. Those transactions shall be accounted for as secured borrowings, in which either cash or securities that the holder is permitted by contract or custom to sell or repledge received as collateral are considered the amount borrowed, the securities loaned are considered pledged as collateral against the cash borrowed and reclassified as set forth in paragraph [860-30-25-5(a)](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5), and any rebate paid to the transferee of securities is interest on the cash the transferor is considered to have borrowed. ##### [860-30-25-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:39fc569fec07b098a3b67a0755a9ab84753c899be45dfc529c3aa96a4867e7f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a securities lending transaction, the transferor of securities being loaned accounts for cash received in the same way whether the transfer is accounted for as a sale or a secured borrowing. Cash collateral or securities received as collateral that a securities lender is permitted to sell or repledge are the proceeds of a borrowing secured by them. The cash received shall be recognized as the transferor's asset, as shall investments made with that cash, even if made by [agents](https://asc.understandingaccounting.org/glossary/a/#agent "A party that acts for and on behalf of another party. For example, a third-party intermediary is an agent of the transferor if it acts on behalf of the transferor.") or in pools with other securities lenders, along with the obligation to return the cash. If securities that may be sold or repledged are received, the transferor of the securities being loaned accounts for those securities in the same way as it would account for cash received. See Example 1 (paragraph [860-30-55-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-1)) for an illustration of a securities lending transaction that is accounted for as a secured borrowing in which cash collateral is transferred. ##### [860-30-25-9](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:14e8125386de18dff42c3bd538db66baeeda22a39f4239b586580977020650fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As noted in paragraphs [860-30-25-4](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-4) and [860-30-25-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-8), the collateral accounting provisions do not apply to cash, or securities that can be sold or pledged for cash, received as so-called collateral for noncash financial assets, for example, in certain securities lending transactions. Such cash or securities that can be sold or pledged for cash are accounted for as proceeds of either a sale or a borrowing. #### Sales of Collateral Held ##### [860-30-25-10](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:06.980Z to 2026-09-10T02:07:06.980Z Record version: sha256:c0ea6f2210bdef167f2425a1a86fe426b6c7261d24ef38132bd3ebf9a4b5930a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Obligations to return to the transferor assets borrowed and then sold have sometimes been effectively recognized as part of a liability for securities sold but not yet purchased, and this Section does not require any change in that practice. Source downloaded (UTC): 2026-09-10T02:07:08.800Z to 2026-09-10T02:07:08.800Z Record version: sha256:66f368463f2bdf5b7ed849323ed2b0740e944be9ba77ff7046b0700039d0bec0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/860/30/#30-initial-measurement) SEC content: no #### Noncash Collateral ##### [860-30-30-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:08.800Z to 2026-09-10T02:07:08.800Z Record version: sha256:441bcbe71d27be7782260e1dd9f06d9280946d0f408d6b430a8ece7500e928f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Noncash [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given.") recognized by the secured party as its asset under paragraph [860-30-25-5(c)](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5) that the secured party has not already sold shall be initially measured at fair value. Source downloaded (UTC): 2026-09-10T02:07:12.876Z to 2026-09-10T02:07:12.876Z Record version: sha256:a6bb6c6228a4f0fb51fa8a531258f781b0b5780db9993a85eaf58cd9e1b2da2c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/860/30/#35-subsequent-measurement) SEC content: no ##### [860-30-35-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:12.876Z to 2026-09-10T02:07:12.876Z Record version: sha256:dab243f5ffae661300c60bf35af3f4b127086292de75de61ca4172518d619498 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section provides subsequent measurement guidance for the following assets and liabilities related to [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.") that are accounted for as secured borrowings: 1. a Pledged assets required to be reclassified 2. b Obligation to return transferred [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."). #### Pledged Assets Required to Be Reclassified ##### [860-30-35-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:12.876Z to 2026-09-10T02:07:12.876Z Record version: sha256:b179183f09fa3dbec736410ab3b86cd9c912c4bbf54221e7d48e6744f9c751d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [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.") that has transferred collateral that must be reclassified in accordance with paragraph [860-30-25-5(a)](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5) (for example, as securities pledged to creditors) shall not change its measurement of that collateral. The transferor shall follow the same measurement principles as before the transfer. For example, securities reclassified from the available-for-sale category to securities pledged to creditors should continue to be measured at fair value, with changes in fair value reported in comprehensive income, while debt securities reclassified from the held-to-maturity category to securities pledged to creditors should continue to be measured at amortized cost. See Topic 320 for guidance related to measurement of investments in securities classified as available for sale and held to maturity. #### Obligation to Return Transferred Collateral ##### [860-30-35-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:12.876Z to 2026-09-10T02:07:12.876Z Record version: sha256:3f19599a3413be4bdda22d6ff727b8fa952bd218317fbd3047f4a19f8cc532b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section does not provide specific guidance on the subsequent measurement of the obligation to return transferred collateral. The liability to return the collateral shall be measured in accordance with other relevant accounting guidance. Paragraph [942-405-35-1](https://asc.understandingaccounting.org/asc/405/942/#405-942-35-1) requires that a bank or savings institution that, as [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."), sells transferred collateral subsequently measure that liability like a short sale at fair value. Source downloaded (UTC): 2026-09-10T02:07:15.071Z to 2026-09-10T02:07:15.071Z Record version: sha256:2500931f33b0e9ceacc007e071a3bcf692fcdc2508fe05d0cf2aa4226ea800ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/860/30/#40-derecognition) SEC content: no ##### [860-30-40-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:15.071Z to 2026-09-10T02:07:15.071Z Record version: sha256:3d112176619b6f8b18dba50a36a7610d3c52c7139ebea0dad8fce21a8ceb3627 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances where an obligor ([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.")) [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.") noncash [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given.") in a secured borrowing and the obligor (transferor) defaults under the terms of the secured contract and is no longer entitled to redeem the pledged asset, the obligor shall [derecognize](https://asc.understandingaccounting.org/glossary/d/#derecognize "Remove previously recognized assets or liabilities from the statement of financial position.") the pledged asset. If the secured party has already sold the collateral, the secured party shall derecognize its obligation to return the collateral. ##### [860-30-40-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:15.071Z to 2026-09-10T02:07:15.071Z Record version: sha256:853d7e14ac95e5e68da6de85fa4aa83339b78322221c39c2249877d23000e94a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Otherwise paragraph [860-30-25-5(c)](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5) addresses the secured party's accounting for the collateral. Source downloaded (UTC): 2026-09-10T02:07:18.940Z to 2026-09-10T02:07:18.940Z Record version: sha256:268ec528c54950fb88d078810c39da4875666124be6bf6ff0b4684d19cc2562e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/860/30/#45-other-presentation-matters) SEC content: no ##### [860-30-45-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:18.940Z to 2026-09-10T02:07:18.940Z Record version: sha256:548c44f4460924ee01d32213d60b47cebbc1129fc0790023a311069030b73916 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the secured party ([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.")) has the right by contract or custom to sell or repledge the [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."), then the obligor ([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.")) shall reclassify that asset and report that asset in its statement of financial position separately (for example, as security pledged to creditors) from other assets not so encumbered. ##### [860-30-45-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-2) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:18.940Z to 2026-09-10T02:07:18.940Z Record version: sha256:a01e7567f23d95a9c784ed6883e9906a3edfd44ad5e2ab947caa08a1d06e38c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Liabilities incurred by either the secured party or obligor in securities borrowing or resale transactions shall be separately classified. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) Liabilities , including accrued interest, incurred by either the secured party or obligor in securities borrowing or resale transactions shall be separately classified. ##### [860-30-45-2A](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-2A) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:18.940Z to 2026-09-10T02:07:18.940Z Record version: sha256:48942ce779ac78cca3cb4620e4c57e0dba09a02901860b441832002c440804c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) If as of the date of the most recent statement of financial position the aggregate carrying amount of reverse repurchase agreements (securities or other assets purchased under agreements to resell) exceeds 10 percent of total assets, the assets shall be separately classified. ##### [860-30-45-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-3) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:18.940Z to 2026-09-10T02:07:18.940Z Record version: sha256:2fe75046c0a363e2ebb926ae7ac5c1827513c476b32cb135ba977e2f0201a2e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section does not specify the classification or the terminology to be used to describe the following: 1. a Pledged assets reclassified by the transferor of securities loaned or transferred under a [repurchase agreement accounted for as a collateralized borrowing](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A repurchase agreement (repo) refers to a transaction in which a seller-borrower of securities sells those securities to a buyer-lender with an agreement to repurchase them at a stated price plus interest at a specified date or in specified circumstances. A repurchase agreement accounted for as a collateralized borrowing is a repo that does not qualify for sale accounting under Topic 860. The payable under a repurchase agreement accounted for as a collateralized borrowing refers to the amount of the seller-borrower's obligation recognized for the future repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a reverse repo.") if the transferee is permitted to sell or repledge those securities 2. b Liabilities incurred by either the secured party or obligor in securities borrowing or resale transactions. Example 1 (see paragraph [860-30-55-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-1)) illustrates possible classifications and terminology. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) This Section does not specify the classification or the terminology to be used to describe the following: 1. a Pledged assets reclassified by the transferor of securities loaned or transferred under a [repurchase agreement accounted for as a collateralized borrowing](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A repurchase agreement (repo) refers to a transaction in which a seller-borrower of securities sells those securities to a buyer-lender with an agreement to repurchase them at a stated price plus interest at a specified date or in specified circumstances. A repurchase agreement accounted for as a collateralized borrowing is a repo that does not qualify for sale accounting under Topic 860. The payable under a repurchase agreement accounted for as a collateralized borrowing refers to the amount of the seller-borrower's obligation recognized for the future repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a reverse repo.") if the transferee is permitted to sell or repledge those securities 2. b Liabilities, including accrued interest, incurred by either the secured party or obligor in securities borrowing or resale transactions. Example 1 (see paragraph [860-30-55-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-1)) illustrates possible classifications and terminology. Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:d92a3920409239f60ef14d8d8620e242343dec6453efce5cfa3fa2c422a8b011 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/860/30/#50-disclosure) SEC content: no ##### [860-30-50-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:d53df0a458a3edf36709facecd642fccac778cbcda9ff9795c9d3ae1920c5959 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/). ##### [860-30-50-1A](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-1A) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:701d8b31c18ad4f45e8d70b38bc9d1852e2ffe6c3f0bf7acaaa05646c270c933 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose all of the following for [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."): 1. a If the entity has entered into [repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred.") or securities lending transactions, it shall disclose its policy for requiring collateral or other security. 2. b As of the date of the latest statement of financial position presented, both of the following: 1. 1 The carrying amount and classifications of both of the following: 1. i Any assets pledged as collateral that are not reclassified and separately reported in the statement of financial position in accordance with paragraph [860-30-25-5(a)](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5) 2. ii Associated liabilities. 2. 2 Qualitative information about the relationship(s) between those assets and associated liabilities; for example, if assets are restricted solely to satisfy a specific obligation, a description of the nature of restrictions placed on those assets. 3. c If the entity has accepted collateral that it is permitted by contract or custom to sell or repledge, it shall disclose all of the following: 1. 1 The fair value as of the date of each statement of financial position presented of that collateral 2. 2 The fair value as of the date of each statement of financial position presented of the portion of that collateral that it has sold or repledged 3. 3 Information about the sources and uses of that collateral. For overall guidance on Topic 860's disclosures, see Section 860-10-50. 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 interim and annual reporting periods, an entity shall disclose all of the following for [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."): 1. a If the entity has entered into [repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred.") or securities lending transactions, it shall disclose its policy for requiring collateral or other security. 2. b As of the date of the latest statement of financial position presented, both of the following: 1. 1 The carrying amount and classifications of both of the following: 1. i Any assets pledged as collateral that are not reclassified and separately reported in the statement of financial position in accordance with paragraph [860-30-25-5(a)](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-5) 2. ii Associated liabilities. 2. 2 Qualitative information about the relationship(s) between those assets and associated liabilities; for example, if assets are restricted solely to satisfy a specific obligation, a description of the nature of restrictions placed on those assets. 3. c If the entity has accepted collateral that it is permitted by contract or custom to sell or repledge, it shall disclose all of the following: 1. 1 The fair value as of the date of each statement of financial position presented of that collateral 2. 2 The fair value as of the date of each statement of financial position presented of the portion of that collateral that it has sold or repledged 3. 3 Information about the sources and uses of that collateral. For overall guidance on Topic 860's disclosures, see Section 860-10-50. ##### [860-30-50-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:752ade656159a7d0a676a84d36faf90722638d90f559d67ee47506e02f8b2e1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-30-50-2 through 50-5 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-2). ##### [860-30-50-6](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:1f3e45103b48268a8412fb7b7c671ec4d967734c48f18190e584d472376d5b7b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-11](https://asc.understandingaccounting.org/updates/asu-2014-11/). #### Disclosures for Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions ##### [860-30-50-7](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-7) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:5dc6c9f072e87eeacd42cb9b319541f19dc727c0f1dd9c248421d037839c5997 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To provide an understanding of the nature and risks of short-term collateralized financing obtained through [repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred."), securities lending transactions, and [repurchase-to-maturity transactions](https://asc.understandingaccounting.org/glossary/r/#repurchase-to-maturity-transaction "A repurchase agreement in which the settlement date of the agreement to repurchase a transferred financial asset is at the maturity date of that financial asset and the agreement would not require the transferor to reacquire the financial asset."), that are accounted for as secured borrowings at the reporting date, an entity shall disclose the following information for each interim and annual period about the collateral pledged and the associated risks to which the transferor continues to be exposed after the transfer: 1. a A disaggregation of the gross obligation by the class of collateral pledged. An entity shall determine the appropriate level of disaggregation and classes to be presented on the basis of the nature, characteristics, and risks of the collateral pledged. 1. 1 Total borrowings under those agreements shall be reconciled to the amount of the gross liability for repurchase agreements and securities lending transactions disclosed in accordance with paragraph [210-20-50-3(a)](https://asc.understandingaccounting.org/asc/210/20/#210-20-50-3) before any adjustments for offsetting. Any difference between the amount of the gross obligation disclosed under this paragraph and the amount disclosed in accordance with paragraph [210-20-50-3(a)](https://asc.understandingaccounting.org/asc/210/20/#210-20-50-3) shall be presented as reconciling item(s). 2. b The remaining contractual maturity of the repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions. An entity shall use judgment to determine an appropriate range of maturity intervals that would convey an understanding of the overall maturity profile of the entity's financing agreements. 3. c A discussion of the potential risks associated with the agreements and related collateral pledged, including obligations arising from a decline in the fair value of the collateral pledged and how those risks are managed. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7)To provide an understanding of the nature and risks of short-term collateralized financing obtained through [repurchase agreements](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement "An agreement under which the transferor (repo party) transfers a financial asset to a transferee (repo counterparty or reverse party) in exchange for cash and concurrently agrees to reacquire that financial asset at a future date for an amount equal to the cash exchanged plus or minus a stipulated interest factor. Instead of cash, other securities or letters of credit sometimes are exchanged. Some repurchase agreements call for repurchase of financial assets that need not be identical to the financial assets transferred."), securities lending transactions, and [repurchase-to-maturity transactions](https://asc.understandingaccounting.org/glossary/r/#repurchase-to-maturity-transaction "A repurchase agreement in which the settlement date of the agreement to repurchase a transferred financial asset is at the maturity date of that financial asset and the agreement would not require the transferor to reacquire the financial asset."), that are accounted for as secured borrowings at the reporting date, an entity shall disclose the following information for each interim and annual period about the collateral pledged and the associated risks to which the transferor continues to be exposed after the transfer: 1. a A disaggregation of the gross obligation by the class of collateral pledged. An entity shall determine the appropriate level of disaggregation and classes to be presented on the basis of the nature, characteristics, and risks of the collateral pledged. 1. 1 Total borrowings under those agreements shall be reconciled to the amount of the gross liability for repurchase agreements and securities lending transactions disclosed in accordance with paragraph [210-20-50-3(a)](https://asc.understandingaccounting.org/asc/210/20/#210-20-50-3) before any adjustments for offsetting. Any difference between the amount of the gross obligation disclosed under this paragraph and the amount disclosed in accordance with paragraph [210-20-50-3(a)](https://asc.understandingaccounting.org/asc/210/20/#210-20-50-3) shall be presented as reconciling item(s). 2. b The remaining contractual maturity of the repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions. An entity shall use judgment to determine an appropriate range of maturity intervals that would convey an understanding of the overall maturity profile of the entity's financing agreements. 3. c A discussion of the potential risks associated with the agreements and related collateral pledged, including obligations arising from a decline in the fair value of the collateral pledged and how those risks are managed. 4. d For a [public business entity](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC."), the weighted-average interest rate of the repurchase liability and the related repurchase liability. ##### [860-30-50-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:9d29b336a271d5b3b660e890a4c6f4d6b560c28009bf59de6a57c16e9373665d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A reporting entity also shall disclose the information required by paragraphs [210-20-50-1 through 50-6](https://asc.understandingaccounting.org/asc/210/20/#210-20-50-1) for both of the following that are either offset in accordance with Section 210-20-45 or subject to an enforceable master netting arrangement or similar agreement: 1. a Recognized [repurchase agreements accounted for as a collateralized borrowing](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A repurchase agreement (repo) refers to a transaction in which a seller-borrower of securities sells those securities to a buyer-lender with an agreement to repurchase them at a stated price plus interest at a specified date or in specified circumstances. A repurchase agreement accounted for as a collateralized borrowing is a repo that does not qualify for sale accounting under Topic 860. The payable under a repurchase agreement accounted for as a collateralized borrowing refers to the amount of the seller-borrower's obligation recognized for the future repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a reverse repo.") and [reverse repurchase agreements accounted for as a collateralized borrowing](https://asc.understandingaccounting.org/glossary/r/#reverse-repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A reverse repurchase agreement accounted for as a collateralized borrowing (also known as a reverse repo) refers to a transaction that is accounted for as a collateralized lending in which a buyer-lender buys securities with an agreement to resell them to the seller-borrower at a stated price plus interest at a specified date or in specified circumstances. The receivable under a reverse repurchase agreement accounted for as a collateralized borrowing refers to the amount due from the seller-borrower for the repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a repo.") 2. b Recognized securities borrowing and securities lending transactions. #### Disclosures for Counterparty Risk for Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions ##### [860-30-50-9](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-9) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:1889f51f0d1ca3e22ac4ed8ff07cb02535c2f2e7a2525447a541a75999b0fbae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7)If as of the date of the most recent statement of financial position the amount at risk under repurchase agreements or the amount at risk under reverse repurchase agreements with any individual counterparty or group of related counterparties exceeds 10 percent of stockholders’ equity, an entity shall disclose the name(s) of those counterparties or group of related counterparties, the amount at risk with each, and the weighted-average maturity of the repurchase agreements or reverse repurchase agreements with each. ##### [860-30-50-10](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-10) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:7b6ec1ea763c6c14b2c41011919c6dd91f92c89262a42f61b5829f7b16303e6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7)As used in this Subtopic, the amount at risk under repurchase agreements is the excess of the carrying amount (or market value, if higher than the carrying amount or if there is no carrying amount) of the securities or other assets sold under agreement to repurchase, including accrued interest plus any cash or other assets on deposit to secure the repurchase obligation, over the amount of the repurchase liability (adjusted for accrued interest). ##### [860-30-50-11](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-11) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:1d63d3a4a0300a905d7cad211f4efe4aa8ddd2a82459c56100e78d36e7daaa64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7)As used in this Subtopic, the amount at risk under reverse repurchase agreements is the excess of the carrying amount of the reverse repurchase agreements over the market value of assets delivered in accordance with the agreements by the counterparty to an entity (or to a third-party agent that has affirmatively agreed to act on behalf of the entity) and not returned to the counterparty, except in exchange for their approximate market value in a separate transaction. ##### [860-30-50-12](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-12) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:22.316Z to 2026-09-10T02:07:22.316Z Record version: sha256:e56ca15f0a5850c2be1fdc7cdb3543c15cc4da1d333d1b40e8de47a3d9dca171 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7)If the aggregate carrying amount of reverse repurchase agreements exceeds 10 percent of total assets as described in paragraph [860-30-45-2A](https://asc.understandingaccounting.org/asc/860/30/#860-30-45-2A), an entity shall disclose whether there are any provisions to ensure that the market value of the underlying assets remains sufficient to protect the entity in the event that the counterparty defaults and, if so, the nature of those provisions. Source downloaded (UTC): 2026-09-10T02:07:24.620Z to 2026-09-10T02:07:24.620Z Record version: sha256:f9ed3ca1d6569fdeb0309685d7212ae87adc4539a3dd0048aa41d6d219c4abfd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/860/30/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [860-30-55-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:24.620Z to 2026-09-10T02:07:24.620Z Record version: sha256:bae2c834ed3b083f1896b8b83b941911ecaf7e290bb1c5d14d89f8dc61918337 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [860-30-25-8](https://asc.understandingaccounting.org/asc/860/30/#860-30-25-8) related to accounting for a securities lending transaction treated as a secured borrowing, in which the securities borrower sells the securities upon receipt and later buys similar securities to return to the securities lender. This Example has the following assumptions: 1. a Transferor's carrying amount and fair value of security loaned: $1,000 2. b Cash [collateral](https://asc.understandingaccounting.org/glossary/c/#collateral "Personal or real property in which a security interest has been given."): $1,020 3. c Transferor's return from investing cash collateral at a 5 percent annual rate: $5 4. d Transferor's rebate to the securities borrower at a 4 percent annual rate: $4. ##### [860-30-55-2](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:24.620Z to 2026-09-10T02:07:24.620Z Record version: sha256:ff0a12fe4dacc1a232b659ab5ad06dd1b76e513081febc5992fb26155e4dbe66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For simplicity, the fair value of the security is assumed not to change during the 35-day term of the transaction. ##### [860-30-55-3](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:24.620Z to 2026-09-10T02:07:24.620Z Record version: sha256:702f4bc44f98132044baef801f31c7506fdff9ecc62902445263524c130ce557 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries for the [transferor](https://asc.understandingaccounting.org/glossary/t/#transferor "An entity that transfers a financial asset, an interest in a financial asset, or a group of financial assets that it controls to another entity.") and the [transferee](https://asc.understandingaccounting.org/glossary/t/#transferee "An entity that receives a financial asset, an interest in a financial asset, or a group of financial assets from a transferor.") are as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-063420BE-2842-4F17-A07C-D571EBEF15D6-low.gif) Journal Entries for the Transferor At inception: Cash " $1,020 " Payable under securities loan agreements " $1,020 " To record the receipt of cash collateral Securities pledged to creditors " 1,000 " Securities " 1,000 " To reclassify loaned securities that the secured party has the right to sell or repledge Money market instrument " 1,020 " Cash " 1,020 " To record investment of cash collateral At conclusion: Cash " 1,025 " Interest 5 Money market instrument " 1,020 " To record results of investment Securities " 1,000 " Securities pledged to creditors " 1,000 " To record return of security Payable under securities loan agreements " 1,020 " Interest (rebate) 4 Cash " 1,024 " To record repayment of cash collateral plus interest - ![](https://asc.understandingaccounting.org/asc-img/GUID-586DD8D3-89D1-4A89-9707-EA2236E8EE6E-low.gif) Journal Entries for the Transferee At inception: Receivable under securities loan agreements " $1,020 " Cash " $1,020 " To record transfer of cash collateral Cash " 1,000 " Obligation to return borrowed securities " 1,000 " To record sale of borrowed securities to a third party and the resulting obligation to return securities that it no longer holds At conclusion: Obligation to return borrowed securities " 1,000 " Cash " 1,000 " To record the repurchase of securities borrowed Cash " 1,024 " Receivable under securities loan agreements " 1,020 " Interest revenue (rebate) 4 To record the receipt of cash collateral and rebate interest ##### [860-30-55-4](https://asc.understandingaccounting.org/asc/860/30/#860-30-55-4) Pending content: yes Source downloaded (UTC): 2026-09-10T02:07:24.620Z to 2026-09-10T02:07:24.620Z Record version: sha256:66fed1b34121da50ac1896eb150df4e469ef17fd4a1f6eaa5ced8ecc88716956 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates one approach for satisfying the quantitative disclosure requirements in paragraph [860-30-50-7](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-7). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E31CF388-CBE0-422F-8A99-AEC1FCEC3FF3-low.gif) "Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings (Dollars in millions)" 20XX Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30-90 days Greater Than 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ XXX $ XXX $ XXX $ XXX $ XXX State and municipal securities XXX XXX XXX XXX XXX Asset-backed securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX 20XX Gross Obligations Overnight Up to 30 Days 30-90 Days Over 90 Days Securities lending transactions U.S. Treasury and agency securities XXX XXX XXX XXX XXX State and municipal securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX Total borrowings $ XXX $ XXX $ XXX $ XXX $ XXX Gross amount of recognized liabilities for repurchase agreements and securities lending in footnote X $ XXX Amounts related to agreements not included in offsetting disclosure in footnote X $ XXX Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) This Example illustrates one approach for satisfying the quantitative disclosure requirements in paragraph [860-30-50-7(a) through (b)](https://asc.understandingaccounting.org/asc/860/30/#860-30-50-7). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E31CF388-CBE0-422F-8A99-AEC1FCEC3FF3-low.gif) "Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings (Dollars in millions)" 20XX Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30-90 days Greater Than 90 days Total Repurchase agreements and repurchase-to-maturity transactions U.S. Treasury and agency securities $ XXX $ XXX $ XXX $ XXX $ XXX State and municipal securities XXX XXX XXX XXX XXX Asset-backed securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX 20XX Gross Obligations Overnight Up to 30 Days 30-90 Days Over 90 Days Securities lending transactions U.S. Treasury and agency securities XXX XXX XXX XXX XXX State and municipal securities XXX XXX XXX XXX XXX Corporate securities XXX XXX XXX XXX XXX Equity securities XXX XXX XXX XXX XXX Non-U.S. sovereign debt XXX XXX XXX XXX XXX Loans XXX XXX XXX XXX XXX Other XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX Total borrowings $ XXX $ XXX $ XXX $ XXX $ XXX Gross amount of recognized liabilities for repurchase agreements and securities lending in footnote X $ XXX Amounts related to agreements not included in offsetting disclosure in footnote X $ XXX Source downloaded (UTC): 2026-09-10T02:07:27.942Z to 2026-09-10T02:07:27.942Z Record version: sha256:9ab1d697f6acc91affc2e0198ad82387e52de382bec998066366dd762ca9d4fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/860/30/#60-relationships) SEC content: no #### Balance Sheet ##### [860-30-60-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:27.942Z to 2026-09-10T02:07:27.942Z Record version: sha256:ff18efdb3d51918803167664913573028fb5386b10e0662e4a12f6cb51bfaced Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the conditions that must be met for an entity to be permitted to offset amounts recognized as payables under [repurchase agreements accounted for as collateralized borrowings](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A repurchase agreement (repo) refers to a transaction in which a seller-borrower of securities sells those securities to a buyer-lender with an agreement to repurchase them at a stated price plus interest at a specified date or in specified circumstances. A repurchase agreement accounted for as a collateralized borrowing is a repo that does not qualify for sale accounting under Topic 860. The payable under a repurchase agreement accounted for as a collateralized borrowing refers to the amount of the seller-borrower's obligation recognized for the future repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a reverse repo.") and amounts recognized as receivables under [reverse repurchase agreements accounted for as collateralized borrowings](https://asc.understandingaccounting.org/glossary/r/#reverse-repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A reverse repurchase agreement accounted for as a collateralized borrowing (also known as a reverse repo) refers to a transaction that is accounted for as a collateralized lending in which a buyer-lender buys securities with an agreement to resell them to the seller-borrower at a stated price plus interest at a specified date or in specified circumstances. The receivable under a reverse repurchase agreement accounted for as a collateralized borrowing refers to the amount due from the seller-borrower for the repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a repo."), see paragraphs [210-20-45-11 through 45-12](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-11) . Source downloaded (UTC): 2026-09-10T02:07:35.766Z to 2026-09-10T02:07:35.766Z Record version: sha256:8f201bc2cdc9b4a5aac9d64c6841235b19e816e7968ab3fb95ba80692b3a8a79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-30-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/860/30/#sec-50-disclosure) SEC content: yes #### Assets Subject to Lien ##### [860-30-S50-1](https://asc.understandingaccounting.org/asc/860/30/#860-30-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:35.766Z to 2026-09-10T02:07:35.766Z Record version: sha256:30a089bac9b367ebaaf23c4c442307465cc383782f3d7d8a43a202cfefa6b605 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [235-10-S99-1](https://asc.understandingaccounting.org/asc/235/10/#235-10-S99-1), Regulation S-X Rule 4-08(b), for required disclosures for assets subject to lien. Source downloaded (UTC): 2026-09-10T02:07:38.248Z to 2026-09-10T02:08:00.369Z Record version: sha256:81efbbb3a83475c1252526213dea5700c8bf621a91a7f3e9fb0abca380c1f07f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40: Transfers and Servicing — Transfers to Qualifying Special Purpose Entities ### Machine-generated study aids ```json { "summary": "ASC 860-40 formerly governed transfers of financial assets to qualifying special-purpose entities (QSPEs), which under pre-2010 GAAP were exempt from consolidation and could support sale accounting for the transferor. Every substantive paragraph in the subtopic (Sections 05, 10, 15, 25, 40, 45 and 55) was superseded by ASU 2009-16 (formerly FAS 166), which eliminated the QSPE concept entirely. The subtopic is now an empty shell retained only for reference; transfers to securitization entities are analyzed under the general derecognition conditions of ASC 860-10 and the consolidation guidance in ASC 810.", "key_points": [ "All guidance in this subtopic (860-40-05-1 through 05-6, 10-1, 15-1 through 15-29, 25-1 through 25-3, 40-1 through 40-11, 45-1 through 45-4, and 55-1 through 55-29) was superseded by Accounting Standards Update No. 2009-16.", "ASU 2009-16 removed the concept of a qualifying special-purpose entity, so an entity can no longer rely on QSPE status to avoid consolidation or to achieve sale accounting.", "Because the QSPE scope-exception was eliminated, transfers to securitization vehicles must satisfy the general surrender-of-control conditions in ASC 860-10-40 (including legal isolation, the transferee's ability to pledge or exchange, and no effective control by the transferor).", "Whether the transferee securitization entity must be consolidated is now determined under ASC 810-10, including the variable interest entity model as amended by ASU 2009-17.", "No recognition, measurement, derecognition, presentation, or disclosure requirements remain in ASC 860-40; the subtopic number is retained solely to preserve the Codification's structure." ], "categories": [ "Derecognition", "Financial instruments", "Consolidation", "Transition and effective dates" ], "audience_level": "intermediate", "student_note": "Exam-relevant point: the QSPE is dead GAAP — post-2009 you never get automatic off-balance-sheet treatment for a securitization vehicle. The common mistake is citing old FAS 140/QSPE rules (or this subtopic) as live authority instead of applying ASC 860-10's control-based derecognition test together with ASC 810-10's VIE consolidation analysis.", "related_topics": [ "860-10", "860-20", "860-50", "810-10", "825-10" ], "key_concepts": [ "qualifying special-purpose entity", "superseded guidance", "transfers of financial assets", "sale accounting", "securitization", "surrender of control", "variable interest entity", "consolidation scope exception" ] } ``` Source downloaded (UTC): 2026-09-10T02:07:38.248Z to 2026-09-10T02:07:38.248Z Record version: sha256:3cf5330f486de03b54b1994d315d2efe1ebc54f2015cfea392bd29b1a1ff1ec8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/860/40/#00-status) SEC content: no ##### [860-40-00-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:38.248Z to 2026-09-10T02:07:38.248Z Record version: sha256:2c15fa23eb47a4ff4c7f9fd19f91add3ab7b6e3a6b3a27ebb012a63c3b6bee28 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
AffiliateRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
AgentRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
Beneficial InterestsRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
ComminglingSupersededAccounting Standards Update No. 2009-1612/23/2009
Condominium StructureSupersededAccounting 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
Derivative Financial InstrumentRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
Embedded Call OptionRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
Financial AssetRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
Guaranteed Mortgage SecuritizationSupersededAccounting Standards Update No. 2009-1612/23/2009
Qualifying Special-Purpose EntitySupersededAccounting Standards Update No. 2009-1612/23/2009
SecuritizationRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
TransferRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
TransfereeRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
TransferorRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
Unilateral AbilityRemoved from SubtopicAccounting Standards Update No. 2009-1612/23/2009
860-40-05-1 through 05-4SupersededAccounting Standards Update No. 2009-1612/23/2009
860-40-05-6SupersededAccounting Standards Update No. 2009-1612/23/2009
860-40-10-1SupersededAccounting Standards Update No. 2009-1612/23/2009
860-40-15-1 through 15-29SupersededAccounting Standards Update No. 2009-1612/23/2009
860-40-25-1 through 25-3SupersededAccounting Standards Update No. 2009-1612/23/2009
860-40-40-1 through 40-11SupersededAccounting Standards Update No. 2009-1612/23/2009
860-40-45-1 through 45-4SupersededAccounting Standards Update No. 2009-1612/23/2009
860-40-55-1 through 55-29SupersededAccounting Standards Update No. 2009-1612/23/2009
Source downloaded (UTC): 2026-09-10T02:07:41.559Z to 2026-09-10T02:07:41.559Z Record version: sha256:f869efa92802532f03b88695d07e3d9e9b7750adc38d445221ce0ca0cbb7bb06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/860/40/#05-overview-and-background) SEC content: no ##### [860-40-05-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:41.559Z to 2026-09-10T02:07:41.559Z Record version: sha256:86b5f857e10c211decb53cfe4eb3fe9430aead808f1f86826ff05bed0e1e97dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-40-05-1 through 05-4 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/40/#860-40-05-1). ##### [860-40-05-5](https://asc.understandingaccounting.org/asc/860/40/#860-40-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:41.559Z to 2026-09-10T02:07:41.559Z Record version: sha256:145d7986699219dea3bb3cec03179b52424d00b6da5e7b08105a8453a2192086 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [860-40-05-6](https://asc.understandingaccounting.org/asc/860/40/#860-40-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:41.559Z to 2026-09-10T02:07:41.559Z Record version: sha256:6e0a6e18113f6a7d9b117ac61bc190590d8fa2c3e2259eabecf78ce01d86617d 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/). ##### [860-40-05-7](https://asc.understandingaccounting.org/asc/860/40/#860-40-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:41.559Z to 2026-09-10T02:07:41.559Z Record version: sha256:6718a17ef0cce1eeb7322668653f003d280e7b1c72af8591d41fd752c629adc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). Source downloaded (UTC): 2026-09-10T02:07:43.543Z to 2026-09-10T02:07:43.543Z Record version: sha256:7133ec43c7e1f1cd703cf7f3c766815d8ec3cb7c0d556c593863f98f97b5ad8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/860/40/#10-objectives) SEC content: no ##### [860-40-10-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:43.543Z to 2026-09-10T02:07:43.543Z Record version: sha256:cff0c8e70646b7bcbd7c56332a5a6ee59910078d6c45cc32776875eb40416b53 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): 2026-09-10T02:07:46.934Z to 2026-09-10T02:07:46.934Z Record version: sha256:d4c5ce055a55ca3401d7d539201722ff853b16de07912ceb078e4dcf024b4b31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/860/40/#15-scope-and-scope-exceptions) SEC content: no ##### [860-40-15-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:46.934Z to 2026-09-10T02:07:46.934Z Record version: sha256:2e4c2ae000cc08da37ce52f94e1388c60841f011de3f75ae5da84ef5c16c743d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-40-15-1 through 15-29 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/40/#860-40-15-1). Source downloaded (UTC): 2026-09-10T02:07:52.052Z to 2026-09-10T02:07:52.052Z Record version: sha256:99bb292a833b3bcd24ba7625140d0d6ab79245226895b64a2640d6e67830e945 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/860/40/#25-recognition) SEC content: no ##### [860-40-25-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:52.052Z to 2026-09-10T02:07:52.052Z Record version: sha256:90d534d008fd39908b1d9a1aa5e042274b5a2ea9a31102568f8466acfbec18bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-40-25-1 through 25-3 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/40/#860-40-25-1). Source downloaded (UTC): 2026-09-10T02:07:55.187Z to 2026-09-10T02:07:55.187Z Record version: sha256:4229ba4f93f7d24efe1655b6b5a24dfa87571609d9f9bea9855fd3f7bd16d65f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/860/40/#40-derecognition) SEC content: no ##### [860-40-40-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:55.187Z to 2026-09-10T02:07:55.187Z Record version: sha256:c1f2cf46497c5063cfb8cbd87d168c01884f3d4c5a1d2528db5d0fb83b089f97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-40-40-1 through 40-11 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/40/#860-40-40-1). Source downloaded (UTC): 2026-09-10T02:07:56.839Z to 2026-09-10T02:07:56.839Z Record version: sha256:6762abd11f97155fd222d113296a9a8c35457fa87712e1a797a92ae81973cfa1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/860/40/#45-other-presentation-matters) SEC content: no ##### [860-40-45-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:07:56.839Z to 2026-09-10T02:07:56.839Z Record version: sha256:20bfba284c41f703d0e0e6a99af5bdf51ad84a107cfa21f5004bc3ee167a1fdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-40-45-1 through 45-4 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/40/#860-40-45-1). Source downloaded (UTC): 2026-09-10T02:08:00.369Z to 2026-09-10T02:08:00.369Z Record version: sha256:3f7a82734098948175c18bde6477f9b9943ed1b8bb7d3dd7c57efcff12bfd62f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 860-40-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/860/40/#55-implementation-guidance-and-illustrations) SEC content: no ##### [860-40-55-1](https://asc.understandingaccounting.org/asc/860/40/#860-40-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:08:00.369Z to 2026-09-10T02:08:00.369Z Record version: sha256:2d1ad6e550e9e961a584a6f63e2299c8505fd5803168f0ffb0e87a7300b6dcfe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraphs 860-40-55-1 through 55-29 superseded by Accounting Standards Update No. 2009-16](https://asc.understandingaccounting.org/asc/860/40/#860-40-55-1). 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).