# ASC 940-20: Financial Services—Brokers and Dealers — Broker-Dealer Activities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/940/20/) 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): 2026-09-10T02:13:27.861Z to 2026-09-10T02:13:58.835Z Record version: sha256:57503e86246ebb3a83f731b5b5b19248070b4c7a9666720c6b4abd0d7fd66425 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20: Financial Services—Brokers and Dealers — Broker-Dealer Activities ### Machine-generated study aids ```json { "summary": "ASC 940-20 governs specific broker-dealer activities, organized into General (commissions, soft-dollar arrangements, mutual fund distribution fees, agency transactions, financial presentation), Clearing (fails, due bills, suspense accounts, trading errors), and Underwriting Subsections. Its core rules are that agency transactions stay off the broker-dealer's statement of financial condition unless they fail to settle on the contracted settlement date, commission income is recognized under Topic 606 while related expenses accrue on trade date, and fails-to-deliver/fails-to-receive are recorded at selling/purchase price including accrued interest.", "key_points": [ "Agency transactions executed for customers are not reflected in the broker-dealer's statement of financial condition unless the transaction fails to settle on the contracted settlement date, in which case it is recorded (e.g., fail-to-receive from customer, payable to customer, or stock borrowed or loaned) (940-20-25-1).", "Commissions are recorded as a receivable from customers on purchases and as reductions of payable to customers on sales; commission income is recognized when (or as) performance obligations are satisfied under Topic 606, while related expenses are accrued on trade date (940-20-25-2).", "At the statement of financial condition date, the broker-dealer must analyze soft-dollar commission income and research provided to determine whether a liability for research due to customers should be accrued or prepaid soft-dollar expenses deferred (940-20-25-3).", "A fail-to-deliver is recorded as a receivable from broker-dealers measured initially at the selling price including accrued interest; a fail-to-receive is recorded as a liability measured at the purchase price including accrued interest, with such liabilities recorded at contract amounts or the fair value of collateral to be returned (940-20-25-4; 25-5; 30-1; 30-2).", "Conditional transactions (e.g., when-issued securities) whose completion is assured beyond a reasonable doubt are recognized like unconditional transactions; if completion is not so assured, only fair value losses are recognized and fair value gains are deferred until the uncertainty is eliminated (940-20-25-7; 35-1).", "Trading errors go to an error suspense account and unreconciled differences are recognized at the transaction amount with an appropriate valuation account until resolved; securities underlying suspense accounts are subsequently measured at fair value with gain or loss in income (940-20-25-6; 35-2).", "Current/noncurrent classification is ordinarily not presented, the broker-dealer's noncontingent share in underwriting or joint accounts is included with trading accounts, unsettled regular-way payables and receivables may be presented net, firm-commitment unsubscribed underwriting shares are measured at fair value, and underwriting and when-issued contractual commitments must be disclosed (940-20-45-1 through 45-3; 35-3; 50-1)." ], "categories": [ "Industry-specific", "Recognition", "Presentation", "Revenue" ], "audience_level": "advanced", "student_note": "This is the operational heart of broker-dealer accounting: remember that agency trades are off-balance-sheet until they fail to settle, and that commission revenue follows Topic 606 while the related expense is accrued on trade date—an asymmetry students often miss. Also note the one-sided treatment of unassured conditional (when-issued) transactions: losses recognized, gains deferred.", "related_topics": [ "940-10", "606", "815-10", "210-10", "940-320", "946-20" ], "key_concepts": [ "agency transactions", "commission income", "soft-dollar arrangements", "fail-to-deliver and fail-to-receive", "suspense accounts and trading errors", "when-issued securities", "underwriting commitments", "mutual fund distribution fees" ] } ``` Source downloaded (UTC): 2026-09-10T02:13:27.861Z to 2026-09-10T02:13:27.861Z Record version: sha256:71d27d7acaa1bb0abd9c19506aa558e0fb5a68753edc0734026185ad4ab011f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/940/20/#00-status) SEC content: no ##### [940-20-00-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:27.861Z to 2026-09-10T02:13:27.861Z Record version: sha256:5d5e3ece4d2da1aa4f6067417704432448944604277bc990718464df153931b9 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
ContractAddedAccounting Standards Update No. 2014-0905/28/2014
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
Performance ObligationAddedAccounting Standards Update No. 2014-0905/28/2014
RevenueAddedAccounting Standards Update No. 2014-0905/28/2014
940-20-05-3AmendedAccounting Standards Update No. 2014-0905/28/2014
940-20-15-4AmendedAccounting Standards Update No. 2014-0905/28/2014
940-20-25-2AmendedAccounting Standards Update No. 2014-0905/28/2014
940-20-25-7AmendedAccounting Standards Update No. 2012-0410/01/2012
940-20-35-1 through 35-3
AmendedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:dc154ed7e391aaad7a1535b9a3b2c668615a92686b48647c9516515ba94d0c97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/940/20/#05-overview-and-background) SEC content: no ##### [940-20-05-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:08b91369576f3e477edcc06538f700567cb4398ffef29cefc9150c114a0ed8f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses certain activities engaged in by brokers and dealers in securities (broker-dealers). The guidance in this Subtopic is presented in the following three Subsections: 1. a General 2. b Clearing 3. c Underwriting. ##### [940-20-05-2](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:a2c8f8c151bf32ea447ab78f65af901d195039afba1c92da537585e9d373af28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance on matters such as commissions, [soft-dollar arrangements](https://asc.understandingaccounting.org/glossary/s/#soft-dollar-arrangements "An arrangement in which a broker-dealer provides research to a customer in return for trade order flow (a certain volume of trades) from that customer."), mutual fund distribution fees, agency transactions, and broker-dealer financial presentation. #### Commissions ##### [940-20-05-3](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:c58f21c4ec145ef5da4e2744621043bdf030818352b53c7710c91f6f6dc8c918 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Acting as an agent, a broker-dealer may buy and sell securities on behalf of its customers. In return for such services, the broker-dealer charges a commission. #### Soft-Dollar Arrangements ##### [940-20-05-4](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:a1a26881ad7bee4f8ae298fa4c352479113139e58bef756e55482f42fdc36437 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Soft-dollar arrangements generate commission income for the broker-dealer. Many of these soft-dollar arrangements are oral, and the value of the research to be provided is typically based on a percentage of commission income. Soft-dollar customers are typically institutional investors or money managers. Soft-dollar research may be generated either internally by the broker-dealer or purchased by the broker-dealer from a third party. #### Mutual Fund Distribution ##### [940-20-05-5](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:a7398de0d0248395c67366128e0557853299b454f8c244384af0c185fbcea216 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Broker-dealers may contract with one or more mutual funds to act as the registered distributor of the mutual fund's shares, assisting the fund in selling and distributing its shares. If a broker-dealer undertakes the responsibility for selling and distributing fund shares, it will incur different types of costs, the most common of which are commissions paid to those of its representatives who arrange fund sales. To compensate a broker-dealer for those selling efforts, mutual funds may establish some form of a fund-charge and shareholder-commission structure that provides fees to the broker-dealer either at the time of sale or over a specified period of time. Two common forms of compensation are the following: 1. a A front-end commission paid to the broker-dealer by the fund shareholder at the time of sale 2. b A 12b-1 distribution fee, which is paid by the fund over a period of time based on a percentage of the fund's daily net asset levels, together with a deferred sales charge, which is a commission paid to the broker-dealer by the shareholder at the time the shareholder exits the fund. Deferred sales charges are often charged to the shareholder in decreasing amounts over time. ### Clearing ##### [940-20-05-6](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:68b8d60d9e5df430ddc2dba9d705f50826f49b8a9e0b15b85a4e5e1db49adafa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Clearing Subsections provide guidance for a broker-dealer's clearing operations. #### Dividend Department ##### [940-20-05-7](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:7ea3ea2515b07a19741bc450c72a220ea14813b7d63eb3eb0bc7843879a8cf09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The dividend department maintains a record of securities that the broker-dealer fails to receive or deliver on the record date. Securities received or delivered against fails that were open on the record date and that are in the name of the delivering broker should be accompanied by due bills. A due bill is an official authorization allowing the purchasing broker-dealer to make a legal claim on the selling broker-dealer for a future distribution to which it is entitled. For cash dividends or interest payments, this typically takes the form of a postdated check. It is usually the responsibility of the dividend department to collect or authorize payments for transactions of this nature. #### Suspense Accounts ##### [940-20-05-8](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:30df3060a858fae8de4783b69e7610877e2783a017b8ea1c7457a63099745337 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because of the number of transactions that take place when trades are cleared for the broker-dealer or its customers, unreconciled differences and trading errors occur. A broker-dealer often has several suspense accounts to facilitate the resolution and identification of differences. ### Underwriting ##### [940-20-05-9](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:678a72d130ce46e922bcba8095d51bc7713bb73cc07298ae8ca0b1efb72fb9be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Underwriting Subsections provide guidance for a broker-dealer's underwriting activities. ##### [940-20-05-10](https://asc.understandingaccounting.org/asc/940/20/#940-20-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:31.954Z to 2026-09-10T02:13:31.954Z Record version: sha256:781cdfcad73ab909675e116d9bd8847275df7251a696f63d27c282209c37a845 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There are several different ways in which a broker-dealer may participate in the underwriting of a new issue of securities. The broker-dealer may be the managing or lead underwriter, a member of the syndicate, or a member of the selling group. Such participation may be on any of the following bases: 1. a Firm commitment 2. b Standby 3. c Best efforts 4. d All or none. Source downloaded (UTC): 2026-09-10T02:13:35.830Z to 2026-09-10T02:13:35.830Z Record version: sha256:19852a4b4c7e5d0337b4914e59df4a6ab969e188dca71d9f14abf56a217fe2b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/940/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [940-20-15-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:35.830Z to 2026-09-10T02:13:35.830Z Record version: sha256:8c5237dc4bd01a0be64b3148a28742a652e59e2fcefd3c57f3680be6264a8d40 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 940-10-15. #### Instruments ##### [940-20-15-2](https://asc.understandingaccounting.org/asc/940/20/#940-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:35.830Z to 2026-09-10T02:13:35.830Z Record version: sha256:0c849a6d914e55d7843911f40647a9be4862defb6a004560db37683e00e0b8be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the scope application of Subtopic 815-10 to contracts for the purchase or sale of when-issued securities or other securities that do not yet exist, see paragraph [815-10-15-17](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-17). ### Clearing #### Overall Guidance ##### [940-20-15-3](https://asc.understandingaccounting.org/asc/940/20/#940-20-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:35.830Z to 2026-09-10T02:13:35.830Z Record version: sha256:1851f7378e3a813263346e06ff20c044d38fa3e7d728f757acc735d03602258a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Clearing Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15. ### Underwriting ##### [940-20-15-4](https://asc.understandingaccounting.org/asc/940/20/#940-20-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:35.830Z to 2026-09-10T02:13:35.830Z Record version: sha256:c8fe4825cef1ff14061d68234c325b60a339fde13a0a672fe2de0531748b1ba9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Underwriting Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15. Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:2c521726d2d842ffb834096f011de238425fce0c83a2043922a7d141063e19fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/940/20/#25-recognition) SEC content: no #### Agency Transactions ##### [940-20-25-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:83d7f357a2d50d7cadfec4bc4eb2ecdf948cd718d0c1722ef7fe8eafde4689b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transactions executed by broker-dealers as agents for customers shall not be reflected in the statement of financial condition of the broker-dealer unless the transaction fails to settle on the contracted settlement date. Because the broker-dealer typically delivers cash or financial instruments on behalf of the customer, if the customer fails on the settlement date, the broker-dealer shall record the transaction (for example, as a [fail-to-receive](https://asc.understandingaccounting.org/glossary/f/#fail-to-receive "A fail-to-receive is a securities purchase from another broker-dealer not received from the selling broker-dealer by the close of business on the settlement date.") from customer, payable to customer, or stock borrowed or loaned on behalf of customer). #### Commissions ##### [940-20-25-2](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:8467ef4cd008e41d1bbdab48aaf885014b251a95ba9f05d3261636087963a41f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For securities purchased, the commission shall be recorded as a receivable from customers; for securities sold, commission shall be recorded as reductions in the payable to customers. The commission income shall be recognized in revenue by the broker-dealer when (or as) it satisfies its [performance obligations](https://asc.understandingaccounting.org/glossary/p/#performance-obligation "A promise in a contract with a customer to transfer to the customer either: A good or service (or a bundle of goods or services) that is distinct A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.") under the [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") in accordance with Topic 606 on [revenue](https://asc.understandingaccounting.org/glossary/r/#revenue "Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.") from contracts 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."). Related expenses shall be accrued by the broker-dealer on the trade date, because substantially all the efforts in generating the commissions have been completed. ##### [940-20-25-3](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:780e8fff411b6237acde98591dad10c9b216f9bb0028570b88eb8456b990d42b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date of the statement of financial condition, the broker-dealer should analyze both the commission income generated from soft-dollar customers and the research provided to the soft-dollar customers to determine whether a liability should be accrued for research due to customers based on the commission income generated or whether any soft-dollar expenses have been prepaid and need to be deferred. ### Clearing #### Fail-to-Deliver ##### [940-20-25-4](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:8b951e00c6403cb5c49e167a100579ecd0fc65700ead0f64c5c27f27da0918f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A broker-dealer that sells securities, either for its own account or for a customer's account, but does not deliver the securities on the settlement date shall record the [fail-to-deliver](https://asc.understandingaccounting.org/glossary/f/#fail-to-deliver "A fail-to-deliver is a securities sale to another broker-dealer that has not been delivered to the buying broker-dealer by the close of business on the settlement date.") as an asset in the receivable account due from broker-dealers. #### Fail-to-Receive ##### [940-20-25-5](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:a638a060b3ad24442b56db2cfd8157f800d23c935a407c3a4d4ba638737a954c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A broker-dealer that purchases securities, either for its own account or for a customer's account, but does not receive the securities on the settlement date shall record the [fail-to-receive](https://asc.understandingaccounting.org/glossary/f/#fail-to-receive "A fail-to-receive is a securities purchase from another broker-dealer not received from the selling broker-dealer by the close of business on the settlement date.") as a liability to the selling broker-dealer. #### Suspense Accounts ##### [940-20-25-6](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:bdc16786f6c3d30c04525b0cdb97c7787233b045bdf361b55ca1795f40de7d02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Trading errors shall be recorded in the broker-dealer's error suspense account until they are resolved. Unreconciled differences shall be recognized at the amount of the transaction with an appropriate valuation account until a determination of the cause of the differences is made and the differences are resolved. #### Conditional Transactions ##### [940-20-25-7](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:0d03b0fcfc648aa5e854c9dc1d34931cd8e4e23eb10e41c9a4de08ba84fce0a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain transactions (for example, those for when-issued securities) are, by their nature, conditional; that is, their completion is dependent on the occurrence of a future event or events. For those conditional transactions in which completion is assured beyond a reasonable doubt, the recognition of the transactions and related profit and loss shall be the same as for unconditional transactions. For those conditional transactions in which completion is not assured beyond a reasonable doubt, only fair value losses shall be recognized, while fair value gains shall be deferred. #### Floor Broker ##### [940-20-25-8](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:41.428Z to 2026-09-10T02:13:41.428Z Record version: sha256:62c4ebcefaecd24f82615eecf567d4d5f5fb26ad8230ec45818d41dc50beebc3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the [floor broker](https://asc.understandingaccounting.org/glossary/f/#floor-broker "A member of a securities exchange who executes transactions on the floor of an exchange for the account of that member's own entity or for the account of other member entities. Broker-dealers often engage floor brokers, who are responsible for executing securities transactions on the exchanges for the account of the broker-dealer. Floor brokers employed by the entity may execute trades on behalf of other broker-dealers, for which the entity is paid a brokerage fee. The purchase and sale department of the broker-dealer maintains the records of floor brokerage fees that are due to other broker-dealers who execute orders on the entity's behalf and brokerage fees due from other broker-dealers.") is employed by the broker-dealer, any costs associated with the floor broker's employment are generally reported as employee compensation. Costs paid to independent floor brokers or floor brokers of other entities for trades on behalf of the broker-dealer are generally reported as floor brokerage expense. Source downloaded (UTC): 2026-09-10T02:13:45.339Z to 2026-09-10T02:13:45.339Z Record version: sha256:843bd835df8811171cabe47a3e9a3965531044655f28ac5029467b6d7486b998 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/940/20/#30-initial-measurement) SEC content: no ### Clearing #### Fail-to-Deliver ##### [940-20-30-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:45.339Z to 2026-09-10T02:13:45.339Z Record version: sha256:5e7b47be034dc2711dbb0c363bc7f92bfa5656e3879875b062218d84e1ef008f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [fail-to-deliver](https://asc.understandingaccounting.org/glossary/f/#fail-to-deliver "A fail-to-deliver is a securities sale to another broker-dealer that has not been delivered to the buying broker-dealer by the close of business on the settlement date.") asset shall be measured initially at the selling price, including any accrued interest. #### Fail-to-Receive ##### [940-20-30-2](https://asc.understandingaccounting.org/asc/940/20/#940-20-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:45.339Z to 2026-09-10T02:13:45.339Z Record version: sha256:4fb9611433a0bcf5113c033bff4f88150f34be89b66570ef96f8cebc36ffed00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [fail-to-receive](https://asc.understandingaccounting.org/glossary/f/#fail-to-receive "A fail-to-receive is a securities purchase from another broker-dealer not received from the selling broker-dealer by the close of business on the settlement date.") liability shall be measured initially at the amount of money representing the purchase price of the securities, including any accrued interest. That is, liabilities related to broker-dealer operations, such as fails-to-receive and securities sold under agreements to repurchase (known as repurchase agreements or repos), shall be recorded at contract amounts or the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of collateral to be returned. Source downloaded (UTC): 2026-09-10T02:13:49.299Z to 2026-09-10T02:13:49.299Z Record version: sha256:a8fa39fe2ed07a8a24b84397f3ec54c05848adc6ab282324a74502f0af9921d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/940/20/#35-subsequent-measurement) SEC content: no ### Clearing #### Conditional Transactions ##### [940-20-35-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:49.299Z to 2026-09-10T02:13:49.299Z Record version: sha256:4f49488808757660007b71620294628c6255c8c0888159d08cd37a851d975ab3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fair value gains deferred under paragraph [940-20-25-7](https://asc.understandingaccounting.org/asc/940/20/#940-20-25-7) shall be recognized when the uncertainty is eliminated. #### Suspense Accounts ##### [940-20-35-2](https://asc.understandingaccounting.org/asc/940/20/#940-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:49.299Z to 2026-09-10T02:13:49.299Z Record version: sha256:cd8fd35712d666bf05cff4c51ef50b785701d7d3e18d555e1144d0d64e7a51fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Securities underlying amounts in suspense accounts shall be subsequently measured at fair value, and the gain or loss shall be recognized in income. ### Underwriting ##### [940-20-35-3](https://asc.understandingaccounting.org/asc/940/20/#940-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:49.299Z to 2026-09-10T02:13:49.299Z Record version: sha256:52db93a9c915a912ffa74dc9c4d5632a99b6e073b164e424f14a2d2e069d48cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. With respect to the underwriting of issues that trade before the settlement date, the broker-dealer shall subsequently measure at fair value any shares that it is firmly committed to purchase but that have not yet been subscribed to by customers. Source downloaded (UTC): 2026-09-10T02:13:51.965Z to 2026-09-10T02:13:51.965Z Record version: sha256:0378777d531684ec3b1213f977ca83831416eb79e74342a4b83e7ab2385e2d2e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/940/20/#45-other-presentation-matters) SEC content: no #### Statement of Financial Condition Classification ##### [940-20-45-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:51.965Z to 2026-09-10T02:13:51.965Z Record version: sha256:0617b807032d4cdac21fb84776794db75fe4c983e173e9322c61cfc10a315059 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Current and noncurrent classifications (see Subtopic 210-10) are ordinarily not presented in the statement of financial condition because such a distinction normally has little meaning for brokers and dealers. ##### [940-20-45-2](https://asc.understandingaccounting.org/asc/940/20/#940-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:51.965Z to 2026-09-10T02:13:51.965Z Record version: sha256:2873d1ed089140ad3ffe33d2e7d3a916596c26237f98bbec6aa4e0b055dba81e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The broker-dealer's share (assuming such share is not merely contingent) in underwriting or joint accounts with other broker-dealers for issued securities shall be included with its trading accounts. ##### [940-20-45-3](https://asc.understandingaccounting.org/asc/940/20/#940-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:51.965Z to 2026-09-10T02:13:51.965Z Record version: sha256:95a1190ce04e1e4f58fb3f7c1d41aedcfd9a2ea11ddad8a4437e5e6e94679d3c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Payables and receivables arising from unsettled regular-way transactions may be recorded net in an account titled net receivable (or payable) for unsettled [regular-way trades](https://asc.understandingaccounting.org/glossary/r/#regular-way-trades "Regular-way trades include both of the following: All transactions in exchange-traded financial instruments that are expected to settle within the standard settlement cycle of that exchange (for example, three days for U.S. exchanges) All transactions in cash-market-traded financial instruments that are expected to settle within the time frame prevalent or traditional for each specific instrument (for example, for U.S. government securities, one or two days)."). Source downloaded (UTC): 2026-09-10T02:13:56.084Z to 2026-09-10T02:13:56.084Z Record version: sha256:38383b2a36e05e44f061146d5e4a93cd1e9bcd7c663152b2de2be3d3dd78ca26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 940-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/940/20/#50-disclosure) SEC content: no #### Contractual Commitments ##### [940-20-50-1](https://asc.understandingaccounting.org/asc/940/20/#940-20-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:13:56.084Z to 2026-09-10T02:13:56.084Z Record version: sha256:696971fe28dc08e014b3542191e96f8c8a3be9ee9e9776586f6667e8b1e565e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Broker-dealers acting as principals in underwriting and when-issued contracts have contractual commitments. Disclosure shall be made of such commitments.