{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/944/20/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"944","topic_title":"Financial Services—Insurance","subtopic":"944-20","subtopic_title":"Insurance Activities","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":"Short-Duration Contracts","heading":"Multiple-Year Retrospectively Rated Insurance Contracts","paragraphs":[{"citation":"944-20-25-1","para":"25-1","html":"
To be accounted for as insurance, a multiple-year retrospectively rated insurance contract must indemnify the insured as required by paragraph 944-20-15-1B.
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For a multiple-year retrospectively rated insurance contract accounted for as insurance, the insurer shall both:
  1. a
    Recognize an asset to the extent that the insured has an obligation to pay cash (or other consideration) to the insurer that would not have been required absent experience under the contract
  2. b
    Recognize a liability to the extent that any cash (or other consideration) would be payable by the insurer to the insured based on experience to date under the contract.
","snippet":"For a multiple-year retrospectively rated insurance contract accounted for as insurance, the insurer shall both:\n(a) Recognize an asset to the extent that the insured has an obligation to pay cash (or other consideration…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f2ef915bf741ea9efa1e98cb57720480366c493d1557d89d6b99e917a1fa286","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}},{"citation":"944-20-25-3","para":"25-3","html":"
Deposit accounting shall not be used to avoid loss recognition that would otherwise be required (for example, if the insured has no future coverage relating to the deposit with the insurer and, therefore, the deposit is not recoverable).
","snippet":"Deposit accounting shall not be used to avoid loss recognition that would otherwise be required (for example, if the insured has no future coverage relating to the deposit with the insurer and, therefore, the deposit is …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8d56a442f1c51060da3457078c3746866db6a2b0913b6130c4bc15c7d5b27fd3","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f1fcbb2546190c283e72898c3ce49768ebc1a0ea69bc6be6ea0a9841e4ec51ae","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}},{"block":"Reinsurance Contracts","heading":"Multiple-Year Retrospectively Rated Contracts by Ceding and Assuming Entities","paragraphs":[{"citation":"944-20-25-4","para":"25-4","html":"
For contracts that meet all of the conditions described in paragraph 944-20-15-55:
  1. a
    The ceding entity shall recognize a liability and the assuming entity shall recognize an asset to the extent that the ceding entity has an obligation to pay cash (or other consideration) to the reinsurer that would not have been required absent experience under the contract (for example, payments that would not have been required if losses had not been experienced).
  2. b
    The ceding entity shall recognize an asset and the assuming entity shall recognize a liability to the extent that any cash (or other consideration) would be payable from the assuming entity to the ceding entity based on experience to date under the contract.
","snippet":"For contracts that meet all of the conditions described in paragraph 944-20-15-55:\n(a) The ceding entity shall recognize a liability and the assuming entity shall recognize an asset to the extent that the ceding entity h…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fada681e1563a514063d93e5157bb76366730d9acb068d117c5b21719297fc6d","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}},{"citation":"944-20-25-5","para":"25-5","html":"
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If either party entering into a new contract in consideration for canceling a retrospectively rated contract would not have agreed to cancel the existing retrospectively rated contract unless a new contract were entered into, the two contracts are in effect the same contract for purposes of measuring assets and liabilities and shall be accounted for that way.
","snippet":"If either party entering into a new contract in consideration for canceling a retrospectively rated contract would not have agreed to cancel the existing retrospectively rated contract unless a new contract were entered …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:235b1da43586d3eb231889c66a97b2348726d8826ee7744d08a8639ee8994b23","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91037a3fa096bbfc5303e229f0aafcefa161c5472c6b2777c38040b2a797d624","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4bf310dcbece3cd17576744767538be6f1e0ba4dea1b817cff585da917015e2","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4bf310dcbece3cd17576744767538be6f1e0ba4dea1b817cff585da917015e2","downloaded_from":"2026-09-10T02:15:10.222Z","last_downloaded_at":"2026-09-10T02:15:10.222Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479996","source_sha256":"5913c93d39a322624fa7f73858308d38ada4b12069fe467d35a8c001367262ab"}}