# ASC 944-20-25: Financial Services—Insurance — Insurance Activities — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/944/20/#25-recognition) 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): 2026-09-10T02:15:10.222Z to 2026-09-10T02:15:10.222Z Record version: sha256:e4bf310dcbece3cd17576744767538be6f1e0ba4dea1b817cff585da917015e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/944/20/#25-recognition) SEC content: no ### Short-Duration Contracts #### Multiple-Year Retrospectively Rated Insurance Contracts ##### [944-20-25-1](https://asc.understandingaccounting.org/asc/944/20/#944-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:10.222Z to 2026-09-10T02:15:10.222Z Record version: sha256:a5d6d9eb8c9efc060f2325c603bfaadde232c32d46ddc760fac441b72d910cc3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-1B). ##### [944-20-25-2](https://asc.understandingaccounting.org/asc/944/20/#944-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:10.222Z to 2026-09-10T02:15:10.222Z Record version: sha256:5f2ef915bf741ea9efa1e98cb57720480366c493d1557d89d6b99e917a1fa286 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [944-20-25-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:10.222Z to 2026-09-10T02:15:10.222Z Record version: sha256:8d56a442f1c51060da3457078c3746866db6a2b0913b6130c4bc15c7d5b27fd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Deposit accounting shall not be used to avoid loss recognition that would otherwise be required (for example, if the insured has no future [coverage](https://asc.understandingaccounting.org/glossary/c/#coverage "An insurance entity's exposure to loss. The concept of coverage would typically include policy limits, deductible, insured, and covered property or insured event.") relating to the deposit with the insurer and, therefore, the deposit is not recoverable). ### Reinsurance Contracts #### Multiple-Year Retrospectively Rated Contracts by Ceding and Assuming Entities ##### [944-20-25-4](https://asc.understandingaccounting.org/asc/944/20/#944-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:10.222Z to 2026-09-10T02:15:10.222Z Record version: sha256:fada681e1563a514063d93e5157bb76366730d9acb068d117c5b21719297fc6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For contracts that meet all of the conditions described in paragraph [944-20-15-55](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-55): 1. a The [ceding entity](https://asc.understandingaccounting.org/glossary/c/#ceding-entity "The party that pays a reinsurance premium in a reinsurance transaction. The ceding entity receives the right to reimbursement from the assuming entity under the terms of the reinsurance contract.") 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](https://asc.understandingaccounting.org/glossary/r/#reinsurer "The assuming entity in a reinsurance transaction.") 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. ##### [944-20-25-5](https://asc.understandingaccounting.org/asc/944/20/#944-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:10.222Z to 2026-09-10T02:15:10.222Z Record version: sha256:aa002c2fde0efd7b29552595356c884573ecef053222521545688c4a9fbb9c8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [944-20-25-6](https://asc.understandingaccounting.org/asc/944/20/#944-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:15:10.222Z to 2026-09-10T02:15:10.222Z Record version: sha256:235b1da43586d3eb231889c66a97b2348726d8826ee7744d08a8639ee8994b23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.