{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/944/20/#40-derecognition","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":"40","label":"40 Derecognition","anchor":"40-derecognition","is_sec":false,"groups":[{"block":"Reinsurance Contracts","heading":"Multiple-Year Retrospectively Rated Contracts by Ceding and Assuming Entities","paragraphs":[{"citation":"944-20-40-1","para":"40-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FA3348A3-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Paragraph <a href=\"/asc/944/20/#944-20-25-6\" class=\"xref\">944-20-25-6</a> states that, if either party entering into a new contract in consideration for canceling a retrospectively rated contract </span></span><span class=\"sfragment\" id=\"sfr_FA334A5F-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">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. </span></span></div></div>","snippet":"Paragraph 944-20-25-6 states that, 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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:168dcd0ccd3064a17f0d5a0fe9bcb96cce8a3a6ebe3debeadf8b66d1868cbe8f","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:add1f398d10d9f736a383a7306595ce5dfee5f277dad1693e61d97bc696723c0","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}},{"block":"Reinsurance Contracts","heading":"Payment from Continuation of Reinsurance Contract","paragraphs":[{"citation":"944-20-40-2","para":"40-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FA334B6B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If a <a href=\"/glossary/c/#ceding-entity\" class=\"term\" title=\"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.\"><span>ceding entity</span></a> loses an asset recognized under paragraph <a href=\"/asc/944/20/#944-20-35-15\" class=\"xref\">944-20-35-15</a> because it terminates the contract, the loss shall be recognized in the period <a href=\"/glossary/t/#termination\" class=\"term\" title=\"In general, the failure to renew an insurance contract. Involuntary terminations include death, expirations, and maturities of contracts. Voluntary terminations of life insurance contracts include lapses with or without cash surrender value and contract modifications that reduce paid-up whole-life benefits or term-life benefits.\"><span>termination</span></a> takes place. </span></span></div></div>","snippet":"If a ceding entity loses an asset recognized under paragraph 944-20-35-15 because it terminates the contract, the loss shall be recognized in the period termination takes place.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fdf6b74be770ce3c43182523e00b64c882e4b2f1e4fa78aeacaa6f1f8a42393b","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09c17516e93d87c51a7e50e3fdfca5a588f2b4973c59861dbae1c9a4af72e40b","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}},{"block":"Reinsurance Contracts","heading":"Assumption Reinsurance","paragraphs":[{"citation":"944-20-40-3","para":"40-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FA334C58-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"><a href=\"/glossary/r/#reinsurance\" class=\"term\" title=\"A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder.\"><span>Reinsurance</span></a> contracts that are legal replacements of one insurer by another (often referred to as assumption and novation) extinguish the ceding entity's liability to the policyholder and shall result in removal of related assets and liabilities from the financial statements of the ceding entity. </span></span></div></div>","snippet":"Reinsurance contracts that are legal replacements of one insurer by another (often referred to as assumption and novation) extinguish the ceding entity's liability to the policyholder and shall result in removal of relat…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:37ec5816d26d004e2ed6ddf56fc9b4cc6e3190b08a176812278e0ef7a05adc5c","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}},{"citation":"944-20-40-4","para":"40-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FA334D51-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Reinsurance contracts in which a ceding entity is not relieved of the legal liability to its policyholder shall not result in removal of the related assets and liabilities from the ceding entity's financial statements. </span></span></div></div>","snippet":"Reinsurance contracts in which a ceding entity is not relieved of the legal liability to its policyholder shall not result in removal of the related assets and liabilities from the ceding entity's financial statements.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:77d6042aa72d5a7dd92771b1840cbadf93d9d8a10d1fc388a472881339d5c933","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}},{"citation":"944-20-40-5","para":"40-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FA334E20-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Whether the liability to the policyholder has been entirely extinguished essentially is a legal question, depending on all of the facts and circumstances. See Section <a altsource=\"GUID-F7EBC768-960A-467F-992E-73EC5FF19D94.ditamap\" class=\"ditamap\">405-20-40</a> for guidance for determining if a liability has been extinguished. </span></span></div></div>","snippet":"Whether the liability to the policyholder has been entirely extinguished essentially is a legal question, depending on all of the facts and circumstances. See Section 405-20-40 for guidance for determining if a liability…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:59b494363f6032380198d24b4e6aecdc7201f3ca84b155bb0b91446b19b62f29","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e167469f2390e680172966e575aeeca176658468d206fad2762d5690aa29d4c7","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:25e5258c0663f00a0b2f1acf31bc9710ed63ec24ca25ebf169b72bcfd8c5d144","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:25e5258c0663f00a0b2f1acf31bc9710ed63ec24ca25ebf169b72bcfd8c5d144","downloaded_from":"2026-09-10T02:15:19.568Z","last_downloaded_at":"2026-09-10T02:15:19.568Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479901","source_sha256":"5815fc102a2adea4c81d023f56b83b5740b19eeb93dda3478304e46d61b945ed"}}