# ASC 944-50-25: Financial Services—Insurance — Policyholder Dividends — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/944/50/#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): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:d7960f30980e611c8db457e0d8cb09b24d6c40efdd9e02ab8045e59ae2d0deb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/944/50/#25-recognition) SEC content: no #### Participating Contracts ##### [944-50-25-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:2e37d5b087bdb5c172cc94ac9982d76e0f250ca1bdbd9713bd88605a99aa98d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For participating contracts other than those long-duration participating life insurance contracts identified in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3), policyholder dividends shall be accrued. ##### [944-50-25-2](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:836aa8378e30bc317a792474468fe25848acf4217f28d4ea9105bb55f0d5d154 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance applies to participating contracts other than those long-duration participating life insurance contracts identified in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3). Limitations may exist on the amount of net income from [participating insurance](https://asc.understandingaccounting.org/glossary/p/#participating-insurance "Insurance in which the policyholder is entitled to participate in the earnings or surplus of the insurance entity. The participation occurs through the distribution of dividends to policyholders.") contracts of a [life insurance entity](https://asc.understandingaccounting.org/glossary/l/#life-insurance-entity "An entity that can issue annuity, endowment, and accident and health insurance contracts as well as life insurance contracts. Life insurance entities may be either stock or mutual entities.") that may be distributed to stockholders. In that circumstance, the policyholders' share of net income on those contracts that cannot be distributed to stockholders shall be recognized by both: 1. a Excluding that share from stockholders' equity by a charge to operations 2. b Recognizing that share as a credit to a liability relating to participating policyholders' funds. Dividends declared or paid to participating policyholders shall reduce the liability recognized in (b); dividends declared or paid in excess of the liability shall be charged to operations. ##### [944-50-25-3](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:ff8857a26f620721370bbeb4cc422fcc5ed43dc8221ad50eb3a8b1aa160f9362 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance applies to participating contracts other than those long-duration participating life insurance contracts identified in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3). For life insurance entities for which there are no net income restrictions and that use life insurance [dividend scales](https://asc.understandingaccounting.org/glossary/d/#dividend-scales "The actuarial formulas used by life insurance entities to determine amounts payable as dividends on participating policies based on experience factors relating, among other things, to investment results, mortality, lapse rates, expenses, premium taxes, and policy loan interest.") unrelated to actual net income, policyholder dividends shall be accrued over the premium-paying periods of the contracts. Paragraph [944-740-25-1](https://asc.understandingaccounting.org/asc/740/944/#740-944-25-1) states that, although payment is not required, a dividend recognized under this paragraph is considered a planned contractual benefit in computing generally accepted accounting principle (GAAP) liabilities, it may be necessary to identify the amount of this dividend to calculate deferred income taxes in those cases in which there is a question as to whether the dividend provision in the liabilities, together with the dividends paid or declared, may exceed the amount of dividends otherwise deductible for federal income tax purposes. ### Long-Duration Contracts #### Certain Long-Duration Participating Life Insurance Contracts ##### [944-50-25-4](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:247d4c451b6b1edd7dc7272797c7dc0d15079ad9ec2a86d9cba30a56067aad2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For long-duration participating life insurance contracts that meet the criteria in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3), [annual policyholder dividends](https://asc.understandingaccounting.org/glossary/a/#annual-policyholder-dividends "Amount of dividends to policyholders calculated and paid each year, representing the policyholders' share of divisible surplus.") shall be expensed. ##### [944-50-25-5](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:3c1c09e3f05661f1c857d0adf100b9ea1aac7a0dd07041832d7fd9c6d8c54dc2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [944-40-25-30](https://asc.understandingaccounting.org/asc/944/40/#944-40-25-30) and [944-40-35-22 through 35-23](https://asc.understandingaccounting.org/asc/944/40/#944-40-35-22) for guidance on accounting for [terminal dividends](https://asc.understandingaccounting.org/glossary/t/#terminal-dividends "Dividends to policyholders calculated and paid upon termination of a contract, such as on death, surrender, or maturity.") as part of the liability for future policyholder benefits.