{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/944/80/#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":"944-80","subtopic_title":"Separate Accounts","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Overall","paragraphs":[{"citation":"944-80-25-1","para":"25-1","html":"
Separate account assets and liabilities shall be included in the financial statements of the insurance entity that owns the assets and is contractually obligated to pay the liabilities.
","snippet":"Separate account assets and liabilities shall be included in the financial statements of the insurance entity that owns the assets and is contractually obligated to pay the liabilities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0926001e11e737ec2f363bf5b6c119d1e888fa09fada42b854e966d865f623b7","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-2","para":"25-2","html":"
The guidance in the following paragraph applies if the separate account arrangement meets all of the following conditions:
  1. a
    The separate account is recognized legally; that is, the separate account is established, approved, and regulated under special rules such as state insurance laws, federal securities laws, or similar foreign laws.
  2. b
    The separate account assets supporting the contract liabilities are insulated legally from the general account liabilities of the insurance entity; that is, the contract holder is not subject to insurer default risk to the extent of the assets held in the separate account.
  3. c
    The insurer must, as a result of contractual, statutory, or regulatory requirements, invest the contract holder's funds within the separate account as directed by the contract holder in designated investment alternatives or in accordance with specific investment objectives or policies.
  4. d
    All investment performance, net of contract fees and assessments, must as a result of contractual, statutory, or regulatory requirements be passed through to the individual contract holder. Contracts may specify conditions under which there may be a minimum guarantee, but not a ceiling, as a ceiling would prohibit all investment performance from being passed through to the contract holder.
","snippet":"The guidance in the following paragraph applies if the separate account arrangement meets all of the following conditions:\n(a) The separate account is recognized legally; that is, the separate account is established, app…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:caa0ac2f5765cb48806ef70c372948c625c07859f46436ea029aea003f4a2a43","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-3","para":"25-3","html":"
All of the following guidance applies if a separate account arrangement meets all of the conditions paragraph 944-80-25-2:
  1. a
    The portion of separate account assets representing contract holder funds shall be reported in the insurance entity's financial statements as a summary total, with an equivalent summary total reported for related liabilities.
  2. b
    Any liabilities related to minimum guarantees (including market risk benefits) and insurance benefit liabilities under the contracts in excess of the fair value of separate account assets representing contract holder funds shall be recognized as general account liabilities.
  3. c
    Contract fees and assessments shall be reported in accordance with paragraph 944-605-25-5.
  4. d
    For the purpose of evaluating the retention of specialized accounting for investments in consolidation as described in paragraph 810-10-25-15, a separate account arrangement shall be considered a subsidiary. An insurer is not required to consolidate an investment in which a separate account holds a controlling financial interest if the investment is not or would not be consolidated in the standalone financial statements of the separate account.
  5. e
    Except as described in paragraph (f), the insurer shall not do either of the following when assessing whether the insurer is required to consolidate an investment held by a separate account:
    1. 1
      Consider any separate account interests held for the benefit of policy holders to be the insurer's interests
    2. 2
      Combine any separate account interests held for the benefit of policy holders with the insurer's general account interest in the same investment.
  6. f
    Separate account interests held for the benefit of a related party policy holder shall be combined with the insurer's general account interest when the Variable Interest Entities Subsections of Subtopic 810-10 require the consideration of related parties. For this purpose, a related party includes any party identified in paragraph 810-10-25-43 other than:
    1. 1
      An employee of the decision maker or service provider (and its other related parties), except if the employee is used in an effort to circumvent the provisions of Subtopic 810-10
    2. 2
      An employee benefit plan of the decision maker or service provider (and its other related parties), except if the employee benefit plan is used in an effort to circumvent the provisions of Subtopic 810-10.
","snippet":"All of the following guidance applies if a separate account arrangement meets all of the conditions paragraph 944-80-25-2:\n(a) The portion of separate account assets representing contract holder funds shall be reported i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6845d1aa37d4f1de7b093b26af21eaafc9ccb62ef1570c1c868c92e37bc3b9f0","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-4","para":"25-4","html":"
All of the following guidance applies if a separate account arrangement does not meet all of the criteria in paragraph
944-80-25-2 through 25-3
:
  1. a
    Assets representing contract holder funds under the arrangement shall be measured and presented the same as other general account assets as prescribed in this Topic.
  2. b
    Any related liability shall be accounted for as a general account liability.
  3. c
    Revenue and expenses related to such arrangements shall be recognized within the respective revenue and expense lines in the statement of operations.
","snippet":"All of the following guidance applies if a separate account arrangement does not meet all of the criteria in paragraph 944-80-25-2 through 25-3:\n(a) Assets representing contract holder funds under the arrangement shall b…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f4b18b1d23e2e769732779575b7fabbb06dd15fe5967eb93301166fee1bd496","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-5","para":"25-5","html":"
Arrangements in which contract holders' funds are maintained in separate accounts to fund fixed account options of variable contracts, market value adjusted contracts, guaranteed investment contracts, and indexed contracts are examples of separate account arrangements that would not meet the criteria in paragraphs
944-80-25-2 through 25-3
because all of the investment performance on these investments is not passed through to the contract holder.
","snippet":"Arrangements in which contract holders' funds are maintained in separate accounts to fund fixed account options of variable contracts, market value adjusted contracts, guaranteed investment contracts, and indexed contrac…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0237f9dc49e336e7dc876270cb3ead825a84884fe9a553accef063333ec1fbec","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:75c0076972a3aeec9fc5a874d35c164e3828b852fd33816348f9fffa1231031e","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"block":null,"heading":"Proportionate Interest in a Separate Account","paragraphs":[{"citation":"944-80-25-6","para":"25-6","html":"
Assets underlying an insurance entity's proportionate interest in a separate account (seed money or other investment) do not represent contract holder funds, and thus do not qualify for separate account accounting and reporting.
","snippet":"Assets underlying an insurance entity's proportionate interest in a separate account (seed money or other investment) do not represent contract holder funds, and thus do not qualify for separate account accounting and re…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d19f9d6fc84a05cdfde3848e203dc0cf03e00cbb6d86e1246bf1387945ad2f7e","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-7","para":"25-7","html":"
The insurance entity shall look through the separate account for purposes of accounting for its interest therein, and account for and classify the assets of the separate account underlying that interest based on their nature as if the assets of the separate account underlying the insurance entity's proportionate interest were held directly by the general account rather than through the separate account structure. Example 2 (see paragraph 944-80-55-4) illustrates the application of this guidance.
","snippet":"The insurance entity shall look through the separate account for purposes of accounting for its interest therein, and account for and classify the assets of the separate account underlying that interest based on their na…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5ed1adad455abc358ea715b9331075f09f909d403ac97eef097191c4a927b1f7","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-8","para":"25-8","html":"
The guidance in the following paragraph applies if a separate account arrangement meets the criteria in paragraphs
944-80-25-2 through 25-3
and either of the following conditions exists:
  1. a
    The terms of the contract allow the contract holder to invest in additional units in the separate account.
  2. b
    The insurance entity is marketing contracts that permit funds to be invested in the separate account.
","snippet":"The guidance in the following paragraph applies if a separate account arrangement meets the criteria in paragraphs 944-80-25-2 through 25-3 and either of the following conditions exists:\n(a) The terms of the contract all…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:741cb430e41d65d512907ebe1b5711a6f4af6777c8e087d54c2026044d4e756b","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-9","para":"25-9","html":"
If the conditions in the preceding paragraph are met, the assets of the separate account underlying the insurance entity's proportionate interest in the separate account shall be accounted for in a manner consistent with the accounting for similar assets held by the general account that the insurance entity may be required to sell. For example:
  1. a
    For a debt security, the guidance in Topic 326 shall be followed for the measurement of credit losses.
  2. b
    The guidance in Subtopic 360-10 shall be followed for both real estate that is held for sale and real estate that is not held for sale. For real estate that does not meet that Subtopic's held-for-sale criteria, the impairment test shall be performed solely using undiscounted cash flows assuming immediate disposition.
","snippet":"If the conditions in the preceding paragraph are met, the assets of the separate account underlying the insurance entity's proportionate interest in the separate account shall be accounted for in a manner consistent with…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:decbd643a13264d35c2550e17a83ea05034bc11b1b24685512bb99b12bcb1cf6","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-10","para":"25-10","html":"
The guidance in paragraphs
944-80-25-6 through 25-9
shall be applied also if either of the following conditions exists:
  1. a
    An insurance entity's interest in the separate account represents 20 percent or greater of the separate account interest.
  2. b
    The underlying investments are other than those that meet the definition of any of the following:
    1. 1
      Securities under Subtopic 320-10 or 321-10
    2. 2
      Subparagraph superseded by Accounting Standards Update No. 2016-01.
    3. 3
      Cash and cash equivalents.
","snippet":"The guidance in paragraphs 944-80-25-6 through 25-9 shall be applied also if either of the following conditions exists:\n(a) An insurance entity's interest in the separate account represents 20 percent or greater of the s…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c80fdae5eb575e7feaa005103a0b4f5c92cfec6cee21624d0f9c020bf4efd2b4","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"citation":"944-80-25-11","para":"25-11","html":"
An insurance entity may report its portion of the separate account value as an investment in equity securities under Subtopic 321-10 if both of the following conditions are met:
  1. a
    The insurance entity's proportionate interest in the separate account is less than 20 percent of the separate account.
  2. b
    All of the underlying investments of the separate account meet the definition of any of the following:
    1. 1
      Securities under Subtopic 320-10 or 321-10
    2. 2
      Subparagraph superseded by Accounting Standards Update No. 2016-01
    3. 3
      Cash and cash equivalents.
","snippet":"An insurance entity may report its portion of the separate account value as an investment in equity securities under Subtopic 321-10 if both of the following conditions are met:\n(a) The insurance entity's proportionate i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bea4ce1c8b0f97200c390ca1d1128848be87711300471525a59993f155a40220","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e2db9669abd3909b87b30c0e7445ad0d6d9f35fd3abb12cb84fdd24d8779805d","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},{"block":null,"heading":"Consolidation of an Investment Fund When Separate Accounts Are Involved","paragraphs":[{"citation":"944-80-25-12","para":"25-12","html":"
If an insurer concludes that an investment fund should be consolidated and a portion of the fund is owned by the insurer's separate accounts, the insurer should consolidate the investment fund in the following manner:
  1. a
    The portion of the fund assets representing the contract holder's interests shall be included as separate account assets and liabilities in accordance with paragraph 944-80-25-3.
  2. b
    The remaining portion of the fund assets (including the portion owned by any other investors) shall be included in the general account of the insurer on a line-by-line basis. For example, if the consolidated fund held debt and equity securities, those amounts would be included in the debt and securities lines.
  3. c
    Noncontrolling interests should not be included in the separate account liability but rather classified as a liability or equity based on other applicable guidance.
","snippet":"If an insurer concludes that an investment fund should be consolidated and a portion of the fund is owned by the insurer's separate accounts, the insurer should consolidate the investment fund in the following manner:\n(a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:530fdec59d4c70489078cfda75eed7415aba9999ed2340b33fde781918b6fc2e","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cc3504f1d5dec8cfeb99243ba2c01c92865368b866ac18da8f850cdd1167978e","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e22b30b42dabae14533ba6a75c2dae9d6eb9858fd87f4e67ac73b8cfc517a82","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e22b30b42dabae14533ba6a75c2dae9d6eb9858fd87f4e67ac73b8cfc517a82","downloaded_from":"2026-09-10T02:18:19.980Z","last_downloaded_at":"2026-09-10T02:18:19.980Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479325","source_sha256":"0b191ad4e75a7c53bbf921696ccd9cb4c63fa8561e23388865aba61adb47de29"}}