# ASC 946-10-25: Financial Services—Investment Companies — Overall — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/946/10/#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): 2026-09-10T02:18:56.377Z to 2026-09-10T02:18:56.377Z

Record version: sha256:1e60fcec6f7ec5e4eb87288602178aeb734cae715ff7d69e8ad1b5b6dffa2368

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 946-10-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/946/10/#25-recognition)

SEC content: no

#### Reassessment of Investment Company Status

##### [946-10-25-1](https://asc.understandingaccounting.org/asc/946/10/#946-10-25-1)

Pending content: no

Source downloaded (UTC): 2026-09-10T02:18:56.377Z to 2026-09-10T02:18:56.377Z

Record version: sha256:e4e0e3bfdcc9f445f3041ae51c33bf08cd8c769a693b6ad2a3e96236fadd3ae5

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


The initial determination of whether an entity is an investment company within the scope of this Topic shall be made upon formation of the entity. An entity shall reassess whether it meets (or does not meet) the assessment of investment company status in paragraphs

[946-10-15-4 through 15-9](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-4)

only if there is a subsequent change in the purpose and design of the entity or if the entity is no longer regulated under the Investment Company Act of 1940.

##### [946-10-25-2](https://asc.understandingaccounting.org/asc/946/10/#946-10-25-2)

Pending content: no

Source downloaded (UTC): 2026-09-10T02:18:56.377Z to 2026-09-10T02:18:56.377Z

Record version: sha256:b706408678806f40acfa0208056f61bc6bcb80ac3f9e7c0d45af762398c94925

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


An entity that is no longer an investment company under this Topic as a result of the reassessment of status shall discontinue applying the guidance in this Topic and shall account for the change in its status prospectively by accounting for its investments in accordance with other Topics as of the date of the change in status. The [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of an investment at the date of the change in status shall be the investment's initial carrying amount.

##### [946-10-25-3](https://asc.understandingaccounting.org/asc/946/10/#946-10-25-3)

Pending content: no

Source downloaded (UTC): 2026-09-10T02:18:56.377Z to 2026-09-10T02:18:56.377Z

Record version: sha256:fd38ef822bbabc2f349e94a53734663e95213eb3d5bc74a6bee88937661e491a

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


An entity that subsequently is an investment company under this Topic as result of the reassessment of status shall account for the effect of the change in status from the date of the change in status. The effect of applying this Topic shall be recognized as a cumulative-effect adjustment to net assets at the date of the change in status. The cumulative-effect adjustment shall be included in the net asset value at the beginning of the period in the per-share information included in the financial highlights. The adjustment to net assets represents both of the following:

1.  a
    
    The difference between the fair value and the carrying amount of the entity's investees (or [parent](https://asc.understandingaccounting.org/glossary/p/#parent "An entity that has a controlling financial interest in one or more subsidiaries. (Also, an entity that is the primary beneficiary of a variable interest entity.)")'s portion of the assets minus liabilities for consolidated investments) at the date of the change in status
    
2.  b
    
    Any amounts previously recognized in accumulated other comprehensive income.