# ASC 946-20: Financial Services—Investment Companies — Investment Company Activities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/946/20/) 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): 2026-09-10T02:19:28.974Z to 2026-09-10T02:20:03.597Z Record version: sha256:2d98f0e7afd9e2cf0019a5d080a90844d929d898a64c10a3f48fbcfd9249bc4a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20: Financial Services—Investment Companies — Investment Company Activities ### Machine-generated study aids ```json { "summary": "ASC 946-20 governs specific \"investment company activities\" — payments by affiliates to reimburse fund losses or cure investment-restriction violations, Rule 12b-1 distribution plans, expense limitation/waiver arrangements, offering costs, shareholder and distribution transactions, and related presentation and disclosure. Its core rules: affiliate payments and gains/losses on non-conforming investments are combined in one line within net realized/unrealized gains (losses) and quantified in the financial highlights (946-20-45-1; 946-20-50-2); a fund with an enhanced 12b-1 plan (or a board-contingent plan once the board commits) accrues a liability and expense for the distributor's excess distribution costs (946-20-25-3), while an excess of fees collected over distributor costs may never be booked as an asset (946-20-45-2). Offering costs are charged to paid-in capital for closed-end funds, partnerships and unit investment trusts, but deferred and amortized straight-line over 12 months for open-end funds and continuously offered closed-end funds (946-20-25-5 through 25-6; 35-5; 35-6).", "key_points": [ "Affiliate payments to reimburse investment losses or losses from investments violating fund guidelines are combined into a single statement of operations line, 'net increase from payments by affiliates and net gains (losses) realized on the disposal of investments in violation of restrictions,' within net realized and unrealized gains (losses) (946-20-45-1), with amounts, circumstances, and the effect on total return disclosed (946-20-50-2).", "A credit enhancement provided by an affiliate is recognized when it becomes available to the fund (946-20-25-2), measured initially at the cost of obtaining a similar enhancement in an arm's-length transaction (946-20-30-1), with subsequent changes in value recorded as unrealized appreciation or depreciation (946-20-35-1).", "Funds with enhanced 12b-1 plans must accrue a liability and expense for the distributor's excess costs, and board-contingent plans accrue only when the board commits to pay; the liability equals cumulative distribution costs less cumulative 12b-1 fees, cumulative CDSL payments, and reasonably estimable future CDSL payments by current shareholders, discounted only if cash flows are reliably determinable and not subject to a reasonable interest charge (946-20-25-3; 30-3 through 30-5; 35-3).", "An excess of cumulative 12b-1 fees and CDSL payments (including estimated future CDSL) over the distributor's cumulative costs shall not be reported as an asset (946-20-45-2); principal plan terms and recoverable distribution costs must be disclosed for board-contingent and enhanced plans (946-20-50-3).", "Excess expenses potentially reimbursable to the adviser under an expense limitation agreement are recorded as a liability only if the Concepts Statement 6 liability criteria and ASC 450-20-25-2 are met — usually they are not — but the agreements and carryover amounts must be disclosed (946-20-25-4; 50-6).", "Offering costs of closed-end funds and investment partnerships are charged to paid-in capital upon sale of shares/units; open-end funds and continuously offered closed-end funds defer them and amortize straight-line over 12 months from commencement of operations; unit investment trust offering costs are charged to paid-in capital pro rata as units are sold and written off when issuance is no longer probable (presumed after one year) (946-20-25-5; 25-6; 35-5; 35-6; 40-1).", "Shareholder purchases and redemptions of open-end funds are recorded on trade date with an offsetting receivable/payable for fund shares (946-20-25-7); distribution liabilities are recorded on the ex-dividend date rather than the declaration date (946-20-25-9); and all voluntary and involuntary fee waivers are shown on the face of the statement of operations as a reduction of total expenses, with the effect of voluntary waivers disclosed in the financial highlights (946-20-50-7)." ], "categories": [ "Industry-specific", "Presentation", "Disclosure", "Recognition" ], "audience_level": "advanced", "student_note": "This subtopic is where fund-specific quirks live: trade-date share accounting, ex-dividend-date distribution liabilities, and the asymmetric 12b-1 rule that a distributor's excess costs can create a fund liability while excess fees collected can never be an asset. A common misunderstanding is assuming adviser expense-reimbursement carryovers are automatically liabilities — under 946-20-25-4 they usually are only disclosed, not accrued.", "related_topics": [ "946-10", "946-205", "946-740", "720-15", "450-20", "850-10" ], "key_concepts": [ "investment company", "payments by affiliates", "12b-1 plan", "contingent-deferred sales load", "excess distribution costs", "expense limitation agreement", "offering costs", "financial highlights and total return" ] } ``` Source downloaded (UTC): 2026-09-10T02:19:28.974Z to 2026-09-10T02:19:28.974Z Record version: sha256:57c93ac74f32350e072d80a2910fc80565487cf41b2f4cbb6cb97483466d6c78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/946/20/#00-status) SEC content: no ##### [946-20-00-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:28.974Z to 2026-09-10T02:19:28.974Z Record version: sha256:eee901ec7db000efd0183d12cf29f0a013fda7a6fdd42682ce33c3a77aac6104 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Front-End LoadAddedAccounting Standards Update No. 2014-0603/14/2014
946-20-05-1AmendedAccounting Standards Update No. 2013-0806/07/2013
946-20-05-1A through 05-1E
AddedAccounting Standards Update No. 2013-0806/07/2013
946-20-05-1DAmendedAccounting Standards Update No. 2014-0603/14/2014
946-20-25-1SupersededAccounting Standards Update No. 2013-0806/07/2013
946-20-25-4AmendedAccounting Standards Update No. 2024-0203/29/2024
946-20-50-1SupersededAccounting Standards Update No. 2013-0806/07/2013
946-20-50-11AmendedAccounting Standards Update No. 2023-0610/09/2023
946-20-50-15AddedAccounting Standards Update No. 2013-0806/07/2013
946-20-50-16AddedAccounting Standards Update No. 2013-0806/07/2013
Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:019a5288735b8dc88d66530882d575fc9b5cfac8061648dfbc0053923ceaba8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/946/20/#05-overview-and-background) SEC content: no ##### [946-20-05-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:c10bd2365a6b576162398df4d436a4997f0667ae860634aa700993855147dcdc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses accounting for certain activities engaged in by investment companies. 1. a [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 3. c [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 4. d [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 5. e [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 6. f [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). #### Background Information about Investment Company Activities ##### [946-20-05-1A](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-1A) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:362822ee1307fd5375f4fdd40c2c11f1075e51784d4b19f1d6d257e4f8f297f8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Typically, an investment company sells its ownership interests, invests the proceeds to achieve its investment objectives, and provides returns to its investors from the net income earned on its investments and net gains realized on the disposal of its investments. ##### [946-20-05-1B](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-1B) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:e8ab3aea5e529cc3a43df9069033c98d83c1fa3f43e051bddfdf1c7d65b2ee6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Several kinds of investment companies exist: management investment companies, unit investment trusts, common (collective) trust funds, exchange-traded funds, investment partnerships, certain separate accounts of life insurance companies, and offshore funds. Management investment companies may be open-end funds (commonly known as mutual funds), [closed-end funds](https://asc.understandingaccounting.org/glossary/c/#closed-end-funds "Closed-end funds are investment companies that issue a fixed number of shares (that generally trade on an open market) to raise capital, similar to the way in which an entity sells stock in an initial public offering."), special purpose funds, venture capital investment companies, small business investment companies, and business development companies. Investment companies are organized as corporations (in the case of mutual funds, under the laws of certain states that authorize the issuance of common shares redeemable on demand of individual shareholders), common law trusts (sometimes called business trusts), limited partnerships, limited liability investment partnerships and companies, and other more specialized entities, such as separate accounts of insurance companies that are not in themselves legal entities. ##### [946-20-05-1C](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-1C) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:aba4d11ec20150a8d10e87982f5b809ff9ad4ca7d5c97804465f92de0febede0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once an investment company has been organized to do business, it usually engages immediately in its planned principal operations, that is, the sale of capital stock and investment of funds. Employee training, development of markets for the sale of capital stock, and similar activities are usually performed by the investment adviser or other agent, and the costs of these activities are not borne directly by the investment company. However, an investment company, particularly one not engaging an agent to manage its portfolio and to perform other essential functions, may engage in such activities and may bear those costs directly during its development stage. ##### [946-20-05-1D](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-1D) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:c9f15cbfed2d3c79b1d03ab6eab29fe67487a4136cd9d8ab1cfcbd386518e3c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Multiple-class funds issue more than one class of shares. Each class of shares typically has a different kind of sales charge, such as a [front-end load](https://asc.understandingaccounting.org/glossary/f/#front-end-load "A sales commission or charge payable at the time of purchase of mutual fund shares."), [contingent-deferred sales load](https://asc.understandingaccounting.org/glossary/c/#contingent-deferred-sales-load "A sales charge imposed directly on redeeming shareholders based on a percentage of the lesser of the redemption proceeds or original cost. The percentage may decrease or be eliminated based on the duration of share ownership (frequently decreases by 1 percent a year). Also referred to as back-end load."), [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940.") fee (referring to Rule 12b-1 in Chapter 17 of the Code of Federal Regulations, which implements the Investment Company Act of 1940), or combinations thereof. Multiple-class funds may charge different classes of shares for specific or incremental expenses, such as transfer-agent, registration, and printing expenses related to each class. ##### [946-20-05-1E](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-1E) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:11fa509bb0a9bde9021c5855e63f3fd40a1276552203191d54379b814c916214 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Venture capital investment companies, including most small business investment companies and private equity investment companies, differ from other types of investment companies. The typical open-end or closed-end investment company is a more passive investor, whereas a venture capital investment company is more actively involved with its investees. In addition to providing funds, whether in the form of loans or equity, a venture capital investment company often provides technical and management assistance to its investees as needed and requested. That assistance is provided for maximizing the overall value of the investment rather than for other benefits. The portfolio of a venture capital investment company may be illiquid by the very nature of the investments, which are usually securities with no public market. Often, gains on those investments are realized over a relatively long holding period. The nature of the investments therefore requires valuation procedures that may differ from those used by the typical investment company primarily addressed by this Subtopic. Venture capital investment companies also may incur liabilities not generally found in other investment companies. #### Payments by Affiliates ##### [946-20-05-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:6f9fca653c0363ff2298cd17e3dbbcc37fa3f7bd6b093ee613581d80c060df7e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Affiliates may make payments to a fund related to investment losses for either of the following reasons: 1. a Payments by affiliates. To reimburse the effect of a loss (realized or unrealized) on a portfolio investment, often caused by a situation outside the fund's, or its affiliates', direct control, such as an issuer default or a decline in [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."). 2. b Investment restriction violations (investments not meeting investment guidelines). Occasionally, a fund adviser may purchase an investment for a fund that clearly violates the fund's investment restrictions (investment restrictions are described in the prospectus or statement of additional information for registered funds and in partnership agreements or offering memorandums for nonregistered funds). The investment held in violation of the fund's investment restrictions may appreciate or depreciate in value. In the case where the investment has depreciated in value and the fund has consequently incurred a loss, the fund adviser may make a payment to the fund in lieu of settlement of a potential claim resulting from the violation of the fund's investment restrictions. This payment, in effect, makes the fund whole relative to the loss that it has incurred. This type of transaction is in essence a payment to put the fund's shareholders in the position they would have been in had the violation not occurred. ##### [946-20-05-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:640e71da5b7bca95ba725e6dc9dd1f0264346462fe7737439bd1c8bbb76d9c15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Payments by affiliates may take several forms, such as any of the following: 1. a A direct cash contribution to the fund to offset the effect of a realized loss on a portfolio investment 2. b Purchase of securities from the fund at prices in excess of the securities' current fair value 3. c Provision of a credit enhancement to maintain the investment's value. #### Certain Distribution Costs ##### [946-20-05-4](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:7002813a6df2ff1e985400d73a2e50b8ae2a8658078c23589a10a04158003dc5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Open-end investment companies, also known as funds, are permitted to finance the distribution of their shares under a plan pursuant to Rule [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940.") in Chapter 17 of the Code of Federal Regulations. (Rule 12b-1 is one of the regulations implementing the Investment Company Act of 1940.) Under Rule 12b-1, a fund's board of directors is required to perform an annual review of the plan and determine whether to continue or terminate it. Under a [traditional 12b-1 plan](https://asc.understandingaccounting.org/glossary/t/#traditional-12b-1-plan "A compensation or reimbursement plan pursuant to Rule 12b-1 that permits the use of a fund's assets to pay distribution-related expenses under certain conditions. The 12b-1 fees under traditional 12b-1 plans are normally discontinued upon plan termination, but may continue to be paid after plan termination under a board-contingent plan."), a fund's [distributor](https://asc.understandingaccounting.org/glossary/d/#distributor "Usually the principal underwriter that sells the fund's capital shares by acting as an agent (intermediary between the fund and an independent dealer or the public) or as a principal, buying capital shares from the fund at net asset value and selling shares through dealers or to the public (see definition of underwriter in section 2(a)(40) of the Investment Company Act of 1940).") may be compensated or reimbursed for its [distribution costs](https://asc.understandingaccounting.org/glossary/d/#distribution-costs "Costs, as defined in a distribution agreement between a distributor and a fund, incurred by a distributor in distributing a fund's shares. Such costs may include commission payments to sales representatives, promotional materials, overhead allocations, and interest.") or efforts through any of the following methods: 1. a A 12b-1 fee, payable by the fund, based on an annual percentage of the fund's average net assets (a [compensation plan](https://asc.understandingaccounting.org/glossary/c/#compensation-plan "A plan that provides for a 12b-1 fee, payable by the fund, based on a percentage of the fund's average net assets. The 12b-1 fee may be more or less than the costs incurred by the distributor.")) or based on an annual percentage of the fund's average net assets limited to actual costs incurred, after deducting [contingent-deferred sales loads](https://asc.understandingaccounting.org/glossary/c/#contingent-deferred-sales-load "A sales charge imposed directly on redeeming shareholders based on a percentage of the lesser of the redemption proceeds or original cost. The percentage may decrease or be eliminated based on the duration of share ownership (frequently decreases by 1 percent a year). Also referred to as back-end load.") received by the distributor (a [reimbursement plan](https://asc.understandingaccounting.org/glossary/r/#reimbursement-plan "A plan that provides for a 12b-1 fee, payable by the fund, that may not exceed the lesser of an annual percentage of the fund's average net assets or actual costs incurred by the distributor net of contingent-deferred sales load received by the distributor.")). Therefore, a compensation plan differs from a reimbursement plan only in that the latter provides for annual or cumulative limits, or both, on fees paid. Fees for both kinds of plans are treated as expenses in a fund's statement of operations. 2. b A front-end load, which is assessed on purchasing shareholders at the time fund shares are sold. 3. c A contingent-deferred sales load imposed directly on redeeming shareholders. The contingent-deferred sales load usually is expressed as a percentage, which declines with the passage of time, of the lesser of redemption proceeds or original cost. The contingent-deferred sales load normally ranges from 4 percent to 6 percent and typically is reduced by 1 percent (for example, from 6 percent to 5 percent) a year until the sales charge reaches 0 percent. ##### [946-20-05-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:a0024d31bee009d1ee554b2a21b5db1a1398fbb8a3581fdc651cf14f380908e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Rule [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940.") plans historically have provided that a fund's board of directors may terminate the plan with no penalty to the fund. (Termination of the plan does not necessitate termination of the fund.) Redeeming shareholders still would be subject to the contingent-deferred sales load, which would be paid to the distributor that sold the shares to those shareholders. However, with a traditional 12b-1 plan, the 12b-1 fees normally would be discontinued on plan termination. Some traditional reimbursement 12b-1 plans provide that, when the plan is terminated, the fund's board of directors has the option, but not the requirement, to pay the distributor for any costs incurred by the distributor in excess of the cumulative contingent-deferred sales load and 12b-1 fees the distributor has received. Such a plan is referred to as a [board-contingent plan](https://asc.understandingaccounting.org/glossary/b/#board-contingent-plan "A reimbursement 12b-1 plan that provides that, on the plan's termination, a fund's board of directors has the option, but not the requirement, to pay the distributor for any excess costs incurred by the distributor."). Under traditional reimbursement 12b-1 plans, including board-contingent plans, contingent-deferred sales load payments by shareholders continue to be remitted to the distributor until [excess costs](https://asc.understandingaccounting.org/glossary/e/#excess-costs "The cumulative distribution costs incurred by the distributor less the sum of cumulative 12b-1 fees paid, cumulative contingent-deferred sales load payments, and future cumulative contingent-deferred sales load payments by current shareholders, if reasonably estimable.") are fully recovered, after which the contingent-deferred sales load payments usually are remitted to the fund instead of the distributor. ##### [946-20-05-6](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:922899d13c7aa1f053805bad9b2effd226690b9a0b8742f5c4fedcd189f5fed1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. With an [enhanced 12b-1 plan](https://asc.understandingaccounting.org/glossary/e/#enhanced-12b-1-plan "A reimbursement 12b-1 plan that provides that, on termination of the plan, the fund is required to continue paying the 12b-1 fee to the extent the distributor has excess costs."), the fund is required to continue paying the 12b-1 fee after termination of the plan to the extent the distributor has excess costs. Contingent-deferred sales load payments by shareholders would continue to be remitted to the distributor to further offset excess costs. Thus, the major distinction between traditional and enhanced 12b-1 plans is the requirement for the fund to continue such payments upon plan termination. ##### [946-20-05-7](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:8c1020853d7d4ade83dfbb6135dbbb6eacc79e996a17991a6e677aac99a45c29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table summarizes the 12b-1 plan attributes. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F8E707FC-AD76-412C-A2AA-147B9B7456DA-low.gif) Traditional Enhanced Compensation Reimbursement Nonboard Contingent Board Contingent "Annual review and approval of plan by board, with ability to terminate plan" X X X X Fund Payment Terms (a) Payment based on average net assets X X X X "Annual or cumulative limitation, or both, based on actual distribution costs" X X X "Upon termination of 12b-1 plan, board has option, but not obligation, to pay excess costs" X "Upon termination of 12b-1 plan, fund is required to continue paying 12b-1 fee to the extent the distributor has excess costs" X (a) "Excludes front-end and contingent deferred sales load payments, which are made by shareholders and not the fund." #### Expense Limitation Agreements ##### [946-20-05-8](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:482e37f9629ee91d811532d9cf1dbfc368e2dbc977e3e6bd36a1543d82b52b6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some expense limitation agreements may provide that reimbursements by the fund adviser of expenses incurred by the fund in excess of the maximum permitted by the prospectus or offering document will be carried over to a future period and reimbursed to the fund adviser when, and to the extent that, the total expense ratio falls below the permitted maximum. Such agreements may provide that reimbursement of excess expenses to the fund adviser is not required after a specified date or upon conclusion of a specified period from the time the fund initially incurred, or the adviser initially reimbursed, the expenses, such as three years. Under most excess expense plans, a fund is obligated to repay a servicer for expenses incurred previously only if, during a defined period, the fund retains the service provider and can reduce its expense ratio to a low enough level to permit payment, and maintain that ratio at a sufficiently low level thereafter. Many substantive conditions could cause the fund to have no obligation to the servicer, including failure to attract assets, significant redemptions of shares by investors, market depreciation, and significant increases in other expenses, all of which could drive expenses up to or beyond the maximum under which payment would otherwise be made. #### Brokerage Service Arrangements ##### [946-20-05-9](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:76e5579f65e471e4ad5f52f1ca948ab322d35ab46bd996fa27b2728ff86e1883 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment company may have a brokerage service arrangement with a broker-dealer or an affiliate of a broker-dealer under which the broker-dealer (or its affiliate), in connection with the investment company's brokerage transactions directed to the broker-dealer, provides or pays for services to the investment company (other than brokerage and research services as those terms are used in section 28(e) of the Securities Exchange Act of 1934). #### General Partner Advisory Services ##### [946-20-05-10](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:54abb0129672634b30d8ba946ef465ada1df752268b5203de86a5b12a118b605 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investment companies organized as limited partnerships typically receive advisory services from the general partner. For such services, a number of partnerships pay fees chargeable as expenses to the partnership, whereas others allocate net income from the limited partners' capital accounts to the general partner's capital account, and still others employ a combination of the two methods. #### Fee Waivers ##### [946-20-05-11](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:51526c401fc6fb949bd06c0f5c2c3bd38c10a27ef5c0a2cf5f3950657a5af6bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An adviser or a third party may voluntarily or involuntarily waive its fee and reimburse expenses (waivers). An example of an involuntary waiver is when the advisory agreement (or other regulation or agreements that are either outside the adviser's control or require shareholder approval) provides that the adviser should reimburse the investment company for expenses in excess of a specified percentage of average net assets. #### Portfolio Insurance ##### [946-20-05-12](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:31.828Z to 2026-09-10T02:19:31.828Z Record version: sha256:bb600134870eb5bd3514baa4ed2c5e973b8cf074bd601e42cd59d1b83adce66d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many municipal bond funds, primarily those organized as unit investment trusts with fixed portfolios, arrange for insurance for the payment of principal and interest when due. The insurance applies to portfolio securities only while they are owned by the fund, and its coverage is not transferable to buyers of the securities. That arrangement differs from those in which the issuer of the securities acquires the insurance, making the insurance feature an element of the securities and transferable on changes in ownership. Source downloaded (UTC): 2026-09-10T02:19:35.385Z to 2026-09-10T02:19:35.385Z Record version: sha256:c1267e5d279154247e45fd8711aeea07fbd7230c4c45ceea9346aa23365a2de5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/946/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [946-20-15-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:35.385Z to 2026-09-10T02:19:35.385Z Record version: sha256:c3a301a581a744df7c9cfe4546feece3d3b1687ebb3f11a101f8c5a6d6983e8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 946-10-15. Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:4f03611f64a5ed1c5acfe02779d0b9871a42aa90397cd35d4d8e384b54ad9f3f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/946/20/#25-recognition) SEC content: no ##### [946-20-25-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:e459081a5ba3402fc6da0a403cc2af5b1d7da6993e8d4ebc481ff816037f588e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). #### Payments by Affiliates ##### [946-20-25-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:bbd36630ad753db4b6f89683b2283f4f3d03d000f5a7c2133821af4be3b8f9c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A credit enhancement provided by an affiliate to maintain an investment's value shall be recognized when the enhancement becomes available to the fund. #### Certain Distribution Costs ##### [946-20-25-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:955dfbd503dd5acb68ec5e3b405bafe6752c89a48ff4005fd9028ea1ee73828d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this paragraph applies to annual and interim financial statements of investment companies that adopt plans that comply with Rule [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940."). A liability, with a corresponding charge to expense, shall be recognized by a fund with an [enhanced 12b-1 plan](https://asc.understandingaccounting.org/glossary/e/#enhanced-12b-1-plan "A reimbursement 12b-1 plan that provides that, on termination of the plan, the fund is required to continue paying the 12b-1 fee to the extent the distributor has excess costs.") for [excess costs](https://asc.understandingaccounting.org/glossary/e/#excess-costs "The cumulative distribution costs incurred by the distributor less the sum of cumulative 12b-1 fees paid, cumulative contingent-deferred sales load payments, and future cumulative contingent-deferred sales load payments by current shareholders, if reasonably estimable."). A liability for excess costs, computed in the same way as for an enhanced 12b-1 plan, shall be recorded by a fund with a [board-contingent plan](https://asc.understandingaccounting.org/glossary/b/#board-contingent-plan "A reimbursement 12b-1 plan that provides that, on the plan's termination, a fund's board of directors has the option, but not the requirement, to pay the distributor for any excess costs incurred by the distributor.") when the fund's board commits to pay such costs. Example 1 (see paragraph [946-20-55-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-55-1)) illustrates this guidance. #### Expense Limitation Agreements ##### [946-20-25-4](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-4) Pending content: yes Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:7c7cf2d1e6f4200e0b77234261f5fe8e1e71c9c3b73778c8fd60fc12ca997bec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability for excess expenses shall be recognized if, and to the extent that, the expense limitation agreement's established terms for repayment of the excess expenses to the adviser by the fund and the attendant circumstances meet the criteria in paragraphs 36(a), 36(b), and 36(c) of FASB Concepts Statement No. 6, Elements of Financial Statements, and the criteria in paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2). In most instances, a liability will not be recorded because it is not likely that excess expenses under such plans will meet those criteria before amounts are actually due to the adviser under the reimbursement agreement. If an assessment of the specific circumstances (such as an agreement to reimburse for either an unlimited period or a period substantially greater than that necessary for the fund to demonstrate its economic viability or an obligation to reimburse the servicer remains even after the cancellation of the fund's contract with the servicer) indicates that those criteria are met, a liability shall be recorded. Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [105-10-65-9](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-9)A liability for excess expenses shall be recognized if, and to the extent that, the expense limitation agreement's established terms for repayment of the excess expenses to the adviser by the fund and the attendant circumstances meet all of the following criteria: 1. a The excess expense or expenses embody a present duty or responsibility to one or more other entities that entails settlement by probable future transfer or use of assets at a specified or determinable date, on occurrence of a specified event, or on demand. 2. b The duty or responsibility obligates a particular entity, leaving it little or no discretion to avoid the future sacrifice. 3. c The transaction or other event obligating the entity has already happened. 4. d The guidance in paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2). In most instances, a liability will not be recorded because it is not likely that excess expenses under such plans will meet those criteria before amounts are actually due to the adviser under the reimbursement agreement. If an assessment of the specific circumstances (such as an agreement to reimburse for either an unlimited period or a period substantially greater than that necessary for the fund to demonstrate its economic viability or an obligation to reimburse the servicer remains even after the cancellation of the fund's contract with the servicer) indicates that those criteria are met, a liability shall be recorded. #### Offering Costs ##### [946-20-25-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:b4d6369945b82b37c98733bfa1add690c4975074ca0a81fcd460f969d1fba560 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Offering costs](https://asc.understandingaccounting.org/glossary/o/#offering-costs "Offering costs include all of the following: Legal fees pertaining to the investment company's shares offered for sale Securities and Exchange Commission (SEC)and state registration fees Underwriting and other similar costs Costs of printing prospectuses for sales purposes Initial fees paid to be listed on an exchange Tax opinion costs related to offering of shares Initial agency fees of securing the rating for bonds or preferred stock issued by closed-end funds.") of [closed-end funds](https://asc.understandingaccounting.org/glossary/c/#closed-end-funds "Closed-end funds are investment companies that issue a fixed number of shares (that generally trade on an open market) to raise capital, similar to the way in which an entity sells stock in an initial public offering.") and investment partnerships shall be charged to paid-in capital upon sale of the shares or units. ##### [946-20-25-6](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:4c843a8b8cd9c4d0e5e6a522ed628244d8e45d35b0b47da96c241abbdec7977c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Offering costs of open-end investment companies and of closed-end funds with a continuous offering period shall be recognized as a deferred charge. #### Capital Share Transactions ##### [946-20-25-7](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:bad4b31b312de2f85a2d90cc96a6a2703b50c7c7295bf1d214e829ba45299fd2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accounting for shareholder transactions of open-end funds differs from the accounting followed by commercial entities in several key aspects. Sales of fund shares are recorded daily by crediting capital stock for the par value of the stock to be issued and additional paid-in capital for the amount paid over the par value; redemptions are recorded daily by debiting those accounts. The offsetting debit (credit), however, is made to an asset (liability) account, typically captioned as receivable for fund shares sold (payable for fund shares redeemed). These entries are made on or as of the date the order to purchase or sell fund shares is received (trade date), not on the day the payment is due (settlement date) as is typical practice for the recording of issuance of equity shares by commercial entities. ##### [946-20-25-8](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:4ab3c757a518dd989fbe36ad3ba44ae3c911f11b196febc91a5e51179bea8c93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investment partnerships shall record capital subscription and redemption commitments as of the date required by the partnership agreement. Cash received before this date shall be recorded as an advance capital contribution liability. #### Dividends ##### [946-20-25-9](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:47a7c92b94b65bfb70f6a58e92ea55d2a689b6ac13232be114224d7a931e1a43 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Both closed-end and open-end investment companies record distribution liabilities on the ex-dividend date rather than the declaration date. For closed-end investment companies, a purchaser typically is not entitled to a dividend for shares purchased on the ex-dividend date. Open-end investment companies record the liability on the ex-dividend date to properly state the net asset value at which sales and redemptions are made. When large (in excess of 15 percent of a closed-end fund's net asset value) dividends or distributions are declared, it is the policy of some exchanges to postpone the ex-dividend date until the dividend has been paid. In such circumstances, the liability for the dividend distribution would be recorded on the books of the fund on the payment date. #### Performance Fees ##### [946-20-25-10](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:54164ad9ee653b972974a40c1732c45ce3d30a5a2ee91bb672ba5166d9868fd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Performance fees by an investment adviser under an investment advisory agreement shall be accrued at interim dates based on actual performance through the accrual date. #### Portfolio Insurance ##### [946-20-25-11](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:42.174Z to 2026-09-10T02:19:42.174Z Record version: sha256:c82a68a9b29bd8c5b67ef1a21b54dc9f6b2c64bb7709cae1f0a968a6ac4af7ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If insurance applies only to the fund's portfolio, it does not have a measurable [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.") in the absence of default of the underlying securities or of indications of the probability of default and, accordingly, the cost of the policy should be treated as an operating expense. Source downloaded (UTC): 2026-09-10T02:19:44.628Z to 2026-09-10T02:19:44.628Z Record version: sha256:a1a236d51afa9ace18deb33c899fcabfa1608790cf1585549558acbcc1fc4ada Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/946/20/#30-initial-measurement) SEC content: no #### Payments by Affiliates ##### [946-20-30-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:44.628Z to 2026-09-10T02:19:44.628Z Record version: sha256:f31975569c94e9d70c9b3f0d8ca164dd468082643b8096a29adfeb727f355366 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount of the payment from a credit enhancement to maintain the investment's value shall be measured initially by the cost of obtaining a similar enhancement in an arm's-length transaction. #### Certain Distribution Costs ##### [946-20-30-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:44.628Z to 2026-09-10T02:19:44.628Z Record version: sha256:af3ecc67e28855f4c939e45c22fbe2c63fe0faa1fecae9ef6984cd0e57e28743 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in paragraphs [946-20-30-3 through 30-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-30-3) applies to annual and interim financial statements of investment companies that adopt plans that comply with Rule [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940."). ##### [946-20-30-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:44.628Z to 2026-09-10T02:19:44.628Z Record version: sha256:428b696d54a551cf7e9a03139bc2c8fb26a9a251ef8c89e0992cb0636b720c8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The liability and expense recognized under paragraph [946-20-25-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-3) shall be measured initially in an amount equal to the cumulative [distribution costs](https://asc.understandingaccounting.org/glossary/d/#distribution-costs "Costs, as defined in a distribution agreement between a distributor and a fund, incurred by a distributor in distributing a fund's shares. Such costs may include commission payments to sales representatives, promotional materials, overhead allocations, and interest.") incurred by the [distributor](https://asc.understandingaccounting.org/glossary/d/#distributor "Usually the principal underwriter that sells the fund's capital shares by acting as an agent (intermediary between the fund and an independent dealer or the public) or as a principal, buying capital shares from the fund at net asset value and selling shares through dealers or to the public (see definition of underwriter in section 2(a)(40) of the Investment Company Act of 1940).") less the sum of all of the following: 1. a Cumulative 12b-1 fees paid 2. b Cumulative [contingent-deferred sales load](https://asc.understandingaccounting.org/glossary/c/#contingent-deferred-sales-load "A sales charge imposed directly on redeeming shareholders based on a percentage of the lesser of the redemption proceeds or original cost. The percentage may decrease or be eliminated based on the duration of share ownership (frequently decreases by 1 percent a year). Also referred to as back-end load.") payments 3. c Future cumulative contingent-deferred sales load payments by [current shareholders](https://asc.understandingaccounting.org/glossary/c/#current-shareholders "Shareholders of a fund, or a class of shares of a fund, at an evaluation or measurement date. Amounts attributable to current shareholders are based on shares outstanding at that date and do not include estimates of future reinvestments or other share purchases."), if reasonably estimable. ##### [946-20-30-4](https://asc.understandingaccounting.org/asc/946/20/#946-20-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:44.628Z to 2026-09-10T02:19:44.628Z Record version: sha256:6939c5af506193f1316fe165bf09771ae88959440077790efaa375df91d50076 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The liability and expense recognized under paragraph [946-20-25-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-3) shall be measured at its present value, calculated using an appropriate current interest rate, if both of the following criteria are met: 1. a The amount and timing of cash flows are reliably determinable. 2. b The distribution costs are not subject to a reasonable interest charge. ##### [946-20-30-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:44.628Z to 2026-09-10T02:19:44.628Z Record version: sha256:3340f72172cb750b3ed5bd3205385e67563b3bbbb64b45c67b82501886091128 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If these conditions are not met, the liability recognized under paragraph [946-20-25-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-3) shall be calculated without discounting to present value. Source downloaded (UTC): 2026-09-10T02:19:47.616Z to 2026-09-10T02:19:47.616Z Record version: sha256:16f2d63b70483f34f11389c3b31be102076a684845279210f32506b0c942a644 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/946/20/#35-subsequent-measurement) SEC content: no #### Payments by Affiliates ##### [946-20-35-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:47.616Z to 2026-09-10T02:19:47.616Z Record version: sha256:022540897ec038c7885bbd403651338cbb1cc36bdc69590e65c92ba5432916ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any subsequent change in the value of a credit enhancement to maintain the investment's value shall be accounted for as unrealized appreciation or depreciation. #### Certain Distribution Costs ##### [946-20-35-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:47.616Z to 2026-09-10T02:19:47.616Z Record version: sha256:163acb9778cdd105b6acdc1d4ac5f35c5941f9d83cfb934cbd7d492dcc7b09bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the following paragraph and paragraph [946-20-35-4](https://asc.understandingaccounting.org/asc/946/20/#946-20-35-4) applies to annual and interim financial statements of investment companies that adopt plans that comply with Rule [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940."). ##### [946-20-35-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:47.616Z to 2026-09-10T02:19:47.616Z Record version: sha256:b4609feb39ab6514c8e4ddee3fb48101b6f74cd03118d7501cf6a68b05ca329a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The liability recognized under paragraph [946-20-25-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-3) shall be subsequently measured using the guidance in paragraphs [946-20-30-4 through 30-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-30-4) . Changes in the liability shall be recognized in the statement of operations as an expense or reduction in expense. ##### [946-20-35-4](https://asc.understandingaccounting.org/asc/946/20/#946-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:47.616Z to 2026-09-10T02:19:47.616Z Record version: sha256:b6d9887e82c0c183c0a6283287dbe243f8dc1b9339284c42a4530c17986f652c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any future cumulative [contingent-deferred sales load](https://asc.understandingaccounting.org/glossary/c/#contingent-deferred-sales-load "A sales charge imposed directly on redeeming shareholders based on a percentage of the lesser of the redemption proceeds or original cost. The percentage may decrease or be eliminated based on the duration of share ownership (frequently decreases by 1 percent a year). Also referred to as back-end load.") payments shall be based on all of the following: 1. a Current [net asset value per share](https://asc.understandingaccounting.org/glossary/n/#net-asset-value-per-share "Net asset value per share is the amount of net assets attributable to each share of capital stock (other than senior equity securities, that is, preferred stock) outstanding at the close of the period. It excludes the effects of assuming conversion of outstanding convertible securities, whether or not their conversion would have a diluting effect.") 2. b The number of shares currently outstanding and the number of years that they have been outstanding 3. c Estimated shareholder [persistency](https://asc.understandingaccounting.org/glossary/p/#persistency "The length of time a shareholder owns shares of a particular fund or class of shares of a fund before redemption.") based on historical fund data or, if historical fund data are not available, group or industry data for a similar class of shares. #### Offering Costs ##### [946-20-35-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:47.616Z to 2026-09-10T02:19:47.616Z Record version: sha256:904ea2500fe82090411a3fe99054ce026097aa4d8f1f554103e6c0d0c54b7675 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Offering costs](https://asc.understandingaccounting.org/glossary/o/#offering-costs "Offering costs include all of the following: Legal fees pertaining to the investment company's shares offered for sale Securities and Exchange Commission (SEC)and state registration fees Underwriting and other similar costs Costs of printing prospectuses for sales purposes Initial fees paid to be listed on an exchange Tax opinion costs related to offering of shares Initial agency fees of securing the rating for bonds or preferred stock issued by closed-end funds.") recognized as a deferred charge under paragraph [946-20-25-6](https://asc.understandingaccounting.org/asc/946/20/#946-20-25-6) shall be amortized to expense over 12 months on a straight-line basis when operations begin. ##### [946-20-35-6](https://asc.understandingaccounting.org/asc/946/20/#946-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:47.616Z to 2026-09-10T02:19:47.616Z Record version: sha256:b150f175cde32ff10e93ff1a9e2fc8bf830f77c4945bfff4c216c045501e44e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Offering costs of unit investment trusts shall be charged to paid-in capital on a pro rata basis as the units or shares are issued or sold by the trust (when the units are purchased by the underwriters). Units sold to underwriters on a firm basis are considered sold by the trust, and the offering costs associated with those units shall be charged to paid-in capital when the units are purchased by the underwriters. Offering costs that remain unamortized at the end of the year shall be reviewed for impairment. (For guidance concerning organization and offering costs, see Subtopic 720-15.) Source downloaded (UTC): 2026-09-10T02:19:49.444Z to 2026-09-10T02:19:49.444Z Record version: sha256:3ec1619d8cf61ec914d6283aa55c6d3a66463ac30bb1c085833a1c8cb85de9e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/946/20/#40-derecognition) SEC content: no #### Offering Costs ##### [946-20-40-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:49.444Z to 2026-09-10T02:19:49.444Z Record version: sha256:0b297fa17945512244211bb71c88ff57eb04d40a824e96b7ed0f1c3e741972ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Offering costs](https://asc.understandingaccounting.org/glossary/o/#offering-costs "Offering costs include all of the following: Legal fees pertaining to the investment company's shares offered for sale Securities and Exchange Commission (SEC)and state registration fees Underwriting and other similar costs Costs of printing prospectuses for sales purposes Initial fees paid to be listed on an exchange Tax opinion costs related to offering of shares Initial agency fees of securing the rating for bonds or preferred stock issued by closed-end funds.") of unit investment trusts that have not yet been charged to paid-in capital shall be written off when it is no longer probable that the shares to which the offering costs relate will be issued in the future. It is presumed that those costs will not have a future benefit one year from the initial offering. Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:c21df030be9b562c2ee44c343d8398e112ab208ce42d3d59d28a7855e2648910 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/946/20/#45-other-presentation-matters) SEC content: no #### Payments by Affiliates ##### [946-20-45-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:7d9b10c7bdfef47591d448a88708fe1559e3a8aa9ec78b005f9341c911b210c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Payments made by affiliates for the two reasons in paragraph [946-20-05-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-2) shall be combined and reported as a separate line item entitled net increase from payments by affiliates and net gains (losses) realized on the disposal of investments in violation of restrictions in the statement of operations as part of net realized and unrealized gains (losses) from investments and foreign currency. That separate line item would comprise amounts related to all of the following: 1. a Voluntary reimbursements by the affiliate for investment transaction losses 2. b Realized and unrealized losses on investments not meeting the investment guidelines of the fund 3. c Reimbursements from the affiliate for losses on investments not meeting the investment guidelines of the fund 4. d Realized and unrealized gains on investments not meeting the investment guidelines of the fund. #### Certain Distribution Costs ##### [946-20-45-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:e25eaa8d782bf57f7b3c90a88dd6c810fd9dcab24fbd476a34aab1445dc6c88a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this paragraph applies to annual and interim financial statements of investment companies that adopt plans that comply with Rule [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940."). An excess of cumulative 12b-1 fees and [contingent-deferred sales load](https://asc.understandingaccounting.org/glossary/c/#contingent-deferred-sales-load "A sales charge imposed directly on redeeming shareholders based on a percentage of the lesser of the redemption proceeds or original cost. The percentage may decrease or be eliminated based on the duration of share ownership (frequently decreases by 1 percent a year). Also referred to as back-end load.") payments to date and future contingent-deferred sales load payments by [current shareholders](https://asc.understandingaccounting.org/glossary/c/#current-shareholders "Shareholders of a fund, or a class of shares of a fund, at an evaluation or measurement date. Amounts attributable to current shareholders are based on shares outstanding at that date and do not include estimates of future reinvestments or other share purchases.") over the cumulative costs incurred by the [distributor](https://asc.understandingaccounting.org/glossary/d/#distributor "Usually the principal underwriter that sells the fund's capital shares by acting as an agent (intermediary between the fund and an independent dealer or the public) or as a principal, buying capital shares from the fund at net asset value and selling shares through dealers or to the public (see definition of underwriter in section 2(a)(40) of the Investment Company Act of 1940).") shall not be reported as an asset. #### Brokerage Service Arrangements ##### [946-20-45-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:82e13bdccf41215ffac67c357fb9868c1cd7b8174632a1d73d4c075b05ce86a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The relevant expense caption on the statement of operations and the expense ratio in the financial highlights shall include the amount that would have been incurred by the investment company for brokerage services had it paid for the services directly in an arm's-length transaction. Such amounts shall also be shown as a corresponding reduction in total expenses, captioned as fees paid indirectly. #### General Partner Advisory Services ##### [946-20-45-4](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:446d686ac7b2328401736ddcbe45da8698e3bc1c57f8b2f7844992c92d4aa342 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amounts of any payments or allocations for advisory services from the general partner shall be presented in either the statement of operations or the statement of changes in partners' capital. #### Expense Offset Arrangements ##### [946-20-45-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:e198f12c716d5804666c8211af4e26e2508be22b2f369ca7f4374d713703d87b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Expense offset arrangements, under which a third party explicitly reduces its fees by a specified or readily ascertainable amount for services provided to the investment company in exchange for use of the investment company's assets, shall be presented in the statement of operations, the expense ratio in the financial highlights, and notes to financial statements in the same manner as brokerage service arrangements. #### Small Business Investment Companies ##### [946-20-45-6](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:37fa9f232e581d2c98e331101685b36ee19342d31015b577a4e9cdf29d2bd6b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The unique features (primarily the existence of significant debt) of small business investment companies often make it desirable that their financial statements be presented in a conventional balance sheet format. #### Venture Capital Investment Companies ##### [946-20-45-7](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:52.764Z to 2026-09-10T02:19:52.764Z Record version: sha256:0bed636300465a1e36ce05b622120455bec862a05800e84574d3d153a50a0551 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Though all venture capital investment companies shall prepare their financial statements in conformity with generally accepted accounting principles (GAAP), the statement presentation of some venture capital investment companies may need to be tailored to present the information in a manner most meaningful to their particular group of investors. For example, if debt is a significant item, a balance sheet might be more appropriate than a statement of net assets. Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:3be31c489c21068c024df5b1c101b241106ede245cc04a421ec1db2638cbfb1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/946/20/#50-disclosure) SEC content: no ##### [946-20-50-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:c4ecf7ed0527deecb2ec7b56daef40d82908626ebfac3f63df47f9de510a1d39 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). #### Payments by Affiliates ##### [946-20-50-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:21e729d6e532f03034f7b7c776646146e308aedcbdfeb7966c33a9481228991b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amounts and circumstances of payments by affiliates to reimburse the fund for losses on investment transactions shall be described in the notes to financial statements. The gains and losses on investments not meeting investment guidelines of the fund shall also be disclosed in the notes to financial statements. In addition, the effect on total return of the payments, as well as any gains or losses on investments not meeting investment guidelines of the fund, shall be quantified and disclosed in the financial highlights in a manner similar to disclosure of the effect of voluntary waivers of fees and expenses on expense ratios. (See Subtopic 850-10.) Total return shall be presented in the financial highlights. #### Certain Distribution Costs ##### [946-20-50-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:5d3f780bd690deb6e03da348b25068c8f769a71cc7609cef4a1e1f8915b965ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this paragraph applies to annual and interim financial statements of investment companies that adopt plans that comply with Rule [12b-1](https://asc.understandingaccounting.org/glossary/b/#12b-1 "Rule 12b-1 in Chapter 17 of the Code of Federal Regulations is one of the regulations implementing the Investment Company Act of 1940."). For both [board-contingent plans](https://asc.understandingaccounting.org/glossary/b/#board-contingent-plan "A reimbursement 12b-1 plan that provides that, on the plan's termination, a fund's board of directors has the option, but not the requirement, to pay the distributor for any excess costs incurred by the distributor.") and [enhanced 12b-1 plans](https://asc.understandingaccounting.org/glossary/e/#enhanced-12b-1-plan "A reimbursement 12b-1 plan that provides that, on termination of the plan, the fund is required to continue paying the 12b-1 fee to the extent the distributor has excess costs."), funds shall disclose in their financial statements the principal terms of such plans and any plan provisions permitting or requiring payments of [excess costs](https://asc.understandingaccounting.org/glossary/e/#excess-costs "The cumulative distribution costs incurred by the distributor less the sum of cumulative 12b-1 fees paid, cumulative contingent-deferred sales load payments, and future cumulative contingent-deferred sales load payments by current shareholders, if reasonably estimable.") after plan termination. For board-contingent and enhanced plans, the aggregate amount of [distribution costs](https://asc.understandingaccounting.org/glossary/d/#distribution-costs "Costs, as defined in a distribution agreement between a distributor and a fund, incurred by a distributor in distributing a fund's shares. Such costs may include commission payments to sales representatives, promotional materials, overhead allocations, and interest.") subject to recovery through future payments by the fund pursuant to the plan and through future [contingent-deferred sales load](https://asc.understandingaccounting.org/glossary/c/#contingent-deferred-sales-load "A sales charge imposed directly on redeeming shareholders based on a percentage of the lesser of the redemption proceeds or original cost. The percentage may decrease or be eliminated based on the duration of share ownership (frequently decreases by 1 percent a year). Also referred to as back-end load.") payments by [current shareholders](https://asc.understandingaccounting.org/glossary/c/#current-shareholders "Shareholders of a fund, or a class of shares of a fund, at an evaluation or measurement date. Amounts attributable to current shareholders are based on shares outstanding at that date and do not include estimates of future reinvestments or other share purchases.") shall be disclosed. For enhanced plans, funds shall disclose the methodology used to estimate future contingent-deferred sales load payments by current shareholders. ##### [946-20-50-4](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:6b52de203e332dab9409b7613032c10409b6a55b85efedbfa60870cc9d352fbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a 12b-1 distribution [reimbursement plan](https://asc.understandingaccounting.org/glossary/r/#reimbursement-plan "A plan that provides for a 12b-1 fee, payable by the fund, that may not exceed the lesser of an annual percentage of the fund's average net assets or actual costs incurred by the distributor net of contingent-deferred sales load received by the distributor.") provides for the carryover of unreimbursed costs to subsequent periods, the terms of reimbursement and the unreimbursed amount shall be disclosed. #### General Partner Advisory Services ##### [946-20-50-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:16d8f11311b653a6dd1c8575d2b6736e9eec8c600421e6da687ba9957d7afcef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The method of computing payments or allocations for advisory services from the general partner shall be described in the notes to financial statements. #### Expense Limitation Agreements ##### [946-20-50-6](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:f4d6cfa537f2bfddfce952e998ef580edf68a6a6c88768505a6442a5df905f36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The existence of reimbursement agreements and the carryover of excess expenses potentially reimbursable to the adviser but not recorded as a liability shall be disclosed in the notes to financial statements. #### Fee Waivers ##### [946-20-50-7](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:f5d61d0a787837b7eaf7613f639d64b4781515f864cc6639e536b002ac47e138 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All voluntary and involuntary fee waivers shall be disclosed on the face of the statement of operations as a reduction of total expenses. The expense ratio in the financial highlights shall be shown net of voluntary and involuntary waivers. The effect of only voluntary waivers on the expense ratio shall be disclosed (either as the basis point effect on the ratio or as the gross expense ratio) in a note to, or as part of, the financial highlights. In addition, the terms of all voluntary and involuntary waivers shall be disclosed in the notes to financial statements. #### Dividends ##### [946-20-50-8](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:37e7975a0b4bdcb052177db8e371d29ae0105bebb29c0c8cdd7441bdaf6d44e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Dividends paid to investors shall be disclosed as a single line item in the statement of changes in net assets, except tax [return of capital](https://asc.understandingaccounting.org/glossary/r/#return-of-capital "Distributions by investment companies in excess of tax-basis earnings and profits.") distributions, which shall be disclosed separately. The notes shall disclose the tax basis components of the dividends paid (that is, either from ordinary income, capital gains, or tax return of capital). Disclosing dividends on a tax basis is consistent with how dividends are reported to shareholders during and at the end of the calendar year. The financial highlights table would disclose per-share information that is consistent with the statement of changes in net assets. ##### [946-20-50-9](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:f2eb3fbc10dc88f4e8ca688bc3b8b214f3a04f725909f9b3af1514f226c6cedf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Dividends from affiliates and controlled companies shall be disclosed. ##### [946-20-50-10](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:6cf39a5b88f808ec50b0f491932ff84b0af911fdd6458b4f0d99fc9ce858a265 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If management of a fund determines that a tax return of capital is likely to occur for the fund's fiscal year, although the exact amount may not be estimable, that fact shall be disclosed in a note to the interim financial statements. #### Components of Capital and Distributable Earnings ##### [946-20-50-11](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-11) Pending content: yes Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:0244bed059099e67dd2bc79d12b91acd0a8b4b1190699cfd478500592e652ce6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance requires all investment companies to disclose only two components of capital on the balance sheet: shareholder capital and distributable earnings. The components of distributable earnings, on a tax basis, shall be disclosed in a note to financial statements. This information enables investors to determine the amount of accumulated and undistributed earnings they potentially could receive in the future and on which they could be taxed. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) This guidance requires all investment companies to disclose two components of capital on the balance sheet: shareholder capital and distributable earnings. The components of distributable earnings, on a tax basis, shall be disclosed in a note to financial statements. This information enables investors to determine the amount of accumulated and undistributed earnings they potentially could receive in the future and on which they could be taxed. ##### [946-20-50-12](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:97be99dd2591194b251d034e04bdc8cd156d38641ff6f234113bacd564ea3173 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The notes shall disclose all of the following tax-basis components of distributable earnings as of the most recent tax year end: 1. a Undistributed ordinary income 2. b Undistributed long-term capital gains 3. c Capital loss carryforwards 4. d Unrealized appreciation (depreciation). ##### [946-20-50-13](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:c086608370405ec5e3d42ddc7fd6f541012e657974209f1c0e11270d8dafc8c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [946-740-35-1](https://asc.understandingaccounting.org/asc/740/946/#740-946-35-1) and [946-740-50-1](https://asc.understandingaccounting.org/asc/740/946/#740-946-50-1) require that, if a provision for deferred income taxes on unrealized appreciation exists, it be charged against the unrealized gains account and disclosed as such in the statement of operations. Explanations shall be provided for the differences between the total of these amounts and distributable earnings (accumulated losses). ##### [946-20-50-14](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:36d1ba60223e8f529eafefade241e5458970d29622057624f48f5e78331ef611 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investment partnerships and other pass-through entities shall aggregate all elements of equity into partners' capital, because the results from operations are deemed distributed to each partner. #### Financial Support to Investees ##### [946-20-50-15](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:4d323528b1c973cadc6013a5f88cd46a902b250b56c12fa075fab400f39a85a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, during the periods presented, an investment company provides financial support to an investee, it shall disclose information about both of the following items, disaggregated by financial support that it was contractually required to provide and financial support that it was not previously contractually required to provide: 1. a The type and amount of financial support provided, including situations in which the investment company assisted the investee in obtaining financial support 2. b The primary reasons for providing the financial support. ##### [946-20-50-16](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:19:56.221Z to 2026-09-10T02:19:56.221Z Record version: sha256:ca9ee18f429628f405c06d6d4d0a5d4a3aabf253f440cac1624841e273072913 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment company also shall separately disclose both of the following items about financial support that it is contractually required to provide to any of its investees but has not yet provided: 1. a The type and amount of financial support to be provided, including situations in which the investment company must assist the investee in obtaining financial support 2. b The primary reasons for the contractual requirement to provide the financial support. Source downloaded (UTC): 2026-09-10T02:20:00.026Z to 2026-09-10T02:20:00.026Z Record version: sha256:0052115d52dfc4d6bb4809820996764e4b24ac44dc6b72b8ad997379a9dc0315 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/946/20/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [946-20-55-1](https://asc.understandingaccounting.org/asc/946/20/#946-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:20:00.026Z to 2026-09-10T02:20:00.026Z Record version: sha256:938725afdceddf0bd8dc07aa7b687d2ccd654e1f3512147caf63e60aa341dcd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates application of the guidance in paragraph [946-20-50-2](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-2). An entity might disclose the following. - In 20XX, a.aa% of the fund's total return consists of a voluntary reimbursement by the adviser for a realized investment loss, and another b.bb% consists of a gain on an investment not meeting the fund's investment restrictions. Excluding these items, total return would have been c.cc%. Additionally, the adviser fully reimbursed the fund for a loss on a transaction not meeting the fund's investment guidelines, which otherwise would have reduced total return by d.dd%.