2.1 Scope and Scope Exceptions

2.1.1 General

ASC 820-10

Overall Guidance

15-1 The Scope Section of the Overall Subtopic establishes the scope for the Fair Value Measurement Topic. Except as noted below, this Topic applies when another Topic requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements).

Other Considerations

Topics and Subtopics Not Within Scope

15-2 The Fair Value Measurement Topic does not apply as follows:

To accounting principles that address share-based payment transactions (this includes all Subtopics in Topic 718 except for 718-40, which is within the scope of Topic 820)
To Sections, Subtopics, or Topics that require or permit measurements that are similar to fair value but that are not intended to measure fair value, including both of the following:
1. Sections, Subtopics, or Topics that permit measurements that are determined on the basis of, or otherwise use, standalone selling price
2. Topic 330.
Subparagraph superseded by Accounting Standards Update No. 2016-02.
To the recognition and measurement of revenue from contracts with customers in accordance with Topic 606
To the recognition and measurement of gains and losses upon the derecognition of nonfinancial assets in accordance with Subtopic 610-20.

ASC 820 establishes a framework for measuring fair value and requires disclosures about fair value measurements. ASC 820 does not, however, include any requirements related to initially or subsequently measuring an item at fair value. Rather, with certain exceptions, ASC 820 applies when another Codification topic requires or permits fair value measurements or disclosures about fair value measurements.

Sections 2.1.2 and 2.1.3 discuss the scope of ASC 820’s measurement and disclosure requirements. Section 2.2 discusses practicability exceptions afforded by ASC 820. Section 2.3 discusses the application of ASC 820 to specific assets, liabilities, equity instruments, and transactions.

2.1.2 Measurement

With certain exceptions (see Sections 2.2 and 2.3), the measurement guidance in ASC 820 applies whenever another Codification topic uses the phrase “fair value” to describe how an entity is required or permitted to measure financial and nonfinancial assets and liabilities, instruments classified in a reporting entity’s stockholders’ equity, or specific transactions, regardless of whether this measurement pertains to initial or subsequent recognition or to disclosure. Fair value measurements that are within the scope of ASC 820 include measurements at (1) fair value less costs to sell and (2) the lower of fair value or cost.1 However, ASC 820 does not apply to measurement objectives under other Codification topics when such objectives are related to an amount similar to fair value but are not intended to represent a fair value measurement (e.g., measurement objectives related to share-based payment arrangements and revenue recognition). When another Codification topic requires that an item be measured at an allocated amount on the basis of relative fair value or by using a residual allocation approach based on fair value, the item is not measured at a fair value amount. However, any fair value amount used in such allocation should be determined in accordance with the measurement guidance in ASC 820 in the absence of a specific exception in the Codification topic requiring such measurement.

Table 2-1 describes other Codification topics that require or permit an entity to measure a recognized item at fair value on the basis of the fair value measurement guidance in ASC 820. Note the following regarding the items in this table:

The table only includes items that are initially or subsequently measured at (1) fair value, (2) fair value less costs to sell, or (3) the lower of fair value or cost. (For more information about the specific type of fair value measurement, see the Codification paragraphs identified in the table.) The table does not include items initially or subsequently measured at (1) relative fair value, (2) a residual amount after the deduction of an item measured at fair value, or (3) an incremental amount on the basis of the change in fair value of an item that is not subsequently recognized at fair value and that has not been subject to a modification.
The table does not address situations in which other Codification topics require an entity to determine the appropriate accounting for an item or a transaction on the basis of a fair value measurement. For example, the table does not cover the requirement to use fair value in determining whether (1) an asset is impaired, (2) an acquisition or disposition involves a business, (3) an entity is a variable interest entity (VIE) or an investment company, (4) an investment is accounted for under the equity method, (5) a lease is classified as operating or capital, (6) an equity-linked instrument or instrument settleable in an issuer’s equity shares is classified within equity, and (7) a convertible instrument contains a beneficial conversion feature (for issuer’s that have not adopted ASU 2020-06). The table also does not address the use of a fair value measurement solely to calculate earnings per share (EPS). In such circumstances, the measurement guidance in ASC 820 applies unless the Codification topic contains a specific exception that permits an entity not to apply ASC 820.
The table does not include transition guidance that applies to certain Codification subtopics. To determine any applicable transition guidance, see the specific Codification paragraphs identified in the table.

Table 2-1

	Items That an Entity Is Required or Permitted to Recognize at Fair Value in Accordance With ASC 820
ASC Subtopic	Initial Measurement or Subsequent Nonrecurring Fair Value Measurement2	Subsequent Recurring Fair Value Measurement3
260-10	Dividend for the difference between the (1) fair value of the consideration transferred to holders of preferred stock and (2) carrying amount of the preferred stock (ASC 260-10-S99-2). Dividend and offsetting entry for a down-round feature that has been triggered (ASC 260-10-25-1 and ASC 260-10-30-1). Dividend and offsetting entry for the fair value of the additional consideration issued when a convertible preferred stock instrument is converted in accordance with an inducement offer (ASC 260-10-S99-2).
310-10	Notes receivable (ASC 310-10-30-5 and 30-6). Standby commitments to purchase loans that are accounted for as written options (ASC 310-10-30-7 and ASC 310-10-35-46). Impairment loss on a collateral-dependent loan receivable measured on the basis of the fair value of the collateral (ASC 310-10-35-22 and ASC 310-10-35-32). Nonmortgage loans held for sale (HFS) (ASC 310-10-35-48). Mortgage or nonmortgage loans transferred into the HFS classification (ASC 310-10-35-49).
310-40	Asset receivable from a purchaser that substitutes the original debtor in a troubled debt restructuring (ASC 310-40-40-1). Asset received from a debtor in full satisfaction of a receivable in a troubled debt restructuring (ASC 310-40-40-2 through 40-4 and ASC 310-40-55-7). Asset recognized for foreclosed property received in a troubled debt restructuring (ASC 310-40-40-7). Debt security of the original debtor received as a full or partial settlement in a troubled debt restructuring (ASC 310-40-40-8A and 40-9).
320-10	Impairment loss on an available-for-sale or held-to-maturity debt security that an investor intends to sell or more likely than not will be required to sell before recovery of the security’s amortized cost basis less any current-period credit loss (ASC 320-10-35-34B). Transfer of a debt security between categories (ASC 320-10-35-10 through 35-10B).	Investments in a trading or available-for-sale debt security (ASC 320-10-35-1 and ASC 320-10-35-36). Investments in a structured note (ASC 320-10-35-38(h)).
321-10	Investment in an equity security that (1) does not have a readily determinable fair value and is accounted for by using the practical expedient in ASC 321-10-35-2 upon the occurrence of (a) an observable price change or (b) an impairment loss or (2) was accounted for by using the practical expedient in ASC 321-10-35-2 and (a) subsequently has a readily determinable fair value or (b) is elected to be accounted for at fair value (ASC 321-10-35-2 through 35-5).	Investment in an equity security that (1) has a readily determinable fair value or (2) does not have a readily determinable fair value and is not accounted for by using the practical expedient in ASC 321-10-35-2 (ASC 321-10-35-1).
323-10	Retained (obtained) investment in common stock of an investee (including a joint venture) in a deconsolidation (derecognition) transaction (ASC 323-10-30-2). The difference between (1) the fair value of contingent consideration issued or issuable and (2) the liability amount recorded for such contingent consideration (ASC 323-10-35-14A). Impairment loss on an equity method investment (ASC 323-10-35-31 and 35-32). The current basis of an investor’s previously held interest in an investee immediately before adoption of the equity method of accounting (ASC 323-10-35-33). The retained investment upon the discontinuance of the equity method of accounting (ASC 323-10-35-36).
325-30	Stock received from a demutualization (ASC 325-30-30-1AA). Impairment loss on an investment in a life-settlement contract that is accounted for by using the investment method (ASC 325-30-35-11).4	Investment in a life-settlement contract that is accounted for by using the fair value method (ASC 325-30-25-2 and ASC 325-30-35-12).5
325-40	Investment in a beneficial interest in securitized financial assets held by a transferor (ASC 325-40-30-1). Impairment loss on a beneficial interest in securitized financial assets that is not classified as trading (ASC 325-40-35-13).	Investment in a beneficial interest in securitized financial assets that is classified as trading (ASC 325-40-25-2).
326-10	Financial instruments within the scope of ASC 326-20, other than held-to-maturity debt securities, when the FVO in ASC 825 is elected (ASC 326-10-65-1(i)).	Financial instruments within the scope of ASC 326-20, other than held-to-maturity debt securities, when the FVO in ASC 825 is elected (ASC 326-10-65-1(i)).
326-20	Expected credit losses on a collateral-dependent financial asset that is measured on the basis of the fair value of the collateral (ASC 326-20-35-4 and 35-5 and ASC 326-20-45-4). Expected credit losses on financial assets secured by collateral maintenance provisions (ASC 326-20-35-6). A valuation allowance once a decision is made to sell a loan not currently classified as HFS (ASC 326-20-35-7).
326-30	Impairment loss on an available-for-sale debt security that an investor intends to sell or more likely than not will be required to sell before recovery of its amortized cost basis (ASC 326-30-35-10).
350-20	Impairment loss on goodwill equal to the excess of the carrying amount of an entity (or reporting unit) over its fair value (ASC 350-20-35-8 and ASC 350-20-35-72 and 35-73).
350-30	Intangible asset acquired individually or with a group of assets in a transaction other than a business combination (ASC 350-30-25-4). Impairment losses on an intangible asset (ASC 350-30-35-14 and ASC 350-30-35-19).6
350-40	Impairment loss on a computer software asset that is being developed for internal use and for which it is no longer probable that the asset will be completed and placed into service (ASC 350-40-35-3).
350-60	See Changing Lanes below table.	See Changing Lanes below table.
360-10	Acquired interest in the residual value of a leased asset (ASC 360-10-30-3 and 30-4). Impairment loss on an acquired interest in the residual value of a leased asset (ASC 360-10-35-14). Impairment loss on a long-lived asset (asset group) classified as held and used (ASC 360-10-35-17 and ASC 360-10-45-13).7 Impairment loss on a long-lived asset (disposal group) classified as HFS (ASC 360-10-35-40 and ASC 360-10-35-43).8 Impairment loss on a long-lived asset (disposal group) that is disposed of in an exchange or spin-off (ASC 360-10-35-47).9
405-20	Guarantee obligation of a debtor that is released from being primarily obligated and becomes secondarily liable on a debt instrument (ASC 405-20-40-2).
410-20	Each layer of an asset retirement obligation (ARO) (ASC 410-20-25-7 and ASC 410-20-35-1).10
420-1011	Liability for a cost associated with an exit or disposal activity (ASC 420-10-30-1). Liability for one-time employee termination benefits (ASC 420-10-25-9 and ASC 420-10-30-4 through 30-6). Liability for a cost to terminate a contract before the end of its term (ASC 420-10-30-7). Liability for a cost that will continue to be incurred under a contract without an economic benefit to the entity (ASC 420-10-30-9). Liability for other costs associated with an exit or disposal activity (ASC 420-10-30-10).
460-10	Guarantee liabilities (ASC 460-10-30-2).12
470-20	Share-lending arrangement on an entity’s own common shares (ASC 470-20-25-20A and ASC 470-20-30-26A). Liability for a convertible instrument issued as repayment of a nonconvertible instrument at the nonconvertible instrument’s maturity (ASC 470-20-30-19). Liability for a convertible instrument issued for cash proceeds when the purchaser also provides (receives) goods or services to (from) the issuer (ASC 470-20-30-26). Liability component of a convertible instrument subject to the cash conversion guidance (ASC 470-20-30-27 and ASC 470-20-40-25). Expense and offsetting entry to additional paid-in capital (APIC) when it is probable that a counterparty to a share-lending arrangement will default (ASC 470-20-35-11A). Adjustment to equity for the difference between the amount previously recognized in equity and the fair value of the conversion option in a convertible debt instrument upon reclassification of the conversion option from equity to an embedded derivative liability (ASC 470-20-35-19). Issuance of equity securities to settle a debt instrument in accordance with the debt instrument’s original conversion terms if the debt instrument did not contain a substantive conversion feature (ASC 470-20-40-5(b)). Consideration exchanged upon settlement of a convertible instrument subject to the cash conversion guidance (ASC 470-20-40-20(a)). Expense and offsetting entry for the fair value of the additional consideration issued when a convertible debt instrument is converted in accordance with an inducement offer (ASC 470-20-40-16 and ASC 470-20-40-26).
470-30	Participation liability when a lender is entitled to participate in the appreciation of the market value of a mortgaged real estate project (ASC 470-30-25-1 and ASC 470-30-30-1).	Participation liability when a lender is entitled to participate in the appreciation of the market value of a mortgaged real estate project (ASC 470-30-35-4A).
470-50	Modified or exchanged debt instrument when the original and new debt instruments are substantially different (ASC 470-50-40-13). Increase in the fair value of an embedded conversion option in a modification or exchange of a convertible debt instrument that does not represent an extinguishment (ASC 470-50-40-15).
470-60	Gain equal to the excess of the carrying amount of a payable over the fair value of assets transferred to a creditor when a debtor transfers assets in full satisfaction of a payable in a troubled debt restructuring (ASC 470-60-35-2). Gain or loss for the difference between the fair value and carrying amount of assets transferred by a debtor to a creditor to fully or partially settle a payable in a troubled debt restructuring (ASC 470-60-35-3 and ASC 470-60-35-8). Equity interest issued by a debtor to a creditor to fully settle a payable in a troubled debt restructuring (ASC 470-60-35-4).
480-10	Mandatorily redeemable financial instruments (ASC 480-10-30-1). Conditionally redeemable financial instruments that become mandatorily redeemable (ASC 480-10-30-2). Liability and reduction to equity for a forward contract that must be physically settled by repurchase of a fixed number of the issuer’s equity shares in exchange for cash (ASC 480-10-30-3 through 30-5). Financial instruments recognized under ASC 480-10-25 (ASC 480-10-30-7). Initial carrying amount of a redeemable equity instrument (ASC 480-10-S99-3A). Subsequent measurement of an equity instrument redeemable at fair value (ASC 480-10-S99-3A).	Liability for contingent consideration in a business combination (ASC 480-10-35-4A). Financial instruments recognized under ASC 480-10-25 that are not subject to another measurement attribute under ASC 480-10 or another Codification topic (ASC 480-10-35-5).
505-20	Adjustment to retained earnings, capital stock, and APIC for a stock dividend (ASC 505-20-30-3).
505-30	Purchase of treasury shares (ASC 505-30-30-3).
710-10		Deferred compensation liability for Plans B and C (ASC 710-10-35-3).13
712-10		Plan assets (ASC 712-10-35-1).14
715-30	Projected benefit obligation upon the occurrence of a settlement, curtailment, or termination benefit (ASC 715-30-35-81 and ASC 715-30-55-76).	Plan assets (ASC 715-30-35-50).15 Participation rights (ASC 715-30-35-58).16 Other contracts with insurance entities (ASC 715-30-35-60).
715-60		Plan assets (ASC 715-60-35-107).17 Participation rights (ASC 715-60-35-116).18 Other contracts with insurance entities (ASC 715-60-35-120).
715-70	Compensation expense at the time of an allocation to participants by a defined contribution plan that received assets from a terminated defined benefit plan (ASC 715-70-55-7). Debt security of a third party or the employer included in the unallocated assets of a defined contribution plan that received assets from a terminated defined benefit plan (ASC 715-70-55-9).
715-80	Noncash contribution to a multiemployer plan (ASC 715-80-35-1).
718-40	The number of shares released to settle a liability related to a specified or determinable benefit to employees that is funded through an employee stock ownership plan (ESOP) (ASC 718-40-25-14). Compensation cost and the credit to equity for committed-to-be-released shares of a leveraged ESOP (ASC 718-40-30-1 through 30-4). Compensation cost and the credit to equity for shares contributed or committed to be contributed to a nonleveraged ESOP (ASC 718-40-30-5). Purchase of suspense shares from an ESOP (ASC 718-40-40-6). Compensation cost equal to the fair value of shares as of the date on which debt of a leveraged ESOP is extinguished (ASC 718-40-40-7).
720-25	Contribution expense (ASC 720-25-25-2 and ASC 720-25-30-1).19
730-10	Tangible and intangible research and development assets acquired in a business combination or an acquisition by an NFP entity, regardless of whether such assets have an alternative future use (ASC 730-10-15-4(f)).
730-20	Warrant or similar instrument issued in a research and development arrangement (ASC 730-20-25-12).
740-10	Acquired financial asset and acquired asset held for disposal in an asset purchase (ASC 740-10-25-51(a)).
805-10	Previously held equity interest in a business combination achieved in stages (ASC 805-10-25-10). Gain or loss on a settlement of a preexisting noncontractual relationship (ASC 805-10-55-21(a)).
805-20	Contingent consideration arrangement of an acquiree that is assumed by an acquirer in a business combination (ASC 805-20-25-15A and ASC 805-20-30-9A). Indemnification asset of an acquirer in a business combination that is related to an asset or liability recognized as of the acquisition date and measured at the acquisition-date fair value (ASC 805-20-25-27 and ASC 805-20-30-18). Identifiable assets acquired, liabilities assumed, and any noncontrolling interest in an acquiree in a business combination (ASC 805-20-30-1).20
805-30	Contingent consideration transferred as part of the consideration in a business combination, regardless of whether the consideration is classified as an asset, a liability, or an equity instrument (ASC 805-30-25-5). Consideration transferred by the acquirer in a business combination (ASC 805-30-30-7).	Contingent consideration transferred as part of the consideration in a business combination, when the consideration is classified as an asset or liability instrument (ASC 805-30-35-1).
805-40	Consideration transferred in a reverse acquisition (ASC 805-40-30-2).
805-50	Difference between the fair value and carrying amount of a noncash asset given as consideration in an asset acquired in an exchange transaction (ASC 805-50-30-1). Initial carrying amount of an asset acquired in an asset acquisition (ASC 805-50-30-2).
805-60	See Changing Lanes below table.
810-10	Fair value of any consideration paid, any noncontrolling interest, and the net amount of the VIE’s identifiable assets and liabilities recognized under ASC 805 when the primary beneficiary of a VIE that is not a business initially consolidates the VIE (ASC 810-10-30-4). Assets, liabilities, and noncontrolling interests of a VIE as of the date of initial consolidation if (1) earlier consolidation was prevented because of a lack of information and (2) it is not practicable to determine carrying amounts (ASC 810-10-30-8B). The financial assets and financial liabilities of a CFE on the basis of the more observable of the fair value of the financial assets or the fair value of the financial liabilities (ASC 810-10-30-11 through 30-15).21 The financial assets and financial liabilities of a CFE if the measurement alternative is not applied (ASC 810-10-30-16). Consideration received and any retained noncontrolling interest when a parent deconsolidates a subsidiary or a group of assets as specified in ASC 810-10-40-3A (ASC 810-10-40-5(a)).	The financial assets and financial liabilities of a CFE on the basis of the more observable of the fair value of the financial assets or the fair value of the financial liabilities (ASC 810-10-35-6 through 35-9).22
810-30	Dividend recognized for the distribution of common stock of a specified research and development arrangement (ASC 810-30-30-1).
815-1023	Derivative instruments (ASC 815-10-05-4, ASC 815-10-30-1, and ASC 815-10-30-3).24 Forward-commitment dollar rolls that do not meet the definition of a derivative (ASC 815-10-30-4). Debt security purchased under a forward purchase contract and classified as available for sale (ASC 815-10-35-5(b)(2)). Debt security purchased under a forward purchase contract or an option contract that is classified as trading (ASC 815-10-35-5(c)(2)). Equity security purchased under a forward purchase contract or an option contract (ASC 815-10-35-6). Forward purchase contract or purchased option on an equity security that (1) does not have a readily determinable fair value and is accounted for by using the practical expedient in ASC 321-10-35-2 upon the occurrence of (a) an observable price change or (b) an impairment loss or (2) was accounted for by using the practical expedient in ASC 321-10-35-2 and (a) subsequently has a readily determinable fair value or (b) is elected to be accounted for at fair value (ASC 815-10-35-6).	Derivative instruments (ASC 815-10-05-4 and ASC 815-10-35-1 through 35-1C).25 Forward-commitment dollar rolls that do not meet the definition of a derivative (ASC 815-10-35-4). Forward purchase contract or purchased option on a debt security that is classified as available for sale (ASC 815-10-35-5(b)(1)). Forward purchase contract or purchased option on a debt security that is classified as trading (ASC 815-10-35-5(c)(1)). Forward purchase contract or purchased option on an equity security that (1) has a readily determinable fair value or (2) does not have a readily determinable fair value and is not accounted for by using the practical expedient in ASC 321-10-35-2 (ASC 815-10-35-6). Option granted to an employee that becomes subject to ASC 815 (ASC 815-10-45-10).
815-15	Hybrid instrument (1) for which separation of an embedded derivative would otherwise be required and (2) that an entity elects to account for at fair value in its entirety (ASC 815-15-25-4 and 25-5 and ASC 815-15-30-1). Hybrid instrument for which an entity cannot reliably identify and measure the embedded derivative that must be bifurcated (ASC 815-15-25-53 and ASC 815-15-30-1). Embedded derivative that must be separated from a hybrid instrument (ASC 815-15-30-2 and 30-3). Increase in equity resulting from the reclassification of a conversion option in a convertible debt instrument from an embedded derivative liability to equity (ASC 815-15-35-4). Decrease in equity resulting from the extinguishment of the conversion option in a convertible debt instrument that contains a separate equity component as a result of a previous reclassification of the conversion option from an embedded derivative liability to equity (ASC 815-15-40-4).	Hybrid instrument (1) for which separation of an embedded derivative would otherwise be required and (2) that an entity elects to account for at fair value in its entirety (ASC 815-15-25-4 and 25-5 and ASC 815-15-35-1). Hybrid instrument for which an entity cannot reliably identify and measure the embedded derivative that must be bifurcated (ASC 815-15-25-53 and ASC 815-15-35-2). Embedded derivative that must be separated from a hybrid instrument (ASC 815-15-35-2A).
815-40	Issuer’s initial measurement of an equity-linked contract (ASC 815-40-30-1). Issuer’s measurement of an equity-linked contract that is reclassified from equity to an asset or liability (ASC 815-40-35-9). Issuer’s initial measurement of put warrants (ASC 815-40-55-18). A contract that is reclassified from an asset or liability to equity (ASC 815-40-35-10).	Issuer’s subsequent measurement of an equity-linked contract that is classified as an asset or liability (ASC 815-40-35-4). Issuer’s subsequent measurement of put warrants (ASC 815-40-55-18).
815-45	Weather derivatives entered into for trading or speculative activities (ASC 815-45-30-4).	Liability for a written nonexchange-traded-option-based weather derivative (ASC 815-45-35-5). Weather derivatives entered into for trading or speculative activities (ASC 815-45-35-7).
825-10	Eligible financial assets, financial liabilities, insurance contracts, or warranty contracts for which an entity has elected the FVO (ASC 825-10-15-4 and 15-5).26	Eligible financial assets, financial liabilities, insurance contracts, or warranty contracts for which an entity has elected the FVO (ASC 825-10-15-4 and 15-5).27
830-20		Investment in a foreign-denominated, available-for-sale debt security (ASC 830-20-35-6).
835-30	Note receivable; sales price; and cost of property, goods, or services exchanged when interest on the note is not stated, the stated amount is unreasonable, or the stated face amount of the note materially differs from the current cash sales price (ASC 835-30-25-5 and ASC 835-30-25-10 and 25-11).28
842-50	Impairment loss on the residual value of a leased asset when the lessor sells substantially all of the minimum lease payments associated with a leveraged lease and retains an interest in the residual value of the asset (ASC 842-50-35-21).29
845-10	Nonmonetary transactions, including nonreciprocal transfers (ASC 845-10-30-1 through 30-4 and ASC 845-10-30-10).30 Non-pro-rata split-off of a segment of a business in a corporate plan of reorganization (ASC 845-10-30-12 and 30-13). Dividends-in-kind recognized under ASC 845-10-25-3 (ASC 845-10-30-14). Certain purchases and sales of inventory with the same counterparty (ASC 845-10-30-15 and 30-16). Impairment losses on barter credits (ASC 845-10-30-19).
852-20	Assets and liabilities in certain quasi-reorganizations (ASC 852-20-05-1).
860-20	Asset obtained or liability incurred by a transferor upon completion of a transfer of financial assets that meets the conditions to be accounted for as a sale (ASC 860-20-30-1, ASC 860-20-55-21, ASC 860-20-55-24 and 55-25, and ASC 860-20-55-83). Asset or liability recognized by a transferee upon completion of a transfer of financial assets (ASC 860-20-30-2). Transferred financial assets and liabilities that are re-recognized by a transferor upon regaining control of financial assets (ASC 860-20-30-3).	Financial assets subject to prepayment (ASC 860-20-35-2).
860-30	Noncash collateral recognized by a secured party as its asset that the secured party has not already sold (ASC 860-30-30-1).	Bank or savings institution that, as a transferee, sells transferred collateral and recognizes a liability for the sold collateral (ASC 860-30-35-3).
860-50	Servicing assets or servicing liabilities that qualify for separate recognition (ASC 860-50-30-1). Impairment loss on a class of servicing assets accounted for by using the amortization method (ASC 860-50-35-9(b)). Increase in the fair value of a class of servicing liabilities accounted for by using the amortization method (ASC 860-50-35-11).	Classes of servicing assets or servicing liabilities accounted for by using the fair value measurement method (ASC 860-50-35-1 and ASC 860-50-35-3(e)).
920-350	Capitalized costs of rights to program materials (ASC 920-350-30-3 and ASC 920-350-35-3). Termination of a network affiliation agreement that is replaced (ASC 920-350-40-1).
920-405	Asset and liability for a broadcast license agreement by a licensee (ASC 920-405-30-1).
926-20	Impairment losses on unamortized film costs (ASC 926-20-35-13). Impairment losses on film properties in development (ASC 926-20-40-3).
932-360	Impairment losses on an oil- and gas-producing property (ASC 932-360-35-8).
940-20	Loss on a conditional transaction (ASC 940-20-25-7). Fail-to-receive liabilities (ASC 940-20-30-2). Fair value gain deferred on a conditional transaction (ASC 940-20-35-1).	Securities underlying amounts in suspense accounts (ASC 940-20-35-2). Shares in an underwriting for which the underwriter is firmly committed to purchase any shares to which customers have not yet subscribed (ASC 940-20-35-3).
940-320	Securities from proprietary trading (ASC 940-320-30-2).	Securities from proprietary trading (ASC 940-320-35-1).
940-325	Investment in the form of equity or financing provided to another entity in a financial-restructuring transaction (ASC 940-325-30-1).	Investment in the form of equity or financing provided to another entity in a financial-restructuring transaction (ASC 940-325-35-1).
940-340	Exchange membership recognized as a contributed interest and the related subordinated liability (ASC 940-340-30-2).	Exchange membership recognized as a contributed interest and the related subordinated liability (ASC 940-340-35-2).
942-310	Debt-equity swaps (ASC 942-310-30-1). An impairment loss on a debt-equity swap (ASC 942-310-35-5). Loan receivable to be disposed of “by sale of swap” (ASC 942-310-55-1).
942-405		Obligation for a short sale (ASC 942-405-35-1).
944-20		Liability to the contract holder for a group-participating pension contract (ASC 944-20-55-12).
944-40	Asset or liability for a market risk benefit (ASC 944-40-30-19C).	Liability for certain group-participating pension contracts and experience-related contracts (ASC 944-40-25-19). Asset or liability for a market risk benefit (ASC 944-40-35-8A).
944-80	Asset and liability for the portion of separate-account assets representing contract holder funds (ASC 944-80-30-1). Asset transferred from the general account to a separate account to the extent of third-party contract holders’ proportionate interests in the separate account for certain separate-account arrangements (ASC 944-80-35-3 and ASC 944-80-40-1). Impairment loss on an insurance entity’s proportionate interest in a separate-account arrangement (ASC 944-80-35-8). Increase in an insurance entity’s proportionate interest in a separate-account arrangement as a result of a transaction executed at fair value (ASC 944-80-35-10).	Asset and liability for certain investments in separate-account assets (ASC 944-80-35-1 and 35-2).
944-360	Real estate acquired in settling mortgage guaranty and title insurance claims (ASC 944-360-30-1).
944-805	Asset or liability recognized by an acquirer for insurance and reinsurance contracts obtained in a business combination (ASC 944-805-30-1).
944-815		Liability for a traditional variable annuity contract that is based on the fair value of the assets held in a separate account for policyholders (ASC 944-815-25-2).
946-10	Initial carrying amount of an investment as of the date on which an entity is no longer an investment company (ASC 946-10-25-2). Adjustment to net assets for the difference between the carrying amount and fair value of an investment as of the date on which an entity becomes an investment company (ASC 946-10-25-3).
946-320	Stock dividends (ASC 946-320-35-6). Other noncash dividends (ASC 946-320-35-7).	Investment in a debt or equity security (ASC 946-320-35-1).
946-325		Other investments (ASC 946-325-35-1).
946-830		Forward exchange contracts (ASC 946-830-05-2(e) and ASC 946-830-45-10). Purchased interest (i.e., interest accrued between the last coupon date and the settlement date of the purchase) (ASC 946-830-45-14).
948-310	Mortgage loan to be sold to an affiliated entity (ASC 948-310-30-1). Mortgage loan HFS (ASC 948-310-35-1). Mortgage loan transferred to a long-term investment classification (ASC 948-310-30-4).
950-350	Consideration paid to purchase a title plant (ASC 950-350-30-2).
958-30	Embedded derivative related to certain split-interest agreements (ASC 958-30-25-12, ASC 958-30-25-14, ASC 958-30-30-9, ASC 958-30-55-10, and ASC 958-30-55-23). Liability recognized for certain split-interest agreements (ASC 958-30-25-10 and ASC 958-30-30-5). Asset received by an NFP entity acting as a trustee under a revocable split-interest agreement (ASC 958-30-30-3). Asset that is received by an NFP entity acting as a trustee or that is otherwise under the control of the NFP entity as part of an irrevocable split-interest agreement (ASC 958-30-30-4). Contributed asset received from a donor under a pooled income fund agreement or net income unitrust (ASC 958-30-30-10). Beneficial interest in a split-interest agreement of a third party that is owned by an NFP entity (ASC 958-30-30-11).	Embedded derivative related to certain split-interest agreements (ASC 958-30-25-12, ASC 958-30-25-14, ASC 958-30-35-7, ASC 958-30-55-10, and ASC 958-30-55-23). Liability recognized for certain split-interest agreements (ASC 958-30-35-2 and ASC 958-30-35-8). Beneficial interest in a split-interest agreement of a third party that is owned by an NFP entity (ASC 958-30-35-10).
958-310		Changes in a contribution receivable arising from an unconditional promise to give debt securities or equity securities with readily determinable fair values (ASC 958-310-35-11). Changes in a contribution receivable arising from a promise to give noncash assets (ASC 958-310-35-13).
958-320	Investment in a debt security received as a contribution or through an agency transaction (ASC 958-320-30-1).	Investments in debt securities (ASC 958-320-35-1).
958-321	Investment in an equity security received as a contribution or through an agency transaction (ASC 958-321-30-1).	Investment in an equity security that must be measured at fair value under ASC 321 (ASC 958-321-35-1).
958-325	Other investments received as a contribution or through an agency transaction (ASC 958-325-30-1). Impairment losses on other investments measured at carrying value by a voluntary health and welfare entity (ASC 958-325-35-5). Impairment losses on other investments measured at the lower of cost or fair value by an NFP entity that is not a college, university, voluntary health and welfare, or health care entity (ASC 958-325-35-7).	Other investments measured at fair value by an institution of higher education, including a college, university, and community or junior college (ASC 958-325-35-1). Other investments measured at fair value by a voluntary health and welfare entity (ASC 958-325-35-3). Other investments measured at fair value by an NFP entity that is not a college, university, voluntary health and welfare, or health care entity (ASC 958-325-35-6).
958-360	Contribution of a recognized collection item made by an NFP entity (ASC 958-360-40-2).
958-605	Direct personnel costs incurred by an affiliate that provides a service to an NFP entity (ASC 958-605-25-17). Gift in kind reported as a contribution when originally received by an NFP entity (ASC 958-605-25-20 and ASC 958-605-30-11).31 Contribution received by an NFP entity (ASC 958-605-30-2 and ASC 958-695-30-7).32 Asset and liability of an intermediary that raises or holds contributions for others (ASC 958-605-30-12). Asset and liability of an agent that raises or holds contributions for others (ASC 958-605-30-13). Asset for a beneficial interest that entitles the holder with an unconditional right to receive all or a portion of the specified cash flows from a charitable trust or another identifiable pool of assets (ASC 958-605-30-14).	Asset for a beneficial interest that entitles the holder of an unconditional right to receive all or a portion of the specified cash flows from a charitable trust or other identifiable pool of assets (ASC 958-605-35-3).
958-720	Liability and expense for an unconditional promise to give (ASC 958-720-30-1). Services received from personnel of an affiliate that directly benefit the recipient NFP entity (ASC 958-720-30-3).
958-805	Gains and losses for the difference between the carrying amount and fair value of consideration transferred (ASC 958-805-25-34 and ASC 958-805-30-11). Identifiable assets acquired, liabilities assumed, and any noncontrolling interest in an acquiree in an acquisition by an NFP entity in accordance with ASC 805-20 (ASC 958-805-30-5). Consideration transferred in an acquisition by an NFP entity that is a business combination, including contingent consideration (ASC 958-805-30-10 and ASC 958-805-30-13).	Asset or liability for contingent consideration (ASC 958-805-35-3).
958-810		Certain investments of NFP entities that are not health care entities within the scope of ASC 954 (ASC 958-810-15-4).
960-30	Noncash contribution from an employer (ASC 960-30-45-2(c)).
960-325		Plan investments other than insurance contracts reported at contract value (ASC 960-325-35-1 through 35-3).33
962-205	Noncash contribution from an employer (ASC 962-205-45-7(c)).
962-325		Plan investments other than fully benefit-responsive investment contracts (FBRICs) (ASC 962-325-35-1 and 35-1A and ASC 962-325-35-5 and 35-6).34
965-20	Noncash contributions (ASC 965-20-30-1).
965-320		Plan investments in the form of equity or debt securities (ASC 965-320-35-1).35
965-325		Plan investments other than insurance contracts accounted for at contract value and FBRICs (ASC 965-325-35-1 and ASC 965-325-35-3).36 Investment contracts held by a defined benefit health and welfare benefit plan (ASC 965-325-35-2).
965-360		Plan investments in the form of real estate or investments other than insurance contracts (ASC 965-360-35-2).37
970-323	Investment in a real estate venture obtained by contribution of real estate (ASC 970-323-30-3).
972-360	Common property recognized as an asset of a common interest realty association that is received in a nonreciprocal transfer from the developer (ASC 972-360-30-1).
974-720	Asset or liability of a real estate investment trust that will be transferred between the real estate investment trust and its adviser (ASC 974-720-25-2).
985-20	Tangible or intangible asset to be used in research and development activities and that is acquired in a business combination (ASC 985-20-15-3).

Changing Lanes

Formation of Joint Ventures

On August 23, 2023, the FASB issued ASU 2023-05, under which an entity that qualifies as a joint venture or a corporate joint venture is required to apply a new basis of accounting upon formation of the joint venture. Specifically, the ASU stipulates that a joint venture must initially measure its assets and liabilities at fair value on the formation date. The amendments in ASU 2023-05 are effective for all joint ventures within the ASU’s scope that are formed on or after January 1, 2025. Early adoption is permitted. For more information about ASU 2023-05, see Deloitte’s September 8, 2023, Heads Up.

Certain Crypto Assets

On December 13, 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets.

The ASU applies to all entities that hold certain crypto assets, including private companies and not-for-profit entities. In this context, the term “crypto assets” refers to assets that meet the scope criteria in the new guidance. As outlined in ASC 350-60-15-1 (added by the ASU), these scope criteria are as follows:

The crypto asset meets the U.S. GAAP definition of an intangible asset.
The holder does not have “enforceable rights to or claims on underlying goods, services, or other assets.”
The asset is created or resides on “a distributed ledger based on blockchain or similar technology.”
The asset is secured by cryptography.
The asset is fungible.
The asset is “not created or issued by the reporting entity or its related parties.”38

For all entities, the ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. For more information about ASU 2023-08, see Deloitte’s December 15, 2023, Heads Up.

2.1.3 Disclosure

ASC 820’s disclosure requirements do not apply to fair value measurements at initial recognition (i.e., to initial measurements of assets, liabilities, equity instruments, or transactions at fair value).39 However, with certain exceptions, assets and liabilities that are subsequently measured at fair value on a recurring or nonrecurring basis in accordance with ASC 820 are subject to ASC 820’s disclosure requirements (see Section 2.3 for more information). In addition, ASC 820 requires entities to disclose fair value amounts measured in accordance with ASC 820 as well as other fair-value-related information for certain assets and liabilities that are not measured at fair value.40 Other Codification topics also require certain disclosures regarding fair value amounts, including when an asset, liability, equity instrument, or transaction is initially measured at fair value. In these circumstances, in the absence of a specific scope exception in ASC 820 or another Codification topic, the fair value information must be prepared on the basis of the measurement guidance in ASC 820.

See Chapter 11 for more information about the fair value disclosure requirements in ASC 820. See Appendix A for more information about other Codification topics that require fair value disclosures.

Connecting the Dots

Entities in certain industries, such as real estate, may prepare basic financial statements under U.S. GAAP and report fair value information as a supplement to the financial statements. Other entities may disclose fair value amounts related to particular assets, liabilities, and equity instruments. ASC 820 applies to the disclosure of such supplemental fair value information. ASC 820-10-15-1 states that the guidance in ASC 820 “applies when another Topic requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements).”

Footnotes

ASC 820 does not, however, apply to measurements based on the lower of cost or market value, such as measurements of inventory under ASC 330.

ASC 820-10-50-2(a) states that “[n]onrecurring fair value measurements . . . are those that other Topics require or permit in the statement of financial position in particular circumstances (for example, when a reporting entity measures a long-lived asset or disposal group classified as held for sale at fair value less costs to sell in accordance with Topic 360 because the asset’s fair value less costs to sell is lower than its carrying amount).” In some cases, an item may be remeasured to fair value in consecutive reporting periods; however, such remeasurement is a nonrecurring fair value measurement because the other Codification topic that requires or permits such measurement does not require or permit the measurement for all changes in fair value. For example, a long-lived asset or disposal group classified as HFS may be remeasured to fair value less costs to sell in each financial reporting period until its disposal because the fair value less costs to sell declines in each financial reporting period. However, such measurement is not a recurring fair value measurement because ASC 360 does not allow an entity to remeasure a long-lived asset or disposal group classified as HFS at a fair value amount that exceeds the asset’s (or disposal group’s) original cost basis. In the absence of a specific exception, the disclosure requirements in ASC 820 apply to items subsequently measured at fair value on a nonrecurring basis (see Sections 2.3 and 11.2.2.1 for more information). Conversely, the disclosure requirements in ASC 820 do not apply to items that are initially measured at fair value. Other Codification topics may, however, require specific disclosures regarding initial measurements at fair value under ASC 820 (see Appendix A for more information).

ASC 820-10-50-2(a) states that “[r]ecurring fair value measurements . . . are those that other Topics require or permit in the statement of financial position at the end of each reporting period.” In the absence of a specific exception, the disclosure requirements in ASC 820 apply to items subsequently measured at fair value on a recurring basis (see Sections 2.3 and 11.2.2.1 for more information).

See Section 2.3.10 for more information about life-settlement contracts accounted for under ASC 325-30.

See footnote 4.

Finite-lived intangible assets may be tested for impairment as part of an asset group. Any impairment loss is allocated to the finite-lived intangible assets on a relative fair value basis.

See Section 2.3.7 for more information about the impairment of long-lived assets (asset groups) under ASC 360-10.

See footnote 7.

See Section 2.3.9 for discussion of a practical expedient related to the fair value measurement of an ARO under ASC 410-20.

See Section 2.3.13 for discussion of an exception to the fair value measurement requirements under ASC 420-10.

See Section 2.3.4 for discussion of a practical expedient related to this fair value measurement under ASC 460-10.

See Section 2.3.17 for more information about deferred compensation arrangements held in rabbi trusts accounted for under ASC 710-10.

See Section 2.3.15 for more information about plan assets and obligations accounted for under ASC 712-10.

See Section 2.3.15 for more information about plan assets and obligations accounted for under ASC 715-30.

See Section 2.3.15 for more information about the measurement of a participation right under ASC 715-30.

See Section 2.3.15 for more information about plan assets and obligations accounted for under ASC 715-60.

See Section 2.3.15 for more information about the measurement of a participation right under ASC 715-60.

See Section 2.3.18 for more information about contributions made accounted for under ASC 720-25.

See Section 2.3.6 for discussion of exceptions to the measurement principle in ASC 805-20-30-1.

See Section 2.3.3 for more information about financial assets and financial liabilities of a CFE accounted for in accordance with ASC 810-10-30-11 through 30-15.

See footnote 21.

This table does not include any references to the guidance in ASC 815-20, ASC 815-25, ASC 815-30, and ASC 815-35 regarding how to recognize the change in fair value of a derivative or nonderivative instrument designated as a hedging instrument. ASC 815-10-35-2 states that “[t]he accounting for changes in the fair value (that is, gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship.” When ASC 815-20, ASC 815-25, ASC 815-30, or ASC 815-35 refers to “fair value” with respect to assessing, measuring, or recognizing the effects of hedge accounting, the measurement guidance in ASC 820 applies. However, depending on how fair value is used in the application of hedge accounting, a resulting measurement may not be a fair value measurement. See Section 2.3.11 for more information about the hedged item in a fair value hedge accounted for under ASC 815-25.

Some instruments that possess the characteristics of a derivative instrument under ASC 815-10 are subject to an exception from derivative accounting, while other instruments that do not have these characteristics are nevertheless subject to derivative accounting. As discussed in ASC 815-10-15-71, a loan commitment related to the origination of mortgage loans that will be held for sale must be accounted for as a derivative instrument regardless of whether it possesses all the characteristics of a derivative instrument.

See footnote 24.

See Section 2.3.2 and Chapter 12 for more information about the FVO election under ASC 825.

See footnote 26.

See Section 2.3.1 for more information about notes receivable or payable accounted for under ASC 835-30.

See Section 2.3.8 for more information about lease contracts accounted for under ASC 842.

See Section 2.3.12 for more information about nonmonetary transactions accounted for under ASC 845-10.

See Section 2.3.18 for more information about contributions accounted for under ASC 958-605.

See footnote 32.

See Section 2.3.16 for more information about plan assets and obligations accounted for under ASC 960-325.

See Section 2.3.16 for more information about plan assets and obligations accounted for under ASC 962-325.

See Section 2.3.16 for more information about the accounting for plan assets and obligations under ASC 965-320.

See Section 2.3.16 for more information about the accounting for plan assets and obligations under ASC 965-325.

See Section 2.3.16 for more information about the accounting for plan assets and obligations under ASC 965-360.

A reporting entity that performs mining or validating services, and that receives newly created crypto assets as consideration for those services, would not be deemed the creator of those crypto assets as long as the services constitute the entity’s only involvement with the creation of the asset.

Items initially measured on the basis of a relative fair value allocation are also not subject to ASC 820’s disclosure requirements.

Under ASC 820-10-50-2E, certain disclosure provisions of ASC 820 apply to classes of “assets and liabilities not measured at fair value in the statement of financial position but for which the fair value is disclosed,” including financial instruments for which fair value is disclosed under ASC 825. These disclosure requirements have been incorporated into ASC 825-10-50-10 through 50-15.

Confidential and Proprietary — for Use Solely by Authorized Personnel

This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.