Loans subject to ASC 310-30 that are acquired individually or in pools in arm's length transactions should be recorded at their fair value. ASC 860 requires transferees to initially measure, at fair value, any recognized financial asset; and ASC 310-30-30-1 notes that for (all) loans acquired in a purchase business combination, the initial recognition of those loans should be "the present value of amounts expected to be received" (i.e., fair value).

For acquired impaired loans within the scope of ASC 310-30, the buyer must independently assess the expected cash flows to determine the accretable yield under ASC 310-30. The buyer of the loans cannot use the seller’s expectations under an ASC 310-10 model about future cash flows because it cannot assume that the seller’s expectations would match its own expectations. Furthermore, the buyer cannot use the transferor’s ASC 450-20 loan loss allowance because it cannot assume that the general allowance would approximate the cash flows not expected to be remitted for individual loans. However, it may be appropriate for the buyer to consider information obtained from the transferor, if any, such as loss histories or econometric projections, in forming the buyer's own expectations of the cash flows.

Under ASC 310-30, it is not appropriate for the buyer to report impaired loans on a gross basis (i.e., record the gross contractual principal and carry over the seller’s ALLL, or otherwise adjust the seller's allowance for the buyer's estimate of incurred losses). Only the declines in collectibility that occur subsequent to acquisition should be reflected in the buyer’s ALLL.