C. Application of the derecognition principles to the transfer of the financial asset(s) is the first step when analyzing a transfer for derecognition. This involves assessing whether the transferor has transferred substantially all the risks and rewards of ownership related to the financial asset, as per the requirements of the relevant accounting standards, such as IFRS 9 or ASC 3260. If the transferor has not transferred substantially all the risks and rewards, the financial asset should still be recognized on the balance sheet, and further analysis would involve steps like assessing whether the contractual rights to the cash flows have expired or considering the consolidation requirements for groupings of assets. However, the initial determination of whether derecognition principles apply to the transferred asset(s) comes first.