Let's try to simplify this discussion. Much debate over whether reckoned righteousness (Romans 4) is inherent (transferred) righteousness (Catholic view) or imputed (reckoned, accounted, credited) righteousness (Protestant view). Those words in the Protestant view are in the Bible, whereas “inherent or transferred" are not).  So let’s stick with Bible terms. 

Bottom line, Phil 3:9: there is a “righteousness of my own” that Paul spoke of that a man could have if he obeyed the laws of God, “derived from the Law”. Zacharias and Elizabeth were both “righteous in the sight of God, walking blamelessly in the commandments and requirements of the Lord” Lk 1:6.
But Paul says as a believer in Jesus he had a righteousness that is through faith, the righteousness which comes from God on the basis of faith. Let’s go to Romans where Paul elaborates on this new righteousness in Christ. However, “by the works of the Law no flesh will be justified in His sight” Rom 3:20. But apart from the Law, the righteousness of God has been manifested…even the righteousness of God through faith in Jesus Christ… Rom 3:21,22. So believers are justified by grace through faith to “demonstrate God’s righteousness (i.e. He is the only One who perfectly does everything in a just and right way) Rom 3:24-28. Justification is “by faith apart from the works of the Law” Rom 3:28. A simply definition of the word justification is “to be declared righteous in God’s sight”, to be cleared of all guilt, to be pardoned from all punishment, to be declared to be “just-as-if-I-had-not-sinned”.

Paul goes on to use the examples of Abraham and David to show that their righteousness was as “reckoned” to them Rom 4:3 (quoting Gen 15:6) on the basis of their faith, and not their works. Certainly, with Abraham, it wasn’t through keeping of the Law of Moses which had not even been given during his life; he hadn’t even been circumcised yet in Gen 15:6 (Rom 4:10). This method of reckoned righteousness was to be the model for all believers of all times, Jew or Gentile (Rom 4:11). This was essential to the concept of salvation by grace, not Law-keeping (Rom 4:16). Paul later in Romans said that “if salvation is by grace, it is no longer on the basis of works, otherwise grace is no longer grace” (Rom 11:6). If God bases our salvation in any degree upon our works, we will fall short and not be saved. It must be 100% by grace. God demanded that salvation be such, so that all the glory would go to Him and not to man. It would exclude all boasting (Rom 3:27). Finally, Paul says that righteousness would be reckoned to the one who believes in Jesus (Rom 4:23-24) just as it was to Abraham (and David).

The Biblical use of the words “counted, reckoned, credited, imputed”: how do we best illustrate that? Something that is considered yours even though it is not really yours or of your doing. A bank account has credits and debits. A credit is something put to your account. That is usually a deposit you made or a direct deposit of your paycheck, for example. But what if all of a sudden you notice that a credit of $1,000,000 shows up on your bank statement that you did not earn or deposit. But it is now considered or reckoned to be yours for you to used to pay your debts. That is salvation. Our righteousness will not save us. David says our righteousness is as filthy rags, no matter how great it is (like Zacharias). But God credits our spiritual bank account with righteousness that is not ours, but which will be credited to our account, totally sufficient to save us. Whether it is imparted, imputed, transferred, inherent, let us not get caught up that squabble among the theologians. God declares us to be righteousness in His sight by grace through faith, not works. This is called justification, a term in God’s spiritual courtroom where He judges us. Once we are covered by God’s grace through faith, He continues to reckon us to be righeous his sight even though we still sin, but “blessed is the man whose sin the Lord will not take into account” (Rom 4:8). God does not account our trespasses against us (2 Cor 5:19). If we walk in the light, the blood continues to wash away any sin we commit and it is not charged against us (1 Jn 1:7).
This would apply to all sins, past, present and future, as long as we are covered by grace. Yes, we can fall from grace, but don’t let that possibility take away from the joy of reckoned righteousness. And the assurance of continued salvation by grace through faith that we have in Christ.

I read a great chapter in a book by William Worthy. It begins with a quote: “The image of covering occurs frequently in Scripture particularly in connection with atonement.” R.C.Sproul

1. Garments for Adam and Eve (Gen 3:7,21). They covered their private parts with leaves, but God gave them coverings of animal skins. Not to read too much into this story, but interesting that God provided clothing for their sinful condition. Their covering of leaves was inadequate even though they were the only ones in the Garden at that time. Is that a lesson that we can’t provide our own righteousness?
2. The dirty garments of Joshua, the High Priest (Zech 3:1-5). Joshua was the high priest, who along with Zerubbabel, led the 1st return from Babylon to rebuild the temple. His special priestly robes had perhaps become dirty from working on the temple? Satan was accusing him before the Lord. For what? Not being dressed appropriately? Not resuming the work on the temple that had been delayed? Not sure. But the Lord rebuked him and gave Joshua clean garments and took his iniquity (whatever it was) away from him. Then the angel of the Lord told him that he was a symbol of “My Servant the Branch” (i.e. the Branch of David which is Jesus). Not sure the typology here. Jesus our High Priest obviously. All believers are priests in the new covenant, and they will be given the clean clothing of imputed righteousness.
3. The wedding garment of Matthew 23:1-13. The guest who actually accepted the invitation and attending the wedding feast did more than the Jews who rejected the invitation to come into the kingdom of God. But he didn’t have on the appropriate wedding garment. Surely he was offered one (an assumption but a reasonable one), and perhaps refused it. Maybe he didn’t think he needed one. I have always thought this man was a Judaizer who would actually become a member of the church kingdom but yet continued to trust in his own goodness and law keeping, i.e. a legalist. The wedding garment would be the imputed righteousness offered to every member of the kingdom, a nice garment probably unlike what they normally wore since they had been brought in from the highways and byways.
   In connection with this story, read Isaiah 61:10: he hath clothed me with the garments of salvation, he hath covered me with the robe of righteousness, as a bridegroom docket herself with ornaments and as a bride adorneth herself with her jewels. In Isaiah, believers get even more than just a guest garment; they are given the clothes the bride and groom would wear.
4. The best robe for the prodigal. The prodigal son in the parable In Luke 15:22-24 was forgiven and was given the “best robe”. I’m sure this irritated the elder brother who was probably still in his work clothes since he had continued the hard farm work while his younger brother was out wasting his inheritance. Again, this could be stretching it a little perhaps, but could represent the robe of imputed righteousness that prodigals, sinners, receive. But legalists have always been a thorn in the church kingdom, trying to make the new covenant a law of works instead of a law of faith. They trust their own righteousness and law keeping instead of God’s grace and reckoned righteousness.
5. Clothed with Christ. Galatians 3:26,27: you are children of God by faith in Jesus Christ. For as many of you as have been baptized have “put on” Christ (as if putting on clothes). Romans 13:14 put on the Lord Jesus Christ and make no provision for the flesh…. I mean, how can you “put on” Jesus as if He is a piece of clothing. The idea must be the reckoned righteousness that is given us by faith in Jesus.

I hope this article helps explain “reckoned righteousness”. On your worst day (as long as you have not fallen from grace), you can rejoice in knowing that you have this reckoned righteousness, and that God sees and considers you to be righteous in his sight even though you sin often. Some worry that this doctrine will cause Christians to sin willfully since they are covered by grace. Paul foresees that and asks, “Shall we continue in sin that grace might abound? God forbid” Romans 6:1. Anyone who willfully sins without any regret simply is not a sincere believer, a true believer. Suppose someone gives you a beautiful new white suite or dress so you can attend a special wedding of a friend or loved one. Who would just willfully go out and roll in the mud, dirtying that new garment, and then walk into the wedding to honor the bride and groom?