# ASC 205-958-50: Presentation of Financial Statements — Not-for-Profit Entities — 50 Disclosure Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/205/958/#50-disclosure) 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): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:d36e2cd3ca5cae60e0f07674866e5c06828c0993f39a5599b1cae162e234d2bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/958/#50-disclosure) SEC content: no #### Nature of the Not-for-Profit Entity's Activities ##### [205-958-50-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:cac10f2e3b300ffbfb005b51e9d30267c9b7e1f76c4485c4f4967aabb0593751 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements shall provide a description of the nature of the [not-for-profit entity's](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP's) activities, including a description of each of its major classes of programs. If not provided in the notes to financial statements, the description can be presented on the statement of activities (for example, using column headings). #### Reporting Endowment Funds ##### [205-958-50-1A](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1A) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:b259c3f14b4884d68a26607fabd648f9bee69e27e688e4d55a29ef768e98871e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP shall disclose information to enable users of financial statements to understand all of the following about its [endowment funds](https://asc.understandingaccounting.org/glossary/e/#endowment-fund "An established fund of cash, securities, or other assets to provide income for the maintenance of a not-for-profit entity (NFP). The use of the assets of the fund may be with or without donor-imposed restrictions. Endowment funds generally are established by donor-restricted gifts and bequests to provide a source of income in perpetuity or for a specified period. See Donor-Restricted Endowment Fund. Alternatively, an NFP's governing board may earmark a portion of its net assets as a Board-Designated Endowment Fund. See Funds Functioning as Endowment.") (both donor restricted and board designated): 1. a Net asset classification (for example, [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") or [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).")) 2. b Net asset composition (for example, [board-designated endowment funds](https://asc.understandingaccounting.org/glossary/b/#board-designated-endowment-fund "An endowment fund created by a not-for-profit entity's (NFP's) governing board by designating a portion of its net assets without donor restrictions to be invested to provide income for a long but not necessarily specified period (sometimes called funds functioning as endowment or quasi-endowment funds). In rare circumstances, a board-designated endowment fund also can include a portion of net assets with donor restrictions. For example, if an NFP is unable to spend donor-restricted contributions in the near term, then the board sometimes considers the long-term investment of these funds. See Endowment Fund.") or [donor-restricted endowment funds](https://asc.understandingaccounting.org/glossary/d/#donor-restricted-endowment-fund "An endowment fund that is created by a donor stipulation (donors include other types of contributors, including makers of certain grants) requiring investment of the gift in perpetuity or for a specified term. Some donors or laws may require that a portion of income, gains, or both be added to the gift and invested subject to similar restrictions. The term does not include a Board-Designated Endowment Fund. See Endowment Fund.")) 3. c Changes in net asset composition 4. d Spending policies 5. e Related investment policies. ##### [205-958-50-1B](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:f6bc50d1966a2316a2b80b0225153511c39f7ad7ae564aa39fb5f6967ce16d95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At a minimum, an NFP shall disclose all of the following information for each period for which it presents financial statements: 1. a A description of the governing board's interpretation of the law or laws that underlie the NFP's net asset classification of donor-restricted endowment funds, including its interpretation of the ability to spend from [underwater endowment funds](https://asc.understandingaccounting.org/glossary/u/#underwater-endowment-fund "A donor-restricted endowment fund for which the fair value of the fund at the reporting date is less than either the original gift amount or the amount required to be maintained by the donor or by law that extends donor restrictions."). 2. b A description of the NFP's policy or policies for the appropriation of endowment assets for expenditure (its endowment spending policy or policies), including its policy, and any actions taken during the period, concerning appropriation from underwater endowment funds. 3. c A description of the NFP's endowment investment policies, including all of the following: 1. 1 Return objectives and risk parameters 2. 2 How return objectives relate to the NFP's endowment spending policy or policies 3. 3 The strategies employed for achieving return objectives. 4. d The composition of the NFP's endowment by net asset class at the end of the period, in total and by type of endowment fund, showing donor-restricted endowment funds separately from board-designated endowment funds. 5. e A reconciliation of the beginning and ending balance of the NFP's endowment, in total and by net asset class, including, at a minimum, all of the following line items that apply: 1. 1 Investment return, net 2. 2 [Contributions](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") 3. 3 Amounts appropriated for expenditure 4. 4 [Subparagraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). 5. 5 Other changes. ##### [205-958-50-1C](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1C) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:e6a64193f7126cf2aba97f05a98b62ec1154058264661a7949ef7b47dc8019d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an NFP is subject to a donor restriction or applicable laws that its governing board interprets as requiring the maintenance of purchasing power for donor-restricted endowment funds, the NFP shall periodically adjust the disclosed amount that is required to be maintained either by the donor or by law to reflect that interpretation to maintain the purchasing power of the endowment fund in perpetuity. Under those circumstances, unless a donor provides an amount or an index, an NFP shall use the inflation (deflation) index (or indexes) that it deems most relevant for adjusting that amount (for example, the Consumer Price Index or the Higher Education Price Index). ##### [205-958-50-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:759d9e407af77ae59c03f14193a557769827022201650f3e9d2e5c28e1d38689 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For each period for which a statement of financial position is presented, an NFP shall disclose each of the following, in the aggregate, for all underwater endowment funds: 1. a The fair value of the underwater endowment funds 2. b The original endowment gift amount or level required to be maintained by donor stipulations or by law that extends donor restrictions 3. c The amount of the deficiencies of the underwater endowment funds ((a) less (b)). ##### [205-958-50-2A](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-2A) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:f5443ecacacb62ba74db502eeddcb890f547b4f05f9d0afc4256901fd89d9c33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 3 (see paragraphs [958-205-55-31 through 55-52](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-31) ) illustrates the application of the disclosure requirements in paragraphs [958-205-50-1A through 50-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1A) . #### Ratio of Fundraising Expenses to Amounts Raised ##### [205-958-50-3](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:3cec2204fdc5693ecfa4129002a6decda927574bfc08e9d920178e065ac5c31d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an NFP discloses in its financial statements a ratio of fundraising expenses to amounts raised, it also shall disclose how it computes that ratio. #### Comparative Financial Statements ##### [205-958-50-4](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:03.410Z to 2026-09-09T22:56:03.410Z Record version: sha256:7653ebb546e57a0be792b1d2dbf84e78721301eb0673bcf0f16559f8469e5094 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the prior year's financial information is summarized and does not include the minimum information required by the Not-for-Profit Entities Topic (for example, if the statement of activities does not present revenues, expenses, gains, and losses by [net asset](https://asc.understandingaccounting.org/glossary/n/#net-assets "The excess or deficiency of assets over liabilities of a not-for-profit entity, which is divided into two mutually exclusive classes according to the existence or absence of donor-imposed restrictions. See Net Assets with Donor Restrictions and Net Assets without Donor Restrictions.") class), the nature of the prior-year information shall be described by the use of appropriate titles on the face of the financial statements and in a note to financial statements (see paragraph [958-205-45-8](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-8)).