# ASC 205-958: Presentation of Financial Statements — Not-for-Profit Entities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/205/958/) 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): 2026-09-09T22:55:47.235Z to 2026-09-09T22:56:13.307Z Record version: sha256:46bae6ca391aa1be6dc19231325f4b29bc6525e3f7a6de4e83577be770c83242 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958: Presentation of Financial Statements — Not-for-Profit Entities ### Machine-generated study aids ```json { "summary": "ASC 958-205 governs the presentation of a not-for-profit entity's general-purpose financial statements. A complete set consists of a statement of financial position, a statement of activities, a statement of cash flows, and notes (958-205-45-4), with net assets classified in two minimum classes—net assets with donor restrictions and net assets without donor restrictions (958-205-45-2(b)). It also prescribes when donor restrictions expire, how endowment funds (including those under UPMIFA) are classified, and the required endowment and underwater endowment disclosures.", "key_points": [ "A complete set of NFP financial statements includes a statement of financial position at period end, a statement of activities and statement of cash flows for the period, plus accompanying notes (958-205-45-4).", "NFPs must classify and report net assets in two groups—with donor restrictions and without donor restrictions—based on the existence or absence of donor-imposed restrictions; the two classes are a minimum scheme that may be further disaggregated (958-205-45-2(b); 958-205-05-6B).", "All NFPs must report information about all expenses in one location (face of the statement of activities, a note schedule, or a separate statement) in an analysis showing the relationship of functional to natural classifications (958-205-45-6; 958-720-45-15).", "Expiration of a donor-imposed restriction is recognized in the period the restriction expires—when the stipulated time elapses or the stipulated purpose is fulfilled—and where multiple temporary restrictions exist, when the last one expires (958-205-45-9); restrictions on long-lived assets expire when the assets are placed in service (958-205-45-12).", "Under an enacted version of UPMIFA, the original gift, subsequent gifts, and investment returns of a donor-restricted endowment fund are net assets with donor restrictions until appropriated for expenditure by the governing board, at which point the appropriated amount is reclassified if time and purpose restrictions are met (958-205-45-13D through 45-13F).", "Accumulated losses of an underwater endowment fund stay with that fund in net assets with donor restrictions, and the NFP must disclose in the aggregate the fair value, the original gift/required level, and the deficiency (958-205-45-13H; 958-205-50-2).", "Required endowment disclosures include the board's interpretation of relevant law, spending and investment policies, endowment composition by net asset class and fund type, and a beginning-to-ending reconciliation of endowment balances (958-205-50-1A through 50-1B); reporting by fund groups is not required but is not precluded (958-205-45-3)." ], "categories": [ "Not-for-profit", "Presentation", "Disclosure", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "This is the backbone of NFP reporting and a heavy CPA exam topic: know the three required statements, the two net asset classes, and the functional/natural expense analysis. The classic misunderstanding is endowment classification—under UPMIFA the entire donor-restricted endowment (including accumulated investment return and underwater deficits) stays in net assets with donor restrictions until the board appropriates it, while a board-designated (quasi-) endowment sits in net assets without donor restrictions.", "related_topics": [ "958-210", "958-220", "958-230", "958-605", "958-720", "958-320" ], "key_concepts": [ "net assets with donor restrictions", "net assets without donor restrictions", "donor-restricted endowment fund", "board-designated endowment fund", "underwater endowment fund", "appropriation for expenditure", "functional and natural expense analysis", "statement of activities" ] } ``` Source downloaded (UTC): 2026-09-09T22:55:47.235Z to 2026-09-09T22:55:47.235Z Record version: sha256:d1630ea27cb46ddff8e4742334d0b6af0c1ebea54cc4da8f11caf5ae2b4ba918 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/958/#00-status) SEC content: no ##### [205-958-00-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:47.235Z to 2026-09-09T22:55:47.235Z Record version: sha256:ff98b24351de65173d45cb2b1e4932090aacbbe49464f2c393b7e5b2f43ecdcd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Board-Designated Endowment FundAmendedAccounting Standards Update No. 2016-1408/18/2016
Conditional ContributionAddedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2010-0701/28/2010
Contributions ReceivableAddedAccounting Standards Update No. 2016-1408/18/2016
Donor-Imposed ConditionAddedAccounting Standards Update No. 2018-0806/21/2018
Donor-Imposed RestrictionAmendedAccounting Standards Update No. 2016-1408/18/2016
Donor-Restricted Endowment FundAmendedAccounting Standards Update No. 2016-1408/18/2016
Donor-Restricted SupportAddedAccounting Standards Update No. 2016-1408/18/2016
Endowment FundAmendedAccounting Standards Update No. 2016-1408/18/2016
Functional ClassificationSupersededAccounting Standards Update No. 2016-1408/18/2016
Functional Expense ClassificationAddedAccounting Standards Update No. 2016-1408/18/2016
Funds Functioning as EndowmentAmendedAccounting Standards Update No. 2016-1408/18/2016
Management and General ActivitiesAmendedAccounting Standards Update No. 2016-1408/18/2016
Natural Expense ClassificationAmendedAccounting Standards Update No. 2024-0311/04/2024
Natural Expense ClassificationAmendedAccounting Standards Update No. 2016-1408/18/2016
Natural Expense ClassificationAddedAccounting Standards Update No. 2014-0603/14/2014
Net AssetsAmendedAccounting Standards Update No. 2016-1408/18/2016
Net Assets with Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Net Assets without Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Permanent EndowmentSupersededAccounting Standards Update No. 2016-1408/18/2016
Permanent RestrictionSupersededAccounting Standards Update No. 2016-1408/18/2016
Permanently Restricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
Quasi-endowment FundsSupersededAccounting Standards Update No. 2016-1408/18/2016
ReclassificationSupersededAccounting Standards Update No. 2016-1408/18/2016
Reclassification of Net AssetsAddedAccounting Standards Update No. 2016-1408/18/2016
Restricted SupportSupersededAccounting Standards Update No. 2016-1408/18/2016
Spending RateAddedAccounting Standards Update No. 2014-0603/14/2014
StipulationSupersededAccounting Standards Update No. 2016-1408/18/2016
Temporarily Restricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
Underwater Endowment FundAddedAccounting Standards Update No. 2016-1408/18/2016
Unrestricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
Unrestricted SupportSupersededAccounting Standards Update No. 2016-1408/18/2016
Voluntary Health and Welfare EntitySupersededAccounting Standards Update No. 2016-1408/18/2016
958-205-05-5 through 05-6AAmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-05-6BAddedAccounting Standards Update No. 2016-1408/18/2016
958-205-05-8 through 05-10
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-45-2AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-45-4 through 45-6
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-45-6AmendedAccounting Standards Update No. 2014-0603/14/2014
958-205-45-9 through 45-13
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-45-10AmendedAccounting Standards Update No. 2015-1006/12/2015
958-205-45-10AAddedAccounting Standards Update No. 2015-1006/12/2015
958-205-45-13A through 45-13J
AddedAccounting Standards Update No. 2016-1408/18/2016
958-205-45-13DAmendedMaintenance Update 2018-12 (PDF)09/10/2018
958-205-45-14 through 45-19
SupersededAccounting Standards Update No. 2016-1408/18/2016
958-205-45-21 through 45-35
SupersededAccounting Standards Update No. 2016-1408/18/2016
958-205-45-21AAmendedAccounting Standards Update No. 2012-0410/01/2012
958-205-45-22AmendedMaintenance Update 2016-05 (PDF)04/12/2016
958-205-45-27AmendedAccounting Standards Update No. 2014-0603/14/2014
958-205-45-36AddedAccounting Standards Update No. 2020-0709/17/2020
958-205-50-1AAmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-50-1BAmendedAccounting Standards Update No. 2016-1912/14/2016
958-205-50-1BAmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-50-1CAddedAccounting Standards Update No. 2016-1408/18/2016
958-205-50-2AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-50-2AAmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-50-4AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-1 through 55-2
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-5AmendedAccounting Standards Update No. 2016-1811/17/2016
958-205-55-5 through 55-7
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-9AmendedMaintenance Update 2018-02 (PDF)02/02/2018
958-205-55-9 through 55-21
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-11AmendedMaintenance Update 2017-06 (PDF)04/07/2017
958-205-55-12AmendedAccounting Standards Update No. 2015-0101/09/2015
958-205-55-12AmendedAccounting Standards Update No. 2014-0603/14/2014
958-205-55-13 through 55-17
AmendedAccounting Standards Update No. 2020-0709/17/2020
958-205-55-19 through 55-21
AmendedAccounting Standards Update No. 2016-1811/17/2016
958-205-55-21AmendedAccounting Standards Update No. 2020-0709/17/2020
958-205-55-21AmendedAccounting Standards Update No. 2012-0410/01/2012
958-205-55-22 through 55-30
SupersededAccounting Standards Update No. 2016-1408/18/2016
958-205-55-22AmendedAccounting Standards Update No. 2012-0410/01/2012
958-205-55-31AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-32AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-32AmendedAccounting Standards Update No. 2012-0410/01/2012
958-205-55-33 through 55-35
SupersededAccounting Standards Update No. 2016-1408/18/2016
958-205-55-36 through 55-39
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-37AmendedMaintenance Update 2016-11 (PDF)06/27/2016
958-205-55-38AmendedAccounting Standards Update No. 2012-0410/01/2012
958-205-55-40SupersededAccounting Standards Update No. 2016-1408/18/2016
958-205-55-40AmendedAccounting Standards Update No. 2012-0410/01/2012
958-205-55-41AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-42 through 55-46
SupersededAccounting Standards Update No. 2016-1408/18/2016
958-205-55-47 through 55-52
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-205-55-53SupersededAccounting Standards Update No. 2016-1408/18/2016
Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:590318c65eb48fcc9e6ce11e2d3d88602e739008e5956404f5ad906f63fae49d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/958/#05-overview-and-background) SEC content: no ##### [205-958-05-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:8411f09af7b6abfd714a3241053f29c007f4d2d0a7d040f53a60cfc5a7dba276 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic discusses the presentation of financial statements for [not-for-profit entities](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.") (NFPs), including the following items: 1. a The objectives of financial reporting by NFPs 2. b A complete set of financial statements 3. c Statement of functional expenses 4. d Comparative financial statements 5. e Expiration of restrictions 6. f Reporting endowment funds 7. g Disclosures of a general nature that do not belong with other Subtopics. ##### [205-958-05-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:a2cd06860aae2b4dd19d35b5a064351cae122318dda7cdd4c231c92889e7b05e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additional information concerning the reporting model of an NFP can be found in the following Subtopics: 1. a Not-for-Profit Entities—Balance Sheet, Subtopic 958-210 2. b Not-for-Profit Entities—Income Statement, Subtopic 958-220 3. c Not-for-Profit Entities—Statement of Cash Flows, Subtopic 958-230. #### Purpose of Financial Statements ##### [205-958-05-3](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:c42bcddab1c79ab26146f7b30b819439b0fe29dcdcfb06ecb79cbef2c8bcec38 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The primary purpose of financial statements is to provide relevant information to meet the common interests of donors, members, creditors, and others who provide resources to NFPs. Those external users of financial statements have common interests in assessing both of the following: 1. a The services an NFP provides and its ability to continue to provide those services 2. b How managers discharge their stewardship responsibilities and other aspects of their performance. ##### [205-958-05-4](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:272c6e768637f450b7d4d356772c0bd93b10d65540e5c813be9c4347f52d5ad4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. More specifically, the purpose of financial statements, including accompanying notes, is to provide information about all of the following: 1. a The amount and nature of an NFP's assets, liabilities, and net assets 2. b The effects of transactions and other events and circumstances that change the amount and nature of net assets 3. c The amount and kinds of inflows and outflows of economic resources during a period and the relation between the inflows and outflows 4. d How an NFP obtains and spends cash, its borrowing and repayment of borrowing, and other factors that may affect its [liquidity](https://asc.understandingaccounting.org/glossary/l/#liquidity "An asset's or liability's nearness to cash. Donor-imposed restrictions may influence the liquidity or cash flow patterns of certain assets. For example, a donor stipulation that donated cash be used to acquire land and buildings limits an entity's ability to take effective actions to respond to unexpected opportunities or needs, such as emergency disaster relief. On the other hand, some donor-imposed restrictions have little or no influence on cash flow patterns or an entity's financial flexibility. For example, a gift of cash with a donor stipulation that it be used for emergency-relief efforts has a negligible impact on an entity if emergency relief is one of its major ongoing programs.") 5. e The service efforts of an NFP. #### A Complete Set of Financial Statements ##### [205-958-05-5](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:178c7d7019664ea4928aa1c0cba836f6f9e7431d02b8f565a792a80413e86f00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. General-purpose external financial statements provided by an NFP include a statement of financial position, a statement of activities, and a statement of cash flows. Individual financial statements provide different information, and the information each statement provides generally complements information in other financial statements. ##### [205-958-05-6](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:4ffe8416a7751578a8fa1230135246ef0a70bde175bb74cc0b15a78692cc2511 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. General-purpose financial statements classify and report net assets in two groups—[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).") and [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).")—based on the existence or absence of [donor-imposed restrictions](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction "A donor stipulation (donors include other types of contributors, including makers of certain grants) that specifies a use for a contributed asset that is more specific than broad limits resulting from the following: The nature of the not-for-profit entity (NFP) The environment in which it operates The purposes specified in its articles of incorporation or bylaws or comparable documents for an unincorporated association. Some donors impose restrictions that are temporary in nature, for example, stipulating that resources be used after a specified date, for particular programs or services, or to acquire buildings or equipment. Other donors impose restrictions that are perpetual in nature, for example, stipulating that resources be maintained in perpetuity. Laws may extend those limits to investment returns from those resources and to other enhancements (diminishments) of those resources. Thus, those laws extend donor-imposed restrictions.") and the nature of those restrictions. ##### [205-958-05-6A](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-6A) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:ed318200dd5451c11f55cf8f095b10ff9a2e026751aaa87ff1c8911af31670d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Not-for-Profit Entities Topic uses certain statement titles and the terms _net assets without donor restrictions_ and _net assets with donor restrictions_. Other titles and other labels may also be used, as illustrated in paragraphs [958-205-55-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-2) and [958-210-55-3](https://asc.understandingaccounting.org/asc/210/958/#210-958-55-3). ##### [205-958-05-6B](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-6B) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:22d0dd9509828f0bb8ce5ff49811925e35b046801de1b64f5b08d03dd1480166 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The two required net asset classes (with donor restrictions and without donor restrictions) are a minimum classification scheme, if they are applicable. An NFP can choose to further disaggregate the two net asset classes. For example, an NFP may wish to disaggregate net assets with donor restrictions between those expected to be maintained in perpetuity and those expected to be spent over time or for a particular purpose. However, paragraph [958-210-45-1](https://asc.understandingaccounting.org/asc/210/958/#210-958-45-1) does require that the amounts for each of the two classes of net assets and the total of net assets be reported in a statement of financial position. ##### [205-958-05-7](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:a18bea3e39ab538119d010c2195a7b800457f0cb06e8db20d9fb86bbc36e1f94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Not-for-Profit Entities Topic does not use the terms fund balance or changes in fund balances because in current practice those terms are commonly used to refer to individual groups of assets and related liabilities rather than to an entity's net assets or changes in net assets taken as a whole. While reporting by fund groups is not a necessary part of external financial reporting, paragraph [958-205-45-3](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-3) does not preclude providing disaggregated information by fund groups. #### Reporting Endowment Funds ##### [205-958-05-8](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:bc358446a766b726440e20515366cf9688c06b58cd96f48f1e2aa483c8fe59bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Laws concerning use of net appreciation of [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.") that are donor-restricted may vary from jurisdiction to jurisdiction. For example, most jurisdictions follow enacted versions of the Uniform Prudent Management of Institutional Funds Act of 2006 or similar legal guidance (including interpretations of the law issued by state Attorneys General) and some jurisdictions follow trust law. ##### [205-958-05-9](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:cbc2afc4c8a8d6c2e8991756982e0ccdaab9946483012a14c9b5da00f0dcad20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because donor stipulations and laws vary, NFPs must assess the relevant facts and circumstances for their endowment gifts and their relevant laws to determine the classification of endowment funds within the NFP financial reporting model (see paragraph [958-205-45-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-2)), including whether some or all of the investment return on endowments is available for spending. ##### [205-958-05-10](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:50.396Z to 2026-09-09T22:55:50.396Z Record version: sha256:7e029e58d79212f4320eb354ae06ffee2e3679d3cf29492de38e83abb277d550 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Subsection 4(a) of the Uniform Prudent Management of Institutional Funds Act of 2006 provides that, unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. For related guidance, see paragraphs [958-205-45-13 through 45-13F](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13). Source downloaded (UTC): 2026-09-09T22:55:53.033Z to 2026-09-09T22:55:53.033Z Record version: sha256:03d9322acc9fcd7138c887a518591ff96468eae4e8dc9cd7b012441f2fcddbf6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/205/958/#10-objectives) SEC content: no ##### [205-958-10-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-10-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:53.033Z to 2026-09-09T22:55:53.033Z Record version: sha256:2dd4f0e37ceff4e6aebbba8078a8157b7e4e3149df9fa9a7e26188b937c775eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The standards for reporting financial information in this Subtopic, in combination with Subtopics 958-210, 958-220, and 958-230, focus on the content of financial statements, that is, on the basic information to be provided in financial statements by a [not-for-profit entity](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). These Subtopics have the following objectives: 1. a Require information that meets the objectives of financial reporting for NFPs 2. b Define what constitutes a complete set of general-purpose financial statements for those entities 3. c Require methods of reporting that information that are all of the following: 1. 1 Comprehensive 2. 2 Understandable 3. 3 Useful for decisions by present and potential resource providers 4. 4 Consistent with the conceptual framework. Source downloaded (UTC): 2026-09-09T22:55:55.086Z to 2026-09-09T22:55:55.086Z Record version: sha256:1456a8ea5f660688828706b2546eb0cf9b8306bc91857aabf6dd8be473d17643 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/958/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-958-15-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:55.086Z to 2026-09-09T22:55:55.086Z Record version: sha256:8c48778ee635e252203e4256e298961e8eedcd51be3a2440d753a7b988da29b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15. It discusses how [not-for-profit entities](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.") (NFPs) report assets, liabilities, net assets, revenues, expenses, gains, and losses in financial statements; however, it does not specify when to recognize or how to measure those elements. Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:e301c9eb338a59127b50b231a62629cc4f7b1326dafe9f0ec11c1e6366a6f9ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/958/#45-other-presentation-matters) SEC content: no ##### [205-958-45-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:d3b222f581f2354c38b222dc1020b5c2b0e84529472b8505e97640b7a7f4d495 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic specifies certain basic information to be reported in financial statements of [not-for-profit entities](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.") (NFPs). The requirements generally are no more stringent than requirements for business entities. The degree of aggregation and order of presentation of items of assets and liabilities in statements of financial position or of items of revenues and expenses in statements of activities of NFPs, although not specified, generally should be similar to those required or permitted for business entities. Particular formats for a statement of financial position, a statement of activities, or a statement of cash flows, are neither prescribed nor prohibited in part because similar prescriptions and proscriptions do not exist for business entities. ##### [205-958-45-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:9af320dc7861f35a370df646251cdae7c707732fa863eaf4ec3d10fa883e36ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The usefulness of information provided by financial statements of NFPs can be vastly improved if certain basic information is classified in comparable ways. NFPs shall do the following: 1. a Report assets and liabilities in reasonably homogeneous groups and sequence or classify them in ways that provide relevant information about their interrelationships, [liquidity](https://asc.understandingaccounting.org/glossary/l/#liquidity "An asset's or liability's nearness to cash. Donor-imposed restrictions may influence the liquidity or cash flow patterns of certain assets. For example, a donor stipulation that donated cash be used to acquire land and buildings limits an entity's ability to take effective actions to respond to unexpected opportunities or needs, such as emergency disaster relief. On the other hand, some donor-imposed restrictions have little or no influence on cash flow patterns or an entity's financial flexibility. For example, a gift of cash with a donor stipulation that it be used for emergency-relief efforts has a negligible impact on an entity if emergency relief is one of its major ongoing programs."), and [financial flexibility](https://asc.understandingaccounting.org/glossary/f/#financial-flexibility "The ability of an entity to take effective actions to alter amounts and timing of cash flows so it can respond to unexpected needs and opportunities."). 2. b Classify and report net assets in two groups—[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).") and [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).")—based on the existence or absence of [donor-imposed restrictions](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction "A donor stipulation (donors include other types of contributors, including makers of certain grants) that specifies a use for a contributed asset that is more specific than broad limits resulting from the following: The nature of the not-for-profit entity (NFP) The environment in which it operates The purposes specified in its articles of incorporation or bylaws or comparable documents for an unincorporated association. Some donors impose restrictions that are temporary in nature, for example, stipulating that resources be used after a specified date, for particular programs or services, or to acquire buildings or equipment. Other donors impose restrictions that are perpetual in nature, for example, stipulating that resources be maintained in perpetuity. Laws may extend those limits to investment returns from those resources and to other enhancements (diminishments) of those resources. Thus, those laws extend donor-imposed restrictions."). Information about restrictions imposed by donors on the use of contributed assets, including their potential effects on specific assets and on liabilities or classes of net assets, shall be disclosed in accordance with paragraph [958-210-50-3](https://asc.understandingaccounting.org/asc/210/958/#210-958-50-3), because it is helpful in assessing the financial flexibility of an NFP. 3. c Aggregate items of revenues, expenses, gains, and losses into reasonably homogeneous groups and classify and report them as increases or decreases in net assets with donor restrictions or net assets without donor restrictions. 4. d Classify and report cash receipts and cash payments as resulting from investing, financing, or operating activities. ##### [205-958-45-3](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:4899d598b6ee82bb913e0f9b4bb8576850d18d96d5e76cd4b557a6a2bd8285c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Reporting by fund groups is not a necessary part of external financial reporting; however, this Subtopic does not preclude providing disaggregated information by fund groups. #### Complete Set of Financial Statements ##### [205-958-45-4](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:efd7280ae4ab1a41f298baf94b3aca19dea64dd357813d303feac6745cef326c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A complete set of financial statements of an NFP shall include a statement of financial position as of the end of the reporting period, a statement of activities and a statement of cash flows for the reporting period, and accompanying notes to financial statements. ##### [205-958-45-5](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:8074e6ea866520280e689022d150e0801edabdbb6977ec0afffafec26c993d08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A set of financial statements shall include, either in the body of financial statements or in the accompanying notes, information required by generally accepted accounting principles (GAAP) or required by applicable specialized accounting and reporting principles and practices unless NFPs are specifically exempt from providing that information. #### Reporting of Expenses by Nature and Function ##### [205-958-45-6](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:910a1a0385a5939fa3ead496318ab66bb53b26debae44470ca2a7a5c11a176fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Reporting expenses by nature and function is useful in associating expenses with service efforts and accomplishments of NFPs. All NFPs shall report information about all expenses in one location—on the face of the statement of activities, as a schedule in the notes to financial statements, or in a separate financial statement—as required by paragraph [958-720-45-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-15). The relationship between functional classification and natural classification for all expenses shall be presented in an analysis that disaggregates [functional expense classifications](https://asc.understandingaccounting.org/glossary/f/#functional-expense-classification "A method of grouping expenses according to the purpose for which costs are incurred. The primary functional classifications of a not-for-profit entity are program services and supporting activities."), such as major classes of [program services](https://asc.understandingaccounting.org/glossary/p/#program-services "The activities that result in goods and services being distributed to beneficiaries, customers, or members that fulfill the purposes or mission for which the not-for-profit entity (NFP) exists. Those services are the major purpose for and the major output of the NFP and often relate to several major programs.") and [supporting activities](https://asc.understandingaccounting.org/glossary/s/#supporting-activities "Supporting activities are all activities of a not-for-profit entity (NFP) other than program services. Generally, they include the following: Management and general activities Fundraising activities Membership development activities.") by their [natural expense classifications](https://asc.understandingaccounting.org/glossary/n/#natural-expense-classification "A method of grouping expenses according to the kinds of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, professional services, supplies, interest expense, rent, utilities, and depreciation. (P) December 16, 2026; (N) December 16, 2026220-40-65-1A method of grouping expenses according to the types of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, nonemployee professional services, supplies, interest expense, rent, utilities, and depreciation."), such as salaries, rent, electricity, supplies, interest expense, depreciation, awards and grants to others, and professional fees. To the extent that expenses are reported by other than their natural classification (such as salaries included in cost of goods sold or facility rental costs of special events reported as direct benefits to donors), they shall be reported by their natural classification in the functional expense analysis. For example, salaries, wages, and fringe benefits that are included as part of the cost of goods sold on the statement of activities shall be included with other salaries, wages, and fringe benefits in the functional expense analysis. External and direct internal investment expenses that have been netted against investment return shall not be included in the functional expense analysis. Certain items that are typically reported in other comprehensive income of for-profit entities, such as those items listed in paragraph [220-10-45-10A](https://asc.understandingaccounting.org/asc/220/10/#220-10-45-10A), are considered gains or losses and, like other gains and losses, shall not be included in the functional expense analysis. See Note F in paragraph [958-205-55-21](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-21) for an example that illustrates the reporting of expenses by nature and function. #### Comparative Financial Statements ##### [205-958-45-7](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:e31ccfd67754d07ca51ee41170cf2ae1886c25f2661b3304173bb80a1ef2977f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance provided by Section 205-10-45 encourages but does not require comparative financial statements. ##### [205-958-45-8](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:6b10fb01dd9ae476822946383d4d9cec167cd4f7c1afa929424d56c10cb86787 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFPs sometimes present comparative information for a prior year or years only in total rather than by net asset class. Such summarized information may not include sufficient detail to constitute a presentation in conformity with GAAP. If the prior year's financial information is summarized and does not include the minimum information required by this Topic (for example, if the statement of activities does not present revenues, expenses, gains, and losses by net asset 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. The use of appropriate titles includes a phrase such as _with summarized financial information for the year ended June 30, 19PY_, following the title of the statement or column headings that indicate the summarized nature of the information. Labeling the prior-year summarized financial information for comparative purposes only without further disclosure in the notes to financial statements would not constitute the use of an appropriate title. #### Expirations of Donor-Imposed Restrictions ##### [205-958-45-9](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:059bd291f06d267318f1bb749e66ef9ce2357cd5fef1111c84594946960d9f7d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP shall recognize the expiration of a [donor-imposed restriction](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction "A donor stipulation (donors include other types of contributors, including makers of certain grants) that specifies a use for a contributed asset that is more specific than broad limits resulting from the following: The nature of the not-for-profit entity (NFP) The environment in which it operates The purposes specified in its articles of incorporation or bylaws or comparable documents for an unincorporated association. Some donors impose restrictions that are temporary in nature, for example, stipulating that resources be used after a specified date, for particular programs or services, or to acquire buildings or equipment. Other donors impose restrictions that are perpetual in nature, for example, stipulating that resources be maintained in perpetuity. Laws may extend those limits to investment returns from those resources and to other enhancements (diminishments) of those resources. Thus, those laws extend donor-imposed restrictions.") on a [contribution](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.") in the period in which the restriction expires. A restriction expires when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. If two or more donor-imposed restrictions that are temporary in nature are imposed on a contribution, the effect of the expiration of those restrictions shall be recognized in the period in which the last remaining restriction has expired. ##### [205-958-45-10](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:c315cbf2b92407b871f916d0711263900dcb9134d0e63f5f2cc1cbaa87bfda6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a gift of a [term endowment](https://asc.understandingaccounting.org/glossary/t/#term-endowment "An endowment fund established to provide income for a specified period. See Endowment Fund.") that is to be invested for five years has two donor-imposed restrictions that are temporary in nature—a purpose restriction (to be invested) and a time restriction (for a period of five years). After five years of investing, the purpose restriction will be met and the time restriction will lapse.In Year 5, when that term endowment is no longer donor-restricted, a [reclassification of net assets](https://asc.understandingaccounting.org/glossary/r/#reclassification-of-net-assets "Simultaneous increase of one class of net assets and decrease of another. A reclassification of net assets usually results from a donor-imposed restriction (donors include other types of contributors, including makers of certain grants) being satisfied or otherwise lapsing.") shall be reported to reflect the decrease in [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).") and the increase in [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)."). ##### [205-958-45-10A](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-10A) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:336c102ad2624cf42d49e922d87e792367a5aba3ad6af9ca18c8ce9c087c9641 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining when the last of two or more donor-imposed restrictions that are temporary in nature has expired, explicit donor stipulations generally carry more weight than implied restrictions. For example, assume in Year 1 that an entity receives an unconditional promise to give that is payable in two equal installments in Years 2 and 3 with an explicit donor stipulation that its gift is to cover purchases of new equipment for the new School of Chemistry, which is expected to be completed in Year 3. That gift would have a purpose restriction (to be used to acquire new equipment to be housed in the new building), and because the unconditional promise is payable in Years 2 and 3, an entity generally would imply a time restriction (see paragraph [958-605-45-5](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-5)). If, however, the building was completed early and opened in Year 2 and all of the needed equipment was purchased in Year 2 and exceeded the promised amount, absent an explicit stipulation to the contrary, it would be reasonable to conclude that those purchases fulfilled the donor restriction on the promised gift. The restriction for the purchase of the equipment expires when the equipment is placed in service in accordance with paragraph [958-205-45-12](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-12). In addition, a reclassification of net assets would be reported to reflect the decrease in net assets with donor restrictions and the increase in net assets without donor restrictions in Year 2. ##### [205-958-45-11](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:938699254647e7e7e3a5cf9fe543067782a6a860e98bc118cdccb7c8a3505df1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an expense is incurred for a purpose for which both net assets without donor restrictions and net assets with donor restrictions are available, a donor-imposed restriction is fulfilled to the extent of the expense incurred unless the expense is for a purpose that is directly attributable to another specific external source of revenue. For example, an expense does not fulfill an existing donor restriction if that expense is incurred for a purpose that is directly attributable to and reimbursed by a sponsored exchange agreement or a conditional award from a government agency, private foundation, or others. Explicit time restrictions, such as those discussed in paragraph [958-205-45-10](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-10), and implied time restrictions, such as those discussed in paragraph [958-605-45-5](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-5), make net assets unavailable to support expenses until the time restrictions have expired. ##### [205-958-45-12](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-12) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:069ee76da9699004bb2b4e34fb686acc66e6a11843f8651f496a1292a6a53687 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unless donor stipulations limit the use of the assets for a period of time or for a particular purpose, donor restrictions on long-lived assets, if any, or cash to acquire or construct long-lived assets are considered to have expired when the assets are placed in service. #### Reporting Endowment Funds ##### [205-958-45-13](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:1e6d995a9f923357a7b8a209944371e38196464011cfd778425b47d687ab52cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Endowment funds are established either by a donor or by a governing board and can be either with donor restrictions or without donor restrictions. Endowment funds with donor restrictions are referred to as [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."). A donor-restricted endowment fund results from a gift with a stipulation that the resources be invested either for a long, specified period of time or in perpetuity. Those without donor restrictions are referred to as [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.") (sometimes called [funds functioning as endowment](https://asc.understandingaccounting.org/glossary/f/#funds-functioning-as-endowment "Net assets without donor restrictions (donors include other types of contributors, including makers of certain grants) designated by an entity's governing board to be invested to provide income for generally a long but not necessarily specified period. A board-designated endowment, which results from an internal designation, is generally not donor-restricted and is classified as net assets without donor restrictions. The governing board has the right to decide at any time to expend such funds. In rare circumstances, funds functioning as endowment 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, the board sometimes considers the long-term investment of these funds. (Sometimes referred to as quasi-endowment funds or board-designated endowment funds.)") or quasi-endowment funds). A board-designated endowment fund is created when a governing board designates or earmarks a portion of its [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).") to be invested, generally for a long but possibly unspecified period of time. ##### [205-958-45-13A](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13A) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:76f332c2ac35081d34ef44a3f0f4b130835474e937b8469e5b1495a6f8e6a70e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP shall report the net assets of an endowment fund in a statement of financial position within the following two classes of net assets on the basis of the existence or absence of [donor-imposed restrictions](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction "A donor stipulation (donors include other types of contributors, including makers of certain grants) that specifies a use for a contributed asset that is more specific than broad limits resulting from the following: The nature of the not-for-profit entity (NFP) The environment in which it operates The purposes specified in its articles of incorporation or bylaws or comparable documents for an unincorporated association. Some donors impose restrictions that are temporary in nature, for example, stipulating that resources be used after a specified date, for particular programs or services, or to acquire buildings or equipment. Other donors impose restrictions that are perpetual in nature, for example, stipulating that resources be maintained in perpetuity. Laws may extend those limits to investment returns from those resources and to other enhancements (diminishments) of those resources. Thus, those laws extend donor-imposed restrictions."): 1. a [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)."). For example, a donor-restricted endowment would be classified as net assets with donor restrictions. 2. b [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)."). For example, a board-designated endowment fund, which generally results from an internal designation of net assets without donor restrictions, would thus generally be classified as net assets without donor restrictions. 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. ##### [205-958-45-13B](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13B) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:258325058dab71e74e65e942a689913eb1a450c668068cb0f4e3075710a91150 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When classifying a donor-restricted endowment fund, consideration shall be given to both the donor's explicit stipulations and the applicable laws that extend donor restrictions. Investment return generally is considered free of donor restrictions unless its use is limited by a donor-imposed restriction or by law. In the United States, most donor-restricted endowment funds are subject to an enacted version of the Uniform Prudent Management of Institutional Funds Act of 2006 ([UPMIFA](https://asc.understandingaccounting.org/glossary/u/#upmifa "Uniform Prudent Management of Institutional Funds Act of 2006")) that extends a donor's restriction to use of the funds, including the investment return, until the funds are appropriated for expenditure by the governing board. Thus, if a donor or law imposes a restriction on the investment return, those returns shall be reported within net assets with donor restrictions until appropriated for expenditure. Conversely, for an endowment fund that is created by a governing board (board-designated endowment fund), assuming no other purpose-type restrictions exist on the use of those funds, that original fund and all investment returns are free of donor restrictions and shall be reported in net assets without donor restrictions. ##### [205-958-45-13C](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13C) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:fc77dba31272033a04864dfc2ce47fe54106cf81cd159c46eaa505ad7b670c64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [958-205-45-13D through 45-13F](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13D) provide guidance for classification of net assets of donor-restricted endowment funds for NFPs that follow an enacted version of UPMIFA. ##### [205-958-45-13D](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13D) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:cb757cf5326c551f0111381025b8766b8fc52b64d3fac678d34b595259384c08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Donor-restricted endowment funds generally result from a donor's stipulation or by extension of a donor restriction imposed through UPMIFA that limits an NFP's use of an endowment fund. The original gifted amount, any additional gifts to that fund, and any resulting investment returns shall initially be classified as net assets with donor restrictions. Therefore, unless stated otherwise in the gift instrument, the assets in a donor-restricted endowment fund are donor-restricted assets until they are appropriated for expenditure by the NFP's governing board. Donors may provide specific instructions on spending from a donor-restricted endowment fund or from the components of investment return generated from the fund. ##### [205-958-45-13E](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13E) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:2c18cd8fce28346493f87e365f7e2d3364dab862fd5de4d7029689c53ef4ac8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount of net assets with donor restrictions in the donor-restricted endowment fund is reduced when the governing board appropriates for expenditure funds from the endowment fund. Upon appropriation for expenditure, the restriction expires to the extent of the amount appropriated as long as all of the time restrictions have lapsed and all of the purpose restrictions have been met. At that time, the appropriated amount is reclassified from net assets with donor restrictions to net assets without donor restrictions in accordance with paragraph [958-205-45-9](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-9). However, if purpose restrictions from a donor have not yet been met, those funds shall remain in net assets with donor restrictions until those purpose restrictions have been satisfied. ##### [205-958-45-13F](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13F) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:2f22856b5d43d00fbba7e460c01f6534fe135bd363db24ed245f4eb884590f98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the absence of interpretation of the phrase _appropriated for expenditure_ in subsection 4(a) of UPMIFA (see paragraph [958-205-05-10](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-10)) by legal or regulatory authorities (for example, court decisions or interpretations by state attorneys general), for purposes of the guidance in this Subtopic, appropriation for expenditure is deemed to occur upon approval for expenditure, unless approval is for a future period, in which case appropriation is deemed to occur when that period is reached. Approval for expenditure may occur through different means within and across NFPs. For example, expenditures could be approved as part of a formal, annual budget. Expenditures also could be approved during the year as unexpected needs arise (such as for emergency relief efforts). ##### [205-958-45-13G](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13G) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:bbe6bab497cb49b63da00ed5881a0ec35c5b926ab44e998d47498f5c7d5bc07a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As discussed in paragraph [958-205-05-8](https://asc.understandingaccounting.org/asc/205/958/#205-958-05-8), some NFPs follow trust law. For donor-restricted endowment funds that are subject to trust law, typically at least, the amount of the original gift(s) and any gains or net appreciation of the fund are not considered to be available for expenditure. Generally, interest, dividends, rents, or other forms of ordinary income are available for spending and are classified as net assets without donor restrictions unless a purpose or other donor restriction exists on use of the investment income. ##### [205-958-45-13H](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13H) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:d43702326b651e3ac6724c686442d51b502f163aeeb1e43ffc4e47436dc3ca09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a donor-restricted endowment fund is an [underwater endowment fund](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."), the accumulated losses shall be included together with that fund in net assets with donor restrictions. An NFP shall disclose the required information in accordance with paragraph [958-205-50-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-2). ##### [205-958-45-13I](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13I) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:72db92c26b5e476c0945ff135ed690e20c2e0c0f132f4f513d0742092d3292bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Note E of Example 1 (paragraph [958-205-55-21](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-21)) for an illustrative disclosure about endowment funds and investment management policies. ##### [205-958-45-13J](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13J) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:5d1fea081740f6d6f71a050e06f16192bc46d1d79d68061ef4d1b4eaade98cc2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [958-205-55-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-2)) for an illustration of a statement of activities, showing support from both a donor-restricted endowment fund and a board-designated endowment fund, along with a statement of financial position, statement of cash flows, and example notes for an NFP. ##### [205-958-45-14](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-14) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:0e3e8282a8be59048cb74cbd7c09ec21c1198508035637e535e134c4f74336ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-15](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-15) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:66b70e2d08276fadfcaa4d57268960166c087378e577f0573b3ad8bdd6a92d88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-15A](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-15A) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:ee54613c2354ac291e53ed30df6b133d2aee29d90bd1aae41bcfc872bd674fdc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-16](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-16) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:69469a25c1b363a290a8fdd84b4ac691a0904407b75f930425f5600e085b2e54 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-17](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-17) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:332cdc8b2dbca5abbd2452dbb74f7ee7d2b0c63f2b358d18c64a03a1e80b1c23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-18](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-18) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:35e120dd151a384e575d2e46fbd6ca7c359865fbe65f8cf110cb4525457981e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-19](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-19) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:06c3041b00063f3ba529634df2eaceb2dc722c920c44036064fb7c1afa52ca4f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-20](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-20) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:cfae660efad9e944e87d23df7a2570a70bb19cf9e9e69a3f7c5c58fc2ed37fe1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [205-958-45-21](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-21) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:c8f26afcb14e3400fc57d2ba4117af0ef67b0509536e25289f79fd2e32340a6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-21A](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-21A) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:ef7ac63b696f52fe86da41409e1974d8266c3f78d2c0d4549ef63ee131e79c21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-22](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-22) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:d31075ee18381a0d0ec9da6b7790caffbd15b42e1b498eee7845c77c273b12cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-23](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-23) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:50973f736edb2c6cf403b3adab9f7e83f5adaa87b0c3aea821c0d85f58caba62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-24](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-24) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:47629867fbab87b03592f980e23b1caada706d19695e0226ee9e51196d845fee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-25](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-25) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:50ad0f223ab92b028bf983125b6c689c2100b9dee9d01717e7882449d15db352 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-26](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-26) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:79fd39e0a3cad21776122097a20c1eaf27fbffea912a71cdb9882a4c16de1c00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-27](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-27) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:41a3e6d088963e185bd8895b86e26b30dd3af50cbdf60c29d84890b46981cf96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-28](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-28) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:1a504ad646f2d29a8bcdba19f0e958902d3f45ba2996ec21c0d92989030e3108 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-29](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-29) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:5dfe25197af621d6ebca3dd58081f918a7b75c1cb47a82d84df659a0b35e826a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-30](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-30) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:3097ea3405b168f724a33cc0937381aafa44e522cd2bcf314ea36b5d18a8a1a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-31](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-31) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:53f1f07a966af602e5719fe6f916dc2b55097f80ba1f093371569f41162f30a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-32](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-32) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:f49a93fe792f46b39eb9b219f9b3483f3b2e0ae16a77fb8d88fe280dc2e74e97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-33](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-33) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:073236f6679c2c886bf214e1d3eff3c241901bbe6b3b10a951d6c9c5d1eae37a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-34](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-34) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:b173e989fc533ae2afd19d37d7c74f56fa95d401f017c1d59ea8ae22f371d310 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-45-35](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-35) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:c2348ed1ca4cf78a9fcb3a2c81365fdb778e8515e61b7c0faf8fde5812310239 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). #### Contributed Nonfinancial Assets ##### [205-958-45-36](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-36) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:59.657Z to 2026-09-09T22:55:59.657Z Record version: sha256:71b9df3e92d0a0eef36badfe18c45040a66715c53dd2154f6b9626f32145d8f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP shall present contributed nonfinancial assets as a separate line item in the statement of activities, apart from contributions of cash and other financial assets, as discussed in paragraph [958-605-45-7A](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-7A). 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)). Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:5b6eccd7805ac93aa6e54112378e8b671ef3346de96b794517b19f1fee49b54e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/958/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [205-958-55-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:67e82c7003f09229905dfe9a319f7d5019e55ed8309c33cbc5d752b07a72fe31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This paragraph provides implementation guidance on the application of paragraphs [958-205-45-13C through 45-13F](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13C) . Enacted versions of the Uniform Prudent Management of Institutional Funds Act of 2006 vary across jurisdictions, so a [not-for-profit entity](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) would have to assess the specific law applicable to its operations for guidance. Other sources that may be helpful in that assessment could include discussion that occurred in the legislative committees leading to the law adopted in a particular state, announcements from the state attorney general, a consensus of learned lawyers in the state, or similar information. In the absence of new legislation, clarifying court decisions, additional guidance issued by the state attorney general, or similar developments, the governing board's interpretation of the relevant law shall be consistent from year to year. #### Illustrations ##### [205-958-55-1A](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-1A) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:c9c4d1506054f49d7d43eab0898e4ab3a17d2c5ef6e204efd185c1cbafc9f8b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used in the presentation of a full set of financial statements, including certain notes to the financial statements, by an NFP. ##### [205-958-55-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:8c0589088b656ce20dc02ccb2e383cbb81c6014b5f45128e89e5d3c578a78359 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides illustrations of statements of financial position, statements of activities, statements of cash flows, and selected notes to the financial statements for Not-for-Profit Entity A. The terms _statement of financial position_ and _statement of activities_ indicate the content and purpose of the respective statements and serve as possible titles for those statements. Other appropriately descriptive titles may also be used. For example, a statement reporting financial position could be called a balance sheet. Current practice and the statement's purpose suggest, however, that a statement of cash flows only be titled statement of cash flows. These illustrations are intended as examples only; they present only a few of the permissible formats. Other formats or levels of detail may be appropriate for certain circumstances. For example, a schedule of expenses by nature and function is illustrated in the notes to the financial statements but also may be presented on the face of the statement of activities or as a separate statement. Not-for-profit entities (NFPs) are encouraged to provide information in ways that are most relevant and understandable to donors, creditors, and other external users of financial statements. NFPs typically provide comparative financial statements; however, for simplicity, the illustrative statements of activities and statements of cash flows provide information for a single period. ##### [205-958-55-3](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:f232dfcaf01891e320826b3178aac9d93c14e955d9d51fe8201fd96da2e43e19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The illustrations also include certain notes to financial statements for matters discussed in Subtopics 958-210, 958-220, and 958-230. The illustrative notes are not intended to illustrate compliance with all generally accepted accounting principles (GAAP) and specialized accounting and reporting principles and practices. ##### [205-958-55-4](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:2e41bf4bc83b8907c0f215a1e1dd30805627177c30721722ea67f563f7efd455 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Shading is used to highlight certain basic totals that must be reported in financial statements to comply with the provisions of Subtopics 958-210, 958-220, and 958-230. Together they require not only reporting those certain basic totals but also reporting components of those aggregates; for example, they require reporting information about the gross amounts of items of revenues and expenses and cash receipts and payments. ##### [205-958-55-5](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:f5b9a3466f1931b34c125929d2a538365feb69b4555e891a4ab19aca288aec4f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following facts and transactions are reflected in the illustrative financial statements in Example 1. The transactions are presented by class of net assets to facilitate locating their effects in the statements and notes. The transactions in (a) through (hh) affect [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)."). The transactions in (i) through (n), (s), (t), and (w) affect [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)."). The transactions in (hhh), (o) through (r), and (u) affect both classes of net assets. 1. a Not-for-Profit Entity A invested cash in excess of daily requirements in short-term investment instruments. Interest earned on these investments totaled $850, which is included in the net investment return on the statement of activities. The governing board previously designated a portion of net assets without donor restrictions for long-term investment (quasi-endowment). Those assets earned $5,800, comprising $2,000 of dividends, interest, and rents and $3,800 of realized and unrealized net gains. 2. b Not-for-Profit Entity A received [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.") without donor restrictions of the following: cash, $5,120; recognizable contributed services, $300; other consumable assets, $1,410; equipment, $140; and [unconditional promises to give](https://asc.understandingaccounting.org/glossary/u/#unconditional-promise-to-give "A promise to give that depends only on passage of time or demand by the promisee for performance.") to support activities of 20X1, $1,020. 3. c Equipment with an original cost of $660 and accumulated depreciation of $330 was destroyed in a fire. Insurance proceeds of $250 were received. The equipment was originally purchased with assets without associated donor restrictions. 4. d All conditions of a prior year's grant of $650 were substantially met. The grant proceeds were originally recorded as a refundable advance. 5. e Not-for-Profit Entity A made a payment of $425 on its prior year unconditional grant to an unrelated agency. 6. f Not-for-Profit Entity A repaid $1,140 of its notes payable. Interest of $32 was incurred and paid on these notes. 7. g Not-for-Profit Entity A repaid $1,000 of its long-term debt. Interest of $350 was incurred and paid on the debt. 8. h Depreciation amounted to $3,200. 9. hh Not-for-Profit Entity A sold equipment that was fully depreciated for $200. 10. hhh Not-for-Profit Entity A's financial assets consisted of cash and cash equivalents, short-term investments, accounts and interest receivable, contributions receivable, assets restricted to investment in land, buildings, and equipment, and long-term investments. The $193,490 of donor-restricted net assets included the net assets resulting from contributions receivable of $1,000, which were without purpose restrictions and were due within one year. The remaining amounts of contributions receivable were either purpose-restricted or due in greater than one year. In addition, amounts made unavailable by the governing board included $36,600 of board-designated long-term investments. The $1,300 liquidity reserve, created in a prior year when the governing board designated net assets without donor restrictions, was included as a reconciling item in Not-for-Profit Entity A's note on liquidity risk and the availability of resources because the intention of the designation was to support unanticipated liquidity needs and not general expenditures. 11. i Not-for-Profit Entity A received contributions with donor restrictions as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-4679A91B-E002-41EF-BEDC-19A41DCF6FAC-low.gif) Restricted to: Cash Consumable Assets Promises to Give Program purposes " $2,170 " $960 $920 Use in future periods 740 1000 "Acquisition of land, buildings, and equipment" 770 " 1,380 " 12. ii The composition of assets restricted to investment in land, buildings, and equipment as of June 30, 20X1, and 20X0, is shown below. The change in restricted cash below represents a purchase of investments restricted to investment in land, buildings, and equipment. - ![](https://asc.understandingaccounting.org/asc-img/GUID-5B6EE151-81F3-4FE2-9175-8429835A9D53-low.gif) 6/30/20X1 6/30/20X0 Restricted cash $60 $160 Contributions receivable " 2,440 " " 1,500 " Investments " 2,710 " " 2,900 " " $5,210 " " $4,560 " 13. j In addition, a donor transferred cash of $200 to set up an [annuity trust](https://asc.understandingaccounting.org/glossary/a/#annuity-trust "See Charitable Remainder Trust.") having a related annuity obligation with a present value of $100. Upon the death of the beneficiary, the remaining interest will be used for a donor-restricted purpose. 14. k In addition, a donor contributed cash of $70 to create a [term endowment](https://asc.understandingaccounting.org/glossary/t/#term-endowment "An endowment fund established to provide income for a specified period. See Endowment Fund."). At the end of 15 years the endowment assets can be used to support Not-for-Profit Entity A's operations. 15. l Not-for-Profit Entity A made payments of $145 to beneficiaries of annuity trust agreements. 16. m A donor contributed a paid-up life insurance policy with a cash surrender value of $80. Upon the death of the insured, the death benefit must be used to create a [donor-restricted endowment fund](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."). There was no change in the cash surrender value between the date of the gift and the end of the fiscal year. 17. n A donor contributed cash of $200 to create a donor-restricted endowment fund. The income is restricted to use for Program A activities. 18. o Not-for-Profit Entity A collected [promises to give](https://asc.understandingaccounting.org/glossary/p/#promise-to-give "A written or oral agreement to contribute cash or other assets to another entity. A promise carries rights and obligations—the recipient of a promise to give has a right to expect that the promised assets will be transferred in the future, and the maker has a social and moral obligation, and generally a legal obligation, to make the promised transfer. A promise to give may be either conditional or unconditional.") of $3,055: $980 of amounts for general purposes, $610 of amounts restricted to future periods, $1,025 of amounts restricted to program purposes, and $440 of amounts for acquisition of land, buildings, and equipment. 19. p Not-for-Profit Entity A utilized all of the $1,410 consumable assets contributed for general purposes, and $350 of the $960 consumable assets contributed for program purposes. 20. q A trust annuitant died and the $400 [remainder interest](https://asc.understandingaccounting.org/glossary/r/#remainder-interest "The right to receive all or a portion of the assets of a split-interest agreement remaining at the end of the agreement's term.") became available for the general use of Not-for-Profit Entity A. Management decided to invest the remainder interest in short-term investments. The actuarial gain on death of the annuitant is included in the actuarial loss on annuity obligations. 21. r Not-for-Profit Entity A acquired and placed in service $1,500 of equipment for Program A; net assets with donor restrictions were available at the time the equipment was purchased. 22. s Net investment return of $18,000 was earned from the pooled donor-restricted endowment. This comprised $12,000 of realized and unrealized net gains and $6,000 of interest and dividends. Additionally, $300 of interest and dividends was earned from separately invested donor-restricted endowment funds and annuity trust assets, which are required to be reinvested. The original endowment gift amount as adjusted to the level required by donor stipulations or by law that extends donor restrictions was $122,337. 23. t Not-for-Profit Entity A reinvested the yield of $120 on a donor-restricted endowment fund that requires income to be added to the original gift until the fund's value is $2,500. 24. u Not-for-Profit Entity A's governing board appropriated for current operations $7,500 of net assets with donor restrictions from the donor-restricted endowment fund. The full amount appropriated was reclassified to net assets without donor restrictions in the current year because the purpose restrictions on $3,000 of the appropriated amount were met in the current year and there were no purpose restrictions on the remaining $4,500. 25. v Not-for-Profit Entity A follows an enacted version of [UPMIFA](https://asc.understandingaccounting.org/glossary/u/#upmifa "Uniform Prudent Management of Institutional Funds Act of 2006"). 26. w None of Not-for-Profit Entity A's endowment funds were underwater as of the date of the financial statements. ##### [205-958-55-6](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:0e8b3aa6d838916114bcfbeff150ce5cfc96d0ce46831aab8825bd33abed64e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the requirements of Subtopic 958-210. Comparative statements of financial position are provided to facilitate understanding of the statement of activities and the statement of cash flows. ##### [205-958-55-7](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:732bf59048faee955573f540e523c001a900f0fd79c25ef281aac6c5bc472df9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A statement of financial position that sequences assets and liabilities based on their relative [liquidity](https://asc.understandingaccounting.org/glossary/l/#liquidity "An asset's or liability's nearness to cash. Donor-imposed restrictions may influence the liquidity or cash flow patterns of certain assets. For example, a donor stipulation that donated cash be used to acquire land and buildings limits an entity's ability to take effective actions to respond to unexpected opportunities or needs, such as emergency disaster relief. On the other hand, some donor-imposed restrictions have little or no influence on cash flow patterns or an entity's financial flexibility. For example, a gift of cash with a donor stipulation that it be used for emergency-relief efforts has a negligible impact on an entity if emergency relief is one of its major ongoing programs.") is presented. For instance, cash and cash equivalents of donor-restricted endowment funds held temporarily until suitable long-term investment opportunities are identified are included in the classification long-term investments. Similarly, cash and [contributions receivable](https://asc.understandingaccounting.org/glossary/c/#contributions-receivable "Contributions receivable are the amounts due, as of the date of the financial statements, to the plan from employers, participants, and other sources of funding (for example, state subsidies or federal grants). They include amounts due pursuant to firm commitments, as well as legal or contractual requirements.") restricted by donors to investment in land, buildings, and equipment are not included with the line items cash and cash equivalents or contributions receivable. Rather, those items are reported as assets restricted to investment in land, buildings, and equipment and are sequenced closer to land, buildings, and equipment. (Pursuant to paragraph [958-210-50-3](https://asc.understandingaccounting.org/asc/210/958/#210-958-50-3), the kind of asset is required to be described in the notes to financial statements because its nature is not clear from the description on the face of the statement of financial position. That note is not illustrated in this Example.) Assets and liabilities also may be arrayed by their relationship to net asset classes, classified as current and noncurrent, or arranged in other ways. ##### [205-958-55-8](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:b1d3278cf6a4e1fd906e555943b5dd31b1cdd03adc628c4eca1348c6036f682a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For an alternative presentation of the net asset section of a statement of financial position, see Example 1 (paragraph [958-210-55-3](https://asc.understandingaccounting.org/asc/210/958/#210-958-55-3)). ##### [205-958-55-9](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:5997e7715940d87c98444e4571f7c8253d549c1e44eb9e8888af8c8f1f3d3aee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates a statement of financial position for Not-for-Profit Entity A. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C1C1957D-5FED-4433-885D-1CD1DCFF0D60-low.gif) Not-for-Profit Entity A Statements of Financial Position " June 30, 20X1 and 20X0" (in thousands) Assets: 20X1 20X0 Cash and cash equivalents "$4,575 " "$4,960 " Accounts and interest receivable " 2,130 " " 1,670 " Inventories and prepaid expenses 610 " 1,000 " Contributions receivable " 3,025 " " 2,700 " Short-term investments " 1,400 " " 1,000 " "Assets restricted to investment in land, buildings, and equipment" " 5,210 " " 4,560 " "Land, buildings, and equipment" " 61,700 " " 63,590 " Long-term investments " 218,070 " " 203,500 " Total assets "$296,720 " "$282,980 " Liabilities and net assets: Liabilities: Accounts payable " $2,570 " " $1,050 " Refundable advance 650 Grants payable 875 " 1,300 " Notes payable " 1,140 " Annuity trust obligations " 1,685 " " 1,700 " Long-term debt " 5,500 " " 6,500 " Total liabilities " 10,630 " " 12,340 " Net assets: Without donor restrictions (Note DD) "92,600" "84,570" With donor restrictions (Note B) "193,490" "186,070" Total net assets "286,090" "270,640" Total liabilities and net assets "$296,720 " "$282,980 " Note: See paragraph 958-205-55-21 for the notes to financial statements. ##### [205-958-55-10](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:3a0cbf4784486c49e3c88d8b8cc7ea621be6d05d43c081be94590297b5025fdc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the requirements of Subtopic 958-220. Three formats of statements of activities are presented. To facilitate comparison of the formats, the same level of aggregation is used in each of the statements of activities. The guidance in Subtopic 958-220 permits flexibility to present information in a number of ways as long as the requirements are met. Each format has certain advantages, as follows: 1. a Format A reports information in a single column. That format most easily accommodates presentation of multiyear comparative information. 2. b Format B reports the same information in columnar (or multicolumn) format with a column for each class of net assets. Use of a total column is optional as long as the change in total net assets is presented in accordance with paragraph [958-210-45-1](https://asc.understandingaccounting.org/asc/210/958/#210-958-45-1). That format makes evident that the effects of expirations on donor restrictions result in [reclassification of net assets](https://asc.understandingaccounting.org/glossary/r/#reclassification-of-net-assets "Simultaneous increase of one class of net assets and decrease of another. A reclassification of net assets usually results from a donor-imposed restriction (donors include other types of contributors, including makers of certain grants) being satisfied or otherwise lapsing."). It also accommodates presentation of aggregated information about contributions and investment return for the entity as a whole. However, care is needed for labels and headings to ensure that they clearly communicate all columns and subtotals. 3. c Format C reports information in two statements with summary amounts from a statement of revenues, expenses, and other changes in net assets without donor restrictions (Part 1 of 2) and a statement of changes in net assets (Part 2 of 2). Alternative formats for the statement of changes in net assets—a single-column and a multicolumn or columnar—are illustrated. The two-statement format focuses attention first on changes in net assets without donor restrictions. That format may be preferred by membership organizations and other NFPs that view certain transactions and events, including the receipts of donor-restricted revenues and gains from contributions and investment return, as incidental or insignificant to their daily operations. ##### [205-958-55-11](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:4435de17c546efb9c5c8b9dde0e84108483af1f7890784582fb09dc3d314ff19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The three illustrative statements of activities show items of revenues and gains first, then expenses, then losses; reclassification of net assets, which must be shown separately, is reported with revenues and gains. Those items could be arranged in other ways and other subtotals may be included. For example, the items may be sequenced using any one of the following sequences: 1. a Revenues, expenses, gains and losses, and reclassification of net assets shown last 2. b Certain revenues, less directly related expenses, followed by a subtotal, then other revenues, other expenses, gains and losses, and reclassification of net assets 3. c Expenses followed by revenues, gains and losses, and the reclassification of net assets. Although in the illustrative statements of activities, expenses are reported by nature in the single-column format example and by function in the multicolumn format example, expenses may be reported in the statement of activities by either natural classification or functional classification or by both. ##### [205-958-55-12](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-12) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:d31a471640cfcfd4340c5e4301d9ccb321ded913122287e0b67c00ff1caa7a6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provide additional illustrations of statements of activities: 1. a Example 1 in Subtopic 958-220 (see paragraph [958-220-55-5](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-5)) provides an illustration that shows how items may be sequenced to distinguish between operating and nonoperating activities or to make other distinctions, if desired. 2. b Example 2 in Subtopic 958-220 (see paragraph [958-220-55-7](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-7)) illustrates the display of an appropriately labeled subtotal for change in a class of net assets before the effects of a discontinued operation. 3. c Example 3 in Subtopic 958-220 (see paragraph [958-220-55-8](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-8)) provides three possible methods of displaying fundraising efforts in the revenue section of the statement of activities if an NFP acts as an [agent](https://asc.understandingaccounting.org/glossary/a/#agent "An entity that acts for and on behalf of another. Although the term agency has a legal definition, the term is used broadly to encompass not only legal agency, but also the relationships described in Topic 958. A recipient entity acts as an agent for and on behalf of a donor if it receives assets from the donor and agrees to use those assets on behalf of or transfer those assets, the return on investment of those assets, or both to a specified beneficiary. A recipient entity acts as an agent for and on behalf of a beneficiary if it agrees to solicit assets from potential donors specifically for the beneficiary's use and to distribute those assets to the beneficiary. A recipient entity also acts as an agent if a beneficiary can compel the recipient entity to make distributions to it or on its behalf."), [trustee](https://asc.understandingaccounting.org/glossary/t/#trustee "An entity that has a duty to hold and manage assets for the benefit of a specified beneficiary in accordance with a charitable trust agreement. In some states, not-for-profit entities (NFPs) are organized under trust law rather than as corporations. Those NFPs are not trustees as defined because, under those statutes, they hold assets in trust for the community or some other broadly described group, rather than for a specific beneficiary."), or [intermediary](https://asc.understandingaccounting.org/glossary/i/#intermediary "Although in general usage the term intermediary encompasses a broad range of situations in which an entity acts between two or more other parties, in this usage, it refers to situations in which a recipient entity acts as a facilitator for the transfer of assets between a potential donor and a potential beneficiary (donee) but is neither an agent or trustee nor a donee and donor.") in raising resources for another. 4. d Example 1 in Subtopic 958-320 (see paragraph [958-320-55-4](https://asc.understandingaccounting.org/asc/320/958/#320-958-55-4)) provides an illustration of an NFP that presents: 1. 1 Net investment return 2. 2 Appropriation of funds from the quasi-endowment 3. 3 Appropriation of funds from a donor-restricted endowment fund in which the purpose restrictions on the appropriated amount have been met during the period. ##### [205-958-55-13](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-13) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:a9dbf4bf2b1be98cadcb9577e78a2751d76f4af473b7b90d6fffb43debbdccef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Format A (a single-column format) is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-A7FDD94D-C11D-4056-A79B-DE93B6C69062-low.gif) Not-for-Profit Entity A Statement of Activities " Year Ended June 30, 20X1" (in thousands) Changes in net assets without donor restrictions: Revenues and gains: Contributions of cash and other financial assets " $6,790 " Contributions of nonfinancial assets " 1,850 " Fees " 5,200 " "Investment return, net" " 6,650 " Gain on sale of equipment 200 Other 150 Total revenues and gains without donor restrictions " 20,840 " Net assets released from restrictions (Note D): Satisfaction of program restrictions " 8,990 " Satisfaction of equipment acquisition restrictions " 1,500 " Expiration of time restrictions " 1,250 " Appropriation from donor endowment and subsequent satisfaction of any related donor restrictions " 7,500 " Total net assets released from restrictions " 19,240 " "Total revenues, gains, and other support without donor restrictions" " 40,080 " Expenses and losses: Salaries and benefits " 15,115 " Grants to other organizations " 4,750 " Supplies and travel " 3,155 " Services and professional fees " 2,840 " Office and occupancy " 2,528 " Depreciation " 3,200 " Interest 382 Total expenses (Note F) " 31,970 " Fire loss on building 80 Total expenses and losses " 32,050 " Increase in net assets without donor restrictions " 8,030 " Changes in net assets with donor restrictions: Contributions of cash and other financial assets " 7,430 " Contributions of nonfinancial assets 960 "Investment return, net" " 18,300 " Actuarial loss on annuity trust obligations (30) Net assets released from restrictions (Note D) " (19,240)" Increase in net assets with donor restrictions " 7,420 " Increase in total net assets " 15,450 " Net assets at beginning of year " 270,640 " Net assets at end of year " $286,090 " Note: See paragraph 958-205-55-21 for the notes to financial statements. ##### [205-958-55-14](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-14) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:ee8d155c3bcf3ad2ddc8345100e519088fb5438c8040b74fb019371ed888804a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Format B (a multicolumn format) is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-71A82750-4765-4E46-BDD8-C1E7AC235306-low.gif) Not-for-Profit Entity A Statement of Activities " Year Ended June 30, 20X1" (in thousands) Without Donor Restrictions With Donor Restrictions Total "Revenues, gains, and other support:" Contributions of cash and other financial assets " $6,790 " " $7,430 " " $14,220 " Contributions of nonfinancial assets " 1,850 " 960 " 2,810 " Fees " 5,200 " " 5,200 " "Investment return, net" " 6,650 " "18,300" " 24,950 " Gain on sale of equipment 200 200 Other 150 150 Net assets released from restrictions (Note D): Satisfaction of program restrictions " 8,990 " " (8,990)" Satisfaction of equipment acquisition restrictions " 1,500 " " (1,500)" Expiration of time restrictions " 1,250 " " (1,250)" Appropriation from donor endowment and subsequent satisfaction of any related donor restrictions " 7,500 " " (7,500)" Total net assets released from restrictions " 19,240 " " (19,240)" - "Total revenues, gains, and other support" " 40,080 " " 7,450 " " 47,530 " Expenses and losses: Program A " 13,296 " " 13,296 " Program B " 8,649 " " 8,649 " Program C " 5,837 " " 5,837 " Management and general " 2,038 " " 2,038 " Fundraising " 2,150 " " 2,150 " Total expenses (Note F) " 31,970 " " 31,970 " Fire loss on building 80 80 Actuarial loss on annuity trust obligations 30 30 Total expenses and losses " 32,050 " 30 " 32,080 " Change in net assets " 8,030 " " 7,420 " " 15,450 " Net assets at beginning of year " 84,570 " " 186,070 " " 270,640 " Net assets at end of year " $92,600 " " $193,490 " " $286,090 " Note: See paragraph 958-205-55-21 for the notes to financial statements. ##### [205-958-55-15](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-15) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:51fb0f0e9d8eb6da7e70142f660fffec8ada8b2d6115b39e213ed860b9326e1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Format C, Part 1 of 2 is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-2B4364B1-B339-4DAC-B634-75572ACBFD8B-low.gif) Not-for-Profit Entity A " Statement of Revenues, Expenses, and" Other Changes in Net Assets without Donor Restrictions " Year Ended June 30, 20X1" (in thousands) Revenues and gains without donor restrictions: Contributions of cash and other financial assets " $6,790 " Contributions of nonfinancial assets " 1,850 " Fees " 5,200 " "Investment return, net" " 6,650 " Gain on sale of equipment 200 Other 150 Total revenues and gains without donor restrictions " 20,840 " Net assets released from restrictions (Note D): Satisfaction of program restrictions " 8,990 " Satisfaction of equipment acquisition restrictions " 1,500 " Expiration of time restrictions " 1,250 " Appropriation from donor endowment and subsequent satisfaction of any related donor restrictions " 7,500 " Total net assets released from restrictions " 19,240 " "Total revenues, gains, and other support without donor restrictions" " 40,080 " Expenses and losses: Program A " 13,296 " Program B " 8,649 " Program C " 5,837 " Management and general " 2,038 " Fundraising " 2,150 " Total expenses (Note F) " 31,970 " Fire loss on building 80 Total expenses and losses without donor restrictions " 32,050 " Increase in net assets without donor restrictions " $8,030 " Note: See paragraph 958-205-55-21 for the notes to financial statements. ##### [205-958-55-16](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-16) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:eb1ba3fbe3003c9a50308ae4c644c91e223ca170e851fd7ae5fd28eeb66b0287 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Format C, Part 2 of 2 is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-1C78284C-5B5D-4DFB-90D3-D9F8EA6A96A1-low.gif) Not-for-Profit Entity A Statement of Changes in Net Assets " Year Ended June 30, 20X1" (in thousands) Net assets without donor restrictions: Total revenues and gains " $20,840 " Net assets released from restrictions (Note D) " 19,240 " Total expenses and losses " (32,050)" Increase in net assets without donor restrictions " 8,030 " Net assets with donor restrictions: Contributions of cash and other financial assets " 7,430 " Contributions of nonfinancial assets 960 "Investment return, net" " 18,300 " Actuarial loss on annuity trust obligations (30) Net assets released from restrictions (Note D) " (19,240)" Increase in net assets with donor restrictions " 7,420 " Increase in net assets " 15,450 " Net assets at beginning of year " 270,640 " Net assets at end of year " $286,090 " Note: See paragraph 958-205-55-21 for the notes to financial statements. ##### [205-958-55-17](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-17) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:1f07d3b49f88dae67b98018a7ffc48015ed50231427e02771b2a1da4938331e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Format C, Part 2 of 2 (Alternate) is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-AC102D9C-5D1F-4446-BB36-CCDD8D156EB0-low.gif) Not-for-Profit Entity A Statement of Changes in Net Assets " Year Ended June 30, 20X1" (in thousands) Without Donor Restrictions With Donor Restrictions Total "Revenues, gains, and other support:" Revenues and gains without donor restrictions " $20,840 " " $20,840 " Revenues and gains with donor restrictions: Contributions of cash and other financial assets " $7,430 " " 7,430 " Contributions of nonfinancial assets 960 960 "Investment return, net" " 18,300 " " 18,300 " Net assets released from restrictions (Note D) " 19,240 " " (19,240)" - "Total revenues, gains, and other support" " 40,080 " " 7,450 " " 47,530 " Expenses and losses: Expenses and losses " 32,050 " " 32,050 " Actuarial loss on annuity trust obligations 30 30 Total expenses and losses " 32,050 " 30 " 32,080 " Change in net assets " 8,030 " " 7,420 " " 15,450 " Net assets at beginning of year " 84,570 " " 186,070 " " 270,640 " Net assets at end of year " $92,600 " " $193,490 " " $286,090 " Note: See paragraph 958-205-55-21 for the notes to financial statements. ##### [205-958-55-18](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-18) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:93d6ebddee45ba6800391efbe5481e56ba6aee4c68fcd6fab811373736fb9d2c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the requirements of Subtopic 958-230. Statements of cash flows are illustrated using both the direct and indirect methods of reporting cash flow from operating activities. An NFP may choose either method of reporting cash flows from operating activities. If the direct method is used, a reconciliation to the indirect method (as illustrated in paragraph [230-10-55-10](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-10)) may be reported but is not required. ##### [205-958-55-19](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-19) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:d2f0e95ed0877c57e04b6af2ce00baf4d6cc1a680b8d7587d61c694f76de3fed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The direct method is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-BC065802-7D0E-4C1D-956A-612827D60E1A-low.gif) Not-for-Profit Entity A Statement of Cash Flows " Year Ended June 30, 20X1" (in thousands) Cash flows from operating activities: Change in net assets " $15,450 " Adjustments to reconcile change in net assets to net cash used by operating activities: Depreciation " 3,200 " Fire loss 80 Actuarial loss on annuity trust obligations 30 Gain on sale of equipment (200) Increase in accounts and interest receivable (460) Decrease in inventories and prepaid expenses 390 Increase in contributions receivable (325) Increase in accounts payable " 1,520 " Decrease in refundable advance (650) Decrease in grants payable (425) Contributions restricted for long-term investment " (2,740)" Realized and unrealized gains on investments " (15,800)" Interest and dividends restricted for reinvestment (300) Net cash used by operating activities (230) Cash flows from investing activities: Purchase of equipment " (1,500)" Proceeds on sale of equipment 200 Insurance proceeds from fire loss on building 250 Proceeds from sale of investments " 76,100 " Purchase of investments "(75,000)" Net cash provided by investing activities 50 Cash flows from financing activities: Proceeds from contributions restricted for: Investment in perpetual endowment 200 Investment in term endowment 70 "Investment in land, buildings, and equipment" " 1,210 " Investment subject to annuity trust agreements 200 " 1,680 " Other financing activities: Interest and dividends restricted for reinvestment 300 Payments of annuity trust obligations (145) Payments on notes payable " (1,140)" Payments on long-term debt " (1,000)" " (1,985)" Net cash used by financing activities (305) "Net decrease in cash, cash equivalents, and restricted cash" (485) "Cash, cash equivalents, and restricted cash at beginning of year" "5,120" "Cash, cash equivalents, and restricted cash at end of year" "$ 4,635" Supplemental data: Noncash investing and financing activities: Gifts of equipment $140 "Gift of paid-up life insurance, cash surrender value" 80 Interest paid 382 ##### [205-958-55-20](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-20) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:735b12fa8cd30a260eae04830a04f1dd153142fa082a314c49b93c50235e868e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The indirect method is as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-1E92F344-B94C-48B1-AB8A-8C25843E1C18-low.gif) Not-for-Profit Entity A Statement of Cash Flows " Year Ended June 30, 20X1" (in thousands) Cash flows from operating activities: Change in net assets " $15,450 " Adjustments to reconcile change in net assets to net cash used by operating activities: Depreciation " 3,200 " Fire loss 80 Actuarial loss on annuity trust obligations 30 Gain on sale of equipment (200) Increase in accounts and interest receivable (460) Decrease in inventories and prepaid expenses 390 Increase in contributions receivable (325) Increase in accounts payable " 1,520 " Decrease in refundable advance (650) Decrease in grants payable (425) Contributions restricted for long-term investment " (2,740)" Realized and unrealized gains on investments " (15,800)" Interest and dividends restricted for reinvestment (300) Net cash used by operating activities (230) Cash flows from investing activities: Purchase of equipment " (1,500)" Proceeds on sale of equipment 200 Insurance proceeds from fire loss on building 250 Proceeds from sale of investments " 76,100 " Purchase of investments "(75,000)" Net cash provided by investing activities 50 Cash flows from financing activities: Proceeds from contributions restricted for: Investment in perpetual endowment 200 Investment in term endowment 70 "Investment in land, buildings, and equipment" " 1,210 " Investment subject to annuity trust agreements 200 " 1,680 " Other financing activities: Interest and dividends restricted for reinvestment 300 Payments of annuity trust obligations (145) Payments on notes payable " (1,140)" Payments on long-term debt " (1,000)" " (1,985)" Net cash used by financing activities (305) "Net decrease in cash, cash equivalents, and restricted cash" (485) "Cash, cash equivalents, and restricted cash at beginning of year" "5,120" "Cash, cash equivalents, and restricted cash at end of year" "$ 4,635" Supplemental data: Noncash investing and financing activities: Gifts of equipment $140 "Gift of paid-up life insurance, cash surrender value" 80 Interest paid 382 ##### [205-958-55-21](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-21) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:42a696b86f632d23d6d24c31ae5c3815d1e7acaa23bb8d6c725417268444d20a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are illustrative notes to financial statements. Note B provides information required by paragraph [958-210-45-9](https://asc.understandingaccounting.org/asc/210/958/#210-958-45-9). Note DD provides information required by paragraph [958-210-45-11](https://asc.understandingaccounting.org/asc/210/958/#210-958-45-11). Note F provides information required by paragraph [958-720-45-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-15). Note G provides information required by paragraphs [958-210-45-7(c)](https://asc.understandingaccounting.org/asc/210/958/#210-958-45-7) and [958-210-50-1A](https://asc.understandingaccounting.org/asc/210/958/#210-958-50-1A). Note D and Note E provide information that is useful to users but is not explicitly required. Note H provides information required by paragraphs [230-10-50-7 through 50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-7) . Comparative statements of financial position are provided in the illustrative example in paragraph [958-205-55-9](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-9) only to facilitate understanding of the statement of cash flows. For purposes of applying paragraphs [230-10-50-7 through 50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-7) to this illustrative example, assume that the year ended June 30, 20X1, is the only period for which a statement of financial position is presented. Additional disclosure examples for contributed nonfinancial assets recognized are illustrated in paragraph [958-605-55-70U](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70U). Additional endowment disclosure requirements are illustrated in Example 3 included in this Section. All amounts are in thousands. - Note B - Net assets with donor restrictions are restricted for the following purposes or periods. - ![](https://asc.understandingaccounting.org/asc-img/GUID-E8568F2A-D0FC-4877-B98E-086214D7671B-low.gif) Subject to expenditure for specified purpose: Program A activities: Purchase of equipment " $3,060 " Research 950 Educational seminars and publications 240 Program B activities: Disaster relief 745 Educational seminars and publications 280 Program C activities: general 210 Buildings and equipment " 2,150 " Annuity trust agreements for research " 2,815 " " 10,450 " Subject to the passage of time: "For periods after June 30, 20X1" " 3,140 " Subject to NFP spending policy and appropriation: "Investment in perpetuity (including amounts above original gift amount of $122,337), which, once appropriated, is expendable to support:" Program A activities " 33,300 " Program B activities " 15,820 " Program C activities " 16,480 " Any activities of the organization " 109,100 " " 174,700 " Subject to appropriation and expenditure when a specified event occurs: "Endowment requiring income to be added to original gift until fund's value is $2,500" " 2,120 " Paid-up life insurance policy that will provide proceeds upon death of insured for an endowment to support general activities 80 " 2,200 " Not subject to appropriation or expenditure: Land required to be used as a recreation area " 3,000 " Total net assets with donor restrictions " $193,490 " - Note D - Net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes or by occurrence of the passage of time or other events specified by donors. - ![](https://asc.understandingaccounting.org/asc-img/GUID-1B7B6BE0-24F0-4CCC-A7EE-80047FB07F3E-low.gif) Purpose restrictions accomplished: Program A expenses "$4,350 " Program B expenses "3,450" Program C expenses "1,190" "8,990" Program A equipment acquired and placed in service " 1,500 " Time restrictions expired: Passage of specified time 850 Death of annuity beneficiary 400 " 1,250 " Release of appropriated endowment amounts without purpose restrictions "4,500" Release of appropriated endowment amounts with purpose restrictions "3,000" Total restrictions released "$19,240 " - Note DD - Not-for-Profit Entity A's governing board has designated, from net assets without donor restrictions of $92,600, net assets for the following purposes as of June 30, 20X1. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C114BCD1-9DEC-4B32-AD05-91DACE5BF02F-low.gif) Quasi-endowment " $36,600 " Liquidity reserve "1,300 " Total " $37,900 " - Note E - Investments are carried at fair value, and realized and unrealized gains and losses are reflected within investment return, net, in the statement of activities. Not-for-Profit Entity A invests cash in excess of daily requirements in short-term investments. At June 30, 20X1, $1,400 was invested short term, and during the year short-term investments earned $850. Most long-term investments are held in two investment pools. Pool A is for donor-restricted endowments and the unappropriated net appreciation of those endowments. Pool B is for amounts designated by the board of trustees for long-term investment. Annuity trusts of $4,500, term endowments of $70, and certain donor-restricted endowments of $2,200 are separately invested. Long-term investment activity is reflected in the following table. - ![](https://asc.understandingaccounting.org/asc-img/GUID-88446C20-D25B-4E5D-958C-6FA2FAF23B98-low.gif) Pool A Pool B Other Total Investments at beginning of year " $164,000 " " $32,800 " " $6,700 " " $203,500 " Gifts available for investment: Gifts creating perpetual endowment 200 80 280 Gifts creating term endowments 70 70 Gifts creating annuity trusts 200 200 Amount withdrawn at death of annuitant (400) (400) "Investment return, net" "18,000" "5,800" 300 " 24,100 " Amounts appropriated for current operations " (7,500)" " (2,000)" " (9,500)" Annuity trust income for current and future payments (180) (180) Investments at end of year " $174,700 " " $36,600 " " $6,770 " " $218,070 " Pool A Pool B Other Total Permanently restricted net assets " $136,820 " " $2,200 " " $139,020 " Temporarily restricted net assets " 10,752 " " 4,570 " " 15,322 " Unrestricted net assets " 27,128 " " $36,600 " " 63,728 " " $174,700 " " $36,600 " " $6,770 " " $218,070 " - Laws and regulations allow the governing board to appropriate so much of an endowment fund as is prudent considering the following relevant factors: the duration and preservation of the endowment fund, the purposes of Not-for-Profit Entity A and the endowment fund, general economic conditions, the possible effect of inflation or deflation, the expected total return from income and the appreciation of investments, Not-for-Profit Entity A's other resources, and Not-for-Profit Entity A's investment policy. Under Not-for-Profit Entity A's endowment spending policy, 5 percent of the average of the fair value at the end of the previous 3 years is appropriated, which was $7,500 for the year ended June 30, 20X1. - Note F - The table below presents expenses by both their nature and their function for fiscal year 20X1. - ![](https://asc.understandingaccounting.org/asc-img/GUID-F8C0AE7E-C621-4393-BA03-A13463E49F8A-low.gif) Program Activities Supporting Activities Total Expenses A B C Programs Subtotal Management and General Fund- Supporting Subtotal Raising Salaries and benefits " $7,400 " " $3,900 " " $1,725 " " $13,025 " " $1,130 " $960 " $2,090 " " $15,115 " Grants to other organizations " 2,075 " 750 " 1,925 " " 4,750 " " 4,750 " Supplies and travel 890 " 1,013 " 499 " 2,402 " 213 540 753 " 3,155 " Services and professional fees 160 " 1,490 " 600 " 2,250 " 200 390 590 " 2,840 " Office and occupancy " 1,160 " 600 450 " 2,210 " 218 100 318 " 2,528 " Depreciation " 1,440 " 800 570 " 2,810 " 250 140 390 " 3,200 " Interest 171 96 68 335 27 20 47 382 Total expenses " $13,296 " " $8,649 " " $5,837 " " $27,782 " " $2,038 " " $2,150 " " $4,188 " " $31,970 " - The financial statements report certain categories of expenses that are attributable to more than one program or supporting function. Therefore, these expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include depreciation, interest, and office and occupancy, which are allocated on a square-footage basis, as well as salaries and benefits, which are allocated on the basis of estimates of time and effort. - Note G - The following reflects Not-for-Profit Entity A's financial assets as of the balance sheet date, reduced by amounts not available for general use because of contractual or donor-imposed restrictions within one year of the balance sheet date. Amounts not available include amounts set aside for long-term investing in the quasi-endowment that could be drawn upon if the governing board approves that action. However, amounts already appropriated from either the donor-restricted endowment or quasi-endowment for general expenditure within one year of the balance sheet date have not been subtracted as unavailable. - ![](https://asc.understandingaccounting.org/asc-img/GUID-14C5C7FE-1C47-42C5-9480-AFBB3ECDCFE7-low.gif) "Financial assets, at year-end" " $234,410 " "Less those unavailable for general expenditures within one year, due to: " Contractual or donor-imposed restrictions: Restricted by donor with time or purpose restrictions " (11,940)" Subject to appropriation and satisfaction of donor restrictions " (174,700)" Investments held in annuity trust " (4,500)" Board designations: "Quasi-endowment fund, primarily for long-term investing" " (36,600)" Amounts set aside for liquidity reserve " (1,300)" Financial assets available to meet cash needs for general expenditures within one year " $5,370 " - Not-for-Profit Entity A is substantially supported by restricted contributions. Because a donor's restriction requires resources to be used in a particular manner or in a future period, Not-for-Profit Entity A must maintain sufficient resources to meet those responsibilities to its donors. Thus, financial assets may not be available for general expenditure within one year. As part of Not-for-Profit Entity A's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. In addition, Not-for-Profit Entity A invests cash in excess of daily requirements in short-term investments. Occasionally, the board designates a portion of any operating surplus to its liquidity reserve, which was $1,300 as of June 30, 20X1. There is a fund established by the governing board that may be drawn upon in the event of financial distress or an immediate liquidity need resulting from events outside the typical life cycle of converting financial assets to cash or settling financial liabilities. In the event of an unanticipated liquidity need, Not-for-Profit Entity A also could draw upon $10,000 of available lines of credit (as further discussed in Note XX) or its quasi-endowment fund. - Note H - The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C6A7E29D-B65F-4AAB-8261-D6BAF68BF357-low.gif) 6/30/20X1 Cash and cash equivalents " $4,575 " "Restricted cash included in assets restricted to investment in land, buildings, and equipment" 60 "Total cash, cash equivalents, and restricted cash shown in the statement of cash flows" " $4,635 " - Assets restricted to investment in land, buildings, and equipment on the statement of financial position include restricted cash received with a donor-imposed restriction that limits use of that cash to long-term purposes. ##### [205-958-55-22](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-22) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:f9a46621bc41fb3aaebf34bc0ad50639074eecec3c2a460f7cf27e5a8aac5eea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-23](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-23) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:cbe13841f31bb48ead80d6e9faf43e4a3d8754dc86cba95d9538ce58216e59c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-24](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-24) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:d42e5ca6525fac4674df065b2e0e76b4802cfc001b253f0a9564c1896ca3554e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-25](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-25) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:f484088747646c70f0a2abe6f899fe3fe761b9681425c45ad75fd32621e7865f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-26](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-26) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:3dc6738461c5b8e8f573b625fd95adbf274ab2c0e9ae14ebc11dfca9ed455ca3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-27](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-27) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:558667665561067d3200773081678cac20e5d1b392d7d5343a7e849ace4aa079 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-28](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-28) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:9bec5d39df870ed7c88690e2fa8437904517ac9c5ad03ed897391ac87a906aee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-29](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-29) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:e4755563622fbfb01b7eed664c74f0bd115f5e2339ddde024c92836d0453e3f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-30](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-30) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:6542385cf9a9d3e4643b60a86242a01ae154df38682dc4b2883373f55d8c51c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-31](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-31) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:7fcf0e36fc6ed497e94740b28a6b45344b8311173b6ef3519acdca598564f198 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates application of the disclosure guidance in paragraphs [958-205-50-1A through 50-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1A) by an NFP (NFP B) subject to an enacted version of the Uniform Prudent Management of Institutional Funds Act of 2006 even though that disclosure guidance applies whether or not an NFP is subject to an enacted version of that law. ##### [205-958-55-32](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-32) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:e1312bcfdc50e3529b8428e523297d399d33fbdd416c915e4652a04cb501cfe6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example makes all of the following assumptions: 1. a NFP B is issuing a full set of financial statements for both the current fiscal year, 200Y, and the previous fiscal year, 200X.NFP B is required to disclose the information in paragraph [958-205-50-1B](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B) for each period for which it presents financial statements; however, for simplicity, the disclosures provide information for a single period, 200Y. 2. b NFP B has a sizable endowment. 3. c Before 200Y, an enacted version of the Uniform Prudent Management of Institutional Funds Act of 2006 became effective for the State to whose law NFP B is subject. 4. d [Subparagraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). 5. e None of the funds have donor stipulations that override the restriction described in subsection 4(a) of the law, which the enacted version in the State included verbatim: "unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution." 6. f [Subparagraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). 7. g [Subparagraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-33](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-33) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:ba7714e86f112109884e5a82cac0490d113df280a0c6c726f0b8a1bca0e870b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-34](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-34) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:87e77b2d60d7805e706d2926df5cf541035859a5ce329a4c39cccdd0c98aa1a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-35](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-35) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:53254338bf05a3c9beeb2713de18593af6245fb672b1478a915b053d5009d789 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-36](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-36) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:55904976e8711319837a1e6dee34f0c4d0d5fe051df6fce3953074acd0d1dfe7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table contains assumptions about NFP B's endowment-related activities in the year 200Y. - ![](https://asc.understandingaccounting.org/asc-img/GUID-1A06BD54-AC31-49B3-99E6-6949E5765E68-low.gif) Board- Donor-Restricted Designated Endowment Endowment Funds Funds Total "Investment return, net(a)" 372 10 382 Contributions to donor-restricted endowment fund " 2,000 " - " 2,000 " Amounts appropriated for expenditure(a) " (7,077)" (373) " (7,450)" Transfer to create board-designated endowment funds - 500 500 Total change in endowment funds " $(4,705)" $137 " $(4,568)" (a) "Included within investment return, net is $125 of 200Y net depreciation that occurred in recent donor-restricted endowment funds, causing the fair value of those funds to be less than the original gift amount. In addition, so as not to suspend certain programs, NFP B's Board deemed it prudent to continue to appropriate $75 to those programs. " ##### [205-958-55-37](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-37) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:473aa7f707f345e476ea8a07b16848fd435d9408d7c789c2fe6aca9a28b16199 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure of its endowment follows. - NOTE X: ENDOWMENT - NFP B's endowment consists of approximately 100 individual funds established for a variety of purposes. Its endowment includes both donor-restricted endowment funds and funds designated by the Board of Trustees to function as endowments. As required by GAAP, net assets associated with endowment funds, including funds designated by the Board of Trustees to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. ##### [205-958-55-38](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-38) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:fbf5d989f19a8973db27e925a53bb3152321e59b6c6e79080c17be43d662d65a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure of its interpretation of the law or laws that underlie NFP B's net asset classification of donor-restricted endowment funds follows as required by paragraph [958-205-50-1B(a)](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B). - Interpretation of Relevant Law - NFP B is subject to the State Prudent Management of Institutional Funds Act (SPMIFA) and, thus, classifies amounts in its donor-restricted endowment funds as net assets with donor restrictions because those net assets are time restricted until the Board of Trustees appropriates such amounts for expenditure. Most of those net assets also are subject to purpose restrictions that must be met before reclassifying those net assets to net assets without donor restrictions. The Board of Trustees of NFP B has interpreted SPMIFA as not requiring the maintenance of purchasing power of the original gift amount contributed to an endowment fund, unless a donor stipulates the contrary. As a result of this interpretation, when reviewing its donor-restricted endowment funds, NFP B considers a fund to be underwater if the fair value of the fund is less than the sum of (a) the original value of initial and subsequent gift amounts donated to the fund and (b) any accumulations to the fund that are required to be maintained in perpetuity in accordance with the direction of the applicable donor gift instrument. NFP B has interpreted SPMIFA to permit spending from underwater funds in accordance with the prudent measures required under the law.Additionally, in accordance with SPMIFA, NFP B considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: - (1) The duration and preservation of the fund - (2) The purposes of the organization and the donor-restricted endowment fund - (3) General economic conditions - (4) The possible effect of inflation and deflation - (5) The expected total return from income and the appreciation of investments - (6) Other resources of the organization - (7) The investment policies of NFP B. ##### [205-958-55-39](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-39) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:8e9c62d991672fa926b356361ccb247c2c8eeaa7911de35cba8b04131a8fe91c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure of its endowment net asset composition by type of fund as of June 30, 200Y, follows as required by paragraph [958-205-50-1B(d)](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B). - ![](https://asc.understandingaccounting.org/asc-img/GUID-6314D66D-F2C8-4E5E-B7D6-7556ECDEEE05-low.gif) 200Y "Endowment Net Asset Composition by Type of Fund as of June 30, 200Y" Without Donor Restrictions With Donor Restrictions Total Board-designated endowment funds " $7,084 " $- " $7,084 " Donor-restricted endowment funds: Original donor-restricted gift amount and amounts required to be maintained in perpetuity by donor - " 97,759 " " 97,759 " Accumulated investment gains Portion subject to appropriation under SPMIFA - " 35,201 " " 35,201 " Term endowment - " 4,388 " " 4,388 " Total funds " $7,084 " " $137,348 " " $144,432 " ##### [205-958-55-40](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-40) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:7f940e3a8a4e4a5cbeab7f7c79aa0deb46a23b2c8c8a2dfe3e3fe02f28c553f8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-41](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-41) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:624b047965215c8391675f0dacedd1ffc217eb9ff04960a1d84cace0c55d9e72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure of a reconciliation of the beginning and ending balances of the endowment, in total and by net asset classes, for the fiscal year ended June 30, 200Y, follows as required by paragraph [958-205-50-1B(e)](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B). - ![](https://asc.understandingaccounting.org/asc-img/GUID-BA01B22D-2C93-4660-8E1B-6E36F97F8257-low.gif) "Changes in Endowment Net Assets for the Fiscal Year Ended June 30, 200Y" Without Donor Restrictions With Donor Restrictions Total "Endowment net assets, beginning of year" " $6,947 " " $142,053 " " $149,000 " "Investment return, net" 10 372 382 Contributions - " 2,000 " " 2,000 " Appropriation of endowment assets for expenditure (373) " (7,077)" " (7,450)" Other changes: Transfers to create board-designated endowment funds 500 - 500 "Endowment net assets, end of year" " $7,084 " " $137,348 " " $144,432 " ##### [205-958-55-42](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-42) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:fd427e5d81cd12d5512da69dd941fcb6cf07dbe01592ed42d2a49d2acf47cda1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-43](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-43) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:094bafe37b75a39ea09bc0ac0c173c244669de6e71e11131bd0f9b4448b92030 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-44](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-44) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:7cb71fb34dc68db43817083cffce3d4eb5e39c16f928470bad5e6f91df99abc7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-45](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-45) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:e7b92239f10f016af755ee232350af4ff6dd6c5e2978d4dee6f4fac8478c45e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-46](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-46) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:6b1c137f0d8703499788e843cc4c55d1aee947583433fcee1f326511c56fed95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). ##### [205-958-55-47](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-47) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:b02a6851e3b35d32a4292406c4575a9c4ffcb077f3232d7f6139ea7ee3dca34b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's presentation under paragraphs [958-210-45-9 through 45-10](https://asc.understandingaccounting.org/asc/210/958/#210-958-45-9) and disclosure under paragraph [958-210-50-3](https://asc.understandingaccounting.org/asc/210/958/#210-958-50-3) follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C19DFCE4-3A97-428C-BFF4-FDDF729647AE-low.gif) Description of Amounts Classified as Net Assets with Donor Restrictions (Endowment Only) 200Y Net Assets with Donor Restrictions Original donor-restricted endowment gift amount and amounts required to be retained by donor "$97,759 " Term endowment funds "4,388" Accumulated investment gains on endowment funds Without purpose restrictions " 20,102 " With purpose restrictions " 15,099 " Total endowment funds classified as net assets with donor restrictions "$137,348 " ##### [205-958-55-48](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-48) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:b404726336edef0f43ca619b9272c9a5b4ff60e282d11ccb79e4a462b656e3a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The illustrative disclosure in the preceding paragraph includes only the net assets with donor restrictions within NFP B's endowment. A typical disclosure would be presented outside an endowment note disclosure and include all of the net assets classified within net assets with donor restrictions. ##### [205-958-55-49](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-49) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:af3b02aef4a264dc817482a5d0098eec2ad07cb8bf07a379cfd0fdbab7afce29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure under paragraph [958-205-50-2](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-2) follows. - Underwater Endowment Funds - From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or SPMIFA requires NFP B to retain as a fund of perpetual duration. Deficiencies of this nature exist in 3 donor-restricted endowment funds, which together have an original gift value of $3,500, a current fair value of $3,300, and a deficiency of $200 as of June 30, 200Y. These deficiencies resulted from unfavorable market fluctuations that occurred shortly after the investment of new contributions for donor-restricted endowment funds and continued appropriation for certain programs that was deemed prudent by the Board of Trustees. ##### [205-958-55-50](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-50) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:41ca90106a58f6a6598e0229de73a0372ca73488a7f58c0ca9553d4e78e0be2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure under paragraph [958-205-50-1B(c)(1)](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B) follows. - Return Objectives and Risk Parameters - NFP B has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the organization must hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. Under this policy, as approved by the Board of Trustees, the endowment assets are invested in a manner that is intended to produce results that exceed the price and yield results of the S&P 500 index while assuming a moderate level of investment risk. NFP B expects its endowment funds, over time, to provide an average rate of return of approximately 8 percent annually. Actual returns in any given year may vary from this amount. ##### [205-958-55-51](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-51) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:8c7394eb6a13aa31973d0aa7b682c96e6f8cc9866796e6747e18541ddd66f331 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure under paragraph [958-205-50-1B(c)(3)](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B) follows. - Strategies Employed for Achieving Objectives - To satisfy its long-term rate-of-return objectives, NFP B relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). NFP B targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints. ##### [205-958-55-52](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-52) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:29edd53b89dccc9dc2c6bec454266e6bd9ffd83376c767d4da0e98fdc3659ac0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B's disclosure under paragraph [958-205-50-1B(b) and (c)(2)](https://asc.understandingaccounting.org/asc/205/958/#205-958-50-1B) follows. - Spending Policy and How the Investment Objectives Relate to Spending Policy - NFP B has a policy of appropriating for distribution each year 5 percent of its endowment fund's average fair value over the prior 12 quarters through the calendar year-end preceding the fiscal year in which the distribution is planned. In establishing this policy, NFP B considered the long-term expected return on its endowment. Accordingly, over the long term, NFP B expects the current spending policy to allow its endowment to grow at an average of 3 percent annually. NFP B has a policy that permits spending from underwater endowment funds depending on the degree to which the fund is underwater, unless otherwise precluded by donor intent or relevant laws and regulations. The governing board appropriated for expenditure $75 from underwater endowment funds during the year, which represents 3 percent of the 12-quarter moving average, not the 5 percent it generally draws from its endowment. ##### [205-958-55-53](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-53) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:06.531Z to 2026-09-09T22:56:06.531Z Record version: sha256:0c5674fe59a6428f828dd7939254752e5c47a4a6f6c94a54e55c979671ae1971 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). Source downloaded (UTC): 2026-09-09T22:56:09.519Z to 2026-09-09T22:56:09.519Z Record version: sha256:4edf9dd43a8c2b097e693c716208d8b9048d3f32c7f847d56c243775c098cc22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/205/958/#60-relationships) SEC content: no #### Risks and Uncertainties ##### [205-958-60-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:09.519Z to 2026-09-09T22:56:09.519Z Record version: sha256:0ae3369265c08e6ec9d34b6634433e8882b6d538c539b67628bb9ba03dc0a368 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For disclosures about the principal services performed by a [not-for-profit entity](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) and the revenue sources for the entity's services, see paragraph [275-10-50-2](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-2). Source downloaded (UTC): 2026-09-09T22:56:13.307Z to 2026-09-09T22:56:13.307Z Record version: sha256:af38c36595611ef0800d498b2f62c3e7ba5f171f9c869f2b845ca01bfcd7f7e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-958-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/205/958/#65-transition-and-open-effective-date-information) SEC content: no ##### [205-958-65-1](https://asc.understandingaccounting.org/asc/205/958/#205-958-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:13.307Z to 2026-09-09T22:56:13.307Z Record version: sha256:830a96fba954cafeb6b5a3d5da3c602497286bdd858ad7ef0446dd2fc9840e0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 03/23/2010 after the end of the transition period stated in FASB Staff Position FAS 117-1, _Endowments of Not-for-Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds_.