# ASC Topic 205: Presentation of Financial Statements Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/205/) 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): 2026-09-09T22:51:47.839Z to 2026-09-09T22:58:14.869Z Record version: sha256:aa174c6919f145ff79237957471371a942f3e67459870e4c3749b9bdbab5c746 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 205 governs the overall presentation of financial statements: what a full set of statements includes, how comparative periods must be presented and any change in basis or reclassification explained (205-10), when a disposal qualifies as a discontinued operation and how it is presented and disclosed (205-20), when an entity must abandon going-concern accounting for the liquidation basis because liquidation is "imminent" (205-30), and management's required each-period evaluation of substantial doubt about the entity's ability to continue as a going concern within one year after issuance (205-40). Layered on top are industry-specific presentation Subtopics — agriculture (205-905), health care (205-954), investment companies (205-946), not-for-profit entities (958-205), common interest realty associations (205-972), and the employee benefit plan Subtopics for defined benefit pension (960-205), defined contribution (962-205), and health and welfare plans (965-205) — while 205-915 (development stage entities) was entirely superseded by ASU 2014-10. The unifying idea is that the going concern basis is presumed unless liquidation is imminent, and that financial statements must be presented in a comparable, clearly labeled form that lets users assess an entity's continuing operations, disposals, and ability to meet obligations. Source downloaded (UTC): 2026-09-09T22:51:47.839Z to 2026-09-09T22:52:44.916Z Record version: sha256:34d8feaa45efaa35528017d1679d1e06ac2fa9641df7b38837d044dbe0b3794b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10: Presentation of Financial Statements — Overall ### Machine-generated study aids ```json { "summary": "ASC 205-10 sets the pervasive scope for the Presentation of Financial Statements Topic (applying to both business entities and NFPs) and governs comparative financial statements. It explains that presenting statements for a series of periods is more meaningful than a single period, lists the elements of a full set of financial statements, and requires that prior-period figures actually be comparable, with any change in presentation basis or reclassification explained.", "key_points": [ "Topic 205 comprises four subtopics: Overall, Discontinued Operations, Liquidation Basis of Accounting, and Going Concern (205-10-05-1), and the Overall Subtopic's scope applies pervasively to all of them (205-10-15-1).", "The guidance applies to both business entities and not-for-profit entities (205-10-15-2).", "A full set of financial statements shall show financial position at period-end, earnings (net income), comprehensive income (if required to report it), cash flows, and investments by and distributions to owners (205-10-45-1A).", "It is ordinarily desirable that the statement of financial position, income statement, and statement of changes in equity be presented for one or more preceding years as well as the current year (205-10-45-2).", "Prior-year comparative figures must in fact be comparable with the most recent period, and any exceptions to comparability must be clearly brought out as described in Topic 250 (205-10-45-3).", "Changes in the manner or basis of presenting corresponding items for two or more periods (including reclassifications) must be explained, because any change in practice affecting comparability must be disclosed (205-10-50-1).", "Notes, explanations, and accountants' report qualifications from preceding years must be repeated or at least referred to in the comparative statements to the extent they remain significant (205-10-45-4; 205-10-50-2)." ], "categories": [ "Presentation", "Financial statement presentation", "Disclosure" ], "audience_level": "introductory", "student_note": "This is the foundational \"what goes in a complete set of financial statements\" guidance and the source of the comparability/reclassification disclosure requirement. A common misunderstanding is thinking GAAP mandates comparative statements — 205-10-45-2 says it is \"ordinarily desirable,\" while SEC rules (Regulation S-X) are what actually compel comparative presentation for registrants.", "related_topics": [ "205-20", "205-30", "205-40", "220-10", "250-10", "830-30" ], "key_concepts": [ "comparative financial statements", "full set of financial statements", "comparability", "reclassification disclosure", "statement of financial position", "comprehensive income", "pervasive scope", "not-for-profit entities" ] } ``` Source downloaded (UTC): 2026-09-09T22:51:47.839Z to 2026-09-09T22:51:47.839Z Record version: sha256:5774951e8aa551ce437017cc1c76a97f6c2cfc061871f6cfafedae5992762fe5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/10/#00-status) SEC content: no ##### [205-10-00-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:47.839Z to 2026-09-09T22:51:47.839Z Record version: sha256:62fdf0ec68e3db5a864b1c8c4a8ec7b8f0f5c8585f14a20eafc636471bc2522b 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
BusinessAmendedAccounting Standards Update No. 2017-0101/05/2017
BusinessAddedAccounting Standards Update No. 2014-0804/10/2014
Comprehensive IncomeAddedAccounting Standards Update No. 2011-0506/16/2011
Corporate Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
Nonprofit ActivityAddedAccounting Standards Update No. 2014-0804/10/2014
205-10-05-1AmendedMaintenance Update 2025-05 (PDF)06/20/2025
205-10-05-1AmendedAccounting Standards Update No. 2013-0704/22/2013
205-10-05-3AmendedAccounting Standards Update No. 2023-0508/23/2023
205-10-05-3AmendedAccounting Standards Update No. 2014-0804/10/2014
205-10-05-3AAddedAccounting Standards Update No. 2014-0804/10/2014
205-10-05-4AddedAccounting Standards Update No. 2013-0704/22/2013
205-10-45-1AAmendedAccounting Standards Update No. 2025-1112/08/2025
205-10-45-1AAddedAccounting Standards Update No. 2011-0506/16/2011
205-10-45-2AmendedAccounting Standards Update No. 2025-1212/17/2025
205-10-45-4AmendedAccounting Standards Update No. 2020-1010/29/2020
205-10-50-1AmendedAccounting Standards Update No. 2025-1112/08/2025
205-10-50-2AddedAccounting Standards Update No. 2020-1010/29/2020
Source downloaded (UTC): 2026-09-09T22:51:50.899Z to 2026-09-09T22:51:50.899Z Record version: sha256:b62ed5e2b74548fff19dad400f584b29147f4ffd236dda224dc7031c0d4447af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/10/#05-overview-and-background) SEC content: no ##### [205-10-05-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:50.899Z to 2026-09-09T22:51:50.899Z Record version: sha256:03b608204ba007b17ddf11bc64e62299ace36cefbfa0d1cb002671cda280e76b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Presentation of Financial Statements Topic includes the following Subtopics: 1. a Overall 2. b Discontinued Operations 3. c Liquidation Basis of Accounting 4. d Going Concern. ##### [205-10-05-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:50.899Z to 2026-09-09T22:51:50.899Z Record version: sha256:bc7aaca0a2293f7a5dbf792efeaae949864b99d11fb021a5a853a0f42f356258 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Overall Subtopic describes the benefits of presenting comparative financial statements instead of single-period financial statements, and addresses how the comparative information shall be presented and the required disclosures. ##### [205-10-05-3](https://asc.understandingaccounting.org/asc/205/10/#205-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:50.899Z to 2026-09-09T22:51:50.899Z Record version: sha256:acad13c450119f908e025c6658204c241cbacab47691bdf2b1e3603b3ecb82ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Discontinued Operations Subtopic discusses the conditions under which either of the following would be reported in an entity's financial statements as a discontinued operation: 1. a A [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") that either has been disposed of or is classified as held for sale 2. b A [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity.") that, on acquisition or upon formation of a [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities."), is classified as held for sale. ##### [205-10-05-3A](https://asc.understandingaccounting.org/asc/205/10/#205-10-05-3A) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:50.899Z to 2026-09-09T22:51:50.899Z Record version: sha256:b4278c26cd082595c5c28a8f4f3afd042f008edb4bd9128ee74089c71453b6f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a component of an entity that either has been disposed of or is classified as held for sale does not meet the conditions to be reported in discontinued operations, Section 360-10-45 on other presentation matters of property, plant, and equipment provides guidance on presenting disposal gains and losses and impairment losses on assets classified as held for sale. ##### [205-10-05-4](https://asc.understandingaccounting.org/asc/205/10/#205-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:50.899Z to 2026-09-09T22:51:50.899Z Record version: sha256:33cf4175a3b804c60e38f7d7daab87f4c4f84e1344c47c4ab3af989e4276978e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Liquidation Basis of Accounting Subtopic provides guidance on when and how an entity should prepare its financial statements using the liquidation basis of accounting and describes the related disclosures that should be made. Source downloaded (UTC): 2026-09-09T22:51:54.072Z to 2026-09-09T22:51:54.072Z Record version: sha256:08854faa1e00e933603302ea88f88abba45b6fda20031884aa8a7c30aebaeb22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-10-15-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:54.072Z to 2026-09-09T22:51:54.072Z Record version: sha256:37f4b2230a245b42e49a6cd5d347b24adebc31330cfb1a5c21dc5ed3c287824a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of the Presentation of Financial Statements Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Presentation of Financial Statements Topic. #### Entities ##### [205-10-15-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:54.072Z to 2026-09-09T22:51:54.072Z Record version: sha256:ccb21da896865b1fa8277cbd964384e5596ce766342f3c066dc394428619301f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Presentation of Financial Statements Topic applies to business entities and not-for-profit entities (NFPs). Source downloaded (UTC): 2026-09-09T22:51:59.498Z to 2026-09-09T22:51:59.498Z Record version: sha256:8e2f8da529d5e44f22e2430c8aee842975cf1d4403baa481a2c8169f6e37be68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/10/#45-other-presentation-matters) SEC content: no #### Comparative Financial Statements ##### [205-10-45-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:59.498Z to 2026-09-09T22:51:59.498Z Record version: sha256:d0d9139b13d4c0c901565f3a6ce1462f3ec50e8fe38b35b2da951ee38b7f97f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The presentation of comparative financial statements in annual and other reports enhances the usefulness of such reports and brings out more clearly the nature and trends of current changes affecting the entity. Such presentation emphasizes the fact that statements for a series of periods are far more significant than those for a single period and that the accounts for one period are but an installment of what is essentially a continuous history. ##### [205-10-45-1A](https://asc.understandingaccounting.org/asc/205/10/#205-10-45-1A) Pending content: yes Source downloaded (UTC): 2026-09-09T22:51:59.498Z to 2026-09-09T22:51:59.498Z Record version: sha256:54a7fbfe2f448e498adf287c798ea35f0960d9bbf16c07919366e81f72a45301 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A full set of financial statements for a period shall show all of the following: 1. a Financial position at the end of the period 2. b Earnings ([net income](https://asc.understandingaccounting.org/glossary/n/#net-income "A measure of financial performance resulting from the aggregation of revenues, expenses, gains, and losses that are not items of other comprehensive income. A variety of other terms such as net earnings or earnings may be used to describe net income.")) for the period, (which may be presented as a separate statement or within a continuous statement of [comprehensive income](https://asc.understandingaccounting.org/glossary/c/#comprehensive-income "The change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Comprehensive income comprises both of the following:All components of net incomeAll components of other comprehensive income.") \[see paragraph [220-10-45-1A](https://asc.understandingaccounting.org/asc/220/10/#220-10-45-1A)\]) 3. c Comprehensive income (total nonowner changes in equity) for the period in one statement or two separate but consecutive statements (if the reporting entity is required to report comprehensive income, see paragraph [220-10-15-3](https://asc.understandingaccounting.org/asc/220/10/#220-10-15-3)) 4. d Cash flows during the period 5. e Investments by and distributions to owners during the period. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)A full set of financial statements for a period shall show all of the following (unless not required to do so by other Topics): 1. a Financial position at the end of the period 2. b Earnings ([net income](https://asc.understandingaccounting.org/glossary/n/#net-income "A measure of financial performance resulting from the aggregation of revenues, expenses, gains, and losses that are not items of other comprehensive income. A variety of other terms such as net earnings or earnings may be used to describe net income.")) for the period, (which may be presented as a separate statement or within a continuous statement of [comprehensive income](https://asc.understandingaccounting.org/glossary/c/#comprehensive-income "The change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Comprehensive income comprises both of the following:All components of net incomeAll components of other comprehensive income.") \[see paragraph [220-10-45-1A](https://asc.understandingaccounting.org/asc/220/10/#220-10-45-1A)\]) 3. c Comprehensive income (total nonowner changes in equity) for the period in one statement or two separate but consecutive statements (if the reporting entity is required to report comprehensive income, see paragraph [220-10-15-3](https://asc.understandingaccounting.org/asc/220/10/#220-10-15-3)) 4. d Cash flows during the period 5. e Investments by and distributions to owners during the period. ##### [205-10-45-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-45-2) Pending content: yes Source downloaded (UTC): 2026-09-09T22:51:59.498Z to 2026-09-09T22:51:59.498Z Record version: sha256:f53becf5ce2590a8f440f767236043edd83a743de5b63552d310e95688c2764e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In any one year it is ordinarily desirable that the statement of financial position, the income statement, and the statement of changes in equity be presented for one or more preceding years, as well as for the current year. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)In any one year it is ordinarily desirable that the financial statements be presented for one or more preceding years, as well as for the current year. ##### [205-10-45-3](https://asc.understandingaccounting.org/asc/205/10/#205-10-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:59.498Z to 2026-09-09T22:51:59.498Z Record version: sha256:0e1e5bcb715c22f88ac50c47f31aec56f3f0f06c2f23749e5ada34f8cd495695 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Prior-year figures shown for comparative purposes shall in fact be comparable with those shown for the most recent period. Any exceptions to comparability shall be clearly brought out as described in Topic 250. ##### [205-10-45-4](https://asc.understandingaccounting.org/asc/205/10/#205-10-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:51:59.498Z to 2026-09-09T22:51:59.498Z Record version: sha256:4e8a6fcf70c2a47cd80038f5c8046121fbb650cc255972e9d4fd0c9207bfc81f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Notes to financial statements, explanations, and accountants' reports containing qualifications that appeared on the statements for the preceding years shall be repeated, or at least referred to, in the comparative statements to the extent that they continue to be of significance. (See paragraph [205-10-50-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-50-2).) Source downloaded (UTC): 2026-09-09T22:52:01.583Z to 2026-09-09T22:52:01.583Z Record version: sha256:407f94dd9612977398ebb37761753a68d2eb0857787791b092518a01eac79f93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/10/#50-disclosure) SEC content: no #### Changes Affecting Comparability ##### [205-10-50-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-50-1) Pending content: yes Source downloaded (UTC): 2026-09-09T22:52:01.583Z to 2026-09-09T22:52:01.583Z Record version: sha256:0364e92d1d4d27a9d0557aa66a945c37b7454b9531c7f8decdc50a3c17bed647 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, because of reclassifications or for other reasons, changes have occurred in the manner of or basis for presenting corresponding items for two or more periods, information shall be furnished that will explain the change. This procedure is in conformity with the well-recognized principle that any change in practice that affects comparability of financial statements shall be disclosed. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If, because of reclassifications or for other reasons, changes have occurred in the manner of or basis for presenting corresponding items for two or more periods, information shall be furnished for interim and annual reporting periods that will explain the change. This procedure is in conformity with the well-recognized principle that any change in practice that affects comparability of financial statements shall be disclosed. ##### [205-10-50-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:01.583Z to 2026-09-09T22:52:01.583Z Record version: sha256:529008ad8a762335c7d6008a3d058d549ee57817962f411edba3d9773bdf5916 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Notes to financial statements, explanations, and accountants' reports containing qualifications that appeared on the statements for the preceding years shall be repeated, or at least referred to, in the statements to the extent that they continue to be of significance. (See paragraph [Check output number.205-10-45-4](https://asc.understandingaccounting.org/asc/205/10/#205-10-45-4).) Source downloaded (UTC): 2026-09-09T22:52:03.345Z to 2026-09-09T22:52:03.345Z Record version: sha256:a3021a8f97b9fc6d1352005a233d2f8e4735291e46914c3a64e0bc248d18867b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/205/10/#60-relationships) SEC content: no #### Foreign Currency Matters ##### [205-10-60-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:03.345Z to 2026-09-09T22:52:03.345Z Record version: sha256:14f9a0015bd705c9a39fc052f7c0c9b20af35bd514c35fa02fee3ede8588124e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on translating foreign currency statements that are incorporated in the financial statements of a reporting entity by consolidation, combination, or the equity method of accounting, see Subtopic 830-30. Source downloaded (UTC): 2026-09-09T22:52:09.215Z to 2026-09-09T22:52:09.215Z Record version: sha256:800335efa9b18a138f727c1d3988bb275de91bc09e96b874774e5316bda65dbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/10/#sec-00-status) SEC content: yes ##### [205-10-S00-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-S00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:09.215Z to 2026-09-09T22:52:09.215Z Record version: sha256:95479ef8d0dd2b61ccac11f33a4d04a6aaeafb4c481cc711e7aea7c72f71ebee 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
205-10-S99-1 through S99-6
AmendedAccounting Standards Update No. 2019-0707/26/2019
205-10-S99-1AmendedAccounting Standards Update No. 2012-0308/27/2012
205-10-S99-5AmendedAccounting Standards Update No. 2021-0608/09/2021
205-10-S99-6AmendedAccounting Standards Update No. 2010-2108/02/2010
205-10-S99-8AmendedAccounting Standards Update No. 2012-0308/27/2012
Source downloaded (UTC): 2026-09-09T22:52:11.847Z to 2026-09-09T22:52:11.847Z Record version: sha256:ddbd2c89b14fa76acf046fab1837fef28b2769278e91e4926eec9a1a1a6b309b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-S15: SEC 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/10/#sec-15-scope-and-scope-exceptions) SEC content: yes #### Entities ##### [205-10-S15-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-S15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:11.847Z to 2026-09-09T22:52:11.847Z Record version: sha256:a625f4051d09e6461f4e1c6077e02cc922d01246edb3a5b53e7e4858bc695489 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-5](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-5), Regulation S-X Rule 5-01, for entities to which this Subtopic applies. Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:34ad9807fa7be7ec2219f625a48248125a4bf7370d8bfc2cc30f7a7364ee5a11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/10/#sec-45-other-presentation-matters) SEC content: yes #### Form and Order of Financial Statements ##### [205-10-S45-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-S45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:48d1b6c23df0ce215b8ae96c22156954fee29d859e3ce0a63c7717d948f11183 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-1(a)](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-1), Regulation S-X Rule 4-01(a), for requirements for form and order of financial statements and terminology used in financial statements. ##### [205-10-S45-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-S45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:7b05bc02ed866873f204e0ca829f81e14e5efbacb8851677e5f7621163db06e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-1(b)](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-1), Regulation S-X Rule 4-01(b), for requirements for presentation of dollar amounts required to be shown in the financial statements. ##### [205-10-S45-3](https://asc.understandingaccounting.org/asc/205/10/#205-10-S45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:5b17ec911d995a245a8771c8afc8308f76c00e7c2386e4af82ee18fc974af07f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-9](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-9), SAB Topic 11.E, for SEC Staff views on chronological ordering of data. ##### [205-10-S45-4](https://asc.understandingaccounting.org/asc/205/10/#205-10-S45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:17d2db155656d5fe3433a4b8fe040032b47b9436a76f11baee725b9ad7863a1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-2), Regulation S-X Rule 4-02, for requirements for omission of certain items not considered material. ##### [205-10-S45-5](https://asc.understandingaccounting.org/asc/205/10/#205-10-S45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:29994ff47d444790ede97920036dae4342d8b42c2782b0ba4c10b6119c25f84f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-3](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-3), Regulation S-X Rule 4-03. for requirements for inapplicable captions and omission of unrequired or inapplicable financial statements. ##### [205-10-S45-6](https://asc.understandingaccounting.org/asc/205/10/#205-10-S45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:0457059d5ff4b0eab196564f03cdd241db5fc52551438df5b7d7b362b4634f06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-4](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-4), Regulation S-X Rule 4-04, for rules pertaining to the omission of substantially identical footnotes. #### Supplemental Schedules ##### [205-10-S45-7](https://asc.understandingaccounting.org/asc/205/10/#205-10-S45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:17.223Z to 2026-09-09T22:52:17.223Z Record version: sha256:cbe9c61c08796aebdb3200b2b4de63e29113e1065b54968c0dd7749196b434ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-6(a)](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-6), Regulation S-X Rule 5-04(a), regarding requirements to provide supplemental schedules. Source downloaded (UTC): 2026-09-09T22:52:19.055Z to 2026-09-09T22:52:19.055Z Record version: sha256:050405332241b84709762fb317db218660029de3c2397b7a643ac62c57c18066 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/10/#sec-50-disclosure) SEC content: yes #### Supplemental Schedules ##### [205-10-S50-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-S50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:19.055Z to 2026-09-09T22:52:19.055Z Record version: sha256:fb2c9e4bb4aff7e46d93d3cdd241f748af4e9f589678b0d073b36c45d960600f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-6(c)](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-6), Regulation S-X Rule 5-04(c), for requirements for Supplemental Schedules I - IV. #### Changes Affecting Comparability ##### [205-10-S50-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-S50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:19.055Z to 2026-09-09T22:52:19.055Z Record version: sha256:cb5902d96ee2c8ad90cd56db97164195a9b07c3ce4db419d7eba365dc78dafcd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-7](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-7), SAB Topic 1.B.2, for SEC Staff views on when historical financial statements are not indicative of the ongoing entity. Source downloaded (UTC): 2026-09-09T22:52:21.394Z to 2026-09-09T22:52:21.394Z Record version: sha256:6e0296829928d3945d45ab76cc8ddb2583d54b48dbc172613a0796fa1c5ad51f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-S55: SEC 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/10/#sec-55-implementation-guidance-and-illustrations) SEC content: yes #### Parent Entity Disclosures and Supplemental Schedules ##### [205-10-S55-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-S55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:21.394Z to 2026-09-09T22:52:21.394Z Record version: sha256:dbe1e6e19053e3af9d4d48051d810b13f70bd03143fa302000b454d21074f83c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [235-10-S99-1](https://asc.understandingaccounting.org/asc/235/10/#235-10-S99-1), Regulation S-X Rule 4-08(e)(3), for requirements for computation of [restricted net assets](https://asc.understandingaccounting.org/glossary/r/#restricted-net-assets "See paragraph 235-10-S99-1, Regulation S-X Rule 4-08(e)(3), for definition of restricted net assets for purposes of the restricted net asset test."). ##### [205-10-S55-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-S55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:21.394Z to 2026-09-09T22:52:21.394Z Record version: sha256:ee6c09ba54f89259732c6a1702cc95ec5c444968636cca9a975302603d6a2e1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-10-S99-8](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-8), SAB Topic 6.K.2, for SEC Staff views on the computation of restricted net assets of subsidiaries and application of tests for parent entity disclosures. Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:731bb576a813870b296834e777bbd959784078b954476d92241f69050156798f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-10-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/205/10/#sec-99-sec-materials) SEC content: yes #### SEC Rules, Regulations, and Interpretations ##### [205-10-S99-1](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:a2626b4e259580e9e81c44d9a9e3460cf0cf853051634a4d706a3bbe0fa660f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 4-01, Form, Order and Terminology (17 CFR 210.4-01). - (a) Financial statements should be filed in such form and order, and should use such generally accepted terminology, as will best indicate their significance and character in the light of the provisions applicable thereto. The information required with respect to any statement shall be furnished as a minimum requirement to which shall be added such further material information as is necessary to make the required statements, in the light of the circumstances under which they are made, not misleading. - (1) Financial statements filed with the Commission which are not prepared in accordance with generally accepted accounting principles will be presumed to be misleading or inaccurate, despite footnote or other disclosures, unless the Commission has otherwise provided. This article and other articles of Regulation S-X provide clarification of certain disclosures which must be included in any event, in financial statements filed with the Commission. - (2) In all filings of foreign private issuers (see § 230.405 of this chapter), except as stated otherwise in the applicable form, the financial statements may be prepared according to a comprehensive set of accounting principles other than those generally accepted in the United States or International Financial Reporting Standards as issued by the International Accounting Standards Board, if a reconciliation to U.S. Generally Accepted Accounting Principles and the provisions of Regulation S-X of the type specified in Item 18 of Form 20-F (§ 249.220f of this chapter) is also filed as part of the financial statements. Alternatively, the financial statements may be prepared according to U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards as issued by the International Accounting Standards Board. - (b) All money amounts required to be shown in financial statements may be expressed in whole dollars or multiples thereof, as appropriate: _Provided_, That, when stated in other than whole dollars, an indication to that effect is inserted immediately beneath the caption of the statement or schedule, at the top of the money columns, or at an appropriate point in narrative material. - (c) Negative amounts (red figures) shall be shown in a manner which clearly distinguishes the negative attribute. When determining methods of display, consideration should be given to the limitations of reproduction and microfilming processes. - \[45 FR 63669, Sept. 25, 1980, as amended at 47 FR 54767, Dec. 6, 1982; 70 FR 20719, Apr. 21, 2005; 73 FR 953, Jan. 4, 2008; 73 FR 1009, Jan. 4, 2008; 76 FR 50119, Aug. 12, 2011; 83 FR 50200, Oct. 4, 2018\] ##### [205-10-S99-2](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:18c58c01702e1b993ec1fe16f4f91c9716c8fa6e36c17e413c0c815e1397c3a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 4-02, Items Not Material (17 CFR 210.4-02). - If the amount which would otherwise be required to be shown with respect to any item is not material, it need not be separately set forth. The combination of insignificant amounts is permitted. ##### [205-10-S99-3](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:a9d651164d94b945f4b973f775366a800a077d95c58ec12031320258871fe12e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 4-03, Inapplicable Captions and Omission of Unrequired or Inapplicable Financial Statements (17 CFR 210.4-03). - (a) No caption should be shown in any financial statement as to which the items and conditions are not present. - (b) Financial statements not required or inapplicable because the required matter is not present need not be filed. - (c) The reasons for the omission of any required financial statements shall be indicated. ##### [205-10-S99-4](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:06a5f9b850c59013bd9abea6c349be8cdd2195345cfbf19636db0a95290a6ac8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 4-04, Omission of Substantially Identical Notes (17 CFR 210.4-04). - If a note covering substantially the same subject matter is required with respect to two or more financial statements relating to the same or affiliated persons, for which separate sets of notes are presented, the required information may be shown in a note to only one of such statements: Provided, That a clear and specific reference thereto is made in each of the other statements with respect to which the note is required. ##### [205-10-S99-5](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:192732578be125309be96dfe73708829feb1f05d0a9bf5f2157ca08eb21813b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 5-01, Application of §§ 210.5-01 to 210.5-04 (17 CFR 210.5-01). - Sections 210.5-01 to 210.5-04 shall be applicable to financial statements filed for all persons except - (a) Registered investment companies (see §§ 210.6-01 through 210.6-11). - (b) Employee stock purchase, savings and similar plans (see §§ 210.6A-01 to 210.6A-05). - (c) Insurance companies (see §§ 210.7-01 to 210.7-05). - (d) Bank holding companies and banks (see §§ 210.9-01 to 210.9-07). - (e) Brokers and dealers when filing Form X-17A-5 \[249.617\] (see §§ 240.17a-5 and 240.17a-10 under the Securities Exchange Act of 1934). - \[50 FR 49533, Dec. 3, 1985, as amended at 85 FR 54064, Aug. 31, 2020\] ##### [205-10-S99-6](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:5eba280b97b4ab89240c4ce96d75ee06dd43d876143aeac348d092720da77199 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 5-04, What Schedules are to Be Filed (17 CFR 210.5-04). - (a) Except as expressly provided otherwise in the applicable form: - (1) The schedules specified below in this Section as Schedules II and III shall be filed as of the date of the most recent audited balance sheet for each person or group. - (2) Schedule II of this section shall be filed for each period for which an audited statement of comprehensive income is required to be filed for each person or group. - (3) Schedules I and IV shall be filed as of the date and for periods specified in the schedule. - (b) When information is required in schedules for both the registrant and the registrant and its subsidiaries consolidated it may be presented in the form of a single schedule: _Provided_, That items pertaining to the registrant are separately shown and that such single schedule affords a properly summarized presentation of the facts. If the information required by any schedule (including the notes thereto) may be shown in the related financial statement or in a note thereto without making such statement unclear or confusing, that procedure may be followed and the schedule omitted. - (c) The schedules shall be examined by the independent accountant if the related financial statements are so examined. - Schedule I—Condensed financial information of registrant. The schedule prescribed by § 210.12-04 shall be filed when the [restricted net assets](https://asc.understandingaccounting.org/glossary/r/#restricted-net-assets "See paragraph 235-10-S99-1, Regulation S-X Rule 4-08(e)(3), for definition of restricted net assets for purposes of the restricted net asset test.") (§210.1-02(dd)) of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. - Schedule II—Valuation and qualifying accounts. The schedule prescribed by § 210.12-09 shall be filed in support of valuation and qualifying accounts included in each balance sheet but not included in Schedule VI. (See § 210.4-02.) - Schedule III—Real estate and accumulated depreciation. The schedule prescribed by § 210.12-28 shall be filed for real estate (and the related accumulated depreciation) held by persons a substantial portion of whose business is that of acquiring and holding for investment real estate or interests in real estate, or interests in other persons a substantial portion of whose business is that of acquiring and holding real estate or interests in real estate for investment. Real estate used in the business shall be excluded from the schedule. - Schedule IV—Mortgage loans on real estate. The schedule prescribed by § 210.12-29 shall be filed by persons specified under Schedule XI for investments in mortgage loans on real estate. - Schedule V—Supplemental Information Concerning Property-casualty Insurance Operations. The schedule prescribed by § 210.12-18 shall be filed when a registrant, its subsidiaries or 50%-or-less-owned equity basis investees, have liabilities for property-casualty ("P/C") insurance claims. The required information shall be presented as of the same dates and for the same periods for which the information is reflected in the audited consolidated financial statements required by §§ 210.3-01 and 3-02. The schedule may be omitted if reserves for unpaid P/C claims and claims adjustment expenses of the registrant and its consolidated subsidiaries, its unconsolidated subsidiaries and its 50%-or-less-owned equity basis investees did not, in the aggregate, exceed one-half of common stockholders' equity of the registrant and its consolidated subsidiaries as of the beginning of the fiscal year. For purposes of this test only the proportionate share of the registrant and its other subsidiaries in the reserves for unpaid claims and claim adjustment expenses of 50%-or-less-owned equity basis investees taken in the aggregate after intercompany eliminations shall be taken into account. - \[45 FR 63671, Sept. 25, 1980, as amended at 46 FR 48137, Oct. 1, 1981; 46 FR 56180, Nov. 16, 1981; 49 FR 47598, Dec. 6, 1984; 50 FR 25215, June 18, 1985; 59 FR 65636, Dec. 20, 1994; 74 FR 18615, Apr. 23, 2009; 83 FR 50202, Oct. 4, 2018\] #### SEC Staff Guidance ##### [205-10-S99-7](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:16d8746acbd61d278ea71e158b92f652f46f129c8c46ca08d9d4a4355f57c6a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 1.B.2, Pro Forma Financial Statements and Earnings per Share. - Question: What disclosure should be made if the registrant's historical financial statements are not indicative of the ongoing entity (e. g., tax or other cost sharing agreements will be terminated or revised)? - Interpretive Response: The registration statement should include pro forma financial information that is in accordance with Article 11 of Regulation S-X and reflects the impact of terminated or revised cost sharing agreements and other significant changes. ##### [205-10-S99-8](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:39c99955a34325c541d5c629bb529fdd3c2e2b78a6438cda816e78b793163eb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 6.K.2, Parent Company Financial Information. - a. Computation of restricted net assets of subsidiaries. - Facts: The revised rules for parent company disclosures adopted in ASR 302 require, in certain circumstances, (1) footnote disclosure in the consolidated financial statements about the nature and amount of significant restrictions on the ability of subsidiaries to transfer funds to the parent through intercompany loans, advances or cash dividends \[Rule 4-08(e)(3)\], and (2) the presentation of condensed parent company financial information and other data in a schedule (Rule 12-04). To determine which disclosures, if any, are required, a registrant must compute its proportionate share of the net assets of its consolidated and unconsolidated subsidiary companies as of the end of the most recent fiscal year which are restricted as to transfer to the parent company because the consent of a third party (a lender, regulatory agency, foreign government, etc.) is required. If the registrant's proportionate share of the restricted net assets of consolidated subsidiaries exceeds 25% of the registrant's consolidated net assets, both the footnote and schedule information are required. If the amount of such restrictions is less than 25%, but the sum of these restrictions plus the amount of the registrant's proportionate share of restricted net assets of unconsolidated subsidiaries plus the registrant's equity in the undistributed earnings of 50% or less owned persons (investees) accounted for by the equity method exceed 25% of consolidated net assets, the footnote disclosure is required. - Question 1: How are restricted net assets of subsidiaries computed? - Interpretative Response: The calculation of restricted net assets requires an evaluation of each subsidiary to identify any circumstances where third parties may limit the subsidiary's ability to loan, advance or dividend funds to the parent. This evaluation normally comprises a review of loan agreements, statutory and regulatory requirements, etc., to determine the dollar amount of each subsidiary's restrictions. The related amount of the subsidiary's net assets designated as restricted, however, should not exceed the amount of the subsidiary's net assets included in consolidated net assets, since parent company disclosures are triggered when a significant amount of consolidated net assets are restricted. The amount of each subsidiary's net assets included in consolidated net assets is determined by allocating (pushing down) to each subsidiary any related consolidation adjustments such as intercompany balances, intercompany profits, and differences between fair value and historical cost arising from a business combination accounted for as a purchase. This amount is referred to as the subsidiary's adjusted net assets. If the subsidiary's adjusted net assets are less than the amount of its restrictions because the push down of consolidating adjustments reduced its net assets, the subsidiary's adjusted net assets is the amount of the subsidiary's restricted net assets used in the tests. - Registrants with numerous subsidiaries and investees may wish to develop approaches to facilitate the determination of its parent company disclosure requirements. For example, if the parent company's adjusted net assets (excluding any interest in its subsidiaries) exceed 75% of consolidated net assets, or if the total of all of the registrant's consolidated and unconsolidated subsidiaries' restrictions and its equity in investees' earnings is less than 25% of consolidated net assets, then the allocation of consolidating adjustments to the subsidiaries to determine the amount of their adjusted net assets would not be necessary since no parent company disclosures would be required. - Question 2: If a registrant makes a decision that it will permanently reinvest the undistributed earnings of a subsidiary, and thus does not provide for income taxes thereon because it meets the criteria set forth in FASB ASC Subtopic Check output number.740-30, Income Taxes—Other Considerations or Special Areas, is there considered to be a restriction for purposes of the test? - Interpretive Response: No. The rules require that only third party restrictions be considered. Restrictions on subsidiary net assets imposed by management are not included. - b. Application of tests for parent company disclosures. - Facts: The balance sheet of the registrant's 100%-owned subsidiary at the most recent fiscal year-end is summarized as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-2C87008F-615B-4F33-B350-9D7B71425B30-low.gif) Current assets $120 Current liabilities $30 Noncurrent assets 45 Long-term debt 60 90 Common stock 25 Retained earnings 50 75 $165 $165 - Net assets of the subsidiary are $75. Assume there are no consolidating adjustments to be allocated to the subsidiary. Restrictive covenants of the subsidiary's debt agreements provide that: - Net assets, excluding intercompany loans, cannot be less than $35. - 60% of accumulated earnings must be maintained. - Question 1: What is the amount of the subsidiary's restricted net assets? - Interpretive Response: - ![](https://asc.understandingaccounting.org/asc-img/GUID-80A5CE4D-6458-4BE7-BA1E-877F4CDD51F2-low.gif) Restriction Computed Restrictions "Net assets: currently $75, cannot be less than $35; therefore " $35 Dividends: 60% of accumulated earnings ($50) cannot be paid out; therefore $30 - Restricted net assets for purposes of the test are $35. The maximum amount that can be loaned or advanced to the parent without violating the net asset covenant is $40 ($75 - 35). Alternatively, the subsidiary could pay a dividend of up to $20 ($50 - 30) without violating the dividend covenant, and loan or advance up to $20, without violating the net asset provision. - Facts: The registrant has one 100%-owned subsidiary. The balance sheet of the subsidiary at the latest fiscal year-end is summarized as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-1822D533-DDEE-4081-A793-7EDA3E4A8D65-low.gif) Current assets $75 Current liabilities $23 Noncurrent assets 90 Long-term debt 57 Redeemable preferred stock 10 Common stock 30 Retained earnings 45 75 $165 $165 - Assume that the registrant's consolidated net assets are $130 and there are no consolidating adjustments to be allocated to the subsidiary. The subsidiary's net assets are $75. The subsidiary's noncurrent assets are comprised of $40 in operating plant and equipment used in the subsidiary's business and a $50 investment in a 30% investee. The subsidiary's equity in this investee's undistributed earnings is $18. Restrictive covenants of the subsidiary's debt agreements are as follows: - 1\. Net assets, excluding intercompany balances, cannot be less than $20. - 2\. 80% of accumulated earnings must be reinvested in the subsidiary. - 3\. Current ratio of 2:1 must be maintained. - Question 2: Are parent company footnote or schedule disclosures required? - Interpretive Response: Only the parent company footnote disclosures are required. The subsidiary's restricted net assets are computed as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-413FAB50-6AB6-44EC-AC71-58773179865F-low.gif) Restriction Computed Restriction "Net assets: currently $75, cannot be less than $20; therefore " $20 Dividends: 80% of accumulated earnings ($45) cannot be paid; therefore $36 Current ratio: must be at least 2:1 ($46 current assets must be maintained since current liabilities are $23 at fiscal year-end); therefore $46 - Restricted net assets for purposes of the test are $20. The amount computed from the dividend restriction ($36) and the current ratio requirement ($46) are not used because net assets may be transferred by the subsidiary up to the limitation imposed by the requirement to maintain net assets of at least $20, without violating the other restrictions. For example, a transfer to the parent of up to $55 of net assets could be accomplished by a combination of dividends of current assets of $9 ($45-36), and loans or advances of current assets of up to $20 and noncurrent assets of up to $26. - Parent company footnote disclosures are required in this example since the restricted net assets of the subsidiary and the registrant's equity in the earnings of its 100%-owned subsidiary's investee exceed 25% of consolidated net assets \[($20 + 18)/$130 = 29%\]. The parent company schedule information is not required since the restricted net assets of the subsidiary are only 15% of consolidated net assets ($20/$130 = 15%). - Although the subsidiary's noncurrent assets are not in a form which is readily transferable to the parent company, the illiquid nature of the assets is not relevant for purposes of the parent company tests. The objective of the tests is to require parent company disclosures when the parent company does not have control of its subsidiaries' funds because it does not have unrestricted access to their net assets. The tests trigger parent company disclosures only when there are significant third party restrictions on transfers by subsidiaries of net assets and the subsidiaries' net assets comprise a significant portion of consolidated net assets. Practical limitations, other than third party restrictions on transferability at the measurement date (most recent fiscal year-end), such as subsidiary illiquidity, are not considered in computing restricted net assets. However, the potential effect of any limitations other than those imposed by third parties should be considered for inclusion in Management's Discussion and Analysis of liquidity. - ![](https://asc.understandingaccounting.org/asc-img/GUID-FFCCC9F7-C134-4E7F-ADEA-9CD31D1206CD-low.gif) Net assets Subsidiary A $ (500) Subsidiary B "$2,000 " Consolidated "$3,700 " - Subsidiaries A and B are 100% owned by the registrant. Assume there are no consolidating adjustments to be allocated to the subsidiaries. Subsidiary A has restrictions amounting to $200. Subsidiary B's restrictions are $1,000. - Question 3: What parent company disclosures are required for the registrant? - Interpretive Response: Since subsidiary A has an excess of liabilities over assets, it has no restricted net assets for purposes of the test. However, both parent company footnote and schedule disclosures are required, since the restricted net assets of subsidiary B exceed 25% of consolidated net assets ($1,000/3,700 = 27%). - ![](https://asc.understandingaccounting.org/asc-img/GUID-11221191-2744-40E1-A5FD-7549DEE35AF9-low.gif) Net assets Subsidiary A $ 850 Subsidiary B $ 300 Consolidated $ 3700 - The registrant owns 80% of subsidiary A. Subsidiary A owns 100% of subsidiary B. Assume there are no consolidating adjustments to be allocated to the subsidiaries. A may not pay any dividends or make any affiliate loans or advances. B has no restrictions. A's net assets of $850 do not include its investment in B. - Question 4: Are parent company footnote or schedule disclosures required for this registrant? - Interpretive Response: No. All of the registrant's share of subsidiary A's net assets ($680) are restricted. Although B may pay dividends and loan or advance funds to A, the parent's access to B's funds through A is restricted. However, since there are no limitations on B's ability to loan or advance funds to the parent, none of the parent's share of B's net assets are restricted. Since A's restricted net assets are less than 25% of consolidated net assets ($680/3700 = 18%), no parent company disclosures are required. - Facts: The consolidating balance sheet of the registrant at the latest fiscal year-end is summarized as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-A66FB021-AC87-4856-80F3-A53CBAA80446-low.gif) Registrant Subsidiary Consolidating Adjustments Consolidated Current assets $800 $700 $0 " $1,500 " 30% investment in affiliate 175 0 0 175 Investment in subsidiary 350 0 (350) 0 Other noncurrent assets $625 $300 (100) $825 " $1,950 " " $1,000 " $(450) " $2,500 " Current liabilities 600 400 $0 " 1,000 " Concurrent liabilities 375 150 0 525 Redeemable preferred stock 275 0 0 275 Common stock 110 1 (1) 110 Paid-in capital 290 49 (49) 290 "Retained earnings " 300 400 (400) 300 700 450 (450) 700 " $1,950 " " $1,000 " $(450) " $2,500 " - The acquisition of the 100%-owned subsidiary was consummated on the last day of the most recent fiscal year. Immediately preceding the acquisition, the registrant had net assets of $700, which included its equity in the undistributed earnings of its 30% investee of $75. Immediately after acquiring the subsidiary's net assets, which had an historical cost of $450 and a fair value of $350, the registrant's net assets were still $700 since debt and preferred stock totaling $350 were issued in the purchase. The subsidiary has debt covenants which permit dividends, loans or advances, to the extent, if any, that net assets exceed an amount which is determined by the sum of $100 plus 75% of the subsidiary's accumulated earnings. - Question 5: What is the amount of the subsidiary's restricted net assets? Are parent company footnote or schedule disclosures required? - Interpretive Response: Restricted net assets for purposes of the test are $350, and both the parent company footnote and schedule disclosures are required. - The amount of the subsidiary's restrictions at year-end is $400 \[$100 + (75% x $400)\]. The subsidiary's adjusted net assets after the push down of the consolidation entry to the subsidiary to record the noncurrent assets acquired at their fair value is $350 ($450 - $100). Since the subsidiary's adjusted net assets ($350) are less than the amount of its restrictions ($400), restricted net assets are $350. The computed percentages applicable to each of the disclosure tests is in excess of 25%. Therefore, both parent company footnote and schedule information are required. The percentage applicable to the footnote disclosure test is 61% \[($75 + 350)/$700\]. The computed percentage for the schedule disclosure is 50% ($350/$700). ##### [205-10-S99-9](https://asc.understandingaccounting.org/asc/205/10/#205-10-S99-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:44.916Z to 2026-09-09T22:52:44.916Z Record version: sha256:df379a68c15a7bf8ee8519a01fc2a3da4b5f6efb7383436d959845c2c9783950 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 11.E, Chronological Ordering of Data. - Question: Does the staff have any preference in what order data are presented (e. g., the most current data displayed first, etc.)? - Interpretive Response: The staff has no preference as to order; however, financial statements and other data presented in tabular form should read consistently from left to right in the same chronological order throughout the filing. Similarly, numerical data included in narrative sections should be consistently ordered. Source downloaded (UTC): 2026-09-09T22:52:47.473Z to 2026-09-09T22:53:32.088Z Record version: sha256:b93aa0921f4a3a3b90cc7c0d39a5a404c1c30c4ece83f97b55bc921d3c77345c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20: Presentation of Financial Statements — Discontinued Operations ### Machine-generated study aids ```json { "summary": "ASC 205-20 governs when a disposal must be reported as a discontinued operation and how it is presented and disclosed. A disposal of a component (or group of components) qualifies only if it represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results, triggered when the component is classified as held for sale, disposed of by sale, or disposed of other than by sale (e.g., abandonment or spinoff) (205-20-45-1B). Results of discontinued operations, net of tax, are presented as a separate component of income for current and prior periods, held-for-sale assets and liabilities are presented separately (not offset) on the balance sheet, and extensive note disclosures are required.", "key_points": [ "Scope covers a component or group of components disposed of or classified as held for sale, and a business or nonprofit activity classified as held for sale on acquisition or upon formation of a joint venture; full-cost-method oil and gas properties are excluded (205-20-15-2 through 15-3).", "Discontinued operations reporting requires a strategic shift with a major effect — e.g., disposal of a major geographical area, major line of business, or major equity method investment — upon held-for-sale classification, sale, or disposal other than by sale (205-20-45-1B through 45-1C).", "Held-for-sale classification requires all six criteria in 205-20-45-1E (management commitment, available for immediate sale, active program to locate a buyer, sale probable within one year, active marketing at a price reasonable to fair value, and unlikely significant plan changes), with limited one-year exceptions in 205-20-45-1G; if criteria cease to be met, the asset is reclassified as held and used under 360-10-35-44 (205-20-45-1F).", "Results of all discontinued operations, less applicable income taxes, are reported as a separate component of income for current and prior periods, and any gain or loss on disposal (or loss on held-for-sale classification), computed under other Subtopics such as Topic 360, is presented on the face or disclosed in the notes (205-20-45-3 through 45-3C).", "Interest on debt assumed by the buyer or required to be repaid must be allocated to discontinued operations; allocation of other consolidated interest is permitted but not required and must be applied consistently, while general corporate overhead shall never be allocated (205-20-45-6 through 45-9).", "Assets and liabilities of a discontinued operation classified as held for sale are presented separately in the asset and liability sections of the balance sheet for all periods presented and shall not be offset as a single amount; major classes must be presented on the face or disclosed (205-20-45-10 through 45-11).", "Required disclosures include facts and circumstances of the disposal, segment(s) involved, pretax profit or loss and its major line items, cash flow data, major classes of held-for-sale assets and liabilities with reconciliations, and significant continuing involvement after disposal; an equity method investment disposal gets only the limited disclosure in 205-20-50-7 (205-20-50-1, 50-4A through 50-5D)." ], "categories": [ "Presentation", "Disclosure", "Financial statement presentation", "Derecognition" ], "audience_level": "intermediate", "student_note": "Post-ASU 2014-08 the bar is high: not every disposal of a component is a discontinued operation \\u2014 it must be a strategic shift with a major effect (major line of business, geography, or equity method investment). A common exam trap is assuming continuing involvement or retained interest disqualifies discontinued operations treatment; it does not, it just triggers the extra disclosures in 205-20-50-4A through 50-4B.", "related_topics": [ "360-10", "205-10", "280-10", "260-10", "323-10", "350-20" ], "key_concepts": [ "discontinued operations", "strategic shift with major effect", "component of an entity", "held for sale criteria", "disposal group", "continuing involvement", "interest allocation", "equity method investment disposal" ] } ``` Source downloaded (UTC): 2026-09-09T22:52:47.473Z to 2026-09-09T22:52:47.473Z Record version: sha256:de952b0532ebce3b897ae2d62ea064ecf00d4b780d9c317418e62edfa08eb2e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/20/#00-status) SEC content: no ##### [205-20-00-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:47.473Z to 2026-09-09T22:52:47.473Z Record version: sha256:45210614fecbdd7f2ee14d9805876f7980de18e15164415163426667b2d2b27d 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
BusinessAmendedAccounting Standards Update No. 2017-0101/05/2017
BusinessAddedAccounting Standards Update No. 2014-0804/10/2014
CommoditySupersededAccounting Standards Update No. 2014-0804/10/2014
Continuation of ActivitiesSupersededAccounting Standards Update No. 2014-0804/10/2014
Continuing Cash FlowsSupersededAccounting Standards Update No. 2014-0804/10/2014
Corporate Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
Disposal GroupAmendedAccounting Standards Update No. 2014-0804/10/2014
Firm Purchase CommitmentAddedAccounting Standards Update No. 2014-0804/10/2014
Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
MigrationSupersededAccounting Standards Update No. 2014-0804/10/2014
Nonprofit ActivityAddedAccounting Standards Update No. 2014-0804/10/2014
Not-for-Profit EntityAddedAccounting Standards Update No. 2014-0804/10/2014
Probable (2nd def.)AddedAccounting Standards Update No. 2014-0804/10/2014
Public Business EntityAmendedMaintenance Update 2017-06 (PDF)04/07/2017
Public Business EntityAmendedMaintenance Update 2016-11 (PDF)06/27/2016
Public Business EntityAddedAccounting Standards Update No. 2014-0804/10/2014
205-20-05-1AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-05-2AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-15-1AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-15-2AmendedAccounting Standards Update No. 2023-0508/23/2023
205-20-15-2AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-15-3AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-45-1SupersededAccounting Standards Update No. 2014-0804/10/2014
205-20-45-1A through 45-1G
AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-45-1DAmendedAccounting Standards Update No. 2023-0508/23/2023
205-20-45-1DAmendedAccounting Standards Update No. 2015-1006/12/2015
205-20-45-2SupersededAccounting Standards Update No. 2014-0804/10/2014
205-20-45-3AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-45-3AAmendedAccounting Standards Update No. 2015-0101/09/2015
205-20-45-3A through 45-3C
AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-45-4AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-45-5AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-45-10AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-45-11AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-50-1AmendedAccounting Standards Update No. 2025-1112/08/2025
205-20-50-1AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-50-2SupersededAccounting Standards Update No. 2014-0804/10/2014
205-20-50-3AmendedAccounting Standards Update No. 2025-1112/08/2025
205-20-50-3AmendedAccounting Standards Update No. 2014-0804/10/2014
205-20-50-3AAmendedAccounting Standards Update No. 2025-1112/08/2025
205-20-50-3AAddedAccounting Standards Update No. 2014-0804/10/2014
205-20-50-4SupersededAccounting Standards Update No. 2014-0804/10/2014
205-20-50-4AAmendedAccounting Standards Update No. 2025-1112/08/2025
205-20-50-4AAddedAccounting Standards Update No. 2014-0804/10/2014
205-20-50-4BAmendedAccounting Standards Update No. 2025-1112/08/2025
205-20-50-4BAddedAccounting Standards Update No. 2014-0804/10/2014
205-20-50-5SupersededAccounting Standards Update No. 2014-0804/10/2014
205-20-50-5A through 50-5D
AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-50-5B through 50-5D
AmendedAccounting Standards Update No. 2025-1112/08/2025
205-20-50-6SupersededAccounting Standards Update No. 2014-0804/10/2014
205-20-50-7AmendedAccounting Standards Update No. 2025-1112/08/2025
205-20-50-7AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-55-1 through 55-81
SupersededAccounting Standards Update No. 2014-0804/10/2014
205-20-55-27AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-20-55-80AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-20-55-82AmendedAccounting Standards Update No. 2023-0508/23/2023
205-20-55-82 through 55-103
AddedAccounting Standards Update No. 2014-0804/10/2014
205-20-65-1AddedAccounting Standards Update No. 2014-0804/10/2014
Source downloaded (UTC): 2026-09-09T22:52:50.918Z to 2026-09-09T22:52:50.918Z Record version: sha256:f3dbdd4120b04271fbf0ce8f3e16d1ebe31d09167a5b0d988ab4c40ecb0849da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/20/#05-overview-and-background) SEC content: no ##### [205-20-05-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:50.918Z to 2026-09-09T22:52:50.918Z Record version: sha256:790acb3df3f6381ba27ff862df7bb5f2b96c0449ecfd7c5a73422de91d07117f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the presentation and disclosure requirements for discontinued operations. A discontinued operation may include a [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") or a group of components of an entity, or a [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity."). ##### [205-20-05-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:50.918Z to 2026-09-09T22:52:50.918Z Record version: sha256:36b59a456248e2c25ba7934d24853af1ef534cac9ed0bf209377e8d8e3b79f14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The required disclosures about discontinued operations vary depending on the nature of the discontinued operation. For example, if a discontinued operation includes a component or group of components of an entity that is not an equity method investment, a more comprehensive set of disclosures about the discontinued operation is required. If the discontinued operation includes an equity method investment, or a business or nonprofit activity that is classified as held for sale on acquisition, a more limited set of disclosures is required (see the flowchart in paragraph [205-20-55-82](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-82) for an illustration). Source downloaded (UTC): 2026-09-09T22:52:53.997Z to 2026-09-09T22:52:53.997Z Record version: sha256:599fe054a02172945a03b64083a685e2b630e033f23524ed56522a1cfe4b5e44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-20-15-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:53.997Z to 2026-09-09T22:52:53.997Z Record version: sha256:e87a16fb9651812cf975cd9385733293fc82bcf78bfe9dd5dd9c305a0fad01a9 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 205-10-15, with specific transaction qualifications noted below. #### Transactions ##### [205-20-15-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:53.997Z to 2026-09-09T22:52:53.997Z Record version: sha256:fdefc1b6b82a5781bff4a17fe367a7cbca46a3ef5fbcc2414e9491b34306dfe5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to either of the following: 1. a A [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") or a group of components of an entity that is disposed of or is classified as held for sale 2. b A [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity.") that, on acquisition or upon formation of a [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities."), is classified as held for sale. #### Entities ##### [205-20-15-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-15-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:52:53.997Z to 2026-09-09T22:52:53.997Z Record version: sha256:15f94b17c7921782ed96ab22338dfdefb559de09233401b27edf053b7ea35d6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to oil and gas properties that are accounted for using the full-cost method of accounting as prescribed by the U.S. Securities and Exchange Commission (SEC) (see Regulation S-X, Rule 4-10, Financial Accounting and Reporting for Oil and Gas Producing Activities Pursuant to the Federal Securities Laws and the Energy Policy and Conservation Act of 1975). Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:98bac54cd6b9830c0988590d33ea9eca7ce2a8a683992f3fabbe5e4a990561b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/20/#45-other-presentation-matters) SEC content: no ##### [205-20-45-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:a994c3fe35cec0e14cbc4ffebf701413acff3ba87827cbde81c9b1519e3747f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). #### What Is a Discontinued Operation? ##### [205-20-45-1A](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:a5333e1fcc11aa1b42b3a9293ff74f273a058067b2800f45397bd4a2dd92bcfc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A discontinued operation may include a [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") or a group of components of an entity, or a [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity."). ##### [205-20-45-1B](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:dbce2e4c6054ddbbaf250ab72484597eadb6c2b18c346b8fb1b8ea2b2289b2bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A disposal of a component of an entity or a group of components of an entity shall be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when any of the following occurs: 1. a The component of an entity or group of components of an entity meets the criteria in paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) to be classified as held for sale. 2. b The component of an entity or group of components of an entity is disposed of by sale. 3. c The component of an entity or group of components of an entity is disposed of other than by sale in accordance with paragraph [360-10-45-15](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-15) (for example, by abandonment or in a distribution to owners in a spinoff). ##### [205-20-45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1C) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:64a2642b8336de682b3cdb92162b1e0a8d80801ad403dda2e2c2aee22beb9966 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of a strategic shift that has (or will have) a major effect on an entity's operations and financial results could include a disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity (see paragraphs [205-20-55-83 through 55-101](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-83) for Examples). ##### [205-20-45-1D](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1D) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:063f443b9243579bf29b6ed86dac1b20ab2c08287a2ffad1b65bb62a0318dd3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A business or nonprofit activity that, on acquisition or upon formation of a [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities."), meets the criteria in paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) to be classified as held for sale is a discontinued operation. If the one-year requirement in paragraph [205-20-45-1E(d)](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) is met (except as permitted by paragraph [205-20-45-1G](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1G)), a business or nonprofit activity shall be classified as held for sale as a discontinued operation at the acquisition date or the formation date if the other criteria in paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) are probable of being met within a short period following the acquisition date or the formation date (usually within three months). ##### [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:2dfb9963e3d321f3ab5d4fb80c6d6278d85e1733e1e43380b2c10d48b40895f8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A component of an entity or a group of components of an entity, or a business or nonprofit activity (the entity to be sold), shall be classified as held for sale in the period in which all of the following criteria are met: 1. a Management, having the authority to approve the action, commits to a plan to sell the entity to be sold. 2. b The entity to be sold is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such entities to be sold. (See Examples 5 through 7 \[paragraphs [360-10-55-37 through 55-42](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-37) \], which illustrate when that criterion would be met.) 3. c An active program to locate a buyer or buyers and other actions required to complete the plan to sell the entity to be sold have been initiated. 4. d The sale of the entity to be sold is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur."), and transfer of the entity to be sold is expected to qualify for recognition as a completed sale, within one year, except as permitted by paragraph [205-20-45-1G](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1G). (See Example 8 \[paragraph [360-10-55-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-43)\], which illustrates when that criterion would be met.) 5. e The entity to be sold is being actively marketed for sale at a price that is reasonable in relation to its current fair value. The price at which an entity to be sold is being marketed is indicative of whether the entity currently has the intent and ability to sell the entity to be sold. A market price that is reasonable in relation to fair value indicates that the entity to be sold is available for immediate sale, whereas a market price in excess of fair value indicates that the entity to be sold is not available for immediate sale. 6. f Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. ##### [205-20-45-1F](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1F) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:108298fab418e22da4199fb8c3a79ddfabfc39319eebc98cf7ab5c776bfa9b57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If at any time the criteria in paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) are no longer met (except as permitted by paragraph [205-20-45-1G](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1G)), an entity to be sold that is classified as held for sale shall be reclassified as held and used and measured in accordance with paragraph [360-10-35-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-44). ##### [205-20-45-1G](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1G) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:8fe321f98d8b0c4e7c0c3f4fcab2c538e6d3d57f591842e45eb1d6827f55b359 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Events or circumstances beyond an entity's control may extend the period required to complete the sale of an entity to be sold beyond one year. An exception to the one-year requirement in paragraph [205-20-45-1E(d)](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) shall apply in the following situations in which those events or circumstances arise: 1. a If at the date that an entity commits to a plan to sell an entity to be sold, the entity reasonably expects that others (not a buyer) will impose conditions on the transfer of the entity to be sold that will extend the period required to complete the sale and both of the following conditions are met: 1. 1 Actions necessary to respond to those conditions cannot be initiated until after a [firm purchase commitment](https://asc.understandingaccounting.org/glossary/f/#firm-purchase-commitment "A firm purchase commitment is an agreement with an unrelated party, binding on both parties and usually legally enforceable, that meets both of the following conditions: It specifies all significant terms, including the price and timing of the transaction. It includes a disincentive for nonperformance that is sufficiently large to make performance probable.") is obtained. 2. 2 A firm purchase commitment is probable within one year. (See Example 9 \[paragraph [360-10-55-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-44)\], which illustrates that situation.) 2. b If an entity obtains a firm purchase commitment and, as a result, a buyer or others unexpectedly impose conditions on the transfer of an entity to be sold previously classified as held for sale that will extend the period required to complete the sale and both of the following conditions are met: 1. 1 Actions necessary to respond to the conditions have been or will be timely initiated. 2. 2 A favorable resolution of the delaying factors is expected. (See Example 10 \[paragraph [360-10-55-46](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-46)\], which illustrates that situation.) 3. c If during the initial one-year period, circumstances arise that previously were considered unlikely and, as a result, an entity to be sold previously classified as held for sale is not sold by the end of that period and all of the following conditions are met: 1. 1 During the initial one-year period, the entity initiated actions necessary to respond to the change in circumstances. 2. 2 The entity to be sold is being actively marketed at a price that is reasonable given the change in circumstances. 3. 3 The criteria in paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) are met. (See Example 11 \[paragraph [360-10-55-48](https://asc.understandingaccounting.org/asc/360/10/#360-10-55-48)\], which illustrates that situation.) ##### [205-20-45-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:b1f0443b9117304d23c6e87ed978a695c27e6af0c869f656e907cacfe77d7a5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). #### Statement in Which Net Income Is Reported ##### [205-20-45-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:b0e72b14d4d35804595ee954bade650d1a4b5d4e7ddd45d138dcfbde236422d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The statement in which net income of a business entity is reported or the statement of activities of a not-for-profit entity (NFP) for current and prior periods shall report the results of operations of the discontinued operation, including any gain or loss recognized in accordance with paragraph [205-20-45-3C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3C), in the period in which a discontinued operation either has been disposed of or is classified as held for sale. ##### [205-20-45-3A](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3A) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:74a3b183e5a9bb672f9d6cf5d01544b05ce58fe2146b3ce5fd58e96e005fd17b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The results of all discontinued operations, less applicable income taxes (benefit), shall be reported as a separate component of income. For example, the results of all discontinued operations may be reported in the statement where net income of a business entity is reported as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-B3EC9B47-23DB-4075-9FCF-60F2FBA24286-low.gif) Income from continuing operations before income taxes $XXXX Income taxes XXX Income from continuing operations $XXXX Discontinued operations (Note X) Loss from operations of discontinued Component X (including loss on disposal of $XXX) XXXX Income tax benefit XXXX Loss on discontinued operations XXXX Net income $XXXX ##### [205-20-45-3B](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3B) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:0d53828b062167bd145e7229536378131beeb01db1b768ef0cdad526e5ebad20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A gain or loss recognized on the disposal (or loss recognized on classification as held for sale) shall be presented separately on the face of the statement where net income is reported or disclosed in the notes to financial statements (see paragraph [205-20-50-1(b)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-1)). ##### [205-20-45-3C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3C) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:2bac1d32d95347cb44ca440bcd4b4c56e54e1c47387a317fabb48450b408c98f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A gain or loss recognized on the disposal (or loss recognized on classification as held for sale) of a discontinued operation shall be calculated in accordance with the guidance in other Subtopics. For example, if a discontinued operation is within the scope of Topic 360 on property, plant, and equipment, an entity shall follow the guidance in paragraphs [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37) and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5) for calculating the gain or loss recognized on the disposal (or loss on classification as held for sale) of the discontinued operation. ##### [205-20-45-4](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:85e0f2fe15c6d60389d6725de6f0c6e0d6f941e953cd80a40f2d3cd20817ccfd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Adjustments to amounts previously reported in discontinued operations in a prior period shall be presented separately in the current period in the discontinued operations section of the statement where net income is reported. ##### [205-20-45-5](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:81c8a7fb433588865b0b11755f5914f94d55a6c46edd9fd9caaed719bb62c442 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of circumstances in which those types of adjustments may arise include the following: 1. a The resolution of contingencies that arise pursuant to the terms of the disposal transaction, such as the resolution of purchase price adjustments and indemnification issues with the purchaser 2. b The resolution of contingencies that arise from and that are directly related to the operations of the discontinued operation before its disposal, such as environmental and product warranty obligations retained by the seller 3. c The [settlement](https://asc.understandingaccounting.org/glossary/s/#settlement-of-a-pension-or-postretirement-benefit-obligation "A transaction that is an irrevocable action, relieves the employer (or the plan) of primary responsibility for a pension or postretirement benefit obligation, and eliminates significant risks related to the obligation and the assets used to effect the settlement.") of employee benefit plan obligations (pension, postemployment benefits other than pensions, and other postemployment benefits), provided that the settlement is directly related to the disposal transaction. A settlement is directly related to the disposal transaction if there is a demonstrated direct cause-and-effect relationship and the settlement occurs no later than one year following the disposal transaction, unless it is delayed by events or circumstances beyond an entity's control (see paragraph [205-20-45-1G](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1G)). ##### [205-20-45-6](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:7d7c48eb173b2d8a45c3342149473463b3f12850b2bc1e47b5a406789dbcbe22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Interest on debt that is to be assumed by the buyer and interest on debt that is required to be repaid as a result of a disposal transaction shall be allocated to discontinued operations. ##### [205-20-45-7](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:59e26025b89701b886ddd07e651ca7bbf977d5728ae43daf853e7300597ba898 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The allocation to discontinued operations of other consolidated interest that is not directly attributable to or related to other operations of the entity is permitted but not required. Other consolidated interest that cannot be attributed to other operations of the entity is allocated based on the ratio of net assets to be sold or discontinued less debt that is required to be paid as a result of the disposal transaction to the sum of total net assets of the consolidated entity plus consolidated debt other than the following: 1. a Debt of the discontinued operation that will be assumed by the buyer 2. b Debt that is required to be paid as a result of the disposal transaction 3. c Debt that can be directly attributed to other operations of the entity. ##### [205-20-45-8](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:6d675dd0e045477317c54e29d139f1858ef554819988daf14a41d52d59894ecc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This allocation assumes a uniform ratio of consolidated debt to equity for all operations (unless the assets to be sold are atypical—for example, a finance company—in which case a normal debt-equity ratio for that type of business may be used). If allocation based on net assets would not provide meaningful results, then the entity shall allocate interest to the discontinued operations based on debt that can be identified as specifically attributed to those operations. This guidance applies to income statement presentation of both continuing and discontinued operations (including the presentation of the gain or loss on disposal of a component of an entity). A decision as to interest allocation shall be applied consistently to all discontinued operations. ##### [205-20-45-9](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:ab26f4a898c3f9f981243dc82456810ff0b6e4853f8c6103696b31fcb5072797 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. General corporate overhead shall not be allocated to discontinued operations. #### Statement of Financial Position ##### [205-20-45-10](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:381b08eef40417eaffb9b2f48b061b28400a42e9161e1dcd2bcd5a2e1e960284 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the period(s) that a discontinued operation is classified as held for sale and for all prior periods presented, the assets and liabilities of the discontinued operation shall be presented separately in the asset and liability sections, respectively, of the statement of financial position. Those assets and liabilities shall not be offset and presented as a single amount. If a discontinued operation is part of a [disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.") that includes other assets and liabilities that are not part of the discontinued operation, an entity may present the assets and liabilities of the disposal group separately in the asset and liability sections, respectively, of the statement of financial position. If a discontinued operation is disposed of before meeting the criteria in paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E) to be classified as held for sale, an entity shall present the assets and liabilities of the discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position for the periods presented in the statement of financial position before the period that includes the disposal. When an entity separately presents in prior periods the assets and liabilities of a discontinued operation, the entity shall not apply the guidance in paragraph [360-10-35-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-43) as if those assets and liabilities were held for sale in those prior periods. ##### [205-20-45-11](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:00.884Z to 2026-09-09T22:53:00.884Z Record version: sha256:7d20f6996b00fedde69240d1595fe7a0446549a2a56be99a9fd0de2aa1e00c3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For any discontinued operation initially classified as held for sale in the current period, an entity shall either present on the face of the statement of financial position or disclose in the notes to financial statements (see paragraph [205-20-50-5B(e)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B)) the major classes of assets and liabilities of the discontinued operation classified as held for sale for all periods presented in the statement of financial position. Any loss recognized on a discontinued operation classified as held for sale in accordance with paragraphs [205-20-45-3B through 45-3C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3B) shall not be allocated to the major classes of assets and liabilities of the discontinued operation. Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:b4332a5b83d6241fa20c334e4530c61798fb4e8dad6ae31e69d035c8c03cc73a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/20/#50-disclosure) SEC content: no #### Disclosures Required for All Types of Discontinued Operations ##### [205-20-50-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-1) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:fd16b7ee9aa388c019774a7b66087df527e01302a9fe96f205c8679cc82b9195 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following shall be disclosed in the notes to financial statements that cover the period in which a discontinued operation either has been disposed of or is classified as held for sale under the requirements of paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E): 1. a A description of both of the following: 1. 1 The facts and circumstances leading to the disposal or expected disposal 2. 2 The expected manner and timing of that disposal. 2. b If not separately presented on the face of the statement where net income is reported (or statement of activities for a not-for-profit entity) as part of discontinued operations (see paragraph [205-20-45-3B](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3B)), the gain or loss recognized in accordance with paragraph [205-20-45-3C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3C). 3. c [Subparagraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). 4. d If applicable, the segment(s) in which the discontinued operation is reported under Topic 280 on segment reporting. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For interim and annual reporting periods, the following shall be disclosed in the notes to financial statements that cover the period in which a discontinued operation either has been disposed of or is classified as held for sale under the requirements of paragraph [205-20-45-1E](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1E): 1. a A description of both of the following: 1. 1 The facts and circumstances leading to the disposal or expected disposal 2. 2 The expected manner and timing of that disposal. 2. b If not separately presented on the face of the statement where net income is reported (or statement of activities for a not-for-profit entity) as part of discontinued operations (see paragraph [205-20-45-3B](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3B)), the gain or loss recognized in accordance with paragraph [205-20-45-3C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3C). 3. c [Subparagraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). 4. d If applicable, the segment(s) in which the discontinued operation is reported under Topic 280 on segment reporting. ##### [205-20-50-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:449341a866557730151388b1b7df57cbdcc9ac7fef9884f66eaa918be42bc8a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). #### Change to a Plan of Sale ##### [205-20-50-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-3) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:272428480ca0c3aaf5b1e8caf2901c3c260dbd5452c4ef20daddbbdfb02a4530 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity may change its plan of sale as addressed in paragraph [360-10-35-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-44) or paragraph [360-10-35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-45). In the period in which the decision is made to change the plan for selling the discontinued operation, an entity shall disclose in the notes to financial statements a description of the facts and circumstances leading to the decision to change that plan and the change's effect on the results of operations for the period and any prior periods presented. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)An entity may change its plan of sale as addressed in paragraph [360-10-35-44](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-44) or paragraph [360-10-35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-45). In the period in which the decision is made to change the plan for selling the discontinued operation, an entity shall disclose in the notes to interim and annual financial statements a description of the facts and circumstances leading to the decision to change that plan and the change's effect on the results of operations for the period and any prior periods presented. ##### [205-20-50-3A](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-3A) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:45063bf80b7bdd1bd3591de5c803392fbefc658c4897ff1919d595831a562022 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The nature and amount of adjustments to amounts previously reported in discontinued operations that are directly related to the disposal of a discontinued operation in a prior period shall be disclosed (see paragraph [205-20-45-5](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-5) for examples of circumstances in which those types of adjustments may arise). Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)The nature and amount of adjustments to amounts previously reported in discontinued operations that are directly related to the disposal of a discontinued operation in a prior period shall be disclosed in interim and annual reporting periods (see paragraph [205-20-45-5](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-5) for examples of circumstances in which those types of adjustments may arise). ##### [205-20-50-4](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:3f738a6b569e279dfdbc8fe63c4c45e94f080a7b6796054ea47675d8d5514c81 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). #### Continuing Involvement ##### [205-20-50-4A](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-4A) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:b4480c8ccf0b472f7a1792aa55038160c40b9492fe67a5328d7583759c67aa18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose information about its significant continuing involvement with a discontinued operation after the disposal date. Examples of continuing involvement with a discontinued operation after the disposal date include a supply and distribution agreement, a financial guarantee, an option to repurchase a discontinued operation, and an equity method investment in the discontinued operation. The disclosures are required until the results of operations of the discontinued operation in which an entity retains significant continuing involvement are no longer presented separately as discontinued operations in the statement where net income is reported (or statement of activities for a not-for-profit entity). Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For interim and annual reporting periods, an entity shall disclose information about its significant continuing involvement with a discontinued operation after the disposal date. Examples of continuing involvement with a discontinued operation after the disposal date include a supply and distribution agreement, a financial guarantee, an option to repurchase a discontinued operation, and an equity method investment in the discontinued operation. The disclosures are required until the results of operations of the discontinued operation in which an entity retains significant continuing involvement are no longer presented separately as discontinued operations in the statement where net income is reported (or statement of activities for a not-for-profit entity). ##### [205-20-50-4B](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-4B) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:de5308017d10780164cd1b4d1ba08fc3c66cd489b022be57a5a95375edc1fa6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose the following in the notes to financial statements for each discontinued operation in which the entity retains significant continuing involvement after the disposal date: 1. a A description of the nature of the activities that give rise to the continuing involvement. 2. b The period of time during which the involvement is expected to continue. 3. c For all periods presented, both of the following: 1. 1 The amount of any cash inflows or outflows from or to the discontinued operation after the disposal transaction 2. 2 Revenues or expenses presented, if any, in continuing operations after the disposal transaction that before the disposal transaction were eliminated in consolidated financial statements as intra-entity transactions. 4. d For a discontinued operation in which an entity retains an equity method investment after the disposal (the investee), information that enables users of financial statements to compare the financial performance of the entity from period to period assuming that the entity held the same equity method investment in all periods presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). The disclosure shall include all of the following until the discontinued operation is no longer reported separately in discontinued operations: 1. 1 For each period presented in the statement where net income is reported (or statement of activities for a not-for-profit entity) after the period in which the discontinued operation was disposed of, the pretax income of the investee in which the entity retains an equity method investment 2. 2 The entity's ownership interest in the discontinued operation before the disposal transaction 3. 3 The entity's ownership interest in the investee after the disposal transaction 4. 4 The entity's share of the income or loss of the investee in the period(s) after the disposal transaction and the line item in the statement where net income is reported (or statement of activities for a not-for-profit entity) that includes the income or loss. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For interim and annual reporting periods, an entity shall disclose the following in the notes to financial statements for each discontinued operation in which the entity retains significant continuing involvement after the disposal date: 1. a A description of the nature of the activities that give rise to the continuing involvement. 2. b The period of time during which the involvement is expected to continue. 3. c For all periods presented, both of the following: 1. 1 The amount of any cash inflows or outflows from or to the discontinued operation after the disposal transaction 2. 2 Revenues or expenses presented, if any, in continuing operations after the disposal transaction that before the disposal transaction were eliminated in consolidated financial statements as intra-entity transactions. 4. d For a discontinued operation in which an entity retains an equity method investment after the disposal (the investee), information that enables users of financial statements to compare the financial performance of the entity from period to period assuming that the entity held the same equity method investment in all periods presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). The disclosure shall include all of the following until the discontinued operation is no longer reported separately in discontinued operations: 1. 1 For each period presented in the statement where net income is reported (or statement of activities for a not-for-profit entity) after the period in which the discontinued operation was disposed of, the pretax income of the investee in which the entity retains an equity method investment 2. 2 The entity's ownership interest in the discontinued operation before the disposal transaction 3. 3 The entity's ownership interest in the investee after the disposal transaction 4. 4 The entity's share of the income or loss of the investee in the period(s) after the disposal transaction and the line item in the statement where net income is reported (or statement of activities for a not-for-profit entity) that includes the income or loss. ##### [205-20-50-5](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:c4aef12c9eabdd1adaaa60e4f9af9b2b0ecb28e24d125e02d8d3763bc478d45a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). #### Disclosures Required for a Discontinued Operation Comprising a Component or Group of Components of an Entity ##### [205-20-50-5A](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5A) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:2cdd6336765118cc10d1bbbae7c39d93185d05a6348583e14e6455cc4584db60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [205-20-50-5B through 50-5D](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) provide disclosures required for discontinued operations that meet the criteria in paragraphs [205-20-45-1B through 45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B) except for a discontinued operation that was an equity method investment before the disposal. For disclosures required for discontinued operations that were equity method investments before the disposal, see paragraph [205-20-50-7](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-7). ##### [205-20-50-5B](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:566b8ee1e4b18418419a2f83ec6bc28fdcf76619f6d0f6434a8908b02b72b572 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose, to the extent not presented on the face of the financial statements as part of discontinued operations, all of the following in the notes to financial statements: 1. a The pretax profit or loss (or change in net assets for a not-for-profit entity) of the discontinued operation for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 2. b The major classes of line items constituting the pretax profit or loss (or change in net assets for a not-for-profit entity) of the discontinued operation (for example, revenue, cost of sales, depreciation and amortization, and interest expense) for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 3. c Either of the following: 1. 1 The total operating and investing cash flows of the discontinued operation for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity) 2. 2 The depreciation, amortization, capital expenditures, and significant operating and investing noncash items of the discontinued operation for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 4. d If the discontinued operation includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 5. e The carrying amount(s) of the major classes of assets and liabilities included as part of a discontinued operation classified as held for sale for the period in which the discontinued operation is classified as held for sale and all prior periods presented in the statement of financial position. Any loss recognized on the discontinued operation classified as held for sale in accordance with paragraphs [205-20-45-3B through 45-3C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3B) shall not be allocated to the major classes of assets and liabilities of the discontinued operation. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For interim and annual reporting periods, an entity shall disclose, to the extent not presented on the face of the financial statements as part of discontinued operations, all of the following in the notes to financial statements: 1. a The pretax profit or loss (or change in net assets for a not-for-profit entity) of the discontinued operation for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 2. b The major classes of line items constituting the pretax profit or loss (or change in net assets for a not-for-profit entity) of the discontinued operation (for example, revenue, cost of sales, depreciation and amortization, and interest expense) for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 3. c Either of the following: 1. 1 The total operating and investing cash flows of the discontinued operation for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity) 2. 2 The depreciation, amortization, capital expenditures, and significant operating and investing noncash items of the discontinued operation for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 4. d If the discontinued operation includes a noncontrolling interest, the pretax profit or loss (or change in net assets for a not-for-profit entity) attributable to the parent for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities for a not-for-profit entity). 5. e The carrying amount(s) of the major classes of assets and liabilities included as part of a discontinued operation classified as held for sale for the period in which the discontinued operation is classified as held for sale and all prior periods presented in the statement of financial position. Any loss recognized on the discontinued operation classified as held for sale in accordance with paragraphs [205-20-45-3B through 45-3C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3B) shall not be allocated to the major classes of assets and liabilities of the discontinued operation. ##### [205-20-50-5C](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5C) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:15abe117ee4ef46228c48d013b9a406e91736b3e21cd05a13ea258a635a01304 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity provides the disclosures required by paragraph [205-20-50-5B(a), (b), and (e)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) in the notes to financial statements, the entity shall disclose the following: 1. a For the initial period in which the [disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.") is classified as held for sale and for all prior periods presented in the statement of financial position, a reconciliation of both of the following: 1. 1 The amounts disclosed in paragraph [205-20-50-5B(e)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) 2. 2 Total assets and total liabilities of the disposal group classified as held for sale that are presented separately on the face of the statement of financial position. If the disposal group includes assets and liabilities that are not part of the discontinued operation, an entity shall present those assets and liabilities in line items in the reconciliations that are separate from the assets and liabilities of the discontinued operation (see paragraph [205-20-55-102](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-102) for an Example). 2. b For the periods in which the results of operations of the discontinued operation are reported in the statement where net income is reported (or statement of activities for a not-for-profit entity), a reconciliation of both of the following: 1. 1 The amounts disclosed in paragraph [205-20-50-5B(a) and (b)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) 2. 2 The after-tax profit or loss from discontinued operations presented on the face of the statement where net income is reported (or statement of activities for a not-for-profit entity) (see paragraph [205-20-55-103](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-103) for an Example). Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If an entity provides the disclosures required by paragraph [205-20-50-5B(a), (b), and (e)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) in the notes to financial statements, the entity shall disclose the following in interim and annual reporting periods: 1. a For the initial period in which the [disposal group](https://asc.understandingaccounting.org/glossary/d/#disposal-group "A disposal group for a long-lived asset or assets to be disposed of by sale or otherwise represents assets to be disposed of together as a group in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A disposal group may include a discontinued operation along with other assets and liabilities that are not part of the discontinued operation.") is classified as held for sale and for all prior periods presented in the statement of financial position, a reconciliation of both of the following: 1. 1 The amounts disclosed in paragraph [205-20-50-5B(e)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) 2. 2 Total assets and total liabilities of the disposal group classified as held for sale that are presented separately on the face of the statement of financial position. If the disposal group includes assets and liabilities that are not part of the discontinued operation, an entity shall present those assets and liabilities in line items in the reconciliations that are separate from the assets and liabilities of the discontinued operation (see paragraph [205-20-55-102](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-102) for an Example). 2. b For the periods in which the results of operations of the discontinued operation are reported in the statement where net income is reported (or statement of activities for a not-for-profit entity), a reconciliation of both of the following: 1. 1 The amounts disclosed in paragraph [205-20-50-5B(a) and (b)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B) 2. 2 The after-tax profit or loss from discontinued operations presented on the face of the statement where net income is reported (or statement of activities for a not-for-profit entity) (see paragraph [205-20-55-103](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-103) for an Example). ##### [205-20-50-5D](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5D) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:98e509b7ba200eeeac812dda007973d1b2167f5851cf369434cfaaafd653c5a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of the reconciliation in paragraph [205-20-50-5C(a) or (b)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5C), an entity may aggregate the amounts that are not considered major and present them as one line item in the reconciliation. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For purposes of the reconciliation in paragraph [205-20-50-5C(a) or (b)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5C), an entity may aggregate the amounts that are not considered major and present them as one line item in the reconciliation in interim and annual reporting periods. ##### [205-20-50-6](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:587a8da37da03ef757dd647f794598c8507b6cfe8b131ca9c7dbf89894a56525 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). #### Disclosures Required for a Discontinued Operation Comprising an Equity Method Investment ##### [205-20-50-7](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-7) Pending content: yes Source downloaded (UTC): 2026-09-09T22:53:03.747Z to 2026-09-09T22:53:03.747Z Record version: sha256:6d873ec068ed4b02d16d037890830bef0f3498cd6105457b8fc2fff897792e92 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For an equity method investment that meets the criteria in paragraphs [205-20-45-1B through 45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B) , an entity shall disclose summarized information about the assets, liabilities, and results of operations of the investee if that information was disclosed in financial reporting periods before the disposal in accordance with paragraph [323-10-50-3(c)](https://asc.understandingaccounting.org/asc/323/10/#323-10-50-3). Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)For an equity method investment that meets the criteria in paragraphs [205-20-45-1B through 45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B) , an entity shall disclose summarized information about the assets, liabilities, and results of operations of the investee in interim and annual reporting periods if that information was disclosed in financial reporting periods before the disposal in accordance with paragraph [323-10-50-3(c)](https://asc.understandingaccounting.org/asc/323/10/#323-10-50-3). Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:76dbc76bb1ba076ee01cfb1b0352310b561b6a325f771b8cfc863f3336149450 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/20/#55-implementation-guidance-and-illustrations) SEC content: no ##### [205-20-55-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:42b796afc3facc74423b3514a7298e82dbdd6104831abaca2e469850cfeb349f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:969d62357d1e7047681eacc7cf484987e3c241884578179db9a4757f0bc0eaae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:1bf21c19c958d239ab2aef91bd7075fe9dc783f8b9643559389e9256480195e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-4](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:ca92ce888ebc5853001df7de5f415c459b0d20a2b5feae70e4f478dfbd6e123f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-5](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:f9101e80b3b375cc643af46312fe7eaae87d6394d44341003d3677116365c95d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-6](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:a9a3ab0e2e4f3a5943c7f006ec57360f1f284e18c3efe64a7d3aa31caccc814a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-7](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:c7c1f35d8a82ae1947c1ecd57c76fdc45cce24d842d05c130430755df08d90e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-8](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:d761b34e71184dc61d905edff4de5417cc2c238ff81b604eb965ab6813fc7d77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-9](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:1ef2838849ea9244bc653efd0282c9f1b21a59136086d8b3a3709f7dd3c39d54 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-10](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:bc2102aac0d822a581d57e1c318ec7ab59eb025de7a4cb64d70034fb4a848bf2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-11](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:1770dd82f72c01aa5c0c341ccb39501fdf60c59704c71742a1e3cb9dd77931c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-12](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-12) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:c4aafa17b3171035a8f37d7fff1fc78f83d6d0858c3695eb8e4b692478d0a7d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-13](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-13) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:bc52e1a8710790ec2d8eb55e0c19893db79a2ef8bede0091450c756376e6a032 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-14](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-14) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:439e774ca3b09685c2f5e15eca6f5cec71fca2dfe2aa5c20f1c405403b041da6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-15](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-15) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:ab5108538a72b8d8afd6ffefddec5fba0a464aa54804561d15434f7c4c08a3bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-16](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-16) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:753ecc5d5a429380e121ac2e38751c659b6dbe3beeeaae94c7ad4e64a15c1e9d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-17](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-17) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:2c1f0cf921579b1b972a89079af55ae83b952ad871c14054b9b9105560c2981c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-18](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-18) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:a6e5c70dcc1364b22cb69b07fdbbc8ed2352325071db701851e6ebbe7f577720 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-19](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-19) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:786fd070f95ad75893af2088538a88beb5ababaf77fb551ab4b5cfb9342965c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-20](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-20) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:16681f2fd6b08675553e111b589739ad876e61e0e1d32d0441f65cfd36074128 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-21](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-21) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:d70afa850e75a231b52e2e66a4631a1c385158df92b8e1f767597c4bc6d37a6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-22](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-22) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:6a1cbb62335e8c5e9aaa7fdf716d51ce059cf54e52cffa4f56298c600b0c0081 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-23](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-23) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:61575b7dda06a6fdecf86b0c66f5b1a91ccfacbb0685013c5c9d79a7cc097e15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-24](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-24) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:9687299bebb68e3029209418ea300a0cc217a4ac0538d4c72b9b1bed90b4e6f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-25](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-25) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:682bba9eb492e72c9754a045e89f7ab0e24a88b3c6e1ea44e6054c3c37869a2c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-26](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-26) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:4144cef9f5e2b56b887914b48682c505bfac619aa93f04a941f0468d953d6f78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-27](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-27) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:cf4a42561ae6ec498cf63075fc73d5ab4932ff8e48d13fbdf54043156714bdc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-28](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-28) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:de24aede0a3d857580d7155b926fabec86991565969d3dca0d3d8a767316990f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-29](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-29) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:0c1b1dcd3cd0fc06b85d5181252037eedc43ea0fbb384edf854751906b0a6f17 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-30](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-30) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:893f6cffa69cf06f31b42da2322d87e67b6f2839b1f8cdb6238f20f988c8783c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-31](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-31) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:c5cd52b4acd575f7d11376f76f1a7dbc99274f6c58255531559d016d7278de64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-32](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-32) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:1324bdafd49c43a43826df7046961cfe97dd624f35b20aa929c100913e9a652e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-33](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-33) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:86584bdbef4f56f073bca9e17053f1e4dbbbf4ee81bb9882394e814fa8f692bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-34](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-34) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:0a4d28cb807e14ebd94c241db0f1e2bd0558c57525ed552bc1fdb385a077a832 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-35](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-35) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:50da572d273c5475ac6aa87c12e5afcbff04533e7b70c9e16e7f9c1e147cc5f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-36](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-36) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:080467a25f4ff9211b359316a3ac05531afec8578c84f505b6f17cb585ba5c59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-37](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-37) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:ea779a42728386c7faa0033fdc0d8b449f04f7e02b050dae29d7d9c7ff9a0f52 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-38](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-38) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:3dc382bba89fa985585edbab4199de45919a0191b7222e4952f2b529b5c533e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-39](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-39) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:f6305f1375e90ffaf8e59997058a76eb90fb9b9cfef12a612d0e7e9cc76336ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-40](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-40) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:0252f6fef17e1b0dcba58347506cb5f83bea67e407980e9d90699e4d61c431a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-41](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-41) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:e4d7424d04cb10baa21fb1f8445e49e028d5eb262e2c891c578b2c1dd7114bbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-42](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-42) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:f362c1edc2899abbaf5406e8d5ae27a755ed8ab46517d4806676a77b99273873 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-43](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-43) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:d0d47c710147e16d474bfefe2ad9eebfddc4b6209443b90006e9cb39487ea702 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-44](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-44) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:3228ec8012e18bd7bb281c8019266fbaaeadad5222bb5fde86b983bde37e194f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-45](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-45) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:fd68e934c44ad2605f5f57a8c68e8dc6dda9f34c3034d532c55c16edeb571a98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-46](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-46) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:f3799772e5314fcb042949d8bdd0459e23eab8c5ce4e43fecc8c47827a6c01da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-47](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-47) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:baf7accfb5d2bdfd709bf3b2417d19277d52d2636985355226caf1abf8d22825 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-48](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-48) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:cbaf8a8d4980cc82661b8dfa0785bd29b201817e28336b937fa9f05b160f4f40 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-49](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-49) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:a021c801ddad37c7030b308b929053f174a96ea07639beeb3f4b3013f6ac489b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-50](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-50) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:22f325dec3ea6dd510cda0e3a9d4bff0c6f1c80710bec8dad81aff897da64f9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-51](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-51) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:968e2dabf40c2568c72e05eb951fcc1382653e303d6594fdf1709d8c36bb1928 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-52](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-52) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:2009d606337dcba61551488680f4b030e3918689f93676056b1edaeeb71616bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-53](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-53) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:a747b83d9b5287f6439a800abeec92d84fe03167e8b0dfb358519173d88dbcd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-54](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-54) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:f2d50ed9b316c59b5571c71d0d4960dcf56c580b9100e6c3fb4d947214923679 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-55](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-55) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:ce9a06a09bbdf1278341adf52da3044996ac963a8d2080674e1f5fff330422cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-56](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-56) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:fddbb62ae6c7d325228c360d27a9c5dd2fd82cd74ca6c23662d72b888990d32c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-59](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-59) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:d997445e3996ef28f3919c1bcb28739608e1d31d487c58e772817d64f7c31937 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-60](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-60) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:cc835ac86221a824786197a11aecd9d28651f9b9f620226e53a736082f8cc4d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-62](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-62) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:b9235bb8e228c99c05939c732e0b04fbb6c713dcdd72fa742d0bf81bf947918d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-63](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-63) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:cc020a6674cbc2cf5a33757e515117e2c2da638506829bf9825f1cdff295b65c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-67](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-67) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:78e4b307d455bbb58495288359416fefb8a3ded49e8dfaf3e0e426b163b7fd16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-72](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-72) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:52a7827a33067964ac44b6b6c737c3b81c10d05a4bceee92b5cdfa9d5e8c18ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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[Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-76](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-76) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:f3672e8257984786e519cc30e1b079643922307475e9e7fa97e5b7865e86bfb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-77](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-77) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:3ae5897e77a6246256ac1e877c83de3d173c7adb79c9790dd453e31bb1e74fb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-78](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-78) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:71ebccbac48d7b4ecb72284ac67951a123ad3d32aa9559e232241e19f357c4d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-79](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-79) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:536d7e0610c9d8ab73566d91265bc9e75e4d0ed9a9b4319c132ea7d243dc51ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-80](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-80) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:290913e973c2de0e42665b7c7b41dc6bc29cfd87d665f044f2f87bd944c5fa0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). ##### [205-20-55-81](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-81) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:68b460357a364db3668dbb3dc832ee18858a254194d2d07a046fcc7139113b1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-08](https://asc.understandingaccounting.org/updates/asu-2014-08/). #### Implementation Guidance ##### [205-20-55-82](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-82) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:587e333bc6a20212822a724394fcc1531ac1963ed785b734ec834a25f1cb7114 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following flowchart provides an overview of the disclosures required for discontinued operations. - ![](https://asc.understandingaccounting.org/asc-img/GUID-BADBBDD4-8FAD-44B1-8E6E-F30F20F1B21C-low.gif) "Does the entity have a discontinued operation under the criteria in paragraphs 205-20-45-1A through 45-1D?" Not a discontinued operation. See the flowchart in paragraph 360-10-55-18A for the required disclosures for the impairment or disposal of a long-lived asset. No "Disclose the following in the notes to financial statements that cover the period in which a discontinued operation either has been disposed of or is classified as held for sale under the requirements of paragraph 205-20-45-1E (see paragraph 205-20-50-1):" Yes a. A description of both the facts and circumstances leading to the disposal or expected disposal and the expected manner and timing of that disposal. "b. If not separately presented on the face of the statement where net income is reported (or statement of activities for a not-for-profit entity) as part of discontinued operations (see paragraph 205-20-45-3B), the gain or loss recognized in accordance with paragraph 205-20-45-3C." "d. If applicable, the segment(s) in which the discontinued operation is reported under Topic 280 on segment reporting." Required Disclosures for a Discontinued Operation "Did the entity change its plan of sale as addressed in paragraph 360-10-35-44 or 360-10-35-45?" "In the period in which the decision is made to change the plan for selling the discontinued operation, disclose in the notes to financial statements a description of the facts and circumstances leading to the decision to change that plan and the change's effect on the results of operations for the period and any prior periods presented (see paragraph 205-20-50-3)." Yes No Did the entity have any adjustments to amounts previously reported in discontinued operations? Disclose the nature and amount of adjustments to amounts previously reported in discontinued operations that are directly related to the disposal of a discontinued operation in a prior period. See paragraph 205-20-45-5 for examples of circumstances in which those types of adjustments may arise (see paragraph 205-20-50-3A). Yes "Did the entity have continuing involvement?" No A Yes B No - ![](https://asc.understandingaccounting.org/asc-img/GUID-9784CEEE-62C6-4327-86E9-5960741D994F-low.gif) Disclosures are complete for a discontinued operation that is a business or nonprofit activity held for sale at acquisition or a joint venture upon formation. "Disclose the summarized information about the assets, liabilities, and results of operations of the investee if that information was disclosed in financial reporting periods before the disposal in accordance with paragraph 323-10-50-3(c) (see paragraph 205-20-50-7)." a. The pretax profit or loss (or change in net assets) of the discontinued operation. b. The major classes of line items constituting the pretax profit or loss (or change in net assets) of the discontinued operation. "Was the discontinued operation an equity method investment before the disposal?" "To the extent not presented on the face of the financial statements as part of discontinued operations, disclose all of the following in the notes to financial statements for the periods in which the results of operations of the discontinued operation are presented in the statement where net income is reported (or statement of activities) or for the period in which the discontinued operation is classified as held for sale and all prior periods presented in the statement of financial position (as applicable) (see paragraph 205-20-50-5B):" "d. If the discontinued operation includes a noncontrolling interest, the pretax profit or loss (or change in net assets) attributable to the parent." e. The carrying amount(s) of the major classes of assets and liabilities included as part of a discontinued operation classified as held for sale. "Which criterion does the discontinued operation meet?" 205-20-45-1D 205-20-45-1B through 45-1C C "c. Either the total operating and investing cash flows of the discontinued operation or the depreciation, amortization, capital expenditures, and significant operating and investing noncash items of the discontinued operation." Disclose information about an entity's significant continuing involvement with a discontinued operation after the disposal date. The disclosures are required until the results of operations of the discontinued operation in which an entity retains significant continuing involvement are no longer presented separately as discontinued operations in the statement where net income is reported (or statement of activities). Disclose the following for each discontinued operation in which the entity retains significant continuing involvement after the disposal date (see paragraphs 205-20-50-4A through 50-4B): a. A description of the nature of the activities that give rise to the continuing involvement. b. The period of time during which the involvement is expected to continue. "c. For all periods presented, both the amount of any cash inflows or outflows from or to the discontinued operation after the disposal transaction and revenues or expenses presented, if any, in continuing operations after the disposal transaction that before the disposal transaction were eliminated in consolidated financial statements as intra-entity transactions." "d. For a discontinued operation in which an entity retains an equity method investment after the disposal (the investee), information that enables users of financial statements to compare the financial performance of the entity from period to period assuming that the entity held the same equity method investment in all periods presented in the statement where net income is reported (or statement of activities). The disclosure should include all of the following until the discontinued operation is no longer reported separately in discontinued operations:" "1. For each period presented in the statement where net income is reported (or statement of activities) after the period in which the discontinued operation was disposed of, the pretax income of the discontinued operation in which the entity retains an equity method investment." 2. The entity's ownership interest in the discontinued operation before the disposal transaction. 3. The entity's ownership interest in the investee after the disposal transaction. 4. The entity's share of the income or loss of the investee in the period(s) after the disposal transaction and the line item in the statement where net income is reported (or statement of activities) that includes the income or loss. A B No Yes - ![](https://asc.understandingaccounting.org/asc-img/GUID-46E13975-DCC8-4682-B4EE-0CD57680FF52-low.gif) "Did the entity provide the disclosures required by paragraph 205-20-50-5B(a), (b), and (e)?" "Disclose the following (may aggregate the amounts that are not considered major and present them as one line item in the reconciliation) (see paragraphs 205-20-50-5C through 50-5D):" Disclosures are complete. Yes No 1. The amounts required to be disclosed in paragraph 205-20-50-5B(e). "2. Total assets and total liabilities of the disposal group classified as held for sale that are presented separately on the face of the statement of financial position. If the disposal group includes assets and liabilities that are not part of the discontinued operation, present those assets and liabilities in line items in the reconciliations that are separate from the assets and liabilities of the discontinued operation." "a. For the initial period in which the disposal group is classified as held for sale and for all prior periods presented in the statement of financial position, a reconciliation of both:" "b. For the periods in which the results of operations of the discontinued operation are reported in the statement where net income is reported (or statement of activities), a reconciliation of both:" 1. The amounts required to be disclosed in paragraph 205-20-50-5B(a) and (b). 2. The after-tax profit or loss from discontinued operations presented on the face of the statement where net income is reported (or statement of activities). C #### Illustrations ##### [205-20-55-83](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-83) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:a491fad2d710c87ca6a20d08b29e5b5cb8a9e92876d80f8aafd7ca4e1152fdc9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples 1 through 3 provide illustrations of the guidance in paragraphs [205-20-45-1B through 45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B) on disposals of groups of components of an entity representing strategic shifts that have a major effect on the entity's operations and financial results and are reported in discontinued operations. ##### [205-20-55-84](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-84) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:29057a9c894d1d1c81b8f923cf4398816f8de64366b3849819f461536d6104e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity manufactures and sells consumer products that are grouped into five major product lines. Each product line includes several brands that comprise operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Therefore, for that entity, each major product line includes a group of components of the entity. ##### [205-20-55-85](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-85) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:016fc428fedd7a9f4212e4029e8b78fe28201e2fd1f45f6092d9306f1b95628c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity has experienced high growth in its discount cleaning product line that has lower price points than its premium cleaning product line. Total revenues from the discount cleaning product line are 15 percent of the entity's total revenues; however, the discount cleaning product line will require significant future investments to increase its profits. Therefore, the entity decides to shift its strategy of selling cleaning products at multiple price points and focus solely on selling cleaning products at a premium price point. As a result, the entity decides to sell the discount cleaning product line. ##### [205-20-55-86](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-86) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:b78c492f594c9f156a5b1adc4b8ac44d133e297e3a031d625cd9f4d3d2e85534 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the entity shifts its strategy of offering discount cleaning products to consumers and because the discount cleaning product line is one of five major product lines that is a major part of the entity's operations and financial results, the disposal represents a strategic shift that is reported in discontinued operations. ##### [205-20-55-87](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-87) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:2368aa5818cd01e2c8ca7a8aef6d55e1b567efa814bbeb823103979e05873338 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity manufactures and sells food products that are grouped into five major geographical areas (Europe, Asia, Africa, the Americas, and Oceania). Each major geographical area includes several brands that comprise operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Therefore, for that entity, each major geographical area includes a group of components of the entity. ##### [205-20-55-88](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-88) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:b6ba509ff4354a2a7c22448bed9ed7c682af84144fe302b2d67aaf53cce7219a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity has experienced slower growth in its operations located in the Americas, which accounts for 20 percent of the entity's total assets. Therefore, the entity decides to shift its strategy of selling food products in that geographical area and focus its resources on manufacturing and marketing food products in its other four higher growth geographical areas. As a result, the entity decides to sell its operations in the Americas. ##### [205-20-55-89](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-89) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:f616a1b62d8c76580e3266a4d0775bd5a62dc1a0ef0c1c0e0a239e702bdccd9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the entity's operations in the Americas is one of five major geographical areas that is a major part of the entity's operations and financial results, the disposal represents a strategic shift that is reported in discontinued operations. ##### [205-20-55-90](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-90) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:b6e320b65fed462daacff4a7150b4121abfaa779e01a6225cabf3c0d18233c0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that is a general merchandise retailer operates 1,000 retail stores in 2 different store formats—malls and supercenter stores—throughout the United States. The entity divides its stores into five major geographical regions: the Northwest, Southwest, Midwest, Northeast, and Southeast. For that entity, each retail store comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Therefore, for that entity, each retail store is a component of the entity. ##### [205-20-55-91](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-91) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:7b81414aaa485ec8ed617a7ed12545a122db44de6c7a0fc75c8facd8fae64ba6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity has experienced declining net income at its 200 stores located in malls across all 5 major geographical regions. Historically, net income from the 200 stores in malls has been in a range of 30 to 40 percent of the entity's total net income. Total net income from the 200 stores in malls is down to 15 percent of the entity's total net income because of declining customer traffic in malls. Therefore, the entity decides to shift its strategy of selling products in malls and sell the 200 stores located in malls. ##### [205-20-55-92](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-92) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:b48f9f626b534a27182d97cb4e9d7c5598534749a7c4dea124cc782e29e79b82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the entity decides to shift its strategy of selling products in malls and focus solely on its supercenter stores and because the 200 stores located in malls are a major part of the entity's operations and financial results, the disposal represents a strategic shift that is reported in discontinued operations. ##### [205-20-55-93](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-93) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:27bc07e029d8a22f6938b6a0391c842fa209f805fd58e3b5772150e60549bcbc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration of the guidance in paragraphs [205-20-45-1B through 45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B) . In this Example, the entity disposes of a component of an entity that is an equity method investment representing a strategic shift that has a major effect on the entity's operations and financial results and is reported in discontinued operations. ##### [205-20-55-94](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-94) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:54e72a9d048e35466cb001b7a9442b841012125b6da986ce08430ba76163087f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that follows the successful-efforts method of accounting produces oil and gas in two major geographical areas (Europe and Africa) that are each divided into several regions. Each region comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Therefore, for that entity, each major geographical area includes a group of components of the entity. ##### [205-20-55-95](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-95) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:5b0153ffc22f058bb6383f3a339056b750e14f5c8edfd14243f4c4e04a6ab507 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In its operations located in Africa, the entity operates through a joint venture with another entity that is accounted for by the reporting entity as an equity method investment. The entity's carrying amount of its investment in the joint venture is 20 percent of the entity's total assets. Because of significant investments needed in its operations in Europe, the entity decides to shift its strategy of operating in Africa to focus on its operations in Europe and sell its stake in the joint venture. ##### [205-20-55-96](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-96) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:8844ac55ed630095b356d457ed13b4f26b01f31468b54ba8a395594b1c885259 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the entity shifts its strategy of operating a joint venture to focus on its operations in Europe where it maintains full control and because its operations in Africa are a major part of the entity's operations and financial results, its disposal represents a strategic shift that is reported in discontinued operations. ##### [205-20-55-97](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-97) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:e156203493da2d5f2a85f5f6f606d4ace6a12d3b75a05648ec0a4fffcc4906d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration of the guidance in paragraphs [205-20-45-1B through 45-1C](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1B) . In this Example, the entity sells 80 percent of a group of components of an entity representing a strategic shift that has a major effect on the entity's operations and financial results and is reported in discontinued operations. ##### [205-20-55-98](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-98) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:a37847650e7796e7de6f5f5c0916fa652ad40105dabbfcafb8f3e9b8bdcbf40e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that manufactures and sells sports equipment has two product lines that serve the football and baseball markets. Each product line includes several different brands that each comprise operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Therefore, for that entity, each product line includes a group of components of the entity. ##### [205-20-55-99](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-99) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:251b60cdade1bbd3a8449c37675350f67229fbee676b219264ba450043091ff8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity decides to shift its strategy of trying to sell products to the baseball equipment market, which accounts for 40 percent of its revenues, and focus more on serving its customers in the football equipment market. However, the entity decides to retain some exposure to the baseball equipment market by selling only 80 percent of the group of components in its product line that serves the baseball market to another entity. ##### [205-20-55-100](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-100) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:671682646384298e2a901e7d685d2527e010ee98b7fde8013f0c3d5a19dc5375 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the entity decides to shift its strategy of trying to sell products to the baseball equipment market by selling 80 percent of the group of components of the entity in that product line and because the portion sold comprises a major part of the entity's operations and financial results, its disposal represents a strategic shift that is reported in discontinued operations. ##### [205-20-55-101](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-101) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:ef92575a8f60f69f41097cf1d31424bb5a586accbdf295d1fa887d70569a1c99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because of the entity's significant continuing involvement after the disposal date, the entity provides the disclosures required by paragraphs [205-20-50-4A through 50-4B](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-4A) . ##### [205-20-55-102](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-102) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:b7f6c97e72c78d907680e022e8f2016d8d1dd46fa4d4cf3ffd258ff740abb0a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The table in this illustration provides one example of how to disclose the reconciliation required by paragraph [205-20-50-5C(a)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5C). - ![](https://asc.understandingaccounting.org/asc-img/GUID-D1D3FE70-7C66-43E6-96D8-BB532541411D-low.gif) "Reconciliation of the Carrying Amounts of Major Classes of Assets and Liabilities of the Discontinued Operation That Are Disclosed in the Notes to Financial Statements to Total Assets and Liabilities of the Disposal Group Classified as Held for Sale That Are Presented Separately in the Statement of Financial Position (in thousands of currency units)" 20X4 20X3 Carrying amounts of major classes of assets included as part of discontinued operations Cash $ XX $ XX Trade receivables XX XX Inventories XX XX "Property, plant, and equipment" XX XX Other classes of assets that are not major XX XX Total major classes of assets of the discontinued operation XX XX Other assets included in the disposal group classified as held for sale XX XX Total assets of the disposal group classified as held for sale in the statement of financial position $ XX $ XX Carrying amounts of major classes of liabilities included as part of discontinued operations Trade payables $ XX $ XX Short-term borrowings XX XX Other classes of liabilities that are not major XX XX Total major classes of liabilities of the discontinued operation XX XX Other liabilities included in the disposal group classified as held for sale XX XX Total liabilities of the disposal group classified as held for sale in the statement of financial position $ XX $ XX ##### [205-20-55-103](https://asc.understandingaccounting.org/asc/205/20/#205-20-55-103) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:05.574Z to 2026-09-09T22:53:05.574Z Record version: sha256:48228ce6f12c37517086771f8165af8157ec953fb395be01b762758df62fe3e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The table in this illustration provides one example of how to disclose the reconciliation required by paragraph [205-20-50-5C(b)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5C). - ![](https://asc.understandingaccounting.org/asc-img/GUID-25354546-6340-4392-9BAA-DACC64B212A5-low.gif) "Reconciliation of the Major Classes of Line Items Constituting Pretax Profit (Loss) of Discontinued Operations That Are Disclosed in the Notes to Financial Statements to the After-Tax Profit or Loss of Discontinued Operations That Are Presented in the Statement Where Net Income Is Presented (in thousands of currency units)" 20X4 20X3 Major classes of line items constituting pretax profit (loss) of discontinued operations Revenue $ XX $ XX Cost of sales (XX) (XX) "Selling, general, and administrative expenses" (XX) (XX) Interest expense (XX) (XX) Other income and expense items that are not major (XX) (XX) Pretax profit or loss of discontinued operations related to major classes of pretax profit (loss) XX XX Pretax gain or loss on the disposal of the discontinued operation XX Total pretax gain or loss on discontinued operations XX XX Income tax expense or benefit XX XX Total profit or loss on discontinued operations that is presented in the statement where net income is presented $ XX $ XX Source downloaded (UTC): 2026-09-09T22:53:09.044Z to 2026-09-09T22:53:09.044Z Record version: sha256:c18472464f8f932721f107df8f0616a32e6ec55030bfb7d38b5ac96532a47152 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/205/20/#60-relationships) SEC content: no #### Earnings Per Share ##### [205-20-60-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:09.044Z to 2026-09-09T22:53:09.044Z Record version: sha256:33b53501a7c7d9e6300d8289498cba672fd2f4afad07c25cc600de1744a0e4d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the presentation of basic and diluted per-share amounts for entities that report discontinued operations, see paragraph [260-10-45-3](https://asc.understandingaccounting.org/asc/260/10/#260-10-45-3). ##### [205-20-60-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-60-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:09.044Z to 2026-09-09T22:53:09.044Z Record version: sha256:ccf98fba92aa4428923db479eadedba449c63ed5402b6db66a3aa9c9a39d95ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the control number to use in determining whether potential common shares are dilutive or antidilutive for entities that report discontinued operations, see paragraph [260-10-45-18](https://asc.understandingaccounting.org/asc/260/10/#260-10-45-18). #### Segment Reporting ##### [205-20-60-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-60-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:09.044Z to 2026-09-09T22:53:09.044Z Record version: sha256:95b1bf62d49b732abfe9174a5321c20f4081c38d11e45b88391029f688ee89c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the reporting and financial statement disclosure requirements for a [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") that is reported as a discontinued operation and is a reportable segment, see paragraph [280-10-55-7](https://asc.understandingaccounting.org/asc/280/10/#280-10-55-7). #### Intangibles—Goodwill and Other ##### [205-20-60-4](https://asc.understandingaccounting.org/asc/205/20/#205-20-60-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:09.044Z to 2026-09-09T22:53:09.044Z Record version: sha256:71fd4a62de900ba7d76c7f847dc37df07832802ce22264eed2c55179ded86436 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on reporting a goodwill impairment loss associated with a discontinued operation, see paragraph [350-20-45-3](https://asc.understandingaccounting.org/asc/350/20/#350-20-45-3). #### Compensation—Retirement Benefits ##### [205-20-60-5](https://asc.understandingaccounting.org/asc/205/20/#205-20-60-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:09.044Z to 2026-09-09T22:53:09.044Z Record version: sha256:f4534021271388d7c2e72d6db6095f2889c194ef78fefe669351232d26d63978 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on accounting for the effect on pension obligations of a reduction in work force associated with discontinued operations, see paragraphs [715-30-55-193 through 55-197](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-193) . Source downloaded (UTC): 2026-09-09T22:53:13.160Z to 2026-09-09T22:53:13.160Z Record version: sha256:213803f79d610baca43a6190a2a592a16f5c44ea0a5999d26435b0bea9faa470 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/205/20/#65-transition-and-open-effective-date-information) SEC content: no ##### [205-20-65-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:13.160Z to 2026-09-09T22:53:13.160Z Record version: sha256:2be89d3eeee0f9628ee9f4e12ae1a6825cf511435c7a18d5952ffc65c0467cb8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/05/2017 after the end of the transition period stated in Accounting Standards Update No. 2014-08, _Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity_. Source downloaded (UTC): 2026-09-09T22:53:20.226Z to 2026-09-09T22:53:20.226Z Record version: sha256:0c1e86ab98b93c59cf913d5bfeb3193eda36f4b3d849965a7c1df267977f4b00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/20/#sec-00-status) SEC content: yes ##### [205-20-S00-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-S00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:20.226Z to 2026-09-09T22:53:20.226Z Record version: sha256:1c00bc576a67c83b020fb9d9b2edda6dcee4295ca84c72472005e0e0b7331d0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
Paragraph NumberActionAccounting Standards UpdateDate
205-20-S99-1AmendedAccounting Standards Update No. 2012-0308/27/2012
205-20-S99-2AmendedAccounting Standards Update No. 2012-0308/27/2012
Source downloaded (UTC): 2026-09-09T22:53:22.846Z to 2026-09-09T22:53:22.846Z Record version: sha256:d4e131597588698e2af36678f3df2238ea0d22925f7f9b31618d5b1ac75ddf4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/20/#sec-45-other-presentation-matters) SEC content: yes #### Reporting Discontinued Operations ##### [205-20-S45-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-S45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:22.846Z to 2026-09-09T22:53:22.846Z Record version: sha256:b7d3785ee9ea7f433be8ab367edfc7004f789ddfb689d8102512f95797c799ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-20-S99-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-S99-1), SAB Topic 5.Z.4, for SEC Staff views on classification of disposal of operations when a significant interest is retained. #### Disposal of a Component of an Entity ##### [205-20-S45-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-S45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:22.846Z to 2026-09-09T22:53:22.846Z Record version: sha256:ae587d8ee17c63ed03b7472f5a9f897bec328892f5a15459def1cb317ea0d023 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-20-S99-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-S99-2), SAB Topic 5.Z.5, for SEC Staff views on classification of contingencies relating to discontinued operations. Source downloaded (UTC): 2026-09-09T22:53:26.557Z to 2026-09-09T22:53:26.557Z Record version: sha256:60d73590e2b2e53a9829cee3703bc73f0e1ae8a16749f7f0b54d7aaf0909dfff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/20/#sec-50-disclosure) SEC content: yes #### Allocation of Interest to Discontinued Operations ##### [205-20-S50-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-S50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:26.557Z to 2026-09-09T22:53:26.557Z Record version: sha256:661a696d1c6de8cddcb9695916466287dbeb3620a7a697bb31803d519bf34c3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [205-20-S99-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-S99-3), SEC Observer Comment: Allocation of Interest to Discontinued Operations, for SEC Staff views on disclosure of an accounting policy related to allocation of interest to discontinued operations. #### Reporting Discontinued Operations ##### [205-20-S50-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-S50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:26.557Z to 2026-09-09T22:53:26.557Z Record version: sha256:4c1993d301dd47ff1de8a2b257a2295f615b0b5fc596beb0f68693d620a40c20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [270-10-S99-1(b)(5)](https://asc.understandingaccounting.org/asc/270/10/#270-10-S99-1), Regulation S-X Rule 10-01(b)(5), for disclosure requirements pertaining to the effect of the disposition of any significant segment. Source downloaded (UTC): 2026-09-09T22:53:32.088Z to 2026-09-09T22:53:32.088Z Record version: sha256:2e012fa7ef563a22e8341e8c6acbd3ead9a9ca028da43c0081b141357bf8602b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-20-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/205/20/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [205-20-S99-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-S99-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:32.088Z to 2026-09-09T22:53:32.088Z Record version: sha256:d0be3ea25a40e70d106a1194ed762a00a9ea32a0b36b09c2aec4e2c3925200fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 5.Z.4, Disposal of Operation with Significant Interest Retained. - Facts: A Company disposes of its controlling interest in a component of an entity as defined by FASB ASC Master Glossary. The Company retains a minority voting interest directly in the component or it holds a minority voting interest in the buyer of the component. Controlling interest includes those controlling interests established through other means, such as variable interests. Because the Company's voting interest enables it to exert significant influence over the operating and financial policies of the investee, the Company is required by FASB ASC Subtopic 323-10, Investments—Equity Method and Joint Ventures—Overall, to account for its residual investment using the equity method. FN54 - FN54 In some circumstances, the seller's continuing interest may be so great that divestiture accounting is inappropriate. - Question: May the historical operating results of the component and the gain or loss on the sale of the majority interest in the component be classified in the Company's statement of operations as "discontinued operations" pursuant to FASB ASC Subtopic 205-20, Presentation of Financial Statements—Discontinued Operations? - Interpretive Response: No. A condition necessary for discontinued operations reporting, as indicated in FASB ASC paragraph [205-20-45-1](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1) is that an entity "not have any significant continuing involvement in the operations of the component after the disposal transaction." In these circumstances, the transaction should be accounted for as the disposal of a group of assets that is not a component of an entity and classified within continuing operations pursuant to FASB ASC paragraph [360-10-45-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-5) (Property, Plant, and Equipment Topic). FN55 - FN55 However, a plan of disposal that contemplates the transfer of assets to a limited-life entity created for the single purpose of liquidating the assets of a component of an entity would not necessitate classification within continuing operations solely because the registrant retains control or significant influence over the liquidating entity. ##### [205-20-S99-2](https://asc.understandingaccounting.org/asc/205/20/#205-20-S99-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:32.088Z to 2026-09-09T22:53:32.088Z Record version: sha256:bfe89dc0fba6e29967c6a91f8db93deadcb8c9bd5b0b8d7c73894d9ba9e4c504 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 5.Z.5, Classification and Disclosure of Contingencies Relating to Discontinued Operations. - Facts: A company disposed of a component of an entity in a previous accounting period. The Company received debt and/or equity securities of the buyer of the component or of the disposed component as consideration in the sale, but this financial interest is not sufficient to enable the Company to apply the equity method with respect to its investment in the buyer. The Company made certain warranties to the buyer with respect to the discontinued business, or remains liable under environmental or other laws with respect to certain facilities or operations transferred to the buyer. The disposition satisfied the criteria of FASB ASC Subtopic 205-20 for presentation as "discontinued operations." The Company estimated the fair value of the securities received in the transaction for purposes of calculating the gain or loss on disposal that was recognized in its financial statements. The results of discontinued operations prior to the date of disposal or classification as held for sale included provisions for the Company's existing obligations under environmental laws, product warranties, or other contingencies. The calculation of gain or loss on disposal included estimates of the Company's obligations arising as a direct result of its decision to dispose of the component, under its warranties to the buyer, and under environmental or other laws. In a period subsequent to the disposal date, the Company records a charge to income with respect to the securities because their fair value declined materially and the Company determined that the decline was other than temporary. The Company also records adjustments of its previously estimated liabilities arising under the warranties and under environmental or other laws. - Question 1: Should the writedown of the carrying value of the securities and the adjustments of the contingent liabilities be classified in the current period's statement of operations within continuing operations or as an element of discontinued operations? - Interpretive Response: Adjustments of estimates of contingent liabilities or contingent assets that remain after disposal of a component of an entity or that arose pursuant to the terms of the disposal generally should be classified within discontinued operations. FN56 However, the staff believes that changes in the carrying value of assets received as consideration in the disposal or of residual interests in the business should be classified within continuing operations. - FN56 Registrants are reminded that FASB ASC Topic 460, Guarantees requires recognition and disclosure of certain guarantees which may impose accounting and disclosure requirements in addition to those discussed in this SAB Topic. - FASB ASC paragraph [205-20-45-4](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-4) requires that "adjustments to amounts previously reported in discontinued operations that are directly related to the disposal of a component of an entity in a prior period shall be classified separately in the current period in discontinued operations." The staff believes that the provisions of FASB ASC paragraph [205-20-45-4](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-4) apply only to adjustments that are necessary to reflect new information about events that have occurred that becomes available prior to disposal of the component of the entity, to reflect the actual timing and terms of the disposal when it is consummated, and to reflect the resolution of contingencies associated with that component, such as warranties and environmental liabilities retained by the seller. - Developments subsequent to the disposal date that are not directly related to the disposal of the component or the operations of the component prior to disposal are not "directly related to the disposal" as contemplated by FASB ASC paragraph [205-20-45-4](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-4). Subsequent changes in the carrying value of assets received upon disposition of a component do not affect the determination of gain or loss at the disposal date, but represent the consequences of management's subsequent decisions to hold or sell those assets. Gains and losses, dividend and interest income, and portfolio management expenses associated with assets received as consideration for discontinued operations should be reported within continuing operations. - Question 2: What disclosures would the staff expect regarding discontinued operations prior to the disposal date and with respect to risks retained subsequent to the disposal date? - Interpretive Response: MD&A FN57 should include disclosure of known trends, events, and uncertainties involving discontinued operations that may materially affect the Company's liquidity, financial condition, and results of operations (including net income) between the date when a component of an entity is classified as discontinued and the date when the risks of those operations will be transferred or otherwise terminated. Disclosure should include discussion of the impact on the Company's liquidity, financial condition, and results of operations of changes in the plan of disposal or changes in circumstances related to the plan. Material contingent liabilities, FN58 such as product or environmental liabilities or litigation, that may remain with the Company notwithstanding disposal of the underlying business should be identified in notes to the financial statements and any reasonably likely range of possible loss should be disclosed pursuant to FASB ASC Topic 450, Contingencies. MD&A should include discussion of the reasonably likely effects of these contingencies on reported results and liquidity. If the Company retains a financial interest in the discontinued component or in the buyer of that component that is material to the Company, MD&A should include discussion of known trends, events, and uncertainties, such as the financial condition and operating results of the issuer of the security, that may be reasonably expected to affect the amounts ultimately realized on the investments. - FN57 Item 303 of Regulation S-K. - FN58 Registrants also should consider the disclosure requirements of FASB ASC Topic 460. ##### [205-20-S99-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-S99-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:32.088Z to 2026-09-09T22:53:32.088Z Record version: sha256:4befb490ade05c6c280991fec8d971d7a23ebce48db374ebcec5254e75a177b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SEC Observer Comment: Allocation of Interest to Discontinued Operations. - The SEC staff will expect registrants electing to allocate interest in accordance with paragraph [205-20-45-6](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-6) to clearly disclose the accounting policy (including the method of allocation) and the amount allocated to and included in discontinued operations for all periods presented. Source downloaded (UTC): 2026-09-09T22:53:35.692Z to 2026-09-09T22:54:07.641Z Record version: sha256:eed3e976f780674de35cdee4e7db643b0fe4582bc54ec0b8a90fb63abb0bfdcd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30: Presentation of Financial Statements — Liquidation Basis of Accounting ### Machine-generated study aids ```json { "summary": "ASC 205-30 tells an entity when it must abandon going-concern accounting and switch to the liquidation basis, how to measure assets and liabilities under that basis, and what to disclose. The trigger is that liquidation is \"imminent\" (205-30-25-1 and 25-2), unless the liquidation follows a plan specified in the entity's governing documents at inception. Under the liquidation basis, assets are measured at the estimated cash or other consideration expected to be collected, previously unrecognized items such as trademarks are recognized, expected disposal costs and income/expenses through the end of liquidation are accrued (undiscounted), and the entity presents a statement of net assets in liquidation and a statement of changes in net assets in liquidation.", "key_points": [ "Liquidation basis is required when liquidation is imminent, unless the liquidation follows a plan for liquidation specified in the entity's governing documents at inception (205-30-25-1); investment companies regulated under the Investment Company Act of 1940 are scoped out and the exception may not be applied by analogy (205-30-15-1).", "Liquidation is imminent when a plan is approved by those with authority to make it effective and the likelihood is remote both that other parties will block it and that the entity will return from liquidation, or when a plan is imposed by other forces such as involuntary bankruptcy and return from liquidation is remote (205-30-25-2).", "An inception-specified plan is presumed not to be followed if the entity is forced to dispose of assets for consideration not commensurate with fair value; other deviations matter only to the extent they affect whether consideration is commensurate with fair value (205-30-25-3).", "Assets are measured at the estimated amount of cash or other consideration expected to be collected in settling or disposing of them, which cannot be presumed to equal fair value for all assets (205-30-30-1), and previously unrecognized items expected to be sold or used to settle liabilities (e.g., trademarks) are recognized, possibly in the aggregate (205-30-25-4).", "Liabilities continue to be recognized and measured under other applicable Topics (including 405-20-40-1), adjusted for changed assumptions such as payment timing, but the entity shall not anticipate being legally released as primary obligor (205-30-25-5; 205-30-30-2).", "Estimated disposal costs are accrued and presented in the aggregate separately from the related assets, and expected costs and income through the end of liquidation are accrued when reasonably estimable; neither accrual is discounted (205-30-25-6; 25-7; 205-30-30-3), and all amounts are remeasured at each reporting date (205-30-35-1).", "The entity must present at a minimum a statement of net assets in liquidation and a statement of changes in net assets in liquidation, applied prospectively from the day liquidation became imminent (205-30-45-1; 45-2), and disclose the basis and circumstances of adoption, the liquidation plan and expected completion date, measurement methods and significant assumptions, and accrued costs and income (205-30-50-2)." ], "categories": [ "Presentation", "Financial statement presentation", "Subsequent measurement", "Disclosure" ], "audience_level": "intermediate", "student_note": "This is the one place in GAAP where the going-concern measurement model is replaced wholesale, so exams focus on the \"imminent\" trigger and the two required statements. Common misunderstandings: assuming liquidation-basis asset amounts equal fair value (they are expected collectible consideration, which may differ), forgetting that liabilities still follow their own Topics and cannot be reduced for anticipated legal release, and discounting the disposal-cost and expected income accruals.", "related_topics": [ "205-40", "405-20", "820", "852", "360" ], "key_concepts": [ "liquidation basis of accounting", "liquidation is imminent", "plan for liquidation", "statement of net assets in liquidation", "statement of changes in net assets in liquidation", "expected collectible consideration", "accrued disposal costs", "previously unrecognized assets" ] } ``` Source downloaded (UTC): 2026-09-09T22:53:35.692Z to 2026-09-09T22:53:35.692Z Record version: sha256:726d6bbc62f24724de7f05ec91d4610aad4261b3e7d83047488cb7eca8ebad09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/30/#00-status) SEC content: no ##### [205-30-00-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:35.692Z to 2026-09-09T22:53:35.692Z Record version: sha256:27b8179a159ce03f7f956a736d825a469eda2f73b8e83de63d6dc01e76e15c90 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
Fair ValueAddedAccounting Standards Update No. 2013-0704/22/2013
LiquidationAddedAccounting Standards Update No. 2013-0704/22/2013
RemoteAddedMaintenance Update 2016-17 (PDF)09/02/2016
Statement of Changes in Net Assets in LiquidationAddedAccounting Standards Update No. 2013-0704/22/2013
Statement of Net Assets in LiquidationAddedAccounting Standards Update No. 2013-0704/22/2013
205-30-05-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-15-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-25-1 through 25-7
AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-25-2AmendedMaintenance Update 2016-17 (PDF)09/02/2016
205-30-30-1 through 30-3
AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-35-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-45-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-45-2AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-50-1AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-50-2AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-55-1 through 55-3
AddedAccounting Standards Update No. 2013-0704/22/2013
205-30-65-1AddedAccounting Standards Update No. 2013-0704/22/2013
Source downloaded (UTC): 2026-09-09T22:53:38.416Z to 2026-09-09T22:53:38.416Z Record version: sha256:41b245091fb376539d202948a5ba5488b01f509159779b6f750864e2b1d43168 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/30/#05-overview-and-background) SEC content: no ##### [205-30-05-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:38.416Z to 2026-09-09T22:53:38.416Z Record version: sha256:4121f9ec89b12d1c880d40fabcead32cdca177281f9e673e50fe741d9c81a709 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Liquidation Basis of Accounting Subtopic provides guidance on when and how an entity should prepare its financial statements using the liquidation basis of accounting and describes the related disclosures that should be made. Source downloaded (UTC): 2026-09-09T22:53:41.204Z to 2026-09-09T22:53:41.204Z Record version: sha256:8a14ea085a083f3b7c4a46cb886088c4629e0da29cff757fe462efe93d23cd14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/30/#15-scope-and-scope-exceptions) SEC content: no ##### [205-30-15-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:41.204Z to 2026-09-09T22:53:41.204Z Record version: sha256:41887e4c620926bfd119d9c2a4cf858bc9736169f87f97834ef70c55972906e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities except for investment companies regulated under the Investment Company Act of 1940. Other entities shall not apply this scope exception by analogy. Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:aa9b2a033f0d52a444a67d7b8b83b45d75fdf931e95f9a068ef1c3d25ecf1075 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/205/30/#25-recognition) SEC content: no ##### [205-30-25-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:df76e8ce820b92fbe26d5f2e01ec9035653351736cfe1f21550962900fc19139 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall prepare financial statements in accordance with the requirements of this Subtopic when [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation.") is imminent unless the liquidation follows a plan for liquidation that was specified in the entity's governing documents at the entity's inception. ##### [205-30-25-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:60183de97b9c58d6da80481125d4a2c6cc1f4d61a5fff7c2fb6b3a28eb640f20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Liquidation is imminent when either of the following occurs: 1. a A plan for liquidation has been approved by the person or persons with the authority to make such a plan effective, and the likelihood is [remote](https://asc.understandingaccounting.org/glossary/r/#remote "The chance of the future event or events occurring is slight.") that any of the following will occur: 1. 1 Execution of the plan will be blocked by other parties (for example, those with shareholder rights) 2. 2 The entity will return from liquidation. 2. b A plan for liquidation is imposed by other forces (for example, involuntary bankruptcy), and the likelihood is remote that the entity will return from liquidation. ##### [205-30-25-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:1649e19e4c1e8305c270db306f9e5fd91d94b5543dc7b7ad7e0a27393041e20d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall presume that its plan of liquidation does not follow a plan that was specified in the entity's governing documents at its inception if the entity is forced to dispose of its assets in exchange for consideration that is not commensurate with the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of those assets. Other aspects of the entity's plan of liquidation also might differ from a plan that was specified in the entity's governing documents at its inception (for example, the date at which liquidation shall commence). However, those factors should be considered in determining whether to apply the liquidation basis of accounting only to the extent that they affect whether the entity expects to receive consideration in exchange for its assets that is not commensurate with fair value. ##### [205-30-25-4](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:7210a749d6d7956a1391ba39560391eb54005b660240e219a6c51c286941ee23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When using the liquidation basis of accounting, an entity shall recognize other items that it previously had not recognized (for example, trademarks) but that it expects to either sell in liquidation or use to settle liabilities. Those items may be recognized in the aggregate. ##### [205-30-25-5](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:969734df2547bb6b596b31b62d82528c05af224bf7facf3f6719839795e7243a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall recognize liabilities in accordance with the recognition provisions of other Topics that otherwise would apply to those liabilities, including paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1). ##### [205-30-25-6](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:6e7b217d478049d96c29bf3d9e63f0ccc73c3c73098dcd001c1569a6e8ea74c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall accrue estimated costs to dispose of assets or other items that it expects to sell in liquidation and present those costs in the aggregate separately from those assets or items. ##### [205-30-25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:46.857Z to 2026-09-09T22:53:46.857Z Record version: sha256:bdc9b9025c27d98bcd79dd5288f8f7eb453df64a259693a5ffd0704c6fab7be8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall accrue costs and income that it expects to incur or earn (for example, payroll costs or income from preexisting orders that the entity expects to fulfill during liquidation) through the end of its liquidation if and when it has a reasonable basis for estimation. Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:e24086e1610f27229221146729dfa8f97281ba2154df43a4a965779c58e2ac5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/205/30/#30-initial-measurement) SEC content: no ##### [205-30-30-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:b1e7b585e61f15435b99443205c2df253a35559a1c6e7bf45478ad8a86371e5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall measure assets to reflect the estimated amount of cash or other consideration that it expects to collect in settling or disposing of those assets in carrying out its plan for [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation."). In some cases, [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") may approximate the amount that an entity expects to collect. However, an entity shall not presume this to be true for all assets. ##### [205-30-30-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:89caac955b172096253727c18280eb37695d646e7ef85a2f736d3afcd3a5649b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall measure liabilities in accordance with the measurement provisions of other Topics that otherwise would apply to those liabilities (excluding the accrual of estimated disposal costs as described in paragraph [205-30-25-6](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) and expected income and expenses as described in paragraph [205-30-25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-7)). In applying those other Topics, an entity shall adjust its liabilities to reflect changes in assumptions that are a result of the entity's decision to liquidate (for example, timing of payments). However, an entity shall not anticipate being legally released from being the primary obligor under a liability, either judicially or by the creditor. ##### [205-30-30-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:49.289Z to 2026-09-09T22:53:49.289Z Record version: sha256:3f271a22d84270f577b00625ec67e59476d55e16dc14d9db378e38933d19b56c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall not apply discounting provisions in measuring the accruals for estimated disposal costs in accordance with paragraph [205-30-25-6](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) and expected income and expenses in accordance with paragraph [205-30-25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-7). Source downloaded (UTC): 2026-09-09T22:53:51.962Z to 2026-09-09T22:53:51.962Z Record version: sha256:b4b203761e36b8dfa3d3364bae12ca0f9a7ac99944c3bb56e921be90c4ff21d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/205/30/#35-subsequent-measurement) SEC content: no ##### [205-30-35-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:51.962Z to 2026-09-09T22:53:51.962Z Record version: sha256:6bdd0923f4c3d484dc669a52f0d46bb2e2bdeea10de3eefbed9dce90ffc8644f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At each reporting date, an entity shall remeasure its assets and other items it expects to sell that it had not previously recognized (for example, trademarks), liabilities (if required under the relevant Topic for those liabilities), and the accruals of disposal or other costs or income to reflect the actual or estimated change in carrying value since the previous reporting date in accordance with paragraphs [205-30-30-1 through 30-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-30-1) . Source downloaded (UTC): 2026-09-09T22:53:54.855Z to 2026-09-09T22:53:54.855Z Record version: sha256:b402f9a242c8d39dbe280a12465bc1122106bd07d3824d5cf2a0fa8b09e0ad24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/30/#45-other-presentation-matters) SEC content: no ##### [205-30-45-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:54.855Z to 2026-09-09T22:53:54.855Z Record version: sha256:ff1ef712c21abb9a5b977fc0ed653286aae71a317033f28a597677c2c2312e91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At a minimum, an entity that applies the liquidation basis of accounting shall prepare the following: 1. a A [statement of net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-net-assets-in-liquidation "A statement that presents a liquidating entity's net assets available for distribution to investors and other claimants as of the end of the reporting period.") 2. b A [statement of changes in net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-changes-in-net-assets-in-liquidation "A statement that presents the changes during the period in net assets available for distribution to investors and other claimants during liquidation."). ##### [205-30-45-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:54.855Z to 2026-09-09T22:53:54.855Z Record version: sha256:c92d5e960a5ff5b867f50d09378d76e5e6355291d2340fdeb7148dbb783551a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The liquidation basis of accounting shall be applied prospectively from the day that liquidation becomes imminent. The initial statement of changes in net assets in liquidation shall present only changes in net assets that occurred during the period since liquidation became imminent. Source downloaded (UTC): 2026-09-09T22:53:56.717Z to 2026-09-09T22:53:56.717Z Record version: sha256:e376bcf208f6bccc7042c11f568e23b8f6b334f3bd766ca0b466153e4f980738 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/30/#50-disclosure) SEC content: no ##### [205-30-50-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:56.717Z to 2026-09-09T22:53:56.717Z Record version: sha256:153cd1a5504c5d1137812175715a18d5a5090561a3ec1bcef84c56c97e07e112 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall make all disclosures required by other Topics that are relevant to understanding the entity's [statement of net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-net-assets-in-liquidation "A statement that presents a liquidating entity's net assets available for distribution to investors and other claimants as of the end of the reporting period.") and [statement of changes in net assets in liquidation](https://asc.understandingaccounting.org/glossary/s/#statement-of-changes-in-net-assets-in-liquidation "A statement that presents the changes during the period in net assets available for distribution to investors and other claimants during liquidation."). The disclosures shall convey information about the amount of cash or other consideration that an entity expects to collect and the amount that the entity is obligated or expects to be obligated (in the case of the accruals described in paragraphs [205-30-25-6 through 25-7](https://asc.understandingaccounting.org/asc/205/30/#205-30-25-6) ) to pay during the course of [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation."). ##### [205-30-50-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:53:56.717Z to 2026-09-09T22:53:56.717Z Record version: sha256:4c687c455adb43a8cbe91b82f04f9ff7ab953c0820f84c0396b1048969654da4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At a minimum, an entity shall disclose all of the following when it prepares financial statements using the liquidation basis of accounting: 1. a That the financial statements are prepared using the liquidation basis of accounting, including the facts and circumstances surrounding the adoption of the liquidation basis of accounting and the entity's determination that liquidation is imminent. 2. b A description of the entity's plan for liquidation, including a description of each of the following: 1. 1 The manner by which it expects to dispose of its assets and other items it expects to sell that it had not previously recognized as assets (for example, trademarks) 2. 2 The manner by which it expects to settle its liabilities 3. 3 The expected date by which the entity expects to complete its liquidation. 3. c The methods and significant assumptions used to measure assets and liabilities, including any subsequent changes to those methods and assumptions. 4. d The type and amount of costs and income accrued in the statement of net assets in liquidation and the period over which those costs are expected to be paid or income earned. Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:12b526317ad2249054ca7dc4e4177020cdf25b065e3866a4ae58294dfeb07c52 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/30/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [205-30-55-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:457d38d8ea2cacb1d7f2098d4ec6f2ae88113f907212e0535bfaf62e1b79fe5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Examples illustrate how an entity would determine when it should apply the liquidation basis of accounting. The Examples are not intended to capture every scenario under which an entity might have to apply the liquidation basis of accounting. ##### [205-30-55-2](https://asc.understandingaccounting.org/asc/205/30/#205-30-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:a403db9b83a8a509756117f4358dd47b55a1cebee8fe7a8c3b376711603b32ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A is a manufacturer of goods. In 20X3, Entity A began experiencing financial difficulty because of declining market demand for its goods. On September 19, 20X3, Entity A's board of directors approved a plan for [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation."). The board of directors had the authority to make the plan effective. There were no other parties that could block the execution of the plan, and the likelihood that the entity would return from liquidation was remote. Entity A should begin applying the liquidation basis of accounting as of September 19, 20X3, which is the date that Entity A's board of directors approved the plan for liquidation. ##### [205-30-55-3](https://asc.understandingaccounting.org/asc/205/30/#205-30-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:00.858Z to 2026-09-09T22:54:00.858Z Record version: sha256:5d72938fcd62e896c4ab4ea3db998ffcce43ad42ddce7fd69a339e4ff5d04944 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The governing documents from Entity B's inception specified that its contractual life would end in Year 10. On March 11 of Year 6, Entity B's board of directors determined that the entity would not be able to meet its debt obligations and voted to begin liquidating the entity earlier than planned. Entity B required approval from Entity C, a third party, to make its plan of liquidation effective. Entity B obtained approval from Entity C on April 10 of Year 6. No other parties could block the execution of the plan of liquidation, and the likelihood that Entity B would return from liquidation was remote. Under the plan of liquidation, Entity B anticipated that it would not have sufficient time to sell its assets in exchange for consideration that would approximate the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of those assets. Entity B should begin preparing its financial statements using the liquidation basis of accounting as of April 10 of Year 6, which is the date that the entity had obtained all of the approvals required to make its plan of liquidation effective. Source downloaded (UTC): 2026-09-09T22:54:04.327Z to 2026-09-09T22:54:04.327Z Record version: sha256:82d70dc43bfcd7ef111472ae45858804c76ed841a364cd5ca14b2fbf954b8eee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-30-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/205/30/#65-transition-and-open-effective-date-information) SEC content: no ##### [205-30-65-1](https://asc.understandingaccounting.org/asc/205/30/#205-30-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:04.327Z to 2026-09-09T22:54:04.327Z Record version: sha256:e9bbf5cc0a59e1be540e356d74e19e7c6fe1dbee9e65f4acb64f0c4d34fab42f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 01/05/2016 after the end of the transition period stated in Accounting Standards Update No. 2013-07, _Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting_. Source downloaded (UTC): 2026-09-09T22:54:09.829Z to 2026-09-09T22:54:28.693Z Record version: sha256:0d6bad2d386b9a42536744e6c2e1d1c89a521bc427cbf22f783c7256e60e2a01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40: Presentation of Financial Statements — Going Concern ### Machine-generated study aids ```json { "summary": "ASC 205-40 requires management of every entity, in connection with preparing annual and interim financial statements, to evaluate whether conditions and events considered in the aggregate raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued (or are available to be issued). Substantial doubt exists when it is probable the entity will be unable to meet its obligations as they become due in that lookforward period, assessed initially without regard to unimplemented management plans. Depending on whether management's plans alleviate that doubt, prescribed note disclosures — including an express \"substantial doubt\" statement when doubt is not alleviated — are required.", "key_points": [ "The going concern basis of accounting is presumed unless and until liquidation becomes imminent, at which point the liquidation basis under Subtopic 205-30 applies (205-40-05-1).", "Management must perform the going concern evaluation each annual and interim reporting period, using a one-year-after-issuance lookforward period and conditions known and reasonably knowable at the issuance date (205-40-50-1; 205-40-50-3).", "Substantial doubt exists when relevant conditions and events, in the aggregate, indicate it is probable the entity will be unable to meet its obligations as they become due within one year after issuance; the initial evaluation excludes the mitigating effect of plans not fully implemented (205-40-50-4).", "Management's plans may be considered in alleviating substantial doubt only if it is probable both that the plans will be effectively implemented and that, when implemented, they will mitigate the relevant conditions or events (205-40-50-7); approval of the plan before the issuance date is generally required (205-40-50-8).", "A plan to meet obligations through liquidation cannot be considered in evaluating whether substantial doubt is alleviated, even if liquidation is probable (205-40-50-11).", "If plans alleviate substantial doubt, disclose the principal conditions or events, management's evaluation of their significance, and the plans that alleviated the doubt (205-40-50-12); if doubt is not alleviated, additionally include an explicit statement that substantial doubt exists (205-40-50-13).", "Disclosures continue and become more extensive in subsequent periods, with context and continuity, and in the period substantial doubt no longer exists the entity discloses how the conditions or events were resolved (205-40-50-14)." ], "categories": [ "Disclosure", "Presentation", "Financial statement presentation" ], "audience_level": "introductory", "student_note": "Exam favorite: the assessment window runs one year from the date the financial statements are ISSUED (not the balance sheet date), and the threshold is \"probable,\" not \"reasonably possible.\" The most common mistake is netting management's unimplemented rescue plans into the initial assessment — plans are considered only in the second step, and only if both implementation and mitigation are probable.", "related_topics": [ "205-30", "270-10", "855", "450-20" ], "key_concepts": [ "going concern basis of accounting", "substantial doubt", "one year after issuance date", "probable", "management's plans", "known and reasonably knowable", "liquidation basis of accounting", "note disclosure" ] } ``` Source downloaded (UTC): 2026-09-09T22:54:09.829Z to 2026-09-09T22:54:09.829Z Record version: sha256:b5193c16b48ebb9ac8b017c6cebde1216197fbd01e6ae0a3be5a7fe969247ae5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/40/#00-status) SEC content: no ##### [205-40-00-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:09.829Z to 2026-09-09T22:54:09.829Z Record version: sha256:12a2083f91e474572cb68521658426f78d237fdf44c4f0808e4e58f2ebafd8c7 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
Financial Statements Are Available to Be IssuedAddedAccounting Standards Update No. 2014-1508/27/2014
Financial Statements Are IssuedAddedAccounting Standards Update No. 2014-1508/27/2014
LiquidationAddedAccounting Standards Update No. 2014-1508/27/2014
Probable (2nd def)AddedAccounting Standards Update No. 2014-1508/27/2014
Substantial Doubt about an Entity's Ability to Continue as a Going ConcernAddedAccounting Standards Update No. 2014-1508/27/2014
205-40-05-1 through 05-3
AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-05-3AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-15-1AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-50-1 through 50-14
AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-50-12 through 50-14
AmendedAccounting Standards Update No. 2025-1112/08/2025
205-40-50-12AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-50-13AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-55-1AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-55-1 through 55-3
AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-55-3AddedAccounting Standards Update No. 2016-0202/25/2016
205-40-65-1AddedAccounting Standards Update No. 2014-1508/27/2014
Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:441eb68fbcb4a60340590413af8ab96fdc05039784a4db2ba8c7a8b2b5d05c5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/40/#05-overview-and-background) SEC content: no ##### [205-40-05-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:0119c7c64ee45b3df79a5199fa8d20127ef93b217b0efa4fa5d0db23a91d4f14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Continuation of an entity as a going concern is presumed as the basis for financial reporting unless and until the entity's [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation.") becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements are prepared under the liquidation basis of accounting in accordance with Subtopic 205-30 on the liquidation basis of accounting. ##### [205-40-05-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:bd71d58be5f909ec8f526281056579a56ddba5b28be7c224864807bd36303e04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Even if an entity's liquidation is not imminent, there may be conditions and events, considered in the aggregate, that raise [substantial doubt about the entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies."). In those situations, financial statements continue to be prepared under the going concern basis of accounting, but the guidance in this Subtopic should be followed to determine whether to disclose information about the relevant conditions or events. ##### [205-40-05-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:c2b0054cb276974f613973122549f611e862fb31f11277eabbe7717ed3d2c4c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for evaluating whether there is substantial doubt about an entity's ability to continue as a going concern and about related note disclosures. Source downloaded (UTC): 2026-09-09T22:54:15.563Z to 2026-09-09T22:54:15.563Z Record version: sha256:a6da67a1bd9315d86cfe8d56a5a46080f00271a35597ca8078aa6b6eb009b62f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/40/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [205-40-15-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:15.563Z to 2026-09-09T22:54:15.563Z Record version: sha256:4bcf40b6299061bce9f6893ace641ac19516a806fbb0e778614d1dd7290d77f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities. Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:da932bcb4bbc3d155c29e54d5230897d67a8dee37c4d4af67412c366bca73772 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/40/#50-disclosure) SEC content: no #### Evaluating Conditions and Events That May Raise Substantial Doubt ##### [205-40-50-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:f43347fe5b090a769ba2d080f5693fb76644db7b876a557a09b9aef7e5226385 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In connection with preparing financial statements for each annual and interim reporting period, an entity's management shall evaluate whether there are conditions and events, considered in the aggregate, that raise [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)") (or within one year after the date that the [financial statements are available to be issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-available-to-be-issued "Financial statements are considered available to be issued when they are complete in a form and format that complies with GAAP and all approvals necessary for issuance have been obtained, for example, from management, the board of directors, and/or significant shareholders. The process involved in creating and distributing the financial statements will vary depending on an entity's management and corporate governance structure as well as statutory and regulatory requirements.") when applicable). ##### [205-40-50-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:1c6dc7255065e5df922c5dbb689723bc9eedcf42b7cd1b667694ec2e89a312e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ordinarily, conditions or events that raise substantial doubt about an entity's ability to continue as a going concern relate to the entity's ability to meet its obligations as they become due. Accordingly, management's evaluation of an entity's ability to continue as a going concern ordinarily is based on conditions and events that are relevant to an entity's ability to meet its obligations as they become due within one year after the date that the financial statements are issued. ##### [205-40-50-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:9178cafbd827399ba89679ab9df69d4ef3b98aee4aa45e0026e1fcb8ebf8bfc7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management's evaluation shall be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. ##### [205-40-50-4](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:5520e5d7b39df8b70ee6caef038bc114144f045704e313d3be801ce2c1c4efd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management shall evaluate whether relevant conditions and events, considered in the aggregate, indicate that it is probable that an entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The evaluation initially shall not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date that the financial statements are issued (for example, plans to raise capital, borrow money, restructure debt, or dispose of an asset that have been approved but that have not been fully implemented as of the date that the financial statements are issued). ##### [205-40-50-5](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:6b297520a9bd666296dd3e200c6044d00a884eca2b00e143ec3f69de389726d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When evaluating an entity's ability to meet its obligations, management shall consider quantitative and qualitative information about the following conditions and events, among other relevant conditions and events known and reasonably knowable at the date that the financial statements are issued: 1. a The entity's current financial condition, including its liquidity sources at the date that the financial statements are issued (for example, available liquid funds and available access to credit) 2. b The entity's conditional and unconditional obligations due or anticipated within one year after the date that the financial statements are issued (regardless of whether those obligations are recognized in the entity's financial statements) 3. c The funds necessary to maintain the entity's operations considering its current financial condition, obligations, and other expected cash flows within one year after the date that the financial statements are issued 4. d The other conditions and events, when considered in conjunction with (a), (b), and (c) above, that may adversely affect the entity's ability to meet its obligations within one year after the date that the financial statements are issued. See paragraph [205-40-55-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-2) for examples of those conditions and events. #### Consideration of Management's Plans When Substantial Doubt Is Raised ##### [205-40-50-6](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:0d59e60218e6e2d6478705ca1101d48355cc02f62903247555870272c5a4aa79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When relevant conditions or events, considered in the aggregate, initially indicate that it is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that an entity will be unable to meet its obligations as they become due within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)") (and therefore they raise [substantial doubt about the entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.")), management shall evaluate whether its plans that are intended to mitigate those conditions and events, when implemented, will alleviate substantial doubt about the entity's ability to continue as a going concern. ##### [205-40-50-7](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:a451f5efef9a0151a0370ed36676145719e6ce41bc6ab5efd0c5b9be3c90012d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The mitigating effect of management's plans shall be considered in evaluating whether the substantial doubt is alleviated only to the extent that information available as of the date that the financial statements are issued indicates both of the following: 1. a It is probable that management's plans will be effectively implemented within one year after the date that the financial statements are issued. 2. b It is probable that management's plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. ##### [205-40-50-8](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:f0dd2dbe1fc8ede9783f39862e20e38ecc629108a7f1e521fe22b289dfeb252c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The evaluation of whether it is probable that management's plans will be effectively implemented within one year after the date that the financial statements are issued shall be based on the feasibility of implementation of management's plans in light of an entity's specific facts and circumstances. Generally, to be considered probable of being effectively implemented, management (or others with the appropriate authority) must have approved the plan before the date that the financial statements are issued. Paragraph [205-40-55-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-3) provides examples of plans that management may implement and information that management should consider for each plan in evaluating the feasibility of the plans. ##### [205-40-50-9](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:b87729fd1e74614999c19fa9b766841e47acafe62d22752f27f46def1d418425 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The mitigating effect of management's plans that are not probable of being effectively implemented within one year after the date that the financial statements are issued shall not be considered in evaluating whether substantial doubt about an entity's ability to continue as a going concern is alleviated. ##### [205-40-50-10](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:ad7c8121df7d516d4d6d4e53ffbc75f4c14d5f34ed56c53688eed775b080b697 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As required in paragraph [205-40-50-7](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-7), management shall further assess its plans that are probable of being effectively implemented to determine whether it is probable that those plans will mitigate the conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. In this assessment, management shall consider the expected magnitude and timing of the mitigating effect of its plans in relation to the magnitude and timing of the relevant conditions or events that those plans intend to mitigate. ##### [205-40-50-11](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:2b3cc8089b01e21a9e6893606ffdd997bc2e47a2d93e5af5e9de7c55b04aa14e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan to meet an entity's obligations as they become due through [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation.") (as defined in Subtopic 205-30 on the liquidation basis of accounting) shall not be considered as part of management's plans in evaluating whether substantial doubt is alleviated even if liquidation is probable of occurring. #### Disclosures When Substantial Doubt Is Raised but Is Alleviated by Management's Plans (Substantial Doubt Does Not Exist) ##### [205-40-50-12](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-12) Pending content: yes Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:f77cb692b9d0bf7cd8f0ab8868a5f8287e343d57c9d970f32298d06c52806ded Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is alleviated as a result of consideration of management's plans, an entity shall disclose in the notes to financial statements information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the notes): 1. a Principal conditions or events that raised substantial doubt about the entity's ability to continue as a going concern (before consideration of management's plans) 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that alleviated substantial doubt about the entity's ability to continue as a going concern. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is alleviated as a result of consideration of management's plans, an entity shall disclose in the notes to interim and annual financial statements information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the notes): 1. a Principal conditions or events that raised substantial doubt about the entity's ability to continue as a going concern (before consideration of management's plans) 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that alleviated substantial doubt about the entity's ability to continue as a going concern. #### Disclosures When Substantial Doubt Is Raised and Is Not Alleviated (Substantial Doubt Exists) ##### [205-40-50-13](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-13) Pending content: yes Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:5208555443918988efe863e3faf98db94a771134c906e5bb080c1e98262a6569 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is not alleviated, the entity shall include a statement in the notes to financial statements indicating that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)"). Additionally, the entity shall disclose information that enables users of the financial statements to understand all of the following: 1. a Principal conditions or events that raise substantial doubt about the entity's ability to continue as a going concern 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is not alleviated, the entity shall include a statement in the notes to interim and annual financial statements indicating that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)"). Additionally, the entity shall disclose information that enables users of the financial statements to understand all of the following in interim and annual reporting periods: 1. a Principal conditions or events that raise substantial doubt about the entity's ability to continue as a going concern 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. ##### [205-40-50-14](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-14) Pending content: yes Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:ac3d7f0c420cce0e726c82246451a9fd8889d13927c46aaf75a852d7f0051939 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If conditions or events continue to raise substantial doubt about an entity's ability to continue as a going concern in subsequent annual or interim reporting periods, the entity shall continue to provide the required disclosures in paragraphs [205-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-12) in those subsequent periods. Disclosures should become more extensive as additional information becomes available about the relevant conditions or events and about management's plans. An entity shall provide appropriate context and continuity in explaining how conditions or events have changed between reporting periods. For the period in which substantial doubt no longer exists (before or after consideration of management's plans), an entity shall disclose how the relevant conditions or events that raised substantial doubt were resolved. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If conditions or events continue to raise substantial doubt about an entity's ability to continue as a going concern in subsequent annual or interim reporting periods, the entity shall continue to provide the required disclosures in paragraphs [205-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-12) in those subsequent periods. Disclosures should become more extensive as additional information becomes available about the relevant conditions or events and about management's plans. An entity shall provide appropriate context and continuity in explaining how conditions or events have changed between reporting periods. For the period in which substantial doubt no longer exists (before or after consideration of management's plans), an entity shall disclose how the relevant conditions or events that raised substantial doubt were resolved. The disclosures in this paragraph are required in interim and annual reporting periods. Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:8814a193fe23fec38656795482cf9733d40327c2d4aa04106329f765a80adc2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/40/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [205-40-55-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:01f53bb76554b706ec70a1cce85c93a34b752f5bb633c570139ce1c49c458ccb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following flowchart depicts the decision process to follow for evaluating whether there is substantial doubt about an entity's ability to continue as a going concern and determining related disclosure requirements. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-03959127-76AB-449E-B631-B983D521E9C3-low.gif) No "Are the criteria met for the liquidation basis of accounting? (Subtopic 205-30)" "Are there conditions or events, considered in the aggregate, that raise substantial doubt about an entity's ability to continue as a going concern within one year after the date the financial statements are issued (or available to be issued)? (paragraphs 205-40-50-01 through 50-5)" "An entity shall disclose information to help users understand the following when substantial doubt is alleviated by management's plans: 1. Principal conditions or events that raised substantial doubt, before consideration of management's plans 2. Management's evaluation of the significance of those conditions or events 3. Management's plans that alleviated substantial doubt. (paragraph 205-40-50-12)" Apply the liquidation basis of accounting. (Subtopic 205-30) "No disclosures are required specific to going concern uncertainties under Subtopic 205-40. See Topics 275 and 450 for other disclosures about risks, uncertainties, and contingencies, as applicable." "Is it probable that management's plans will be effectively implemented? (paragraphs 205-40-50-7 through 50-8)" Yes No No Yes Yes Start "An entity shall disclose information to help users understand the following when substantial doubt is not alleviated: 1. Principal conditions or events that raise substantial doubt 2. Management's evaluation of the significance of those conditions or events 3. Management's plans that are intended to mitigate the conditions or events that raise substantial doubt. The entity also should include in the footnotes a statement indicating that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued). (paragraph 205-40-50-13)" No "Consider management's plans intended to mitigate the adverse conditions or events. (paragraphs 205-40-50-6 through 50-11)" "Is it probable that management's plans will mitigate the relevant conditions or events that raise substantial doubt? (paragraph 205-40-50-10)" Yes ##### [205-40-55-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:ab24eb4a3d0d349922ab31ac84f328e52ab94153dbe845f580d4e172f5e4ae6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of adverse conditions and events that may raise [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies."). The examples are not all-inclusive. The existence of one or more of these conditions or events does not determine that there is substantial doubt about an entity's ability to continue as a going concern. Similarly, the absence of those conditions or events does not determine that there is no substantial doubt about an entity's ability to continue as a going concern. Determining whether there is substantial doubt depends on an assessment of relevant conditions and events, in the aggregate, that are known and reasonably knowable at the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)") (or at the date the [financial statements are available to be issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-available-to-be-issued "Financial statements are considered available to be issued when they are complete in a form and format that complies with GAAP and all approvals necessary for issuance have been obtained, for example, from management, the board of directors, and/or significant shareholders. The process involved in creating and distributing the financial statements will vary depending on an entity's management and corporate governance structure as well as statutory and regulatory requirements.") when applicable). An entity should weigh the likelihood and magnitude of the potential effects of the relevant conditions and events, and consider their anticipated timing. 1. a Negative financial trends, for example, recurring operating losses, working capital deficiencies, negative cash flows from operating activities, and other adverse key financial ratios 2. b Other indications of possible financial difficulties, for example, default on loans or similar agreements, arrearages in dividends, denial of usual trade credit from suppliers, a need to restructure debt to avoid default, noncompliance with statutory capital requirements, and a need to seek new sources or methods of financing or to dispose of substantial assets 3. c Internal matters, for example, work stoppages or other labor difficulties, substantial dependence on the success of a particular project, uneconomic long-term commitments, and a need to significantly revise operations 4. d External matters, for example, legal proceedings, legislation, or similar matters that might jeopardize the entity's ability to operate; loss of a key franchise, license, or patent; loss of a principal customer or supplier; and an uninsured or underinsured catastrophe such as a hurricane, tornado, earthquake, or flood. ##### [205-40-55-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:0d62a809111bc451f85767c777d9426c631f8f79de5721054260b53e5f556eef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of plans that management may implement to mitigate conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. The examples are not all-inclusive. Below each example is a list of the types of information that management should consider at the date that the financial statements are issued in evaluating the feasibility of the plans to determine whether it is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that the plan will be effectively implemented within one year after the date that the financial statements are issued. 1. a Plans to dispose of an asset or business: 1. 1 Restrictions on disposal of an asset or business, such as covenants that limit those transactions in loan or similar agreements, or encumbrances against the asset or business 2. 2 Marketability of the asset or business that management plans to sell 3. 3 Possible direct or indirect effects of disposal of the asset or business 2. b Plans to borrow money or restructure debt: 1. 1 Availability and terms of new debt financing, or availability and terms of existing debt refinancing, such as term debt, lines of credit, or arrangements for factoring receivables or sale and leaseback of assets 2. 2 Existing or committed arrangements to restructure or subordinate debt or to guarantee loans to the entity 3. 3 Possible effects on management's borrowing plans of existing restrictions on additional borrowing or the sufficiency of available collateral 3. c Plans to reduce or delay expenditures: 1. 1 Feasibility of plans to reduce overhead or administrative expenditures, to postpone maintenance or research and development projects, or to lease rather than purchase assets 2. 2 Possible direct or indirect effects on the entity and its cash flows of reduced or delayed expenditures 4. d Plans to increase ownership equity: 1. 1 Feasibility of plans to increase ownership equity, including existing or committed arrangements to raise additional capital 2. 2 Existing or committed arrangements to reduce current dividend requirements or to accelerate cash infusions from affiliates or other investors. Source downloaded (UTC): 2026-09-09T22:54:26.646Z to 2026-09-09T22:54:26.646Z Record version: sha256:471eda4e65abcf85fd095283b0615a0048e7db8d260abbc675347495b2c03894 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-65: 65 Transition Date and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/205/40/#65-transition-date-and-open-effective-date-information) SEC content: no ##### [205-40-65-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:26.646Z to 2026-09-09T22:54:26.646Z Record version: sha256:7ce0ccf58dc0d9e1a4cd2ad3705eef155b7b12cc78063f282404007c6d574720 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 06/20/2018 after the end of the transition period stated in Accounting Standards Update No. 2014-15, _Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern_. Source downloaded (UTC): 2026-09-09T22:54:31.391Z to 2026-09-09T22:54:40.616Z Record version: sha256:4ee68d4e95b722227fbce85a9f58a7c90a9ce55b864a98b3a89efd41975c351d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-905: Presentation of Financial Statements — Agriculture ### Machine-generated study aids ```json { "summary": "ASC 205-905 addresses presentation of financial statements for entities in the agricultural industry, with separate Cooperatives Subsections for agricultural cooperatives. Its scope mirrors that of ASC 905-10-15 (General and Cooperatives Subsections). Its only substantive presentation rule permits agricultural cooperatives to label earnings using alternative terms such as margins, net proceeds, or savings (205-905-45-1).", "key_points": [ "This Subtopic provides presentation guidance for financial statements of agricultural entities, with the Cooperatives Subsections covering agricultural cooperatives (205-905-05-1 and 205-905-05-2).", "Scope follows the Overall Agriculture Subtopic: the General Subsection of Section 905-10-15 for general guidance and the Cooperatives Subsection of Section 905-10-15 for cooperatives (205-905-15-1 and 205-905-15-2).", "Agricultural cooperatives may use other terms for earnings, such as margins, net proceeds, or savings (205-905-45-1).", "The Subtopic itself supplies no additional recognition or measurement requirements; it is limited to presentation/terminology for the agriculture industry." ], "categories": [ "Presentation", "Industry-specific", "Financial statement presentation" ], "audience_level": "introductory", "student_note": "This is a very short industry overlay: the only operative rule is that agricultural cooperatives can call their bottom line \"margins,\" \"net proceeds,\" or \"savings\" instead of \"earnings.\" Students often expect substantive agriculture accounting rules here — those live in ASC 905, not in 205-905.", "related_topics": [ "905-10", "905", "205-10", "905-330", "905-360" ], "key_concepts": [ "agricultural cooperatives", "financial statement presentation", "earnings terminology", "margins", "net proceeds", "savings", "industry-specific guidance" ] } ``` Source downloaded (UTC): 2026-09-09T22:54:31.391Z to 2026-09-09T22:54:31.391Z Record version: sha256:4214be23057cf070e74be728e8310f67a3da6e81a62f1359dd99526254d8286b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-905-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/905/#00-status) SEC content: no ##### [205-905-00-1](https://asc.understandingaccounting.org/asc/205/905/#205-905-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:31.391Z to 2026-09-09T22:54:31.391Z Record version: sha256:380b11a43b5dba8a5f271cf9c3904db352ea848cc7fa4287b9375e5056285f2c 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
Agricultural CooperativeAddedAccounting Standards Update No. 2014-0603/14/2014
CooperativesSupersededAccounting Standards Update No. 2014-0603/14/2014
Member of an Agricultural CooperativeAddedAccounting Standards Update No. 2014-0603/14/2014
Nonmember of an Agricultural CooperativeAddedAccounting Standards Update No. 2014-0603/14/2014
PatronsAddedAccounting Standards Update No. 2014-0603/14/2014
905-205-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
905-205-05-2AmendedAccounting Standards Update No. 2014-0603/14/2014
905-205-15-2AmendedAccounting Standards Update No. 2014-0603/14/2014
905-205-45-1AmendedAccounting Standards Update No. 2014-0603/14/2014
Source downloaded (UTC): 2026-09-09T22:54:35.076Z to 2026-09-09T22:54:35.076Z Record version: sha256:d59309960d1c7becb402db0b196224b43a9d00dbb2eaf69ff84a1f131ca9eeef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-905-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/905/#05-overview-and-background) SEC content: no ##### [205-905-05-1](https://asc.understandingaccounting.org/asc/205/905/#205-905-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:35.076Z to 2026-09-09T22:54:35.076Z Record version: sha256:d47ac46ed99b3b04bead632c7e73283be52a43a0a562a1d007b7e4aa78054047 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for the presentation of financial statements for entities in the agricultural industry. The guidance for [agricultural cooperatives](https://asc.understandingaccounting.org/glossary/a/#agricultural-cooperative "The Agricultural Marketing Act of 1929 defines a cooperative association as any association in which farmers act together in processing, preparing for market, handling, and/or marketing the farm products of persons so engaged, and also means any association in which farmers act together in purchasing, testing, grading, processing, distributing, and/or furnishing farm supplies and/or farm business services. Provided, however, that such associations are operated for producers or purchasers and conform to one or both of the following requirements: No member of an agricultural cooperative association is allowed more than one vote because of the amount of stock or membership capital he may own therein. The association does not pay dividends on stock or membership capital in excess of 8 percent per year. In addition to meeting either of the requirements in this paragraph, the association shall not deal in farm products, farm supplies, and farm business services with or for nonmembers of an agricultural cooperative in an amount greater in value than the total amount of such business transacted by it with or for members. All business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the volume of member and nonmember business transacted by such association.") is presented in the Cooperatives Subsections. ### Cooperatives ##### [205-905-05-2](https://asc.understandingaccounting.org/asc/205/905/#205-905-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:35.076Z to 2026-09-09T22:54:35.076Z Record version: sha256:bc1ed235f149b34011a5d6345f4551bddd7e4d50dc2c3721fbeef03a4bb2934b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperatives Subsections provide guidance for the presentation of financial statements for cooperatives in the agricultural industry. Source downloaded (UTC): 2026-09-09T22:54:37.112Z to 2026-09-09T22:54:37.112Z Record version: sha256:b7da81d0bb50dc56213259707ca0368c9737766fc9e8531cdb2c636cca656932 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-905-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/905/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-905-15-1](https://asc.understandingaccounting.org/asc/205/905/#205-905-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:37.112Z to 2026-09-09T22:54:37.112Z Record version: sha256:15b2bcb104387caecf51d1ab09c8a91a58218e39fc0e582164a5ff11f887f98a 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 the [General Subsection](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) of Section 905-10-15. ### Cooperatives ##### [205-905-15-2](https://asc.understandingaccounting.org/asc/205/905/#205-905-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:37.112Z to 2026-09-09T22:54:37.112Z Record version: sha256:e90e65b69de87c2d1d0704bf0dfc15dd6a9103380c87da6c907dd70a6d897661 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Cooperatives Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the [Cooperatives Subsection](https://asc.understandingaccounting.org/asc/905/10/#15-scope-and-scope-exceptions) of Section 905-10-15. Source downloaded (UTC): 2026-09-09T22:54:40.616Z to 2026-09-09T22:54:40.616Z Record version: sha256:a18153defb9b727cd60f06a97454f2d4f31ec36d0a0f1fafee25edef190af22d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-905-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/905/#45-other-presentation-matters) SEC content: no ### Cooperatives ##### [205-905-45-1](https://asc.understandingaccounting.org/asc/205/905/#205-905-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:40.616Z to 2026-09-09T22:54:40.616Z Record version: sha256:6622c2553d9794cfe7fc272fde08cfe03142e45ef06520a71fadd5542e12115d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Agricultural cooperatives](https://asc.understandingaccounting.org/glossary/a/#agricultural-cooperative "The Agricultural Marketing Act of 1929 defines a cooperative association as any association in which farmers act together in processing, preparing for market, handling, and/or marketing the farm products of persons so engaged, and also means any association in which farmers act together in purchasing, testing, grading, processing, distributing, and/or furnishing farm supplies and/or farm business services. Provided, however, that such associations are operated for producers or purchasers and conform to one or both of the following requirements: No member of an agricultural cooperative association is allowed more than one vote because of the amount of stock or membership capital he may own therein. The association does not pay dividends on stock or membership capital in excess of 8 percent per year. In addition to meeting either of the requirements in this paragraph, the association shall not deal in farm products, farm supplies, and farm business services with or for nonmembers of an agricultural cooperative in an amount greater in value than the total amount of such business transacted by it with or for members. All business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the volume of member and nonmember business transacted by such association.") may use other terms for earnings, such as margins, net proceeds, or savings. Source downloaded (UTC): 2026-09-09T22:54:43.054Z to 2026-09-09T22:54:51.555Z Record version: sha256:c66371ec36f7aef3004b7da2053b61ca4ac21f8be614b13ac96721fdca2566b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-915: Presentation of Financial Statements — Development Stage Entities ### Machine-generated study aids ```json { "summary": "ASC 205-915 formerly contained the presentation requirements for development stage entities (inception-to-date cumulative amounts in the income statement, cash flow statement, and equity statement, plus identification of the entity as development stage). Every paragraph in Sections 05, 15, and 45 was superseded by ASU 2014-10, so the subtopic now imposes no requirements. Entities that would once have been development stage entities simply follow the ordinary presentation guidance in ASC 205 and elsewhere in GAAP.", "key_points": [ "All content of this subtopic — overview (205-915-05-1), scope (205-915-15-1), and other presentation matters (205-915-45-1 through 45-6) — was superseded by Accounting Standards Update No. 2014-10.", "As a result, there is no longer any requirement to label an entity as a development stage entity or to present inception-to-date cumulative amounts in the income statement, statement of cash flows, or statement of stockholders' equity.", "Entities formerly within the development stage entity classification now apply the same presentation guidance as any other reporting entity under ASC 205 and related topics.", "The subtopic is retained in the Codification only as a record of superseded paragraphs; citing it as authoritative support for current financial statements is incorrect.", "Effective date and transition for the elimination of this guidance are governed by ASU 2014-10 rather than by any remaining text in 205-915." ], "categories": [ "Presentation", "Financial statement presentation", "Transition and effective dates" ], "audience_level": "introductory", "student_note": "Exam trap: candidates still remember the old \"cumulative amounts since inception\" columns for development stage entities — ASU 2014-10 deleted that entire regime, so start-ups and pre-revenue companies now present financial statements like everyone else. The subtopic survives in the Codification only as superseded shells.", "related_topics": [ "205", "810", "915", "275" ], "key_concepts": [ "development stage entity", "superseded guidance", "inception-to-date information", "financial statement presentation", "simplification of gaap" ] } ``` Source downloaded (UTC): 2026-09-09T22:54:43.054Z to 2026-09-09T22:54:43.054Z Record version: sha256:bbb6c7c2ac50e7064621a161c19e3c4bd6a9f14cf13fdb24028459ca53a2dc09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-915-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/915/#00-status) SEC content: no ##### [205-915-00-1](https://asc.understandingaccounting.org/asc/205/915/#205-915-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:43.054Z to 2026-09-09T22:54:43.054Z Record version: sha256:efecfe9e5a33c509331d668807e4ce799030f9a5191d17ab838fbce82325b53a 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
Development Stage EntitySupersededAccounting Standards Update No. 2014-1006/10/2014
915-205-05-1SupersededAccounting Standards Update No. 2014-1006/10/2014
915-205-15-1SupersededAccounting Standards Update No. 2014-1006/10/2014
915-205-45-1 through 45-6
SupersededAccounting Standards Update No. 2014-1006/10/2014
Source downloaded (UTC): 2026-09-09T22:54:46.354Z to 2026-09-09T22:54:46.354Z Record version: sha256:34985027c4d3083cd562809506db9145c8b1a5367259e366cec9c71865b8f4dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-915-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/915/#05-overview-and-background) SEC content: no ##### [205-915-05-1](https://asc.understandingaccounting.org/asc/205/915/#205-915-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:46.354Z to 2026-09-09T22:54:46.354Z Record version: sha256:407452bdb43e0bbdae829da75e4fc9240122846992acf6cc41ca6bacec4280e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). Source downloaded (UTC): 2026-09-09T22:54:48.166Z to 2026-09-09T22:54:48.166Z Record version: sha256:914add5422e2013fd82d3a5e612676a2693ea3d27ff6d1d559247cd7a20a767e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-915-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/915/#15-scope-and-scope-exceptions) SEC content: no ##### [205-915-15-1](https://asc.understandingaccounting.org/asc/205/915/#205-915-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:48.166Z to 2026-09-09T22:54:48.166Z Record version: sha256:cd02ee79611071845a17277dd4539ca27c92d4dd969bc9796edff9e1b27e5841 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). Source downloaded (UTC): 2026-09-09T22:54:49.937Z to 2026-09-09T22:54:49.937Z Record version: sha256:bf80daccfc71ebb0d1c9b1bcb06f8014d57392beb32471eb856fa5712af96202 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-915-20: 20 Glossary [Read section](https://asc.understandingaccounting.org/asc/205/915/#20-glossary) SEC content: no Source downloaded (UTC): 2026-09-09T22:54:51.555Z to 2026-09-09T22:54:51.555Z Record version: sha256:6b2dde18bc5a665d7414bc951b11434e03a2f379461f4bd4c0495303504457bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-915-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/915/#45-other-presentation-matters) SEC content: no ##### [205-915-45-1](https://asc.understandingaccounting.org/asc/205/915/#205-915-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:51.555Z to 2026-09-09T22:54:51.555Z Record version: sha256:a70a8f7aebc1413fb9c7c7b72e7c8f61a03e86308583ea18f9e136818859270e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). ##### [205-915-45-2](https://asc.understandingaccounting.org/asc/205/915/#205-915-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:51.555Z to 2026-09-09T22:54:51.555Z Record version: sha256:78cc59d444ea47e3d46a68c5e74e55e97bc131eefa94b24d0bba71e1784c76a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). ##### [205-915-45-3](https://asc.understandingaccounting.org/asc/205/915/#205-915-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:51.555Z to 2026-09-09T22:54:51.555Z Record version: sha256:a2f1e5e8c8a24588587937de30936a1f3d0c289391c11a05f09e29bf93962258 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). ##### [205-915-45-4](https://asc.understandingaccounting.org/asc/205/915/#205-915-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:51.555Z to 2026-09-09T22:54:51.555Z Record version: sha256:74c42ea29428391c255680ca966585ee49e12ae94a181f6fdc411c295aaaa598 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). ##### [205-915-45-5](https://asc.understandingaccounting.org/asc/205/915/#205-915-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:51.555Z to 2026-09-09T22:54:51.555Z Record version: sha256:9882bb02868437d4ee57210643983ddcf15d05ead23d84980506a6fe8f6b2c84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). ##### [205-915-45-6](https://asc.understandingaccounting.org/asc/205/915/#205-915-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:51.555Z to 2026-09-09T22:54:51.555Z Record version: sha256:9f6dbe2f36c24a04acfda90cc9becd6aef36df0f8302d1f36fc4c8406bd60b64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). Source downloaded (UTC): 2026-09-09T22:54:54.562Z to 2026-09-09T22:55:25.512Z Record version: sha256:b9fc7a2d22fdc3fa63010ef300b1664a5e5c01beabd825f49bcfe9babe17bbed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946: Presentation of Financial Statements — Financial Services—Investment Companies ### Machine-generated study aids ```json { "summary": "This subtopic governs how investment companies present the statement of changes in net assets and financial highlights. The statement of changes in net assets must separately show operations (net investment income, realized gains/losses, change in unrealized appreciation), net equalization credits/debits, distributions to shareholders (with tax return of capital separate), and capital share transactions. Financial highlights—per-share data, expense and net investment income ratios, total return (or since-inception IRR for certain limited-life funds), and capital commitment data—must be presented as a separate schedule or in the notes for each class of common shares.", "key_points": [ "The statement of changes in net assets summarizes operations, net equalization credits or debits, distributions to shareholders (tax return of capital shown separately), capital share transactions, and capital contributions; temporary tax/GAAP differences that become permanent are reclassified to paid-in capital (205-946-45-3).", "Financial highlights are presented as a separate schedule or in the notes for each class of common shares; funds that are not unitized present only investment returns (total return or IRR) and net investment income and expense ratios (205-946-50-1; 205-946-50-5; 205-946-45-2).", "Per-share data for registered funds and funds computing unitized NAV runs from beginning NAV through net investment income, realized/unrealized gains and losses (a balancing amount), total from investment operations, distributions, capital items, payments by affiliates, to ending NAV (205-946-50-7).", "Expense and net investment income ratios follow the statement of operations: an incentive structured as a fee is in the expense ratio, but an incentive allocation of profits is not, though all incentives must be reflected in the financial highlights disclosure (205-946-50-13 through 50-14).", "Total return is required for all investment companies; unitized funds compute it from change in NAV per share assuming reinvestment, while non-unitized funds use a theoretical investment with returns geometrically linked at capital cash flow dates and reported before and after incentive allocations (205-946-50-18 through 50-22).", "Limited-life, non-continuously-offered funds meeting the five criteria must disclose since-inception internal rate of return net of all incentives, and commitment funds must disclose total committed capital, year of formation, and the ratio of contributed to committed capital (205-946-50-23; 205-946-50-25).", "In master-feeder structures the feeder's ratios include its proportionate share of master fund expenses (and no portfolio turnover), while funds-of-funds compute ratios only at the reporting fund level with disclosure that underlying investee fund income and expenses are excluded (205-946-50-16 through 50-17; 205-946-50-28 through 50-30)." ], "categories": [ "Presentation", "Disclosure", "Financial statement presentation", "Industry-specific" ], "audience_level": "advanced", "student_note": "Investment company reporting substitutes financial highlights and the statement of changes in net assets for the ordinary income-statement/equity presentation, so know which items appear where. The classic trap is the incentive arrangement: an incentive fee hits the expense ratio but an incentive allocation of profits does not—yet both must still be reflected in the financial highlights and in the before/after incentive total return.", "related_topics": [ "946-10", "946-20", "946-205", "946-210", "946-830", "205-10" ], "key_concepts": [ "statement of changes in net assets", "financial highlights", "expense ratio", "net investment income ratio", "total return", "internal rate of return since inception", "master-feeder structure", "incentive allocation" ] } ``` Source downloaded (UTC): 2026-09-09T22:54:54.562Z to 2026-09-09T22:54:54.562Z Record version: sha256:d39778b52e77fd1811067194df3019535816dec7e5dbce66726ff647736dd52b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/946/#00-status) SEC content: no ##### [205-946-00-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:54.562Z to 2026-09-09T22:54:54.562Z Record version: sha256:3d5b8bbfd0ff7cd8b5cd2926d20357d49dd402a4ed5e55034faade4e8f355603 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
946-205-45-1AmendedAccounting Standards Update No. 2016-1912/14/2016
946-205-45-1AmendedMaintenance Update 2016-05 (PDF)04/12/2016
946-205-45-3AmendedMaintenance Update 2018-12 (PDF)09/10/2018
Source downloaded (UTC): 2026-09-09T22:54:57.947Z to 2026-09-09T22:54:57.947Z Record version: sha256:8efa730d597f4a06d45b3a6d87e65c499b02c3509749f5152c93567d2bb5eb58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/946/#05-overview-and-background) SEC content: no ##### [205-946-05-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:57.947Z to 2026-09-09T22:54:57.947Z Record version: sha256:8706f7fbcefe3f8dc99a2e217fc4dcedb4d91ed8240b122836abd06d22cb1f47 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses the presentation of financial statements for investment companies, including both of the following matters: 1. a The statement of changes in net assets 2. b Financial highlights. Source downloaded (UTC): 2026-09-09T22:55:00.374Z to 2026-09-09T22:55:00.374Z Record version: sha256:d0185e8b07be730b29de29127b6d3920016fe9d5fa86d4a4e2a0e77e7bd5102a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/946/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-946-15-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:00.374Z to 2026-09-09T22:55:00.374Z Record version: sha256:83de0ef49b0cbd322ed5e6ded7e049d130e92bc2966e23cf9a16c8acf3bac5aa 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 946-10-15. Source downloaded (UTC): 2026-09-09T22:55:07.169Z to 2026-09-09T22:55:07.169Z Record version: sha256:6a13b6223d777b5d42be8056b7918c350f270cc31fda2e9baf276cb9c09e8df3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/946/#45-other-presentation-matters) SEC content: no ##### [205-946-45-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:07.169Z to 2026-09-09T22:55:07.169Z Record version: sha256:3aaf66c66774f89dc833a2e46a2c637db0646bbc14acae42b7800254e8964fef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The overall objective of financial statements, including financial highlights, of investment companies is to present net assets, results of operations, changes in net assets, and financial highlights resulting from investment activities and, if applicable, from capital share transactions. In reporting to shareholders, investment companies and investment companies registered with the Securities and Exchange Commission (SEC) shall present financial statements and financial highlights as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F7081533-8395-4274-B876-A6D050381BAD-low.gif) Nonregistered Investment Companies Registered Investment Companies "A statement of assets and liabilities with a schedule of investments or a statement of net assets, which includes a schedule of investments therein, as of the close of the latest period. At a minimum, a condensed schedule of investments (as discussed in paragraphs 946-210-50-4 through 50-10) should be provided for each statement of assets and liabilities." "A statement of assets and liabilities with a schedule of investments or a statement of net assets, which includes a schedule of investments therein (that is, a detailed list of investments in securities, options written, securities sold short, and other investments) as of the close of the latest period.(b) A schedule of investments should be provided for each statement of assets and liabilities in conformity with SEC Regulation S-X, Rule 12-12 or 12-12(a)." A statement of operations for the latest period. "A statement of operations for the latest year.(b), (c)" A statement of cash flows for the latest period (if not exempted by Subtopic 230-10). "A statement of cash flows for the latest year (if not exempted by Subtopic 230-10).(b),(c)" A statement of changes in net assets for the latest period. "A statement of changes in net assets for the latest two years (for semiannual reports, the most recent semiannual period and preceding fiscal year).(b),(c)" "Financial highlights for the latest period consisting of per share operating performance, net investment income, and expense ratios and total return for all investment companies organized in a manner using unitized net asset value.(d)" "Financial highlights for the latest five fiscal years(b),(c),(e) (for semiannual reports, the semiannual period and generally the preceding five fiscal years)." (a) "In 2004, the SEC adopted rule and form amendments that among other matters amended Article 6 and Article 12 of SEC Regulation S-X to permit a registered management investment company to include, under Regulation S-X, Rule 12-12C, a summary schedule of investments in securities of unaffiliated issuers in its reports to shareholders, provided that the complete portfolio schedule required by Rule 12-12 is filed with the Securities and Exchange Commission semi-annually and is provided to shareholders upon request free of charge. All other complete portfolio schedules required by Regulation S-X (Rule 12-12A-Investments-securities sold short, Rule 12-12B-Open option contracts written, Rule 12-13-Investments other than securities, and Rule 12-14-Investments in and advances to affiliates) continue to be required in both shareholder reports and SEC Form N-CSR. The amendments also exempt money market funds (which utilize the exemptive requirements of Rule 2a-7 under the 1940 Act) from including a portfolio schedule in reports to shareholders, provided that this information is filed with the SEC on Form N-CSR semi-annually and provided to shareholders upon request, free of charge. See SEC Release No. IC-26372 under the Investment Company Act of 1940 (1940 Act) for additional information and for effective date and compliance date information." "Although that SEC rule allows a money market fund to exclude its portfolio of investments from its shareholder reports, the generally accepted accounting principles (GAAP) requirement in this Guide that a money market fund present, at a minimum, a condensed schedule of investments for each statement of assets and liabilities (see paragraphs 946-210-50-1 through 50-3), has not been modified." (b) "If the most current statement of assets and liabilities included in a registration statement is as of a date more than 245 days prior to the date the filing is expected to become effective, then the financial statements, which may be unaudited, included in such filing are to be updated to a date within 245 days of the expected effective date. A statement of assets and liabilities as of such date must be provided as well as a statement of operations, cash flows (if applicable), and statement of changes in net assets for the interim period from the end of the most recent fiscal year for which a statement of assets and liabilities is presented and the date of the most recent interim statement of assets and liabilities." (c) The Securities and Exchange Commission staff currently requires that sufficient fiscal periods be presented to cover at least twelve calendar months' results of operations ending on the most recent fiscal year-end date (twenty-four calendar months' changes in net assets; sixty months' financial highlights). (d) "For investment companies not using unitized net asset value, financial highlights should be presented and consist of net investment income and expense ratios and total return, or the internal rate of return since inception if applicable." (e) Item 8(a) of SEC Form N-1A requires financial highlights to be presented for the latest five years in the fund's prospectus. Item 4 of SEC Form N-2 requires financial highlights to be presented for the latest ten years in the fund's prospectus. ##### [205-946-45-2](https://asc.understandingaccounting.org/asc/205/946/#205-946-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:07.169Z to 2026-09-09T22:55:07.169Z Record version: sha256:21d069291d3057ba56d13a0658c22b6cad51298a33e046b98873dcca7b66728b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For investment companies not using [unitized](https://asc.understandingaccounting.org/glossary/u/#unitized "See Nonregistered Investment Partnerships—Financial Highlights.") net asset value, financial highlights shall be presented and consist of net investment income and expense ratios and total return, or the internal rate of return since inception if applicable. #### Statement of Changes in Net Assets ##### [205-946-45-3](https://asc.understandingaccounting.org/asc/205/946/#205-946-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:07.169Z to 2026-09-09T22:55:07.169Z Record version: sha256:2924b1477079d4c6d962bda1720a346169aa86d2b30e74f69489a62616dfd058 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The statement of changes in net assets summarizes results from operations, net equalization credits or debits, dividends and distributions to shareholders, capital share transactions, and capital contributions. The increase or decrease in net assets of a registered investment company comprises the following categories: 1. a Operations. Net investment income or loss, net realized gains or losses from investments and foreign currency transactions, and changes in unrealized appreciation or depreciation on investments and translation of assets and liabilities in foreign currencies, as shown in the statement of operations, shall be presented separately to arrive at the net change in net assets resulting from operations. 2. b Net equalization debits or credits. If equalization accounting is used, undistributed investment income included in the price of capital shares issued or reacquired shall be shown as a separate line item. 3. c Distributions to shareholders. Distributions shall be disclosed as a single line item, except for tax [return of capital](https://asc.understandingaccounting.org/glossary/r/#return-of-capital "Distributions by investment companies in excess of tax-basis earnings and profits.") distributions, which shall be presented separately. Distributions made by regulated investment companies often differ from aggregate undistributed net investment income (including net equalization credits or debits and undistributed net investment income) determined in accordance with generally accepted accounting principles (GAAP) and accumulated net realized gains (total net realized gains determined in accordance with GAAP). The principal cause is that required minimum fund distributions are based on income and gain amounts determined in accordance with federal income tax regulations, rather than GAAP. The differences created can be temporary, meaning that they will reverse in the future, or they can be permanent. If in a subsequent period all or a portion of a temporary difference becomes a permanent difference, the amount of the permanent difference shall be reclassified to paid-in capital. ##### [205-946-45-4](https://asc.understandingaccounting.org/asc/205/946/#205-946-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:07.169Z to 2026-09-09T22:55:07.169Z Record version: sha256:513c1461de59fdc2c0ca81d18d306542906d63c3f064ac824a36a9b9b782a150 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management investment companies that have multiple classes of shares or master-feeder structures shall apply all of the following guidance with respect to the statement of changes in net assets: 1. a Multiple class funds. Dividends and distributions paid to shareholders and capital share transactions for each class are required to be presented (or disclosed in the notes to financial statements). 2. b Master-feeder funds: 1. 1 Master funds. The statement of changes in net assets of a master fund shall report capital transactions from or to feeder funds as contributions and withdrawals, respectively. Dividend distributions are normally not made by the master fund when the master fund is treated as a partnership for tax purposes. In those situations where the master fund is treated as a registered investment company and is taxed either as a corporation or trust, there may be distributions to the feeder funds to eliminate any accumulated taxable income at the master fund level. 2. 2 Feeder funds. For feeder funds, the standard reporting format for investment companies with simple capital structures is used. If the feeder fund is a multiple-class fund, the guidance for multiple-class funds in (a) and elsewhere in this Topic shall be followed. ##### [205-946-45-5](https://asc.understandingaccounting.org/asc/205/946/#205-946-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:07.169Z to 2026-09-09T22:55:07.169Z Record version: sha256:af1eba89ad14ab23703030a90829281fe51c5a299da425beaad90bb6dc21962f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For investment partnerships, the statement of changes in net assets may be combined with the statement of changes in partners' capital if the information in paragraph [946-205-45-3](https://asc.understandingaccounting.org/asc/205/946/#205-946-45-3) is presented. ##### [205-946-45-6](https://asc.understandingaccounting.org/asc/205/946/#205-946-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:07.169Z to 2026-09-09T22:55:07.169Z Record version: sha256:dc865bc99795c721f6afd6187b43449cb5c9360c675f30a65cdc7bb50e99ff1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nonpublic investment companies may present a complete set of master financial statements with each feeder financial statement, in a manner that is consistent with the requirements for public investment companies. Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:b48cd891ce3e1eb2b26c4da89b0018fa1e477815fe29a33a83e3a346bf6016b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/946/#50-disclosure) SEC content: no #### Financial Highlights ##### [205-946-50-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:f17caee259b2da21c7613bfb8218fa6f9bbead5dccfab7feaf75410ea93358b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial highlights shall be presented either as a separate schedule or within the notes to financial statements for each class of common shares outstanding. ##### [205-946-50-2](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:3121d2c5db450f7d8757d405bdc433ea73fcb5d4037d76f3c7c775eaae84ff07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investment companies with multiple classes of shares may present financial highlights only for those classes of shares that are included in reports to such shareholders. In such cases, the investment company shall include appropriate disclosures related to all classes so as to ensure that the financial statements are complete (for example, detail of capital share activity in the statement of changes in net assets or notes to financial statements). ##### [205-946-50-3](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:f233a0dbfb8d8b7bf13a5b3962415d21b6ddda8c488c332320405a2f2b2f8f94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nonregistered investment partnerships shall disclose per-share data for all common classes in general-purpose financial statements. However, it is permissible for [financial highlights](https://asc.understandingaccounting.org/glossary/f/#nonregistered-investment-partnerships-financial-highlights "Nonregistered investment partnerships, when disclosing financial highlights, shall interpret the terms classes, units, and theoretical investments as follows: Classes. Nonregistered investment funds typically have one of the following two classes of ownership interest, with one class being the management interest in the fund and the other being the investment interest: For unitized funds (that is, funds with units specifically called for in the governing underlying legal or offering documents), the management interest usually is a voting class and the investment interest is a nonvoting class. Temporary series of shares (that is, shares that are intended at the time of issuance to be consolidated at a later date with another specified series of shares that remains outstanding indefinitely) are not considered separate classes. Permanent series of a class of share shall be the basis for which that share's financial highlights are determined and presented. For nonunitized funds, the management interest usually is the general partner class and the investment interest usually is the limited partner class. Generally, a class has certain rights as governed by underlying legal documents or offering documents and local law. Rights to certain investments that do not otherwise affect the rights available under the underlying legal documents and local law do not ordinarily represent a separate share class. For example, rights to income and gains from a specific investment attributed solely to investors at the date the investment is made (side-pocket investments) are not considered to give rise to a share class. Similarly, a temporary series of shares is not considered a share class. Units. Only funds with units specifically called for in the governing underlying legal or offering documents shall be considered unitized. Some funds may employ units for convenience in making allocations to investors for internal accounting or bookkeeping purposes, but the units are not required or specified by legal or offering documents, and for all other purposes operate like nonunitized investment partnerships. For per-share operating performance, those funds are not considered unitized. Theoretical investment. The term theoretical investment in paragraph 946-205-50-20 shall be considered as the actual aggregate amount of capital invested by each reporting class of investor as of the beginning of the fiscal reporting period, adjusted for cash flows related to capital contributions or withdrawals during the period.") to be presented only for those classes of shares that are included in reports to those classes. ##### [205-946-50-4](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:8a1d78549e16b6939180ab564e77478dfd2b4c8b99fbbe9db737de7a0e7f0978 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Only the classes related to the [nonmanaging investors](https://asc.understandingaccounting.org/glossary/n/#nonmanaging-investors "See Nonregistered Investment Partnerships—Financial Highlights.") (that is, classes of investors that do not consist exclusively of managing investor interests) are considered to be the common interests requiring financial highlight disclosure. ##### [205-946-50-5](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:a5e12e42951ddfc85dae800743c360175231605173f19d4d0dbecf41b777fbc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a fund is not [unitized](https://asc.understandingaccounting.org/glossary/u/#unitized "See Nonregistered Investment Partnerships—Financial Highlights."), only investment returns (either total return or internal rate of return) and net investment income and expense ratios shall be disclosed as indicated in paragraphs [946-205-50-10 through 50-25](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-10) . ##### [205-946-50-6](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:7f8c0ede6533b982107f17289290984f722cc9dc6eb7241b4eb9beb045e327b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The remainder of this guidance is organized according to the nature the item included in the financial highlights as follows: 1. a Per-share information 2. b Ratios 3. c Total return 4. d Capital commitments. ##### [205-946-50-7](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:3698407fb118b90efa1a9a30e08349740f34abc97922fceaf5cdc1b3e8b25228 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Per-share amounts presented are based on a share outstanding throughout each period presented. The caption descriptions in the per-share data shall be the same captions used in the statement of operations and statement of changes in net assets to allow the reader to determine which components of operations are included in or excluded from various per-share data. All of the following per-share information shall be presented for registered investment companies and for investment companies that compute unitized net asset value: 1. a Net asset value at the beginning of the period. 2. b Per-share net investment income or loss. Other methods, such as dividing net investment income by the average or weighted average number of shares outstanding during the period, are acceptable. 3. c Realized and unrealized gains and losses per share, which are balancing amounts necessary to reconcile the change in [net asset value per share](https://asc.understandingaccounting.org/glossary/n/#net-asset-value-per-share "Net asset value per share is the amount of net assets attributable to each share of capital stock (other than senior equity securities, that is, preferred stock) outstanding at the close of the period. It excludes the effects of assuming conversion of outstanding convertible securities, whether or not their conversion would have a diluting effect.") with the other per-share information presented. The amount shown in this caption might not agree with the change in aggregate gains and losses for the period. If such is the case, the reasons shall be disclosed. 4. d Total from investment operations, which represents the sum of net investment income or loss and realized and unrealized gain or loss. 5. e Distributions to shareholders shall be disclosed as a single line item except that tax [return of capital](https://asc.understandingaccounting.org/glossary/r/#return-of-capital "Distributions by investment companies in excess of tax-basis earnings and profits.") distributions shall be disclosed separately. Details of distributions shall conform to those shown in the statement of changes in net assets. 6. f Purchase premiums, redemption fees, or other capital items. 7. g Payments by affiliates (see paragraphs [946-20-05-2 through 05-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-05-2) ). 8. h Net asset value at the end of the period. The information required in (b) through (g) is not required for separate accounts that represent an ownership interest in the underlying separate account portfolios or mutual funds. ##### [205-946-50-8](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:a5000148cbdcecb84cb20b3e85ebc20f978852008526ec9cdae5022fb85a6f6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nonregistered investment partnerships that compute unitized net asset value shall disclose information for each reporting share class related to nonmanaging investors. The information shall be disclosed for each major category affecting net asset value per share (as shown in the statement of operations and statement of changes in net assets of the fund). ##### [205-946-50-9](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:bcbb3cc5a30118963e9e3c41e4f9cf7b81b8b79d79f3e838ac59acfa90f3166a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [946-210-45-16](https://asc.understandingaccounting.org/asc/210/946/#210-946-45-16) provides guidance on the net asset amount that shall be used for purposes of preparing the per-share disclosures required by this Section as the beginning and ending balance in the statement of changes in net assets of the fund. ##### [205-946-50-10](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:625d34675cd5c41c656db823f1b08c66d91f42327c9c24c5809c938e13f30e6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ratios of expenses and net investment income to average net assets are generally annualized for periods less than a year. ##### [205-946-50-11](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:a4c43415422f4baeccfd7a26a911d5f814c9e209e93fc89dac3f8e8a57f38211 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The ratio of expenses to average net assets should be increased by brokerage service and expense offset arrangements (see paragraphs [946-20-45-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-3) and [946-20-45-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-5)). ##### [205-946-50-12](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-12) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:805c2f8ae9d9b8cb57ebf5716cad46fabd7c39aff4474f6bec08be2e41beb306 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When determining expense and net investment income ratios, nonregistered investment partnerships shall calculate average net assets by using the fund's (or class's) weighted-average net assets as measured at each accounting period or periodic valuation (for example, daily, weekly, monthly, quarterly), adjusting for capital contributions or withdrawals from the fund occurring between accounting periods or valuations. (This paragraph is not intended to require any additional interim accounting period or periodic valuation date beyond that which may be provided in offering or organizational documents of the partnership.) ##### [205-946-50-13](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-13) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:6c5aab92304aa27e69eedeaf9835ef90780109ed1fc8d9405b1df7c5df614c5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expense and net investment income ratios shall be calculated by nonregistered investment partnerships based on the expenses allocated to each common or investor class (for example, the limited partner class) before the effects of any incentive allocation. Adequate disclosure shall be made to indicate that the net investment income ratio does not reflect the effects of any incentive allocation. Expenses directly related to the total return of the fund, such as incentive fees, and nonrecurring expenses, such as organizational costs, shall not be annualized when determining the expense ratio. Disclosure shall be made of the expenses that have not been annualized. ##### [205-946-50-14](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-14) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:4dbaf1550da4f872d4c6df399e154a9d3697ce131d31f5a64c1ac447fc211945 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Generally, the determination of expenses for computing those ratios shall follow the presentation of expenses in the fund's statement of operations. Accordingly, if the manager's or general partner's incentive is structured as a fee rather than an allocation of profits, the incentive fee would be factored into the computation of an expense ratio. Because an incentive allocation of profits is not presented as an expense, it shall not be considered part of the expense ratio. However, to avoid potentially significant inconsistencies in ratio presentations based solely on the structuring of incentives as fees or allocations, all incentives shall be reflected in the disclosure of financial highlights. ##### [205-946-50-15](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-15) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:e39befdac8cc5526f93a92132d43e8103ea6ea84545ecebac7328e1984ec5b8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additionally, for the expense ratio, disclosure shall be made of the effect of any agreement to waive or reimburse fees and expenses to each reporting class as a whole, as described in paragraph [946-20-50-7](https://asc.understandingaccounting.org/asc/946/20/#946-20-50-7), and of expense offsets, as described in paragraphs [946-20-45-3](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-3) and [946-20-45-5](https://asc.understandingaccounting.org/asc/946/20/#946-20-45-5). Agreements to waive a portion or all of certain fees to a specific investor, which do not relate to the share class as a whole, do not require disclosure in the financial highlights. However, as ratios are calculated for each common class taken as a whole, the financial statements shall disclose that an individual investor's ratio may vary from those ratios. ##### [205-946-50-16](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-16) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:189389351a085d5a08ba97da68dc4dec62d92fa07b935df3edad58113325c88d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Funds-of-funds shall compute the expense and net investment income ratios using the expenses presented in the fund's statement of operations. Therefore, funds-of-funds typically shall compute these ratios based on the net investment income and expense items at the fund-of-funds level only. Adequate disclosure shall be made so that it is clear to users that the ratios do not reflect the funds-of-funds' proportionate share of income and expenses of the underlying investee funds. ##### [205-946-50-17](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-17) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:502936132308da530a09327d7d43ec4c0c7a8a56e5b2b244209b1533b1e83270 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a master-feeder structure, the feeder shall include its proportionate share of the income and expenses of the master when computing the ratios at the feeder level. If, in a master-feeder structure, an incentive is levied as an allocation at the master level, the feeder shall present its share of the incentive allocation as a separate line item in the statement of operations. ##### [205-946-50-18](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-18) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:7266cd607efffdf48bdde3e886150eee79667c32224c00136a5b2f34b633a360 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Total return shall be presented for all investment companies (for interim periods, the disclosure shall include whether or not total return is annualized). ##### [205-946-50-19](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-19) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:8a8a56314cc8a234c55801c05e3fe50817ab3004e5fcd05a35341ad11ed1048b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For nonregistered investment companies organized in a manner using unitized net asset value, total return shall be computed based on the change in the net asset value per share during the period, and assuming that all dividends are reinvested. ##### [205-946-50-20](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-20) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:f55e5d9661f80904aa18434a81464ece4234fd748472f1f7816f46adf05ae66b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For investment companies not using unitized net asset value, including investment partnerships, total return shall be computed based on the change in value during the period of a [theoretical investment](https://asc.understandingaccounting.org/glossary/t/#theoretical-investment "See Nonregistered Investment Partnerships—Financial Highlights.") made at the beginning of the period. The change in value of a theoretical investment is measured by comparing the aggregate ending value of each class of investor with the aggregate beginning value of each such class, adjusted for cash flows related to capital contributions or withdrawals during the period. ##### [205-946-50-21](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-21) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:474def4561af5abab04be4b18c805e9c04d6232f7ae04466ff900402364a9b07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If capital cash flows occur during the reporting period, returns are geometrically linked based on capital cash flow dates. In general, geometrically linking requires the computation of performance for each discrete period within a year in which invested capital is constant (that is, for each period between investor cash flow dates), then multiplying those performance computations together to obtain the total return for a constant investment outstanding for the entire year. ##### [205-946-50-22](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-22) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:20164845898bc00e7c4ccd89d2604491a8058fcc95d7174aec2d23fde392f3b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because incentive allocations or fees may vary among investors within a class, total return for reporting classes subject to an incentive allocation or fee should report total return before and after the incentive allocation or fee for each reporting class taken as a whole. The effect of incentive allocations on total return is computed on a weighted-average aggregate capital basis. That results in an incentive computation less than the maximum if, for example, certain partners had loss carryovers at the beginning of the period. ##### [205-946-50-23](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-23) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:f999c98b9631b99c7e32f3ed62a501ec41330ad77736b62027a4bab5e4b6fd91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment company shall disclose the internal rate of return since inception of the investment company's cash flows and ending net assets at the end of the period (residual values) as presented in the financial statements, net of all incentive allocations or fees, to each investor class, as of the beginning and end of the period, if, by the terms of their offering documents, they meet all of the following criteria: 1. a Have limited lives 2. b Do not continuously raise capital and are not required to redeem their interests upon investor request (obtaining initial capital commitments from investors at time of organization and subsequently drawing on those commitments to make investments is not considered continuous for this purpose) 3. c Have as a predominant operating strategy the return of the proceeds from disposition of investments to investors 4. d Have limited opportunities, if any, for investors to withdraw before termination of the entity 5. e Do not routinely acquire (directly or indirectly) as part of their investment strategy market-traded securities and derivative instruments. ##### [205-946-50-24](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-24) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:e302e0ded1d806fc66ee7dd9601d6e08f452b3dc771ca059549e263e5ff32439 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A footnote to the financial highlights shall disclose that the internal rate of return since inception of the investment is net of all incentives. The internal rate of return since inception shall be based on a consistent assumption, no less frequently than quarterly, as to the timing of cash inflows and outflows (for example, on actual cash flow dates or cash inflows at the beginning of each month or quarter and cash outflows at the end of each month or quarter). All significant assumptions with respect to the internal rate of return since inception shall be disclosed in the footnotes to the financial highlights. ##### [205-946-50-25](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-25) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:7f2c8fef13bd0f63ec5554edddeba038be28e475c94c0410b50a2455a974926f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investment companies that obtain capital commitments from investors and periodically call capital under those commitments to make investments (principally limited-life, nonregistered investment partnerships) shall disclose in the financial highlights or in a note to financial statements the total committed capital of the partnership (including general partner), the year of formation of the entity, and the ratio of total contributed capital to total committed capital. #### Complex Capital Structures ##### [205-946-50-26](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-26) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:d7ff589db17619f05e265a57cff9e13cf6b594693bccbf9d65e1c04e1c95a54f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management investment companies that have multiple classes of shares or master-feeder structures shall apply the following guidance in preparing financial highlights. ##### [205-946-50-27](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-27) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:82ec1a930e65de17de8efe475b18def1bcfe9e4f5e23f1903384c06e9003bb89 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial highlights, including total return, shall be presented by class except for portfolio turnover, which is calculated at the fund level. The financial highlights for any class for which the shareholders are precluded from investing in may be omitted. ##### [205-946-50-28](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-28) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:bf34e80bb7b54e4c20add8b9898e2d9ba8fca4581baf1b9e00a69d07d13e045b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The feeder fund's ratios of expenses and net investment income to average net assets shall include the expenses of both the feeder and the master fund. Balance credits earned by the master fund shall be reflected in the feeder fund ratios as if they had been earned by the feeder fund directly. Feeder funds need not disclose a portfolio turnover rate because feeders invest all their assets in the master fund. ##### [205-946-50-29](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-29) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:1096d48f2f0220bbf0630c557da1f4faf96ccad40fc6962ab1f6714a265db7d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial highlights section of the master fund organized as a partnership is substantially modified, because per share information is not applicable. The master fund financial highlights section shall include the total return, ratios of expenses and net investment income to average net assets, and portfolio turnover rate. The financial highlights section of master funds not organized as a partnership shall report the normal per-share data. ##### [205-946-50-30](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-30) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:66cdb3be145313e459b0e43c62555a443c97d9fde41c3163c5c67c18addf48e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial highlights for the reporting fund in a fund-of-funds structure are usually similar to a standalone feeder fund in a master-feeder structure. Net investment income and expense ratios shall be computed based on the amounts reported in the statement of operations, and portfolio turnover shall be measured based on the turnover of investments made by the reporting fund in the investee funds, not looking through the investee funds to their portfolio activity. #### Separate Accounts ##### [205-946-50-31](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-31) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:0af019a1fcc86b5459b4c0cbb533fad1f5e090da3a16f17a0c40ebdd3f049228 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Separate accounts with more than two levels of contract charges or net unit values per subaccount may elect to present the required financial highlights for contract expense levels that had units issued or outstanding during the reporting period (including number of units, unit [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date."), net assets, expense ratio, investment income ratio, and total return), for either of the following: 1. a Each contract expense level that results in a distinct net unit value and for which units were issued or outstanding during each reporting period 2. b The range of the lowest and highest level of expense ratio and the related total return and unit fair values during each reporting period. The calculation of the ranges for the total return ratio and unit fair values should correspond to the groupings that produced the lowest and highest expense ratios. ##### [205-946-50-32](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-32) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:f5a1e1484e64608f422ed0e8c7a94683f4d14351ccd51901dd3d0f6b7e316cdc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial highlights table in the separate account's financial statements shall state clearly that the expense ratio considers only the expenses borne directly by the separate account and excludes expenses incurred directly by the underlying funds or charged through the redemption of units. ##### [205-946-50-33](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-33) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:dda0e7eaae8039a6e5600ee12c951c11cee1d9b7e9d7d5523bdf0de444d92903 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the ranges of expense ratios, total returns, and unit fair values are presented, the entity should disclose instances in which individual contract values do not fall within the ranges presented (for example, if a new product is introduced late in a reporting period and the total return does not fall within the range). ##### [205-946-50-34](https://asc.understandingaccounting.org/asc/205/946/#205-946-50-34) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:10.249Z to 2026-09-09T22:55:10.249Z Record version: sha256:02c4b5337c1e35d026e309adc1123e3b2cb4f35ad89ebc2db371dc72a3522b9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expense disclosure shall also include ranges of all fees that are charged by the separate account and a description of those fees, including whether they are assessed as direct reductions in unit values or through the redemption of units for all policies contained within the separate account. Source downloaded (UTC): 2026-09-09T22:55:16.463Z to 2026-09-09T22:55:16.463Z Record version: sha256:513152adb01e4e8f5cde6463912b65a931e84b754818f35e40290bc55c109806 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/946/#sec-00-status) SEC content: yes ##### [205-946-S00-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:16.463Z to 2026-09-09T22:55:16.463Z Record version: sha256:6b4e3656f3af8ad265ea45afdeb050b16f911180c1fb91396e7035bcee73f49b 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
946-205-S99-1AmendedAccounting Standards Update No. 2019-0707/26/2019
Source downloaded (UTC): 2026-09-09T22:55:20.060Z to 2026-09-09T22:55:20.060Z Record version: sha256:a5d3392951d0f6768ec789c9ce2e6d24ea3278a79edd629a07cfbd2fb437674c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/946/#sec-45-other-presentation-matters) SEC content: yes #### Content of Financial Statements ##### [205-946-S45-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:20.060Z to 2026-09-09T22:55:20.060Z Record version: sha256:2499d089fd344e8d6e8018b9f234304c9e528c548ef68f97326e55d9850f8d41 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-10-S99-3](https://asc.understandingaccounting.org/asc/946/10/#946-10-S99-3), Regulation S-X Rule 6-03(a), for requirements pertaining to the content of the financial statements. #### Consolidated and Combined Financial Statements ##### [205-946-S45-2](https://asc.understandingaccounting.org/asc/205/946/#205-946-S45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:20.060Z to 2026-09-09T22:55:20.060Z Record version: sha256:780ae458ca8737701191823452d565217cb6ae0d41e140c710c27f6d194d8c44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-10-S99-3](https://asc.understandingaccounting.org/asc/946/10/#946-10-S99-3), Regulation S-X Rule 6-03(c), for requirements pertaining to consolidated and combined statements. #### Series Companies ##### [205-946-S45-3](https://asc.understandingaccounting.org/asc/205/946/#205-946-S45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:20.060Z to 2026-09-09T22:55:20.060Z Record version: sha256:2bed79209e182e9acb92eca9cf4e92cedfe7ba05bfaca6c5ce15828a1ea54241 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-10-S99-3](https://asc.understandingaccounting.org/asc/946/10/#946-10-S99-3), Regulation S-X Rule 6-03(j), for requirements pertaining to series companies. #### Inapplicable Captions ##### [205-946-S45-4](https://asc.understandingaccounting.org/asc/205/946/#205-946-S45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:20.060Z to 2026-09-09T22:55:20.060Z Record version: sha256:0d4b0d0d9311030089c554fcb38582ff9c9a83df5f41fa50caffac5c23614e8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-10-S99-3](https://asc.understandingaccounting.org/asc/946/10/#946-10-S99-3), Regulation S-X Rule 6-03(l), for circumstances in which it is permissible to omit certain captions or items. #### Required Schedules ##### [205-946-S45-5](https://asc.understandingaccounting.org/asc/205/946/#205-946-S45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:20.060Z to 2026-09-09T22:55:20.060Z Record version: sha256:950a49f1adb10a1498e1469a7aa8a6a4b8e2821755c7a3c92cf8ac993cb343c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-205-S99-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S99-1), Regulation S-X Rule 6-10, for requirements pertaining to the presentation of schedules. Source downloaded (UTC): 2026-09-09T22:55:23.760Z to 2026-09-09T22:55:23.760Z Record version: sha256:87854f21f0ed7a076271290152d2c2bcdc078111756d445577c6546852456e29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/946/#sec-50-disclosure) SEC content: yes #### Management Investment Companies ##### [205-946-S50-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:23.760Z to 2026-09-09T22:55:23.760Z Record version: sha256:e92d7744d577f34845aa6224dc0fdab7ffbffe93323b47b49b4d11fb8ed4f68a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-205-S99-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S99-1), Regulation S-X Rule 6-10(c), for supplemental schedules required for management investment companies. #### Unit Investment Trusts ##### [205-946-S50-2](https://asc.understandingaccounting.org/asc/205/946/#205-946-S50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:23.760Z to 2026-09-09T22:55:23.760Z Record version: sha256:f74255b47aac9bd140593f9a40ad73b00b8dc250cddb5ec2ffc269199c79dd19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-205-S99-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S99-1), Regulation S-X Rule 6-10(d), for supplemental schedules required for unit investment trusts. #### Face-Amount Certificate Investment Companies ##### [205-946-S50-3](https://asc.understandingaccounting.org/asc/205/946/#205-946-S50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:23.760Z to 2026-09-09T22:55:23.760Z Record version: sha256:77c5e930ec6223ae50d6dda94cbd5103310ca2613e31db812ccfbac6c6f8a89a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [946-205-S99-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S99-1), Regulation S-X Rule 6-10(e), for supplemental schedules required for face-amount certificate investment companies. Source downloaded (UTC): 2026-09-09T22:55:25.512Z to 2026-09-09T22:55:25.512Z Record version: sha256:ac5b85950cbb7bff4ec372d454fdf6010112e3c5257d0bf2f1fa568cdfb23980 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-946-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/205/946/#sec-99-sec-materials) SEC content: yes #### SEC Rules, Regulations, and Interpretations ##### [205-946-S99-1](https://asc.understandingaccounting.org/asc/205/946/#205-946-S99-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:25.512Z to 2026-09-09T22:55:25.512Z Record version: sha256:8ae9f0a60f70ba9ba4ef91e6f683eb951d96d5eba30770db0b605e99e0abcc00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 6-10, What Schedules Are to Be Filed (17 CFR 210.6-10). - (a) When information is required in schedules for both the person and its subsidiaries consolidated, it may be presented in the form of a single schedule, provided that items pertaining to the registrant are separately shown and that such single schedule affords a properly summarized presentation of the facts. - (b) The schedules shall be examined by an independent accountant if the related financial statements are so examined. - (c) Management investment companies. - (1) Except as otherwise provided in the applicable form, the schedules specified in this paragraph shall be filed for management investment companies as of the dates of the most recent audited balance sheet and any subsequent unaudited statement being filed for each person or group. - Schedule I—Investments in securities of unaffiliated issuers. The schedule prescribed by § 210.12-12 shall be filed in support of caption 1 of each balance sheet. - Schedule II—Investments in and advances to affiliates. The schedule prescribed by § 210.12-14 shall be filed in support of caption 2 of each balance sheet. - Schedule III—Investments—securities sold short. The schedule prescribed by § 210.12-12A shall be filed in support of caption 9(a) of each balance sheet. - Schedule IV—Open option contracts written. The schedule prescribed by § 210.12-13 shall be filed in support of caption 9(b) of each balance sheet. - Schedule V—Open futures contracts. The schedule prescribed by §210.12-13A shall be filed in support of captions 3(a) and 9(c) of each balance sheet. - Schedule VI—Open forward foreign currency contracts. The schedule prescribed by §210.12-13B shall be filed in support of captions 3(b) and 9(d) of each balance sheet. - Schedule VII—Open swap contracts. The schedule prescribed by §210.12-13C shall be filed in support of captions 3(c) and 9(e) of each balance sheet. - Schedule VIII—Investments—other than those presented in §§210.12-12, 12-12A, 12-12B, 12-13, 12-13A, 12-13B and 12-13C. The schedule prescribed by §210.12-13D shall be filed in support of captions 3(d) and 9(f) of each balance sheet. - (2) When permitted by the applicable form, the schedule specified in this paragraph may be filed for management investment companies as of the dates of the most recent audited balance sheet and any subsequent unaudited statement being filed for each person or group. - Schedule IX—Summary schedule of investments in securities of unaffiliated issuers. The schedule prescribed by § 210.12-12B may be filed in support of caption 1 of each balance sheet. - (d) Unit investment trusts. Except as otherwise provided in the applicable form: - (1) Schedules I and II, specified below in this section, shall be filed for unit investment trusts as of the dates of the most recent audited balance sheet and any subsequent unaudited statement being filed for each person or group. - (2) Schedule III, specified below in this section, shall be filed for unit investment trusts for each period for which a statement of operations is required to be filed for each person or group. - Schedule I—Investment in securities. The schedule prescribed by § 210.12-12 shall be filed in support of caption 1 of each balance sheet (§ 210.6-04). - Schedule II—Allocation of trust assets to series of trust shares. If the trust assets are specifically allocated to different series of trust shares, and if such allocation is not shown in the balance sheet in columnar form or by the filing of separate statements for each series of trust shares, a schedule shall be filed showing the amount of trust assets, indicated by each balance sheet filed, which is applicable to each series of trust shares. - Schedule III—Allocation of trust income and distributable funds to series of trust shares. If the trust income and distributable funds are specifically allocated to different series of trust shares and if such allocation is not shown in the statement of operations in columnar form or by the filing of separate statements for each series of trust shares, a schedule shall be submitted showing the amount of income and distributable funds, indicated by each statement of operations filed, which is applicable to each series of trust shares. - (e) Face-amount certificate investment companies. Except as otherwise provided in the applicable form: - (1) Schedules I, V and X, specified below, shall be filed for face-amount certificate investment companies as of the dates of the most recent audited balance sheet and any subsequent unaudited statement being filed for each person or group. - (2) All other schedules specified below in this section shall be filed for face-amount certificate investment companies for each period for which a statement of operations is filed, except as indicated for Schedules III and IV. - Schedule I—Investment in securities of unaffiliated issuers. The schedule prescribed by § 210.12-21 shall be filed in support of caption 1 and, if applicable, caption 5(a) of each balance sheet. Separate schedules shall be furnished in support of each caption, if applicable. - Schedule II—Investments in and advances to affiliates and income thereon. The schedule prescribed by § 210.12-22 shall be filed in support of captions 1 and 5(b) of each balance sheet and caption 1 of each statement of operations. Separate schedules shall be furnished in support of each caption, if applicable. - Schedule III—Mortgage loans on real estate and interest earned on mortgages. The schedule prescribed by § 210.12-23 shall be filed in support of captions 1 and 5(c) of each balance sheet and caption 1 of each statement of operations, except that only the information required by Column G and note 8 of the schedule need be furnished in support of statements of operations for years for which related balance sheets are not required. - Schedule IV—Real estate owned and rental income. The schedule prescribed by § 210.12-24 shall be filed in support of captions 1 and 5(a) of each balance sheet and caption 1 of each statement of operations for rental income included therein, except that only the information required by Columns H, I and J, and item "Rent from properties sold during the period" and note 4 of the schedule need be furnished in support of statements of operations for years for which related balance sheets are not required. - Schedule V—Qualified assets on deposit. The schedule prescribed by § 210.12-27 shall be filed in support of the information required by caption 4 of § 210.6-06 as to total amount of qualified assets on deposit. - Schedule VI—Certificate reserves. The schedule prescribed by § 210.12-26 shall be filed in support of caption 7 of each balance sheet. - Schedule VII—Valuation and qualifying accounts. The schedule prescribed by § 210.12-09 shall be filed in support of all other reserves included in the balance sheet. - \[81 FR 82013, Nov. 18, 2016\] Source downloaded (UTC): 2026-09-09T22:55:29.204Z to 2026-09-09T22:55:43.454Z Record version: sha256:df2fd3f90682f0a899090983de4ef7c75e96a5fd9d62a52d6b6aba5c08a94a49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-954: Presentation of Financial Statements — Health Care Entities ### Machine-generated study aids ```json { "summary": "ASC 205-954 sets the basic financial statement presentation requirements for health care entities, both not-for-profit business-oriented and investor-owned. It requires a complete set of statements — balance sheet, statement of operations, statement of changes in equity (or net assets), statement of cash flows, and notes (205-954-45-1) — and permits descriptive alternative titles except that the cash flow statement should be titled \"Statement of Cash Flows\" (205-954-45-2). Presentation is essentially the same for both ownership forms except for items that are inapplicable, such as shareholders' equity for NFPs and contributions for investor-owned entities (205-954-05-1).", "key_points": [ "The basic financial statements of a health care entity are a balance sheet, a statement of operations, a statement of changes in equity (or net assets), a statement of cash flows, and notes to the financial statements (205-954-45-1).", "Financial reporting for not-for-profit, business-oriented entities and investor-owned health care entities is consistent except for transactions that clearly are not applicable — NFPs report no shareholders' equity, and investor-owned entities typically report no contributions (205-954-05-1).", "Alternative descriptive titles may be used (for example, statement of financial position instead of balance sheet), but a statement of cash flows should only be titled 'Statement of Cash Flows' (205-954-45-2).", "A not-for-profit, business-oriented health care entity also applies Subtopics 958-205, 958-210, 958-220, and 958-230, subject to the more specific guidance in Topic 954 (205-954-05-2).", "The scope of this Subtopic is the same as the Overall Subtopic scope in Section 954-10-15 (205-954-15-1).", "Former paragraphs 205-954-45-8 and 45-9 were superseded by ASU 2016-14 (the NFP financial statement presentation update)." ], "categories": [ "Presentation", "Financial statement presentation", "Industry-specific", "Not-for-profit" ], "audience_level": "intermediate", "student_note": "This is a short industry-specific overlay: the takeaway is the required set of five statement components and that NFP health care entities follow the general NFP presentation Subtopics (958-205 through 958-230) unless Topic 954 says otherwise. A common misunderstanding is assuming NFP health care entities present like other NFPs in all respects — they use a business-oriented \"statement of operations\" and the more specific Topic 954 guidance controls.", "related_topics": [ "954-10", "958-205", "958-210", "958-220", "958-230", "954-225" ], "key_concepts": [ "health care entities", "not-for-profit business-oriented entity", "investor-owned entity", "statement of operations", "complete set of financial statements", "net assets", "financial statement titles" ] } ``` Source downloaded (UTC): 2026-09-09T22:55:29.204Z to 2026-09-09T22:55:29.204Z Record version: sha256:1955a760a5030c7268633dbabcf61c82ce25973328b20149f88053323d81bd9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-954-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/954/#00-status) SEC content: no ##### [205-954-00-1](https://asc.understandingaccounting.org/asc/205/954/#205-954-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:29.204Z to 2026-09-09T22:55:29.204Z Record version: sha256:777cff4ef0974ed66b1a7dea67f1fca4ae44a505f9542ad2b135ea50587b365b 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
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
Donor-Imposed ConditionAddedAccounting Standards Update No. 2018-0806/21/2018
Promise to GiveAddedAccounting Standards Update No. 2018-0806/21/2018
954-205-45-8SupersededAccounting Standards Update No. 2016-1408/18/2016
954-205-45-9SupersededAccounting Standards Update No. 2016-1408/18/2016
Source downloaded (UTC): 2026-09-09T22:55:32.986Z to 2026-09-09T22:55:32.986Z Record version: sha256:312126d29941adf57ffc11934e0d2d4bc96db160876b1525e24aa4c46a167e22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-954-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/954/#05-overview-and-background) SEC content: no ##### [205-954-05-1](https://asc.understandingaccounting.org/asc/205/954/#205-954-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:32.986Z to 2026-09-09T22:55:32.986Z Record version: sha256:df95dcf542c5b2f89c762365cd2d5c926ba635bd92cfbd8e5ac5566950334b2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the presentation of financial statements for health care entities. The financial reporting for not-for-profit, business-oriented entities and investor-owned health care entities is consistent except for transactions that clearly are not applicable. For example, not-for-profit, business-oriented entities would have nothing to report for shareholders' equity. On the other hand, investor-owned health care entities typically would not have anything to report for [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."). ##### [205-954-05-2](https://asc.understandingaccounting.org/asc/205/954/#205-954-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:32.986Z to 2026-09-09T22:55:32.986Z Record version: sha256:4ac2059fb63d7d971eda49bbbc8b44ff6dcbfe1f8eee8d9172c3d241a2e63945 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A not-for-profit, business-oriented health care entity also applies guidance in the following Subtopics subject to the more specific guidance that is provided in this Topic: 1. a Not-for-Profit Entities—Presentation of Financial Statements, Subtopic 958-205 2. b Not-for-Profit Entities—Statement of Financial Position, Subtopic 958-210 3. c Not-for-Profit Entities—Income Statement—Reporting Comprehensive Income, Subtopic 958-220 4. d Not-for-Profit Entities—Statement of Cash Flows, Subtopic 958-230. Source downloaded (UTC): 2026-09-09T22:55:37.004Z to 2026-09-09T22:55:37.004Z Record version: sha256:29f4716b09ffd3abaa87cd5fc00a2a70649f62fe325f4fe5cbf53ffa3224a86e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-954-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/954/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-954-15-1](https://asc.understandingaccounting.org/asc/205/954/#205-954-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:37.004Z to 2026-09-09T22:55:37.004Z Record version: sha256:97136d3b8fc67332e8309e2f6e8f95476ef8ac05d1be83089c5a6595bc279451 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 954-10-15. ##### [205-954-15-2](https://asc.understandingaccounting.org/asc/205/954/#205-954-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:37.004Z to 2026-09-09T22:55:37.004Z Record version: sha256:4d51ccca7a7ffca0b9320e34c47d468f6bf6f575069ee72bea13f666708cd195 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:8513dd639f9f8f0168fc1f0b9043f3c1d328d0d70f6b07ce2dd215f2be48cbf8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-954-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/954/#45-other-presentation-matters) SEC content: no #### Complete Set of Financial Statements ##### [205-954-45-1](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:c7867ed1c7df90dfaa69d5126e960fe0fe31115139cb8082ea2fca5eebd1b1b5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The basic financial statements of health care entities consist of a balance sheet, a statement of operations, a statement of changes in equity (or net assets), a statement of cash flows, and notes to the financial statements. ##### [205-954-45-2](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:30aec240ff5a300d0689bf5ff9537bbddcc087aa0ccf4c511e9a25453b84049b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The terms _balance sheet_ and _statement of operations_ 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 statement of financial position as well as a balance sheet. Current practice and purpose suggest, however, that a statement of cash flows only be titled Statement of Cash Flows. ##### [205-954-45-3](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:ef76113aebcdbcc9d275e1c444071037f7a2fa412e19d8c20b4cb85b2a4e1b0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [205-954-45-4](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:71f88c7de01496bfde53c30051527542e00ab53c94181f546725c20b9fcec435 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [205-954-45-5](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:89e8515d77882170f1213e92f826568da9bd604c21eee934e31bf695f55ee8db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [205-954-45-6](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:2fdab9500885dba4338cf3002b9d32e06d3774ab9e30189824f86730dc1c886c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [205-954-45-7](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:c4935c99a1dd4ad82d23733a2a1b129d77a1ec7b1084ee4e0680f0820bfdc909 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [205-954-45-8](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:ca0df80646b643884aad19180bfb95b3f9cc7b7bda6564c775ce7501e7829b82 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/). ##### [205-954-45-9](https://asc.understandingaccounting.org/asc/205/954/#205-954-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:41.687Z to 2026-09-09T22:55:41.687Z Record version: sha256:f9da6f4a9e3333b11380e362cc1435e1158eac3adb2f46271e8a19918773454d 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): 2026-09-09T22:55:43.454Z to 2026-09-09T22:55:43.454Z Record version: sha256:b1ea1f9d10f5bc2b8023e8784a0a9d028b9dcc5ea11dac14b2810c915ffd07ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-954-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/954/#50-disclosure) SEC content: no ##### [205-954-50-1](https://asc.understandingaccounting.org/asc/205/954/#205-954-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:55:43.454Z to 2026-09-09T22:55:43.454Z Record version: sha256:eed17db1000603b3ec0e26c412de80d4d5d2d7460b06772ee72e5163200c22d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Section not used](https://asc.understandingaccounting.org/updates/page-1833002/). 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_. Source downloaded (UTC): 2026-09-09T22:56:15.107Z to 2026-09-09T22:56:55.475Z Record version: sha256:c85bd16d2b53e18cfbd9a42254164bd3a7d082c067f29d92a0bb92a55564ca1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960: Presentation of Financial Statements — Plan Accounting—Defined Benefit Pension Plans ### Machine-generated study aids ```json { "summary": "This Subtopic governs the form and content of the annual financial statements of a defined benefit pension plan. The overriding objective is to provide information useful in assessing the plan's present and future ability to pay benefits when due, with content focused on plan participants' needs (960-205-10-1 through 10-2). Annual statements must present net assets available for benefits, changes in those net assets, the actuarial present value of accumulated plan benefits, and the significant factors causing the year-to-year change in that actuarial present value (960-205-45-1).", "key_points": [ "A plan's annual financial statements must include net assets available for benefits at year-end, changes in net assets during the year, the actuarial present value of accumulated plan benefits as of the beginning or end of the plan year, and the significant effects of factors causing the year-to-year change in that actuarial present value (960-205-45-1).", "The objective is met only if net assets and the actuarial present value of accumulated plan benefits are presented as of the same date, and the changes in each are presented for the same period; if a beginning-of-year benefit information date is used, corresponding beginning-of-year net asset and prior-year change statements must also be presented (960-205-45-3 through 45-4).", "An end-of-year benefit information date is preferable, and interim benefit information dates are not permitted (960-205-45-4).", "A statement of cash flows is not required for a defined benefit pension plan reporting under this Subtopic, though it is encouraged where it would show the plan's ability to meet future obligations (960-205-45-6; 230-10-15-4).", "Each master trust interest and the change in that interest must be presented as separate line items in the statements of net assets available for benefits and of changes in net assets available for benefits (960-205-45-7).", "Required disclosures include a general description of the plan (vesting and benefit provisions), significant plan amendments, the priority order of claims on termination and PBGC guarantees, funding policy (including whether ERISA minimum funding requirements were met), insurance contract policies, tax status if no favorable determination letter, joint transactions with the sponsor/employer/employee organization, and significant post-benefit-information-date events (960-205-50-1).", "A plan with a 401(h) account must disclose the nature of those assets and that they are available only to pay retiree health benefits, and must reconcile net assets per the financial statements to Form 5500 with an explanation that 401(h) assets cannot pay pension benefits (960-205-50-4 through 50-5)." ], "categories": [ "Presentation", "Disclosure", "Compensation and benefits", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "Plan financial statements are unusual: there is no balance sheet/income statement pair and no required cash flow statement—instead the story is net assets versus the actuarial present value of accumulated plan benefits, which must be measured at the same date. A common mistake is thinking the comparison of net assets to accumulated benefits shows what each participant would receive on termination; the required PBGC/priority-order disclosure exists precisely to dispel that.", "related_topics": [ "960-10", "960-20", "960-30", "960-325", "962", "230-10" ], "key_concepts": [ "net assets available for benefits", "actuarial present value of accumulated plan benefits", "benefit information date", "funding policy", "plan termination priority", "pbgc guarantee", "401(h) account", "master trust interest" ] } ``` Source downloaded (UTC): 2026-09-09T22:56:15.107Z to 2026-09-09T22:56:15.107Z Record version: sha256:b59de81249ba0426188af829c4bcc572ea9c2321d03676cf8937caeddb6a33ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/960/#00-status) SEC content: no ##### [205-960-00-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:15.107Z to 2026-09-09T22:56:15.107Z Record version: sha256:85cf1a6d170232adf1b9a8922f5a09cf2df6e2026e48394278bb83ca3926857d 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
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Benefits (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Contract ValueAmendedAccounting Standards Update No. 2014-0603/14/2014
Contributory Plan (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Contributory Plan (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit PlanAddedAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit Pension Plan (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Funding Policy (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Funding Policy (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Pension Benefits (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Pension Benefits (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Pension FundAddedAccounting Standards Update No. 2014-0603/14/2014
Plan Assets (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Service (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Service (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Sponsor (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Sponsor (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Unallocated Contract (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Unallocated Contract (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Vested Benefits (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Vested Benefits (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
960-205-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-05-2AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-10-1AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-45-2AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-45-4AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-45-7AddedAccounting Standards Update No. 2017-0602/27/2017
960-205-50-1AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-50-5AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-55-1AmendedAccounting Standards Update No. 2015-12 (Part II)07/31/2015
960-205-55-1AmendedAccounting Standards Update No. 2014-0603/14/2014
960-205-55-2AmendedAccounting Standards Update No. 2014-0603/14/2014
Source downloaded (UTC): 2026-09-09T22:56:36.349Z to 2026-09-09T22:56:36.349Z Record version: sha256:a74de38f45cdc4360c6ca7c3fb3002d13599d4be54949d0f2835f9824fbbb955 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/960/#05-overview-and-background) SEC content: no ##### [205-960-05-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:36.349Z to 2026-09-09T22:56:36.349Z Record version: sha256:e84c262412b0a364c7fd6e49ad65f22edb56b28fc98fa5b36a98cec206d5162c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the presentation of financial statements for [defined benefit pension plans](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)"). ##### [205-960-05-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:36.349Z to 2026-09-09T22:56:36.349Z Record version: sha256:e061ceb10eaff3925b1b586da7f0070ae54b91e8694ef2a79423e3112ee8a95b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To enhance their usefulness, [plan administrators](https://asc.understandingaccounting.org/glossary/p/#plan-administrator "The person or group of persons responsible for the content and issuance of a plan's financial statements in much the same way that management is responsible for the content and issuance of a business entity's financial statements.") may wish to supplement the financial statements with a brief explanation that highlights those matters expected to be of most interest to participants. Including summary financial information for a period of years in such supplementary information, and thereby disclosing trends, may also be helpful. With the information presented in plan financial statements, users can assess the extent to which the plan itself is able to pay participants' [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") and the extent to which payment of benefits is dependent on other factors, namely, the commitment and financial ability of the employer(s), and, for Employee Retirement Income Security Act plans, the security provided by the Pension Benefit Guaranty Corporation. Source downloaded (UTC): 2026-09-09T22:56:38.913Z to 2026-09-09T22:56:38.913Z Record version: sha256:9f4df0360ca1d9925caaf397f07917c4db5376fd3ea7345423f72beb51354b08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/205/960/#10-objectives) SEC content: no ##### [205-960-10-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-10-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:38.913Z to 2026-09-09T22:56:38.913Z Record version: sha256:601d6adc9e774d0eb0ab93493d582f16993056cbdaff780cbbca5f0baa0e1507 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The primary objective of a pension plan's financial statements is to provide financial information that is useful in assessing the plan's present and future ability to pay [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") when due. In that regard, both of the following are recognized: 1. a Information in addition to that contained in a plan's financial statements is needed in assessing the plan's present and future ability to pay benefits when due. 2. b Financial statements for several plan years can provide information more useful in assessing the plan's future ability to pay benefits than can the financial statements for a single plan year (see paragraph [960-205-05-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-05-2)). ##### [205-960-10-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-10-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:38.913Z to 2026-09-09T22:56:38.913Z Record version: sha256:7e7aaa27e6ad8d6b3938657412efe79f54cf3329b5456ad7742089eaf2be168b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although this Subtopic does not identify any one group as the primary users, the content of plan financial statements shall focus on the needs of plan participants because pension plans exist primarily for their benefit. However, plan financial statements should also be useful to others who have any of the following characteristics: 1. a Advise or represent participants 2. b Are present or potential investors or creditors of the employer(s) 3. c Are responsible for funding the plan (for example, state legislators) 4. d For other reasons have a derived or indirect interest in the financial status of the plan. ##### [205-960-10-3](https://asc.understandingaccounting.org/asc/205/960/#205-960-10-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:38.913Z to 2026-09-09T22:56:38.913Z Record version: sha256:de1206e1a2bb59066ec1632ff40f91e238b549c3c6a7eed8e22a0256c37536b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To accomplish its primary objective, a plan's financial statements shall provide information about all of the following: 1. a Plan resources and how the stewardship responsibility for those resources has been discharged 2. b The [accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#accumulated-plan-benefits "Future benefit payments that are attributable under the provisions of a pension plan to employees' service rendered to the benefit information date. Accumulated plan benefits comprise benefits expected to be paid to any of the following: Retired or terminated employees or their beneficiaries Beneficiaries of deceased employees Present employees or their beneficiaries.") of participants 3. c The results of transactions and events that affect the information regarding those resources and benefits 4. d Other factors necessary for users to understand the information provided. Source downloaded (UTC): 2026-09-09T22:56:42.495Z to 2026-09-09T22:56:42.495Z Record version: sha256:92dfed87db194b2570a6c51ce13317238567285696dd5c7756a9dd999d209ae4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/960/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-960-15-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:42.495Z to 2026-09-09T22:56:42.495Z Record version: sha256:886fc3895ba41ac9a030e9d239bf3ffd77d23243e78b3bd9dbc8e18073d335bc 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 960-10-15. Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:728c4da731f41f8f3482af6a1bcebec7d8ae637b7c3d8995e2153045abfeeac1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/960/#45-other-presentation-matters) SEC content: no ##### [205-960-45-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:e8a4817e86ca28cb04fe6951fbd323bb9b016756917431fbb9690b7b8502145b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The annual financial statements of a plan shall include all of the following: 1. a A statement that includes information regarding the [net assets available for benefits](https://asc.understandingaccounting.org/glossary/n/#net-assets-available-for-benefits "The difference between a plan's assets and its liabilities. For purposes of this definition, a plan's liabilities do not include participants' accumulated plan benefits.") as of the end of the plan year. 2. b A statement that includes information regarding the changes during the year in the net assets available for benefits. 3. c Information regarding the [actuarial present value of accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#actuarial-present-value-of-accumulated-plan-benefits "The amount as of a benefit information date that results from applying actuarial assumptions to the benefit amounts determined pursuant to paragraphs 960-20-25-3960-20-25-4960-20-25-5 (that is, the accumulated plan benefits), with the actuarial assumptions being used to adjust those amounts to reflect the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as for death, disability, withdrawal, or retirement) between the benefit information date and the expected date of payment.") as of either the beginning or end of the plan year. Financial information presented as of the beginning of the year shall be the amounts as of the end of the preceding year. See paragraph [960-20-45-1](https://asc.understandingaccounting.org/asc/960/20/#960-20-45-1) for related guidance. 4. d Information regarding the effects, if significant, of certain factors affecting the year-to-year change in the actuarial present value of accumulated plan benefits. ##### [205-960-45-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:3fe0dd69beb98eb99c767ad7b60769d2572600f7d7e4d4ee99e2c5be2d607288 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 1 (see paragraph [960-205-55-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-55-1)) illustrates annual financial statements of a [defined benefit pension plan](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)"). #### Dates Used to Present Information ##### [205-960-45-3](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:990f6c24c7976b3626bff09a851cabeef6eda2801806a70fd3f24dd9e9539e51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The primary objective of the financial statements of a defined benefit pension plan set forth in paragraph [960-205-10-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-10-1) is satisfied only if both of the following occur: 1. a Information regarding both the net assets available for benefits and the actuarial present value of accumulated plan benefits is presented as of the same date. 2. b Information regarding both the changes in net assets available for benefits and the changes in the actuarial present value of accumulated plan benefits is presented for the same period. ##### [205-960-45-4](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:619e62e7ee46757dd46d1c78876def22620ba91c633a8ed28358073c106030ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Therefore, if the [benefit information date](https://asc.understandingaccounting.org/glossary/b/#benefit-information-date "The date as of which the actuarial present value of accumulated plan benefits is presented.") pursuant to paragraph [960-205-45-1(c)](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-1) is the beginning of the year, a statement that includes information regarding the net assets available for benefits as of that date and a statement that includes information regarding the changes during the preceding year in the net assets available for [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") shall also be presented. Use of an end-of-year benefit information date is considered preferable. Plans are encouraged to develop procedures to enable them to use that date (see paragraphs [960-20-35-16 through 35-18](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-16) ). The use of interim [benefit information](https://asc.understandingaccounting.org/glossary/b/#benefit-information "The actuarial present value of accumulated plan benefits.") dates is not permitted. #### 401(h) Account Information ##### [205-960-45-5](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:cde99f005cf19af99921ba308e554f9ff2c30a3d3490ebcfd4f9d5256e946bef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Illustrative financial statements for a defined benefit pension plan with a 401(h) feature are presented in Example 2 (see paragraph [960-205-55-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-55-2)). #### Statement of Cash Flows ##### [205-960-45-6](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:03159c0790ab2fe652bd94a62f1487536bd6fabf68405874476e1cb9994ce3d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [230-10-15-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-15-4) states that a statement of cash flows is not required to be provided by a defined benefit pension plan that presents financial information in accordance with this Subtopic. That paragraph states that other [employee](https://asc.understandingaccounting.org/glossary/e/#employee "A person who has rendered or is presently rendering service.") benefit plans that present financial information similar to that required by this Subtopic (including the presentation of plan investments at fair value) also are not required to provide a statement of cash flows. That paragraph also states that employee benefit plans are encouraged to include a statement of cash flows with their annual financial statements if that statement would provide relevant information about the ability of the plan to meet future obligations (for example, if the plan invests in assets that are not highly liquid or obtains financing for investments). #### Interests in Master Trusts ##### [205-960-45-7](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:49.018Z to 2026-09-09T22:56:49.018Z Record version: sha256:34f953d492f9c99a643015ffe94a7bb219d4c41221ea241f83487376bd479b27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For each master trust in which a plan holds an interest, a plan shall present that interest and the change in that interest in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. See Section 960-325-50 for master trust disclosures. Source downloaded (UTC): 2026-09-09T22:56:52.723Z to 2026-09-09T22:56:52.723Z Record version: sha256:d0507755963f5719e7e785fed152ba63cdcf1285fe0e16e1588c25fa07c98f4f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/960/#50-disclosure) SEC content: no ##### [205-960-50-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:52.723Z to 2026-09-09T22:56:52.723Z Record version: sha256:003be862f4cfda7d9171fb490e7db746e0988f941a346008ff529491dd7643e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements shall include the following disclosures, if applicable: 1. a A brief, general description of the plan agreement, including, but not limited to, vesting and benefit provisions. If a plan agreement or a description thereof providing this information is otherwise published and made available, this description may be omitted provided that reference to such other source is made. 2. b A description of significant plan amendments adopted during the year ending on the latest [benefit information date](https://asc.understandingaccounting.org/glossary/b/#benefit-information-date "The date as of which the actuarial present value of accumulated plan benefits is presented."). If significant amendments were adopted between the latest benefit information date and the plan's year-end, it shall be indicated that the [actuarial present value of accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#actuarial-present-value-of-accumulated-plan-benefits "The amount as of a benefit information date that results from applying actuarial assumptions to the benefit amounts determined pursuant to paragraphs 960-20-25-3960-20-25-4960-20-25-5 (that is, the accumulated plan benefits), with the actuarial assumptions being used to adjust those amounts to reflect the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as for death, disability, withdrawal, or retirement) between the benefit information date and the expected date of payment.") does not reflect those amendments. 3. c A brief, general description of the priority order of participants' claims to the assets of the plan upon plan termination and [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") guaranteed by the Pension Benefit Guaranty Corporation, including a discussion of the application of its guaranty to any recent plan amendment. Such a description serves to alert participants that a comparison of total net assets with the total actuarial present value of accumulated plan benefits (or with the three minimum required categories of [benefit information](https://asc.understandingaccounting.org/glossary/b/#benefit-information "The actuarial present value of accumulated plan benefits.")) does not necessarily indicate which benefits would be covered by [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments—that have been segregated and restricted, usually in a trust, to provide for pension benefits. The amount of plan assets includes amounts contributed by the employer, and by employees for a contributory plan, and amounts earned from investing the contributions, less benefits paid. Plan assets ordinarily cannot be withdrawn by the employer except under certain circumstances when a plan has assets in excess of obligations and the employer has taken certain steps to satisfy existing obligations. Assets not segregated in a trust or otherwise effectively restricted so that they cannot be used by the employer for other purposes are not plan assets even though it may be intended that such assets be used to provide pensions. If a plan has liabilities other than for benefits, those nonbenefit obligations may be considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. Securities of the employer held by the plan are includable in plan assets provided they are transferable.") in the event of plan termination. If material providing this information is otherwise published and made available to participants, the descriptions required by this paragraph may be omitted provided that reference to such other source is made and disclosure similar to the following is made in the financial statements. - Should the plan terminate at some future time, its net assets generally will not be available on a pro rata basis to provide participants' benefits. Whether a particular participant's [accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#accumulated-plan-benefits "Future benefit payments that are attributable under the provisions of a pension plan to employees' service rendered to the benefit information date. Accumulated plan benefits comprise benefits expected to be paid to any of the following: Retired or terminated employees or their beneficiaries Beneficiaries of deceased employees Present employees or their beneficiaries.") will be paid depends on both the priority of those benefits and the level of benefits guaranteed by the Pension Benefit Guaranty Corporation at that time. Some benefits may be fully or partially provided for by the then existing assets and the Pension Benefit Guaranty Corporation guaranty while other benefits may not be provided for at all. 4. d The [funding policy](https://asc.understandingaccounting.org/glossary/f/#funding-policy "The program regarding the amounts and timing of contributions by the employers, plan participants, and any other sources (for example, state subsidies or federal grants) to provide the benefits a pension plan or other postretirement benefit plan specifies.") and any changes in such policy during the plan year. If significant costs of plan administration are being absorbed by the employer(s), that fact shall be disclosed. For a [contributory plan](https://asc.understandingaccounting.org/glossary/c/#contributory-plan "A plan under which retirees or active employees contribute part of the cost. In some contributory plans, retirees or active employees wishing to be covered must contribute; in other contributory plans, participants' contributions result in increased benefits."), the disclosure shall state the method of determining participants' contributions. Plans subject to the Employee Retirement Income Security Act shall disclose whether the minimum funding requirements of the Act have been met. If a minimum funding waiver has been granted by the Internal Revenue Service (IRS) or if a request for a waiver is pending before the IRS, that fact shall be disclosed. 5. e The policy regarding the purchase of contracts with insurance entities that are excluded from plan assets. The plan's dividend income for the year that is related to excluded contracts shall be disclosed, and for purposes of paragraph [960-30-45-2](https://asc.understandingaccounting.org/asc/960/30/#960-30-45-2) may be netted against payments to insurance entities related to such contracts as provided in (g) of that paragraph. 6. f The federal income tax status of the plan, if a favorable letter of determination has not been obtained or maintained. Disclosure of the plan's tax status is not proscribed in other circumstances. 7. g Significant real estate or other transactions in which the plan and any of the following parties are jointly involved: 1. 1 The [sponsor](https://asc.understandingaccounting.org/glossary/s/#sponsor "In the case of a pension plan established or maintained by a single employer, the employer; in the case of a plan established or maintained by an employee entity, the employee entity; in the case of a plan established or maintained jointly by two or more employers or by one or more employers and one or more employee entities, the association, committee, joint board of trustees, or other group of representatives of the parties that have established or that maintain the pension plan.") 2. 2 The employer(s) 3. 3 The [employee](https://asc.understandingaccounting.org/glossary/e/#employee "A person who has rendered or is presently rendering service.") organization(s). 8. h Unusual or infrequent events or transactions occurring after the latest benefit information date but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) that might significantly affect the usefulness of the financial statements in an assessment of the plan's present and future ability to pay benefits. For example, a plan amendment adopted after the latest benefit information date that significantly increases future benefits that are attributable to employees' [service](https://asc.understandingaccounting.org/glossary/s/#service "Employment taken into consideration under a pension plan. Years of employment before the inception of a plan constitute an employee's past service; years thereafter are classified in relation to the particular actuarial valuation being made or discussed. Years of employment (including past service) before the date of a particular valuation constitute prior service; years of employment following the date of the valuation constitute future service; a year of employment adjacent to the date of valuation, or in which such date falls, constitutes current service.") rendered before that date shall be disclosed. If reasonably determinable, the effects of such events or transactions shall be disclosed. If such effects are not quantified, the reasons why they are not reasonably determinable shall be disclosed. This guidance does not contemplate disclosure of normal changes after the benefit information date, such as benefits attributable to service rendered after that date. #### Funding Policy ##### [205-960-50-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:52.723Z to 2026-09-09T22:56:52.723Z Record version: sha256:148cdead0bd7c16c76fd579990023b3f186958f0eb49a9004a67fd7c60e4aad4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although a funding policy disclosure incorporating the technical name of the [actuarial cost method](https://asc.understandingaccounting.org/glossary/a/#actuarial-cost-method "A recognized actuarial technique used for establishing the amount and incidence of employer contributions or accounting charges for pension cost under a pension plan.") and the amortization period for the unfunded [supplemental actuarial value](https://asc.understandingaccounting.org/glossary/s/#supplemental-actuarial-value "The amount assigned under the actuarial cost method in use to years before a given date.") may not be meaningful to most users, such disclosure is not proscribed. A brief description, in general terms and in layman's language, of how contributions are determined pursuant to the actuarial cost method may be more understandable and therefore more useful. Thus, the latter disclosure is preferable. ##### [205-960-50-3](https://asc.understandingaccounting.org/asc/205/960/#205-960-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:52.723Z to 2026-09-09T22:56:52.723Z Record version: sha256:04b2fd1623c5ccd87b1f2b72b5c1bde7269241f548332e5c88ea16986841e8a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plans are encouraged to disclose information regarding the estimated future impact of the funding policy on an existing difference between the net asset and benefit information. However, such disclosure is not required. #### 401(h) Accounts ##### [205-960-50-4](https://asc.understandingaccounting.org/asc/205/960/#205-960-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:52.723Z to 2026-09-09T22:56:52.723Z Record version: sha256:6b2ad4b5136539581b7d09ec884e7edb1141cd8060c42179f0f78e27971b0d74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Defined benefit pension plans shall disclose in the notes to financial statements the nature of the assets related to the 401(h) account, and the fact that the assets are available only to pay retiree health benefits. ##### [205-960-50-5](https://asc.understandingaccounting.org/asc/205/960/#205-960-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:52.723Z to 2026-09-09T22:56:52.723Z Record version: sha256:d087b59ba97f0231738aaf0dac6e9759e43a554acc4a6b92f53ae1ebab650ad2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the Employee Retirement Income Security Act requires 401(h) accounts to be reported as assets of the pension plan, a reconciliation of the net assets reported in the financial statements to those reported in Form 5500 is required. The reconciliation shall be accompanied by a discussion of the 401(h) account, explaining clearly that the assets in the 401(h) account are not available to pay [pension benefits](https://asc.understandingaccounting.org/glossary/p/#pension-benefits "Periodic (usually monthly) payments made pursuant to the terms of the pension plan to a person who has retired from employment or to that person's beneficiary."). Source downloaded (UTC): 2026-09-09T22:56:55.475Z to 2026-09-09T22:56:55.475Z Record version: sha256:65244e2e374fb9e6d2a4ec2342480b06227cd7850955f62335aa160dad27839a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-960-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/960/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [205-960-55-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:55.475Z to 2026-09-09T22:56:55.475Z Record version: sha256:f33a05cad78d253f589c57e8afdf2b8aab2d3b23519cb660a5405f546d6ac6e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates certain applications of the requirements of this Subtopic and in particular of paragraphs [960-205-45-1 through 45-4](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-1) that are applicable for the 1981 annual financial statements of a hypothetical plan, the C&H Company Pension Plan. It does not illustrate other requirements of this Subtopic that might be applicable in circumstances other than those assumed for the C&H Company Pension Plan. The formats presented and the wording of accompanying notes are only illustrative and do not necessarily indicate a preferred method of presentation. Further, the circumstances assumed for the C&H Company Pension Plan are designed to facilitate illustration of many of this Subtopic's requirements. Therefore, the notes to the illustrative financial statements probably are more extensive than would be expected for a typical plan. Included are illustrations of the following alternatives permitted by paragraphs [960-205-45-1 through 45-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-45-1) , [960-20-45-8](https://asc.understandingaccounting.org/asc/960/20/#960-20-45-8), and [960-20-50-6 through 50-7](https://asc.understandingaccounting.org/asc/960/20/#960-20-50-6) : 1. a An end-of-year versus beginning-of-year [benefit information date](https://asc.understandingaccounting.org/glossary/b/#benefit-information-date "The date as of which the actuarial present value of accumulated plan benefits is presented.") 2. b Separate versus combined statements for presenting information regarding the following: 1. 1 The [net assets available for benefits](https://asc.understandingaccounting.org/glossary/n/#net-assets-available-for-benefits "The difference between a plan's assets and its liabilities. For purposes of this definition, a plan's liabilities do not include participants' accumulated plan benefits.") and the [actuarial present value of accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#actuarial-present-value-of-accumulated-plan-benefits "The amount as of a benefit information date that results from applying actuarial assumptions to the benefit amounts determined pursuant to paragraphs 960-20-25-3960-20-25-4960-20-25-5 (that is, the accumulated plan benefits), with the actuarial assumptions being used to adjust those amounts to reflect the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as for death, disability, withdrawal, or retirement) between the benefit information date and the expected date of payment.") 2. 2 Changes in the net assets available for benefits and changes in the actuarial present value of accumulated plan benefits. 3. c A separate statement that reconciles the year-to-year change in the actuarial present value of accumulated plan benefits versus presenting the effects of a change in actuarial assumptions on the face of the statement of [accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#accumulated-plan-benefits "Future benefit payments that are attributable under the provisions of a pension plan to employees' service rendered to the benefit information date. Accumulated plan benefits comprise benefits expected to be paid to any of the following: Retired or terminated employees or their beneficiaries Beneficiaries of deceased employees Present employees or their beneficiaries."). Although not illustrated, paragraph [960-20-45-2](https://asc.understandingaccounting.org/asc/960/20/#960-20-45-2) permits the information regarding the actuarial present value of accumulated plan benefits and changes therein to be presented as notes to financial statements. The set of illustrative annual financial statements and accompanying notes are as follows. - Exhibit D-1 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-807DCF81-2A6D-49FA-8722-136A42BBDC6E-low.gif) "C&H COMPANY PENSION PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS" "December 31, 1981" Assets: "Investments, at fair value (Notes B\[1\] and E)" United States government securities " $350,000 " Corporate bonds and debentures " 3,500,000 " Common stock: C&H Company " 690,000 " Other " 2,250,000 " Mortgages " 480,000 " Real estate " 270,000 " " 7,540,000 " "Deposit administration contract, at contract value (Notes B\[1\] and F)" " 1,000,000 " Total investments " 8,540,000 " Receivables: Employees' contributions " 40,000 " Securities sold " 310,000 " Accrued interest and dividends " 77,000 " " 427,000 " Cash " 200,000 " Total assets " 9,167,000 " Liabilities: Accounts payable " 70,000 " Accrued expenses " 85,000 " Total liabilities " 155,000 " Net assets available for benefits " $9,012,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-2 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-04AE1644-4319-4709-AA20-7F5AB47B51C7-low.gif) "C&H COMPANY PENSION PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS" "Year Ended December 31, 1981" Investment income Net appreciation in fair value of investments " $207,000 " Interest " 345,000 " Dividends " 130,000 " Rents " 55,000 " " 737,000 " Less investment expenses " 39,000 " " 698,000 " Contributions (Note C) Employer " 780,000 " Employees " 450,000 " " 1,230,000 " Total additions " 1,928,000 " Benefits paid directly to participants " 740,000 " Purchases of annuity contracts (Note F) " 257,000 " " 997,000 " Administrative expenses " 65,000 " Total deductions " 1,062,000 " Net increase " 866,000 " Net assets available for benefits Beginning of year " 8,146,000 " End of year " $9,012,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-3 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-96840C46-5137-475F-B918-02B5B060179E-low.gif) C&H COMPANY PENSION PLAN STATEMENT OF ACCUMULATED PLAN BENEFITS "December 31, 1981" Actuarial present value of accumulated plan benefits (Notes B\[2\] and C) Vested benefits Participants currently receiving payments " $3,040,000 " Other participants " 8,120,000 " " 11,160,000 " Nonvested benefits " 2,720,000 " Total actuarial present value of accumulated plan benefits " $13,880,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-4 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D2BD168E-64BA-4222-B478-966BC9B19296-low.gif) "C&H COMPANY PENSION PLAN STATEMENT OF CHANGES IN ACCUMULATED PLAN BENEFITS" "Year Ended December 31, 1981" Actuarial present value of accumulated plan benefits at beginning of year " $11,880,000 " Increase (decrease) during the year attributable to: Plan amendment (Note G) " 2,410,000 " Change in actuarial assumptions (Note B\[2\]) " (1,050,500)" Benefits accumulated " 895,000 " Increase for interest due to the decrease in the discount period (Note B\[2\]) " 742,500 " Benefits paid " (997,000)" Net increase " 2,000,000 " Actuarial present value of accumulated plan benefits at end of year " $13,880,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-5 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-129F9D8C-D42D-4D22-8AA1-2D7ABA187774-low.gif) C&H COMPANY PENSION PLAN STATEMENT OF ACCUMULATED PLAN BENEFITS AND NET ASSETS AVAILABLE FOR BENEFITS \[An alternative for Exhibits D-1 and D-3\] "December 31, 1981" Accumulated Plan Benefits (Notes B\[2\] and C) Actuarial present value of vested benefits Participants currently receiving payments " $3,040,000 " Other participants " 8,120,000 " " 11,160,000 " Actuarial present value of nonvested benefits " 2,720,000 " Total actuarial present value of accumulated plan benefits " 13,880,000 " Net Assets Available for Benefits "Investments, at fair value (Notes B\[1\] and E)" United States government securities " 350,000 " Corporate bonds and debentures " 3,500,000 " Common stock C&H Company " 690,000 " Other " 2,250,000 " Mortgages " 480,000 " Real estate " 270,000 " " 7,540,000 " "Deposit administration contract, at contract value (Notes B\[1\] and F)" " 1,000,000 " Total investments " 8,540,000 " Receivables Employees' contributions " 40,000 " Securities sold " 310,000 " Accrued interest and dividends " 77,000 " " 427,000 " Cash " 200,000 " Total assets " 9,167,000 " Accounts payable " 70,000 " Accrued expenses " 85,000 " Total liabilities " 155,000 " Net assets available for benefits " 9,012,000 " Excess of actuarial present value of accumulated plan benefits over net assets available for benefits " $4,868,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-6 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D1939D33-0E1F-4FDA-A733-F4DA3DBE2276-low.gif) C&H COMPANY PENSION PLAN STATEMENT OF CHANGES IN ACCUMULATED PLAN BENEFITS AND NET ASSETS AVAILABLE FOR BENEFITS \[An alternative for Exhibits D-2 and D-4\] "Year Ended December 31, 1981" Net Increase in Actuarial Present Value of Accumulated Plan Benefits Increase (decrease) during the year attributable to: Plan amendment (Note G) " $2,410,000 " Change in actuarial assumptions (Note B\[2\]) " (1,050,500)" Benefits accumulated " 895,000 " Increase for interest due to the decrease in the discount period (Note B\[2\]) " 742,500 " Benefits paid " (997,000)" Net increase " 2,000,000 " Net Increase in Net Assets Available for Benefits Investment income Net appreciation in fair value of investments " 207,000 " Interest " 345,000 " Dividends " 130,000 " Rents " 55,000 " " 737,000 " Less investment expenses " 39,000 " " 698,000 " Contributions (Note C) Employer " 780,000 " Employees " 450,000 " " 1,230,000 " Total additions " 1,928,000 " Benefits paid directly to participants " 740,000 " Purchases of annuity contracts (Note F) " 257,000 " " 997,000 " Administrative expenses " 65,000 " Total deductions " 1,062,000 " Net increase " 866,000 " Increase in excess of actuarial present value of accumulated plan benefits over net assets available for benefits " 1,134,000 " Excess of actuarial present value of accumulated plan benefits over net assets available for benefits Beginning of year " 3,734,000 " End of year " $4,868,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-7 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-78792FBD-4E19-4DF7-87A9-61AE911E9D39-low.gif) C&H COMPANY PENSION PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS \[If a beginning-of-year benefit information date is selected\] "December 31," 1981 1980 Assets "Investments, at fair value (Notes B\[1\] and E)" United States government securities " $350,000 " " $270,000 " Corporate bonds and debentures " 3,500,000 " " 3,670,000 " Common stock C&H Company " 690,000 " " 880,000 " Other " 2,250,00 " " 1,860,000 " Mortgages " 480,000 " " 460,000 " Real estate " 270,000 " " 240,000 " " 7,540,000 " " 7,380,000 " Deposit administration contract at contract value (Notes B\[1\] and F) " 1,000,000 " " 890,000 " Total investments " 8,540,000 " " 8,270,000 " Receivables Employees' contributions " 40,000 " " 35,000 " Securities sold " 310,000 " " 175,000 " Accrued interest and dividends " 77,000 " " 76,000 " " 427,000 " " 286,000 " Cash " 200,000 " " 90,000 " Total assets " 9,167,000 " " 8,646,000 " Liabilities Accounts payable Securities purchased - " 400,000 " Other " 70,000 " " 60,000 " " 70,000 " " 460,000 " Accrued expenses " 85,000 " " 40,000 " Total liabilities " 155,000 " " 500,000 " Net assets available for benefits " $9,012,000 " " $8,146,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-8 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F62164FD-E0BE-4F65-B876-28D8AD8583ED-low.gif) C&H COMPANY PENSION PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS \[If a beginning-of-year benefit information date is selected\] Year Ended December 31 1981 1980 Investment income Net appreciation (depreciation) in fair value of investments (Note E) " $207,000 " " $(72,000)" Interest " 345,000 " " 320,000 " Dividends " 130,000 " " 110,000 " Rents " 55,000 " " 43,000 " " 737,000 " " 401,000 " Less investment expenses " 39,000 " " 35,000 " " 698,000 " " 366,000 " Contributions (Note C) Employer " 780,000 " " 710,000 " Employees " 450,000 " " 430,000 " " 1,230,000 " " 1,140,000 " Total additions " 1,928,000 " " 1,506,000 " Benefits paid directly to participants " 740,000 " " 561,000 " Purchases of annuity contracts (Note F) " 257,000 " " 185,000 " " 997,000 " " 746,000 " Administrative expenses " 65,000 " " 58,000 " Total deductions " 1,062,000 " " 804,000 " Net increase " 866,000 " " 702,000 " Net assets available for benefits Beginning of year " 8,146,000 " " 7,444,000 " End of year " $9,012,000 " " $8,146,000 " - The accompanying notes are an integral part of the financial statements. - Exhibit D-9 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-3FE98208-D6F5-4EC5-9DE3-2CA8ECE369B6-low.gif) C&H COMPANY PENSION PLAN STATEMENT OF ACCUMULATED PLAN BENEFITS \[If a beginning-of-year benefit information date is selected\] "December 31, 1980" Actuarial present value of accumulated plan benefits (Notes B\[2\] and C) Vested benefits Participants currently receiving payments " $2,950,000 " Other participants " 6,530,000 " " 9,480,000 " Nonvested benefits " 2,400,000 " Total actuarial present value of accumulated plan benefits " $11,880,000 " - At December 31, 1979, the total actuarial present value of accumulated plan benefits was $10,544,000. - During 19X0 the actuarial present value of accumulated plan benefits increased $700,000 as a result of a change in actuarial assumptions (Note B(2)). Also see Note G. - The accompanying notes are an integral part of the financial statements. - C&H COMPANY PENSION PLAN - Notes to Financial Statements - \[Note: The notes are for the accompanying illustrative financial statements that use an end-of-year benefit information date. Modifications necessary to accompany the illustrative financial statements that use a beginning-of-year benefit information date are bracketed.\] - A. Description of Plan - The following brief description of the C&H Company Pension Plan (Plan) is provided for general information purposes only. - Participants should see the Plan agreement for more complete information. 1. 1 General. The Plan is a [defined benefit pension plan](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)") covering substantially all employees of C&H Company (Company). It is subject to the provisions of the Employee Retirement Income Security Act of 1974. 2. 2 [Pension Benefits](https://asc.understandingaccounting.org/glossary/p/#pension-benefits "Periodic (usually monthly) payments made pursuant to the terms of the pension plan to a person who has retired from employment or to that person's beneficiary."). [Employees](https://asc.understandingaccounting.org/glossary/e/#employee "A person who has rendered or is presently rendering service.") with 10 or more years of [service](https://asc.understandingaccounting.org/glossary/s/#service "Employment taken into consideration under a pension plan. Years of employment before the inception of a plan constitute an employee's past service; years thereafter are classified in relation to the particular actuarial valuation being made or discussed. Years of employment (including past service) before the date of a particular valuation constitute prior service; years of employment following the date of the valuation constitute future service; a year of employment adjacent to the date of valuation, or in which such date falls, constitutes current service.") are entitled to annual pension [benefits](https://asc.understandingaccounting.org/glossary/b/#benefit "See Tax (or Benefit).") beginning at normal retirement age (65) equal to 1 1/2% of their final 5-year average annual compensation for each year of service. The Plan permits early retirement at ages 55-64. Employees may elect to receive their pension benefits in the form of a joint and survivor annuity. If employees terminate before rendering 10 years of service, they forfeit the right to receive the portion of their accumulated plan benefits attributable to the Company's contributions. Employees may elect to receive the value of their accumulated plan benefits as a lump-sum distribution upon retirement or termination, or they may elect to receive their benefits as a life annuity payable monthly from retirement. For each employee electing a life annuity, payments will not be less than the greater of the employee's accumulated contributions plus interest or an annuity for five years. 3. 3 Death and Disability Benefits. If an active employee dies at age 55 or older, a death benefit equal to the value of the employee's accumulated pension benefits is paid to the employee's beneficiary. Active employees who become totally disabled receive annual disability benefits that are equal to the normal retirement benefits they have accumulated as of the time they become disabled. Disability benefits are paid until normal retirement age at which time disabled participants begin receiving normal retirement benefits computed as though they had been employed to normal retirement age with their annual compensation remaining the same as at the time they became disabled. - B. Summary of Accounting Policies - The following are the significant accounting policies followed by the Plan: 1. 1 Valuation of Investments. If available, quoted market prices are used to value investments. The amounts shown in Note E for securities that have no quoted market price represent estimated fair value. Many factors are considered in arriving at that fair value. In general, however, corporate bonds are valued based on yields currently available on comparable securities of issuers with similar credit ratings. Investments in certain restricted common stocks are valued at the quoted market price of the issuer's unrestricted common stock less an appropriate discount. If a quoted market price for unrestricted common stock of the issuer is not available, restricted common stocks are valued at a multiple of current earnings less an appropriate discount. The multiple chosen is consistent with multiples of similar companies based on current market prices. Mortgages have been valued on the basis of their future principal and interest payments discounted at prevailing interest rates for similar instruments. The fair value of real estate investments, principally rental property subject to long-term net leases, has been estimated on the basis of future rental receipts and estimated residual values discounted at interest rates commensurate with the risks involved. The Plan's deposit administration contract with the National Insurance Company (National) (Note F) is valued at [contract value](https://asc.understandingaccounting.org/glossary/c/#contract-value "The value of an unallocated contract that is determined by the insurance entity in accordance with the terms of the contract."). Contract value represents contributions made under the contract, plus interest at the contract rate, less funds used to purchase annuities and pay administration expenses charged by National. Funds under the contract that have been allocated and applied to purchase annuities (that is, National is obligated to pay the related pension benefits) are excluded from the Plan's assets. 2. 2 Actuarial Present Value of Accumulated Plan Benefits. Accumulated plan benefits are those future periodic payments, including lump-sum distributions, that are attributable under the Plan's provisions to the service employees have rendered. Accumulated plan benefits include benefits expected to be paid to retired or terminated employees or their beneficiaries, beneficiaries of employees who have died, and present employees or their beneficiaries. Benefits under the Plan are based on employees' compensation during their last five years of credited service. The accumulated plan benefits for active employees are based on their average compensation during the five years ending on the date as of which the [benefit information](https://asc.understandingaccounting.org/glossary/b/#benefit-information "The actuarial present value of accumulated plan benefits.") is presented (the valuation date). Benefits payable under all circumstances—retirement, death, disability, and termination of employment—are included, to the extent they are deemed attributable to employee service rendered to the valuation date. Benefits to be provided via annuity contracts excluded from plan assets are excluded from accumulated plan benefits. The actuarial present value of accumulated plan benefits is determined by an actuary from the AAA Company and is that amount that results from applying actuarial assumptions to adjust the accumulated plan benefits to reflect the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as for death, disability, withdrawal, or retirement) between the valuation date and the expected date of payment. The significant actuarial assumptions used in the valuations as of December 31, 1981 \[1980\], and December 31, 1980 \[1979\], were life expectancy of participants (the 1971 Group Annuity Mortality Table was used), retirement age assumptions (the assumed average retirement age was 60), and investment return. The 1981 \[1980\] and 1980 \[1979\] valuations included assumed average rates of return of 7% \[6.25%\] and 6.25% \[6.75%\], respectively, including a reduction of .2% to reflect anticipated administrative expenses associated with providing benefits. The foregoing actuarial assumptions are based on the presumption that the Plan will continue. Were the Plan to terminate, different actuarial assumptions and other factors might be applicable in determining the actuarial present value of accumulated plan benefits. - C. [Funding Policy](https://asc.understandingaccounting.org/glossary/f/#funding-policy "The program regarding the amounts and timing of contributions by the employers, plan participants, and any other sources (for example, state subsidies or federal grants) to provide the benefits a pension plan or other postretirement benefit plan specifies.") - As a condition of participation, employees are required to contribute 3% of their salary to the Plan. Present employees' accumulated contributions at December 31, 1981 \[1980\], were $2,575,000 \[$2,325,000\], including interest credited at an interest rate of 5% compounded annually. The Company's funding policy is to make annual contributions to the Plan in amounts that are estimated to remain a constant percentage of employees' compensation each year (approximately 5% for 1981 \[and 1980\]), such that, when combined with employees' contributions, all employees' benefits will be fully provided for by the time they retire. Beginning in 1982, the Company's contribution is expected to increase to approximately 6% to provide for the increase in benefits attributable to the Plan amendment effective July 1, 1981 (Note G). The Company's contributions for 1981 \[and 1980\] exceeded the minimum funding requirements of the Employee Retirement Income Security Act. - Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in the Employee Retirement Income Security Act. - D. Plan Termination - In the event the Plan terminates, the net assets of the Plan will be allocated, as prescribed by the Employee Retirement Income Security Act and its related regulations, generally to provide the following benefits in the order indicated: 1. a Benefits attributable to employee contributions, taking into account those paid out before termination. 2. b Annuity benefits former employees or their beneficiaries have been receiving for at least three years, or that employees eligible to retire for that three-year period would have been receiving if they had retired with benefits in the normal form of annuity under the Plan. The priority amount is limited to the lowest benefit that was payable (or would have been payable) during those three years. The amount is further limited to the lowest benefit that would be payable under plan provisions in effect at any time during the five years preceding plan termination. 3. c Other [vested benefits](https://asc.understandingaccounting.org/glossary/v/#vested-benefits "Benefits for which the employee's right to receive a present or future pension benefit is no longer contingent on remaining in the service of the employer. (Other conditions, such as inadequacy of the pension fund, may prevent the employee from receiving the vested benefit.) Under graded vesting, the initial vested right may be to receive in the future a stated percentage of a pension based on the number of years of accumulated credited service; thereafter, the percentage may increase with the number of years of service or of age until the right to receive the entire benefit has vested.") insured by the Pension Benefit Guaranty Corporation (a U.S. governmental agency) up to the applicable limitations (discussed below). 4. d All other vested benefits (that is, vested benefits not insured by the Pension Benefit Guaranty Corporation). 5. e All nonvested benefits. - Benefits to be provided via contracts under which National (Note F) is obligated to pay the benefits would be excluded for allocation purposes. - Certain benefits under the Plan are insured by the Pension Benefit Guaranty Corporation if the Plan terminates. Generally, the Pension Benefit Guaranty Corporation guarantees most vested normal age retirement benefits, early retirement benefits, and certain disability and survivor's pensions. However, the Pension Benefit Guaranty Corporation does not guarantee all types of benefits under the Plan, and the amount of benefit protection is subject to certain limitations. Vested benefits under the Plan are guaranteed at the level in effect on the date of the Plan's termination. However, there is a statutory ceiling on the amount of an individual's monthly benefit that the Pension Benefit Guaranty Corporation guarantees. For plan terminations occurring during 1981 and 1980, that ceiling, which is adjusted periodically, was $X,XXX.XX and $1,159.09 per month, respectively. That ceiling applies to those pensioners who elect to receive their benefits in the form of a single-life annuity and are at least 65 years old at the time of retirement or plan termination (whichever comes later). For younger annuitants or for those who elect to receive their benefits in some form more valuable than a single-life annuity, the corresponding ceilings are actuarially adjusted downward. Benefit improvements attributable to the Plan amendment effective July 1, 1981 (Note G), may not be fully guaranteed even though total benefit entitlements fall below the aforementioned ceilings. For example, none of the improvement would be guaranteed if the plan were to terminated before July 1, 1982. After that date the Pension Benefit Guaranty Corporation would guarantee 20% of any benefit improvements that resulted in benefits below the ceiling, with an additional 20% guaranteed each year the plan continued beyond July 1, 1982. If the amount of the benefit increase below the ceiling is also less than $100, $20 of the increase (rather than 20%) becomes guaranteed by the Pension Benefit Guaranty Corporation each year following the effective date of the amendment. As a result, only the primary ceiling would be applicable after July 1, 1986. - Whether all participants receive their benefits should the Plan terminate at some future time will depend on the sufficiency, at that time, of the Plan's net assets to provide those benefits and may also depend on the level of benefits guaranteed by the Pension Benefit Guaranty Corporation. - E. Investments Other Than Contract with Insurance Entity - Except for its deposit administration contract (Note F), the Plan's investments are held by a bank-administered trust fund. (See paragraph [962-325-55-17](https://asc.understandingaccounting.org/asc/325/962/#325-962-55-17) for a detailed Example of plan investment disclosures.) - F. Contract with Insurance Entity - In 1978, the Company entered into a deposit administration contract with the National Insurance Company under which the Plan deposits a minimum of $100,000 a year. National maintains the contributions in an unallocated fund to which it adds interest at a rate of 8%. The interest rate is guaranteed through 1983 but is subject to change for each succeeding five-year period. When changed, the new rate applies only to funds deposited from the date of change. At the direction of the Plan's administrator, a single premium to buy an annuity for a retiring employee is withdrawn by National from the unallocated fund. Purchased annuities are contracts under which National is obligated to pay benefits to named employees or their beneficiaries. The premium rates for such annuities to be purchased in the future and maximum administration expense charges against the fund are also guaranteed by National on a five-year basis. The annuity contracts provide for periodic dividends at National's discretion on the basis of its experience under the contracts. Such dividends received by the Plan for the year\[s\] ended December 31, 1981, \[and 1980\] were $25,000 \[and $24,000, respectively\]. In reporting changes in net assets, those dividends have been netted against amounts paid to National for the purchase of annuity contracts. - G. Plan Amendment - Effective July 1, 1981, the Plan was amended to increase future annual pension benefits from 1 1/4% to 1 1/2% of final 5-year average annual compensation for each year of service, including service rendered before the effective date. The retroactive effect of the Plan amendment, an increase in the actuarial present value of accumulated plan benefits of $2,410,000, was accounted for in the year ended December 31, 1981. \[The actuarial present values of accumulated plan benefits at December 31, 1980, and December 31, 1979, do not reflect the effect of that Plan amendment. The Plan's actuary estimates that the amendment's retroactive effect on the actuarial present value of accumulated plan benefits at December 31, 1980, was an increase of approximately $1,750,000, of which approximately $1,300,000 represents an increase in vested benefits.\] - H. Accounting Changes - In 1981, the Plan changed its method of accounting and reporting to comply with the provisions of the defined benefit plan accounting standard issued by the Financial Accounting Standards Board. Previously reported financial information pertaining to 1980 \[and 1979\] has been restated to present that information on a comparable basis. ##### [205-960-55-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:55.475Z to 2026-09-09T22:56:55.475Z Record version: sha256:f9f28745767b1952ca047247fccf1d01ed07921c4df7ae1695bcf1c2656c75af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates certain applications of the provisions of this Subtopic and in particular paragraphs [960-205-50-4 through 50-5](https://asc.understandingaccounting.org/asc/205/960/#205-960-50-4) that apply for the annual financial statements of a hypothetical defined benefit pension plan that has been amended to include a 401(h) account. It does not illustrate other provisions that might apply in circumstances other than those assumed in this Example. The financial statements and accompanying notes are as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-2FEBB88D-7D78-4695-9889-58F363354448-low.gif) C&H Company Pension Plan Statement of Net Assets Available for Pension Benefits "December 31," 20X1 20X0 Assets "Investments, at fair value (Note A):" Plan interest in C&H Master Trust " $2,000,000 " " $1,660,000 " C&H Company common stock " 600,000 " " 800,000 " Investment contract with insurance company " 850,000 " " 800,000 " Corporate bonds and debentures " 3,000,000 " " 3,170,000 " U.S. government securities " 300,000 " " 200,000 " Mortgages " 480,000 " " 460,000 " Money market fund " 270,000 " " 240,000 " Total investments " 7,500,000 " " 7,330,000 " Net assets held in 401(h) account (Note H) " 1,072,000 " " 966,000 " Receivables: Employer's contribution " 20,000 " " 10,000 " Securities sold " 310,000 " " 175,000 " Accrued interest and dividends " 70,000 " " 70,000 " Total receivables " 400,000 " " 255,000 " Cash " 180,000 " " 80,000 " Total assets " 9,152,000 " " 8,631,000 " Liabilities Due to broker for securities purchased - " 400,000 " Accounts payable " 70,000 " " 60,000 " Accrued expenses " 70,000 " " 25,000 " Amounts related to obligation of 401(h) account " 1,072,000 " " 966,000 " Total liabilities " 1,212,000 " " 1,451,000 " Net assets available for pension benefits " $7,940,000 " " $7,180,000 " - The accompanying notes are an integral part of the financial statements. - ![](https://asc.understandingaccounting.org/asc-img/GUID-CEC7903E-C77C-4104-934D-30053BC4470A-low.gif) C&H Company Pension Plan Statement of Changes in Net Assets Available for Pension Benefits "For the Year Ended December 31, 20X1" Investment income: Net appreciation in fair value of investments " $233,000 " Interest " 293,000 " Dividends " 4,000 " " 530,000 " Less investment expenses " 30,000 " Plan interest in C&H Master Trust investment income " 117,000 " " 617,000 " Contributions: Employer " 740,000 " Employees " 450,000 " " 1,190,000 " Total additions " 1,807,000 " Benefits paid directly to participants " 740,000 " Purchases of annuity contracts " 257,000 " " 997,000 " Administrative expenses " 50,000 " Total deductions " 1,047,000 " Net increase " 760,000 " Net assets available for pension benefits: Beginning of year " 7,180,000 " End of year " $7,940,000 " - The accompanying notes are an integral part of the financial statements. - Notes to Financial Statements - A. 401 (h) Account - Effective January 1, 19X0, the Plan was amended to include a medical-benefit component in addition to the normal retirement benefits to fund a portion of the postretirement obligations for retirees and their beneficiaries in accordance with Section 401(h) of the Internal Revenue Code. A [separate account](https://asc.understandingaccounting.org/glossary/s/#separate-account "A special account established by an insurance entity solely for the purpose of investing the assets of one or more plans. Funds in a separate account are not commingled with other assets of the insurance entity for investment purposes.") has been established and maintained in the Plan for the net assets related to the medical-benefit component (401(h) account). In accordance with Internal Revenue Code Section 401(h), the Plan's investments in the 401(h) account may not be used for, or diverted to, any purpose other than providing health benefits for retirees and their beneficiaries. Any assets transferred to the 401(h) account from the defined benefit pension plan in a qualified transfer of excess pension plan assets (and any income allocable thereto) that are not used during the plan year must be transferred out of the account to the pension plan. The related obligations for health benefits are not included in this Plan's obligations in the statement of accumulated plan benefits but are reflected as obligations in the financial statements of the health and welfare benefit plan. Plan participants do not contribute to the 401(h) account. Employer contributions or qualified transfers to the 401(h) account are determined annually and are at the discretion of the Plan [Sponsor](https://asc.understandingaccounting.org/glossary/s/#sponsor "In the case of a pension plan established or maintained by a single employer, the employer; in the case of a plan established or maintained by an employee entity, the employee entity; in the case of a plan established or maintained jointly by two or more employers or by one or more employers and one or more employee entities, the association, committee, joint board of trustees, or other group of representatives of the parties that have established or that maintain the pension plan."). Certain of the Plan's net assets are restricted to fund a portion of postretirement health benefits for retirees and their beneficiaries in accordance with Internal Revenue Code Section 401(h). - H. Reconciliation of Financial Statements to Form 5500 - \[Note: The reconciliation of amounts reported in the plan's financial statements to amounts reported in Form 5500 is required by the Employee Retirement Income Security Act.\] - The following is a reconciliation of net assets available for pension benefits per the financial statements to the Form 5500. - ![](https://asc.understandingaccounting.org/asc-img/GUID-E999632E-63BA-4A42-B7EE-64E5E6F4FE12-low.gif) "December 31," 20X1 20X0 Net assets available for pension benefits per the financial statements " $7,940,000 " " $7,180,000 " "Net assets held in 401(h) account included as assets in Form 5500" " 1,072,000 " " 966,000 " Net assets available for benefits per the Form 5500 " $9,012,000 " " $8,146,000 " - The net assets of the 401(h) account included in Form 5500 are not available to pay pension benefits but can be used only to pay retiree health benefits. - The following is a reconciliation of the changes in net assets per the financial statements to the Form 5500. - ![](https://asc.understandingaccounting.org/asc-img/GUID-5BA7830D-FCA9-4D46-9AA1-2DE499E8C584-low.gif) "For the Year Ended December 31, 20X1" Amounts per Financial Statements 401(h) Account Amounts per Form 5500 Net appreciation in fair value of investments " $233,000 " " $10,800 " " $243,800 " Interest income " 293,000 " " 80,200 " " 373,200 " Employer contributions " 740,000 " " 40,000 " " 780,000 " Benefits paid to retirees " 740,000 " " 10,000 " " 750,000 " Administrative expenses " 50,000 " " 15,000 " " 65,000 " - H. Reconciliation of Financial Statements to Form 5500 - \[Note: The reconciliation of amounts reported in plan financial statements to amounts reported in Form 5500 is required by the Employee Retirement Income Security Act.\] - The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C169173B-B39B-41F8-A533-F948F0EC663D-low.gif) Net assets available for benefits per the financial statements " $9,557,000 " Claims payable " (1,200,000)" Net assets held in defined benefit plan-401(h) account " (1,072,000)" Net assets available for benefits per Form 5500 " $7,285,000 " Source downloaded (UTC): 2026-09-09T22:56:59.598Z to 2026-09-09T22:57:32.204Z Record version: sha256:3f53c79a5e26d6a38e50b1a8cfbb4af537ca6d4c8788dcf1ba0df78c46be7114 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962: Presentation of Financial Statements — Plan Accounting—Defined Contribution Pension Plans ### Machine-generated study aids ```json { "summary": "This subtopic governs how a defined contribution pension plan presents its GAAP financial statements. On the accrual basis, the plan must present a statement of net assets available for benefits at plan year-end and a statement of changes in net assets available for benefits for the year, showing total assets, total liabilities, and net assets available for benefits, plus specified minimum categories of changes (net appreciation/depreciation in fair value, investment income, employer/participant/other contributions, benefits paid, insurance contract purchases, and administrative expenses). It also lists required note disclosures about the plan agreement, amendments, contribution basis, tax status, forfeitures, and similar matters.", "key_points": [ "Defined contribution plan financial statements must be prepared on the accrual basis and consist of a statement of net assets available for benefits as of plan year-end and a statement of changes in net assets available for benefits for the year then ended (205-962-45-1).", "The statement of net assets available for benefits presents total assets, total liabilities, and net assets available for benefits (205-962-45-2); non-benefit liabilities such as securities purchased, refunds of excess contributions, income taxes, and third-party administrator fees are accrued and deducted (205-962-45-4).", "The statement of changes reflects income credited to participants and net appreciation or depreciation in fair value of only those investment contracts that are not deemed fully benefit-responsive (205-962-45-6); see 962-325-35-5 for fully benefit-responsive contracts.", "Minimum line items in the statement of changes include net appreciation/depreciation in fair value (realized and unrealized), investment income, employer contributions split between cash and noncash (noncash at fair value), participant contributions, contributions from other sources, benefits paid, payments to insurance entities for excluded contracts, and administrative expenses (205-962-45-7).", "Other significant changes, such as transfers of assets to or from other plans or demutualization proceeds, are presented separately (205-962-45-8).", "A statement of cash flows is not required (per 230-10-15-4) but is encouraged when it would show the plan's ability to meet future obligations, such as when investments are not highly liquid (205-962-45-9).", "An interest in a master trust and the change in that interest must be separate line items in each statement (205-962-45-10), and notes must disclose the plan description, amendments, unallocated assets, contribution basis and ERISA minimum funding compliance, absorbed administrative costs, insurance contract policy, tax status, guarantees, amounts allocated to withdrawing participants (not reported as a liability), and forfeited nonvested accounts and their disposition (205-962-50-1)." ], "categories": [ "Presentation", "Disclosure", "Compensation and benefits", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "Exam questions often test that a defined contribution plan needs only two statements (net assets available for benefits and changes therein) and no statement of cash flows, unlike a business enterprise. A common misunderstanding: amounts allocated to participants who have elected to withdraw but have not yet been paid are NOT reported as a liability under GAAP (205-962-50-1(i)), even though Form 5500 reconciliation may be needed.", "related_topics": [ "962-10", "962-325", "960", "965", "230-10" ], "key_concepts": [ "net assets available for benefits", "statement of changes in net assets available for benefits", "accrual basis", "fully benefit-responsive investment contract", "master trust interest", "forfeited nonvested accounts", "employee benefit plan financial statements", "erisa minimum funding requirements" ] } ``` Source downloaded (UTC): 2026-09-09T22:56:59.598Z to 2026-09-09T22:56:59.598Z Record version: sha256:cd347975de5749bc64345a41a15b307426e6cf38eae4ae532c85fe04e450c90c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/962/#00-status) SEC content: no ##### [205-962-00-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:56:59.598Z to 2026-09-09T22:56:59.598Z Record version: sha256:6a1c9e1ee14c1481e8e99b0be001a9501151384f6cb0e240582bc2e9d27b5798 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
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution PlanAmendedAccounting Standards Update No. 2014-0603/14/2014
Sponsor (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
962-205-45-2AmendedAccounting Standards Update No. 2015-12 (Part I)07/31/2015
962-205-45-3SupersededAccounting Standards Update No. 2015-12 (Part I)07/31/2015
962-205-45-3AmendedAccounting Standards Update No. 2012-0410/01/2012
962-205-45-4AmendedAccounting Standards Update No. 2014-0603/14/2014
962-205-45-5SupersededAccounting Standards Update No. 2018-0907/16/2018
962-205-45-7AmendedMaintenance Update 2016-11 (PDF)06/27/2016
962-205-45-7AmendedAccounting Standards Update No. 2015-12 (Part II)07/31/2015
962-205-45-7AmendedAccounting Standards Update No. 2014-0603/14/2014
962-205-45-7AmendedAccounting Standards Update No. 2012-0410/01/2012
962-205-45-10AddedAccounting Standards Update No. 2017-0602/27/2017
962-205-50-1AmendedMaintenance Update 2016-11 (PDF)06/27/2016
Source downloaded (UTC): 2026-09-09T22:57:03.726Z to 2026-09-09T22:57:03.726Z Record version: sha256:46789dbbce5ceefb0aa5bb3fe45b301ea394e54af9c3e9b6975f957440cb06f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/962/#05-overview-and-background) SEC content: no ##### [205-962-05-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:03.726Z to 2026-09-09T22:57:03.726Z Record version: sha256:b5b4f6b7a45c8d66c675be6400216304568c241834c7553a1557d51dcc1d6e9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the presentation of financial statements of defined contribution pension plans. Source downloaded (UTC): 2026-09-09T22:57:06.466Z to 2026-09-09T22:57:06.466Z Record version: sha256:52e4927386f5dd61e0e13e96c25d95b1a1312420cb4a4302ae91e8b0d0bd45a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/962/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-962-15-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:06.466Z to 2026-09-09T22:57:06.466Z Record version: sha256:50c1a719f53bb6782dd4b2139369d2527a6f8e98c9045e44b425a42dd1b9b319 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 962-10-15. Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:bd73bace74479773fb1f83209d48419c3a61fd53e3b702ad412e86b71aa25766 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/962/#45-other-presentation-matters) SEC content: no ##### [205-962-45-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:9a58147ac5eb33058cd98a78888b6c547afa3a75601c961bbb26a7561db47ed7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements of a [defined contribution plan](https://asc.understandingaccounting.org/glossary/d/#defined-contribution-plan "A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account.") prepared in accordance with generally accepted accounting principles (GAAP) shall be prepared on the accrual basis of accounting and include both of the following: 1. a A statement of net assets available for benefits of the plan as of the end of the plan year 2. b A statement of changes in net assets available for benefits of the plan for the year then ended. #### Net Assets Available for Benefits ##### [205-962-45-2](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:fe88319e13867d430eb37586ed84d1007c83e49a5c03fc29a0b031157c99aecf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The statement of net assets available for benefits of the plan shall present amounts for all of the following: 1. a Total assets 2. b Total liabilities 3. c [Subparagraph superseded by Accounting Standards Update No. 2015-12](https://asc.understandingaccounting.org/updates/asu-2015-12/). (Part I). 4. d Net assets available for benefits. ##### [205-962-45-3](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:5fa1fb4005fbd8cdee58cf621af946285795518f84535fe145f71f59c196693a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-12](https://asc.understandingaccounting.org/updates/asu-2015-12/) (Part I). #### Other Components of Net Assets Available for Benefits ##### [205-962-45-4](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:6587d384ec29541aa6c10cd33fb0dfa39dd12c2d1e620ccf5a885bf315acf8f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan may have liabilities (other than for [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.")) that shall be accrued. Such liabilities may be for amounts owed for securities purchased, refund of excess contributions, income taxes payable by the plan, or other expenses (for example, third-party administrator fees). These liabilities shall be deducted to arrive at net assets available for benefits. ##### [205-962-45-5](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:073e31c6f47cd737b5455361d3f8978d9c95eea45414fdc800b97a009341e552 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-09](https://asc.understandingaccounting.org/updates/asu-2018-09/). #### Changes in Net Assets Available for Benefits ##### [205-962-45-6](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:f013e11863622957fbd2b3f56668f89ae1237ce40f935e89cdd2211c827ca0e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The statement of changes in net assets available for benefits shall be prepared on a basis that reflects income credited to participants in the plan and net appreciation or depreciation in the fair value of only those investment contracts that are not deemed to be fully benefit-responsive. Paragraph [962-325-35-5](https://asc.understandingaccounting.org/asc/325/962/#325-962-35-5) provides guidance on the accounting for fully benefit-responsive investment contracts. ##### [205-962-45-7](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:951567e6dcbb6db35c47abb52b21afddd943868eb7f11c3d2b4638a2c485ea05 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information about changes in net assets available for benefits is intended to present the effects of significant changes in net assets during the year and shall present, at a minimum, all of the following: 1. a The net appreciation or depreciation in fair value. Net appreciation or depreciation includes realized gains and losses on investments that were both purchased and sold during the period as well as unrealized appreciation or depreciation of the investments held at year end. 2. b Investment income, exclusive of changes in fair value described in (a). 3. c Contributions from employers, segregated between cash and noncash contributions (a noncash contribution shall be recorded at fair value; the nature of noncash contributions shall be described either parenthetically or in a note). 4. d Contributions from participants, including those transmitted by the [sponsor](https://asc.understandingaccounting.org/glossary/s/#sponsor "In the case of a pension plan established or maintained by a single employer, the employer; in the case of a plan established or maintained by an employee entity, the employee entity; in the case of a plan established or maintained jointly by two or more employers or by one or more employers and one or more employee entities, the association, committee, joint board of trustees, or other group of representatives of the parties that have established or that maintain the pension plan."). 5. e Contributions from other identified sources (for example, state subsidies or federal grants). 6. f Benefits paid to participants. 7. g Payments to insurance entities to purchase contracts that are excluded from plan assets. 8. h Administrative expenses. ##### [205-962-45-8](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:edde6b677a0b1c43a5e12bde64f07daee38299097ab01a00397aefb57f50a5ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The list of minimum disclosures is not intended to limit the amount of detail or the manner of presenting the information, and subclassifications or additional classifications may be useful. Other changes in net assets available for benefits (for example, transfers of assets to or from other plans or proceeds from demutualization) shall be presented separately in the financial statements if they are significant. #### Statement of Cash Flows ##### [205-962-45-9](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:8440d8c6d4c7ddfdf7ec8fa116208124838c1f8c7beada2c7a4616b5818ea3de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [230-10-15-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-15-4) states that a statement of cash flows is not required to be provided by a defined benefit pension plan that presents financial information in accordance with this Subtopic. That paragraph also states that other employee benefit plans that present financial information similar to that required by Topic 960 (including the presentation of plan investments at fair value) are not required to provide a statement of cash flows. That paragraph also states that employee benefit plans are encouraged to include a statement of cash flows with their annual financial statements if that statement would provide relevant information about the ability of the plan to meet future obligations (for example, if the plan invests in assets that are not highly liquid or obtains financing for investments). #### Interests in Master Trusts ##### [205-962-45-10](https://asc.understandingaccounting.org/asc/205/962/#205-962-45-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:12.422Z to 2026-09-09T22:57:12.422Z Record version: sha256:1c3b0edf123c11a83653c6cf9b56548a102f846d7cea6aee0bcbb27ebcd88541 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For each master trust in which a plan holds an interest, a plan shall present that interest and the change in that interest in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. See Section 962-325-50 for master trust disclosures. Source downloaded (UTC): 2026-09-09T22:57:15.863Z to 2026-09-09T22:57:15.863Z Record version: sha256:c1f893b42cb954e26f3e617a4d9758acbe9a205700832c9366b238f6dd448e77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/962/#50-disclosure) SEC content: no ##### [205-962-50-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:15.863Z to 2026-09-09T22:57:15.863Z Record version: sha256:ee2cf8e664bb7042c9b95a09155a0b846eca65a5cc51e5a5bf68e662aa27a508 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements shall disclose, if applicable, all of the following: 1. a A brief, general description of the plan agreement including, but not limited to, vesting and allocation provisions and the disposition of forfeitures. If a plan agreement or a description providing this information is otherwise published and made available, this description may be omitted from the financial statements provided that reference to the other source is made. 2. b A description of significant plan amendments adopted during the period, and the effects of such amendments on net assets if significant either individually or in the aggregate. 3. c The amount of unallocated assets, as well as the basis used to allocate asset values to participants' accounts if that basis differs from the one used to record assets in the financial statements. 4. d The basis for determining contributions by employers and, for a contributory plan, the method of determining participants' contributions. Plans subject to the minimum funding requirements of the Employee Retirement Income Security Act, such as money purchase pension plans, shall disclose whether those requirements have been met. If a minimum funding waiver has been granted by the Internal Revenue Service (IRS), or if a request for waiver is pending before the IRS, that fact shall be disclosed. 5. e If significant costs of plan administration are being absorbed by the employers, that fact shall be disclosed in the notes to financial statements. 6. f The policy regarding the purchase of contracts with insurance entities that are excluded from plan assets. 7. g The federal income tax status of the plan if a favorable determination letter has not been obtained or maintained. Note that reports filed in accordance with the requirements of the Employee Retirement Income Security Act must include disclosure of information concerning whether a tax ruling or determination letter has been obtained, which is more than is required by Topic 960. 8. h Guarantees by others of debt of the plan. 9. i Amounts allocated to accounts of persons who have elected to withdraw from the plan but have not yet been paid. These amounts shall not be reported as a liability on the statement of net assets available for benefits in financial statements prepared in conformity with generally accepted accounting principles (GAAP). A note to financial statements to reconcile the audited financial statements to Form 5500 may be necessary to comply with the Employee Retirement Income Security Act. 10. j The amount and disposition of forfeited nonvested accounts. Specifically, identification of those amounts that are used to reduce future employer contributions, expenses, or reallocated to participant's accounts, in accordance with plan documents. Source downloaded (UTC): 2026-09-09T22:57:18.010Z to 2026-09-09T22:57:18.010Z Record version: sha256:dbbca847a565a0e5134c0fbae55f7942ede42bc023015a84e64afb15ddb60999 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/962/#sec-00-status) SEC content: yes ##### [205-962-S00-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:18.010Z to 2026-09-09T22:57:18.010Z Record version: sha256:9439eb82ca63aa6468b3a084704800898d4fccedb44e9e4e6db5e0ee92a6a3bf 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
962-205-S99-1AmendedAccounting Standards Update No. 2019-0707/26/2019
Source downloaded (UTC): 2026-09-09T22:57:20.293Z to 2026-09-09T22:57:20.293Z Record version: sha256:ee799e421759394176988d07b82c83f6652feac530d615f465fd57f209780bb4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-S15: SEC 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/962/#sec-15-scope-and-scope-exceptions) SEC content: yes #### Entities ##### [205-962-S15-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:20.293Z to 2026-09-09T22:57:20.293Z Record version: sha256:24072d71c62c1e887046c3e53fc9097bd5fe7e016575ffec8851248e0358e3ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [962-205-S99-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S99-1), Regulation S-X Rule 6A-01, for entities to which Rules 6A-01 through 6A-05 apply. Source downloaded (UTC): 2026-09-09T22:57:27.118Z to 2026-09-09T22:57:27.118Z Record version: sha256:c6431bc41c6b188ec989c17ff10e390d2a997dfb49f38242a014f2ff3b12b958 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-S45: SEC 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/962/#sec-45-other-presentation-matters) SEC content: yes #### Format ##### [205-962-S45-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:27.118Z to 2026-09-09T22:57:27.118Z Record version: sha256:de11555d1f72118bcaa0ea53cdc4ed6ec1b0407863a5277563f88e260e0b8fdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [962-205-S99-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S99-1), Regulation S-X Rule 6A-03, for presentation requirements for statements of financial condition. ##### [205-962-S45-2](https://asc.understandingaccounting.org/asc/205/962/#205-962-S45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:27.118Z to 2026-09-09T22:57:27.118Z Record version: sha256:a0ce961581663e161704450f3ba8accc5139e4140a0041ca229b09a249a77152 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [962-205-S99-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S99-1), Regulation S-X Rule 6A-04, for presentation requirements for statements of income and changes in plan equity. Source downloaded (UTC): 2026-09-09T22:57:28.818Z to 2026-09-09T22:57:28.818Z Record version: sha256:7a68aaa55ee95c53bc077b498a15285cdc746d6d375194447b7274639369138f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/962/#sec-50-disclosure) SEC content: yes #### Valuation of Assets ##### [205-962-S50-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:28.818Z to 2026-09-09T22:57:28.818Z Record version: sha256:251a1b2dd6614e0f994e98948721da7ca8b47874f3196e4a69e369dfd162aaff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [962-205-S99-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S99-1), Regulation S-X Rule 6A-02, for disclosure requirements for employee stock purchase, savings, and other plans within the scope of Rule 6A-01. #### Schedules ##### [205-962-S50-2](https://asc.understandingaccounting.org/asc/205/962/#205-962-S50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:28.818Z to 2026-09-09T22:57:28.818Z Record version: sha256:557b859739d0e6030cbf5e35f7f46efebb0648688db6238d12e5789df048b78d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [962-205-S99-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S99-1), Regulation S-X Rule 6A-05, for schedules required to be filed for entities within the scope of Rule 6A-01. Source downloaded (UTC): 2026-09-09T22:57:32.204Z to 2026-09-09T22:57:32.204Z Record version: sha256:f2ff0aa08982d96c29a1485564c40c0ffe9878969011b443b1f3594eb26bb333 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-962-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/205/962/#sec-99-sec-materials) SEC content: yes #### SEC Rules, Regulations, and Interpretations ##### [205-962-S99-1](https://asc.understandingaccounting.org/asc/205/962/#205-962-S99-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:32.204Z to 2026-09-09T22:57:32.204Z Record version: sha256:f7a049c02176749210cb2b869b23285cde56f5309abea702458160d264b34311 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of Regulation S-X Rule 6A, Employee Stock Purchase, Savings and Similar Plans (17 CFR 210.6A-01 through 17 CFR 210.6A-05). - Rule 6A-01. Application of Rules 6A-01 to 6A-05 (17 CFR 210.6A-01). - Application of §§ 210.6A-01 to 210.6A-05 - (a) Sections 210.6A-01 to 210.6A-05 shall be applicable to financial statements filed for employee stock purchase, savings and similar plans. - (b) \[Reserved\] \[47 FR 56843, Dec. 21, 1982\] - Rule 6A-02. Special Rules Applicable to Employee Stock Purchase, Savings and Similar Plans (17 CFR 210.6A-02). - - The financial statements filed for persons to which this article is applicable shall be prepared in accordance with the following special rules in addition to the general rules in §§ 210.1-01 to 210.4-10. Where the requirements of a special rule differ from those prescribed in a general rule, the requirements of the special rule shall be met. - (a) Investment programs. - If the participating employees have an option as to the manner in which their deposits and contributions may be invested, a description of each investment program shall be given in a footnote or otherwise. The number of employees under each investment program shall be stated. - (b) Net asset value per unit. - Where appropriate, the number of units and the net asset value per unit shall be given by footnote or otherwise. - (c) Federal income taxes. - (1) If the plan is not subject to Federal income taxes, a note shall so state indicating briefly the principal assumptions on which the plan relied in not making provision for such taxes. - (2) State the Federal income tax status of the employee with respect to the plan. - (d) [Valuation of assets](https://asc.understandingaccounting.org/glossary/v/#valuation-of-assets "See paragraph 962-205-S99-1, Regulation S-X Rule 6A-02(d), for the definition of the term value as used in that Rule."). - The statement of financial condition shall reflect all investments at value, showing cost parenthetically. For purposes of this rule, the term _value_ shall mean (1) market value for those securities having readily available market quotations and (2) fair value as determined in good faith by the trustee(s) for the plan (or by the person or persons who exercise similar responsibilities) with respect to other securities and assets. \[47 FR 56843, Dec. 21, 1982\] - Rule 6A-03. Statements of Financial Condition (17 CFR 210.6A-03). - Statements of financial condition filed under this rule shall comply with the following provisions: - PLAN ASSETS - 1\. Investments in securities of participating employers. State separately each class of securities of the participating employer or employers. - 2\. Investments in securities of unaffiliated issuers. - (a) United States Government bonds and other obligations. Include only direct obligations of the United States Government. - (b) Other securities. State separately (1) marketable securities and (2) other securities. - 3\. Investments. Other than securities. State separately each major class. - 4\. Dividends and interest receivable. - 5\. Cash. - 6\. Other assets. State separately (a) total of amounts due from participating employers or any of their directors, officers and principal holders of equity securities; (b) total of amounts due from trustees or managers of the plan; and (c) any other significant amounts. - LIABILITIES AND PLAN EQUITY - 7\. Liabilities. State separately (a) total of amounts payable to participating employers; (b) total of amounts payable to participating employees; and (c) any other significant amounts. - 8\. Reserves and other credits. State separately each significant item and describe each such item by using an appropriate caption or by a footnote referred to in the caption. - 9\. Plan equity at close of period. \[27 FR 78710, Aug. 9, 1962. Redesignated at 47 FR 56843, Dec. 21, 1982\] - Rule 6A-04. Statements of Comprehensive Income and Changes in Plan Equity (17 CFR 210.6A-04). - Statements of comprehensive income and changes in plan equity filed under this rule shall comply with the following provisions: - 1\. Net investment income. - (a) Income. State separately income from (1) cash dividends, (2) interest, and (3) other sources. Income from investments in or indebtedness of participating employers shall be segregated under the appropriate subcaption. - (b) Expenses. State separately any significant amounts. - (c) Net investment income. - 2\. Realized gain or loss on investments. - (a) State separately the net of gains or losses arising from transactions in (1) investments in securities of the participating employer or employers; (2) other investments in securities; and (3) other investments. - (b) State in a footnote or otherwise for each category of investment in paragraph (a) above the aggregate cost, the aggregate proceeds and the net gain or loss. State the principle followed in determining the cost of securities sold, e.g., _average cost_ or _first-in, first-out_. - 3\. Unrealized appreciation or depreciation of investments. - (a) State the amount of increase or decrease in unrealized appreciation or depreciation of investments during the period. - (b) State in a footnote or otherwise the amount of unrealized appreciation or depreciation of investments at the beginning of the period of report, at the end of the period of report, and the increase or decrease during the period. - 4\. Contributions and deposits. - (a) State separately (1) total of amounts deposited by participating employees, and (2) total of amounts contributed by the participating employer or employers. - (b) If employees of more than one employer participate in the plan, state in tabular form in a footnote or otherwise the amount contributed by each employer and the deposits of the employees of each such employer. - 5\. Withdrawals, lapses and forfeitures. State separately (a) balances of employees' accounts withdrawn, lapsed or forfeited during the period; (b) amounts disbursed in settlement of such accounts; and (c) disposition of balances remaining after settlement specified in (b). - 6\. Plan equity at beginning of period. - 7\. Plan equity at end of period. \[27 FR 7870, Aug. 9, 1962. Redesignated at 47 FR 56843, Dec. 21, 1982; 83 FR 50203, Oct. 4, 2018\] - Rule 6A-05. What Schedules Are to be Filed (17 CFR 210.6A-05). - (a) Schedule I of this section shall be filed as of the most recent audited statement of financial condition and any subsequent unaudited statement of financial condition being filed. Schedule II of this section shall be filed as of the date of each statement of financial condition being filed. Schedule III of this section shall be filed for each period for which a statement of comprehensive income and changes in plan equity is filed. All schedules shall be audited if the related statements are audited. - Schedule I—Investments. A schedule substantially in form prescribed by § 210.12-12 shall be filed in support of captions 1, 2 and 3 of each statement of financial condition unless substantially all of the information is given in the statement of financial condition by footnote or otherwise. - Schedule II—Allocation of plan assets and liabilities to investment program. If the plan provides for separate investment programs with separate funds, and if the allocation of assets and liabilities to the several funds is not shown in the statement of financial condition in columnar form or by the submission of separate statements for each fund, a schedule shall be submitted showing the allocation of each caption of each statement of financial condition filed to the applicable fund. - Schedule III—Allocation of plan income and changes in plan equity to investment programs. If the plan provides for separate investment programs with separate funds, and if the allocation of income and changes in plan equity to the several funds is not shown in the statement of comprehensive income and changes in plan equity in columnar form or by the submission of separate statements for each fund, a schedule shall be submitted showing the allocation of each caption of each statement of comprehensive income and changes in plan equity filed to the applicable fund. - (b) \[Reserved\] \[45 FR 63676, Sept. 25, 1980. Redesignated at 47 FR 56843, Dec. 21, 1982, and amended at 50 FR 25215, June 18, 1985; 83 FR 50203, Oct. 4, 2018\] Source downloaded (UTC): 2026-09-09T22:57:36.115Z to 2026-09-09T22:58:00.033Z Record version: sha256:370ed0c1c1222b08103e457e178ad9cae0974bece9f84f2aa9f4504d01bb29d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965: Presentation of Financial Statements — Plan Accounting—Health and Welfare Benefit Plans ### Machine-generated study aids ```json { "summary": "ASC 965-205 (indexed here as 205-965) prescribes the financial statement presentation for health and welfare benefit plans. Defined benefit plans must present, on the accrual basis, a statement of net assets available for benefits, a statement of changes in net assets available for benefits, information about the plan's benefit obligations, and the significant factors causing year-to-year changes in those obligations; defined contribution plans present only the two net-asset statements because the obligation is limited to participants' account balances. It also governs how retiree health benefits funded through a 401(h) account in the sponsor's defined benefit pension plan are reported in the health and welfare plan's financial statements, plus an extensive list of required note disclosures.", "key_points": [ "A defined benefit health and welfare plan's GAAP financial statements are prepared on the accrual basis and include a statement of net assets available for benefits, a statement of changes in net assets available for benefits, information on benefit obligations at year-end, and the significant effects of factors changing those obligations (965-205-45-1).", "Benefit obligation information may be shown in a separate statement, combined with another statement, or in the notes, but it must be presented in its entirety in the same location and in enough detail to identify the nature and classification of the obligations (965-205-45-2; 965-205-50-6).", "A defined contribution health and welfare plan presents only a statement of net assets available for benefits and a statement of changes in net assets available for benefits; benefit obligation information is not applicable because the obligation is limited to the amounts in participants' accounts (965-205-45-3 through 45-4).", "Health and welfare plans are not required to present a statement of cash flows if they provide information similar to that required by Topic 960, though one is encouraged when assets are not highly liquid or investments are financed (965-205-45-5; 230-10-15-4).", "401(h) account assets, liabilities, and changes therein used to fund retiree health benefits are reported in the health and welfare plan's financial statements, either as a single line item or within individual line items with note disclosure; 401(h) obligations go in the plan's statement of benefit obligations and claims paid through the account go in the statement of changes in benefit obligations (965-205-45-6 through 45-8).", "Because ERISA requires 401(h) accounts to be reported as pension plan assets, the health and welfare plan must reconcile net assets to Form 5500 and disclose that the assets are available only to pay retiree health benefits and the significant components of the account's net assets and changes; Topic 815 and 820 investment disclosures are not required for 401(h) assets if the pension plan providing them is named (965-205-50-3 through 50-5).", "Required disclosures include a description of the plan and amendments, funding policy and the portion of estimated postretirement cost funded by retiree contributions, tax status, insurance policies, party-in-interest transactions, subsequent events, assumed health care cost-trend rates, and the effect of a one-percentage-point increase in those trend rates on the postretirement benefit obligation (965-205-50-1)." ], "categories": [ "Financial statement presentation", "Disclosure", "Compensation and benefits", "Presentation" ], "audience_level": "advanced", "student_note": "Exam questions often turn on the difference between defined benefit and defined contribution health and welfare plans: only defined benefit plans report benefit obligations, because a defined contribution plan's obligation is capped at the participant's account balance. A second common trap is the 401(h) account — even though ERISA treats it as a pension plan asset (hence the Form 5500 reconciliation), GAAP requires it and the related retiree health obligations to be reported in the health and welfare plan's statements, not the pension plan's.", "related_topics": [ "965-20", "965-30", "965-325", "960", "962", "230-10" ], "key_concepts": [ "health and welfare benefit plan", "net assets available for benefits", "benefit obligations", "401(h) account", "postretirement benefit obligation", "health care cost-trend rate", "accrual basis of accounting", "form 5500 reconciliation" ] } ``` Source downloaded (UTC): 2026-09-09T22:57:36.115Z to 2026-09-09T22:57:36.115Z Record version: sha256:308e3167ffe590830269bb9da7480fe38751f456f42c450a48f61acad87703a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/965/#00-status) SEC content: no ##### [205-965-00-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:36.115Z to 2026-09-09T22:57:36.115Z Record version: sha256:b43095bab6d38156445e8a83217406375458be17d9d9b24071ca12ca39a55fbc 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
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit Health and Welfare PlansSupersededAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit PlanAddedAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution Health and Welfare PlansSupersededAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution PlanAddedAccounting Standards Update No. 2014-0603/14/2014
Fair Value (2nd def.)SupersededAccounting Standards Update No. 2012-0410/01/2012
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
Plan Assets (1st def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Plan Assets (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
965-205-10-1AmendedAccounting Standards Update No. 2014-0603/14/2014
965-205-10-2AmendedAccounting Standards Update No. 2014-0603/14/2014
965-205-45-1AmendedAccounting Standards Update No. 2014-0603/14/2014
965-205-45-2AmendedAccounting Standards Update No. 2020-1010/29/2020
965-205-45-2AmendedMaintenance Update 2015-11 (PDF)06/19/2015
965-205-45-3AmendedAccounting Standards Update No. 2014-0603/14/2014
965-205-45-4AmendedAccounting Standards Update No. 2014-0603/14/2014
965-205-45-7AmendedMaintenance Update 2016-11 (PDF)06/27/2016
965-205-45-8AmendedMaintenance Update 2016-11 (PDF)06/27/2016
965-205-45-11AddedAccounting Standards Update No. 2017-0602/27/2017
965-205-50-1AmendedAccounting Standards Update No. 2014-0603/14/2014
965-205-50-1AmendedAccounting Standards Update No. 2012-0410/01/2012
965-205-50-5AddedAccounting Standards Update No. 2017-0602/27/2017
965-205-50-6AddedAccounting Standards Update No. 2020-1010/29/2020
965-205-55-3AmendedAccounting Standards Update No. 2014-0603/14/2014
965-205-55-4AmendedAccounting Standards Update No. 2015-12 (Part II)07/31/2015
965-205-55-4AmendedAccounting Standards Update No. 2012-0410/01/2012
965-205-55-6AmendedAccounting Standards Update No. 2015-12 (Part II)07/31/2015
965-205-55-6AmendedAccounting Standards Update No. 2012-0410/01/2012
965-205-55-8AmendedAccounting Standards Update No. 2015-12 (Part II)07/31/2015
Source downloaded (UTC): 2026-09-09T22:57:38.913Z to 2026-09-09T22:57:38.913Z Record version: sha256:abf9375d623a29f65b8fdb1de9ba1477c762202262a03cb56a8b06093637631b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/965/#05-overview-and-background) SEC content: no ##### [205-965-05-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:38.913Z to 2026-09-09T22:57:38.913Z Record version: sha256:ad1876cb50fbbcca2e2aaae0ece9763fc75afb35ecd3dd9363aa8420315bd427 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the presentation of financial statements for [health and welfare benefit plans](https://asc.understandingaccounting.org/glossary/h/#health-and-welfare-benefit-plans "Health and welfare benefit plans include plans that provide the following: Any of the following benefits: Medical, dental, visual, psychiatric, or long-term health care Life insurance (offered separately from a pension plan) Certain severance benefits Accidental death or dismemberment benefits. Benefits for unemployment, disability, vacations, or holidays Other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services."). #### 401(h) Accounts ##### [205-965-05-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:38.913Z to 2026-09-09T22:57:38.913Z Record version: sha256:9953fb66f2be529abb9fc8c4aa763fdbcd27c0c4dff6f3e1374830a2432350a1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Employers may fund a portion of their postretirement medical-benefit obligations related to their health and welfare benefit plans through a health benefit account ([401(h) account](https://asc.understandingaccounting.org/glossary/h/#401-h-accounts "A postretirement medical-benefit component provided in some defined benefit pension plans in addition to the normal retirement benefits of the plan, pursuant to Section 401(h) of the Internal Revenue Code.")) in their defined benefit pension plans, subject to certain restrictions and limitations. ##### [205-965-05-3](https://asc.understandingaccounting.org/asc/205/965/#205-965-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:38.913Z to 2026-09-09T22:57:38.913Z Record version: sha256:d8a592f7b8309e9cbb2a4d0d5fbbdf3e1972ac9807eca1ebd309bbadd9aeaa8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Funding can be accomplished through a qualified transfer of excess pension plan assets (as defined in Section 420 of the Internal Revenue Code) or through additional contributions to the 401(h) account by the employer, employees, or both. Any assets transferred to a 401(h) account in a qualified transfer of excess pension plan assets (and any income allocable thereto) must be used only to pay qualified current retiree health benefits for the taxable year of the transfer (whether directly or through reimbursement). Any assets transferred to the 401(h) account to pay retiree medical expenses in a qualified transfer of excess pension plan assets (and any income allocable thereto) that are not used during the year must be transferred out of the account to the transferor plan and treated as an employer reversion for purposes of a 20 percent excise tax on reversions. The Internal Revenue Code allows employers to allocate up to 25 percent of total contributions to the plan, subject to certain limitations, to the 401(h) account. If the full amount of these contributions is not used during the year, they may be accumulated for future retiree medical expenses in the 401(h) account. The deductibility of employer contributions to a 401(h) account is subject to separate limitations and, therefore, such contributions have no effect on the amount of deductible contributions an employer can make to fund pension benefits under the plan. The earnings on the 401(h) account are ignored for minimum funding purposes. Additionally, under the Code, qualified transfers are not treated as prohibited transactions for purposes of Section 4975. ##### [205-965-05-4](https://asc.understandingaccounting.org/asc/205/965/#205-965-05-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:38.913Z to 2026-09-09T22:57:38.913Z Record version: sha256:625e14e006b0a9a952bfe9f78d2529307acf7ef412592f7520904da2c53437c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The plan sponsor has discretion in making contributions to the 401(h) account. A pension or annuity plan may provide for payment of medical benefits for retired employees, their spouses, and their dependents if all of the following conditions are met: 1. a Benefits are subordinate (as defined in Section 401(h) of the Internal Revenue Code) to the retirement benefits provided by the plan. 2. b A separate account is established and maintained for such benefits. 3. c The employer's contributions to the separate account are reasonable and ascertainable. 4. d It is impossible, at any time before the satisfaction of all obligations under the plan to provide such benefits, for any part of the corpus or income of the separate account to be (within the taxable year or thereafter) used for or diverted to any purpose other than the providing of such benefits. 5. e Notwithstanding the provisions of certain Internal Revenue Code sections, upon satisfaction of all obligations under the plan to provide such benefits, any amount remaining in the separate account must, under the terms of the plan, be returned to the employer. 6. f In the case of an employee who is a key employee (as defined in Section 416(i)), a separate account is established and maintained for such benefits payable to such employee (and the spouse and dependents) and such benefits (to the extent attributable to plan years beginning after March 31, 1984, for which the employee is a key employee) are payable only to such employee (and the spouse and dependents) from that separate account. ##### [205-965-05-5](https://asc.understandingaccounting.org/asc/205/965/#205-965-05-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:38.913Z to 2026-09-09T22:57:38.913Z Record version: sha256:078523c5c504a0a8f5f1bce24cb33e76191da64647df646ebc8f57795ace0c7e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The 401(h) assets may be used only to pay current retiree health benefits, which are obligations of a separate health and welfare benefit plan or health benefit arrangement. They may not be used to satisfy pension obligations. Although the assets may be invested together with assets that are available to pay pension benefits, a separate accounting must be maintained for all qualified transfers, contributions, distributions, expenses, and income earned thereon. Source downloaded (UTC): 2026-09-09T22:57:42.854Z to 2026-09-09T22:57:42.854Z Record version: sha256:56d574585b3be796c971b5620a506645b1c34125c21654299402fc479a0de430 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/205/965/#10-objectives) SEC content: no #### Defined Benefit Health and Welfare Plans ##### [205-965-10-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-10-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:42.854Z to 2026-09-09T22:57:42.854Z Record version: sha256:f328a08a15833af2d507c68a207c031113789d7b5930ccf300c37eec5da8c48b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of financial reporting by [defined benefit health and welfare plans](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)") is the same as that of defined benefit pension plans; both types of plans provide a determinable benefit. Accordingly, the primary objective of the financial statements of a defined benefit health and welfare plan is to provide financial information that is useful in assessing the plan's present and future ability to pay its benefit obligations when due. To accomplish that objective, a plan's financial statements shall provide information about all of the following: 1. a Plan resources and the manner in which the stewardship responsibility for those resources has been discharged 2. b Benefit obligations 3. c The results of transactions and events that affect the information about those resources and obligations 4. d Other factors necessary for users to understand the information provided. #### Defined Contribution Health and Welfare Plans ##### [205-965-10-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-10-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:42.854Z to 2026-09-09T22:57:42.854Z Record version: sha256:6e9a605db99de5ed053cf66842ad25b472a15ea2e0e741fc33e527090c88d4b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of financial reporting by a [defined contribution health and welfare plan](https://asc.understandingaccounting.org/glossary/d/#defined-contribution-plan "A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account.") is to provide financial information that is useful in assessing the plan's present and future ability to pay its benefits. To accomplish that objective, a plan's financial statements shall provide information about all of the following: 1. a Plan resources and the manner in which the stewardship responsibility for those resources has been discharged 2. b The results of transactions and events that affect the information about those resources 3. c Other factors necessary for users to understand the information provided. For example vacation, holiday, and legal are typical plans whose benefits are limited to the balance in the participant's accounts. Source downloaded (UTC): 2026-09-09T22:57:45.456Z to 2026-09-09T22:57:45.456Z Record version: sha256:ed4a9e52e3a94c5006d2bbe68c93bda84cf2858b7605cbcccb70f7184ef51b82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/965/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-965-15-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:45.456Z to 2026-09-09T22:57:45.456Z Record version: sha256:f23cf5f393cd9a7fabd5b7647a6082ba5ebe7bbbed23608b8b9ba46e0ba77fea 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 965-10-15. Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:86e99ec88124f7dd6d19b435008bda77971a223fe77aa174372ef8fc2fba369a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/965/#45-other-presentation-matters) SEC content: no #### Defined Benefit Health and Welfare Plans ##### [205-965-45-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:e85d039a1891b9325ccb8a1743102827f46a1980e45b14d6fae31f425208d4cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements of a [defined benefit health and welfare plan](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)") prepared in accordance with generally accepted accounting principles (GAAP) shall be prepared on the accrual basis of accounting and include all of the following: 1. a A statement of net assets available for benefits as of the end of the plan year (see paragraphs [965-20-45-1 through 45-2](https://asc.understandingaccounting.org/asc/965/20/#965-20-45-1) ) 2. b A statement of changes in net assets available for benefits for the year then ended (see paragraphs [965-20-45-3 through 45-4](https://asc.understandingaccounting.org/asc/965/20/#965-20-45-3) ) 3. c Information regarding the plan's benefit obligations as of the end of the plan year (see Subtopic 965-30) 4. d Information regarding the effects, if significant, of certain factors affecting the year-to-year change in the plan's benefit obligations (see paragraphs [965-30-45-4 through 45-8](https://asc.understandingaccounting.org/asc/965/30/#965-30-45-4) ). ##### [205-965-45-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:be8afbf1f9310951befe2382547a265aa706c1fef16c53f440e665e6d208a717 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information about the benefit obligations shall be presented in a separate statement, combined with other information on another financial statement, or disclosed in the notes to financial statements. Regardless of the format selected, the plan financial statements shall present the benefit obligations information in its entirety in the same location. The information shall be presented in such reasonable detail as is necessary to identify the nature and classification of the obligations. See Examples 1 through 3 (paragraphs [965-205-55-2 through 55-7](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-2) ) for illustrative financial statements of [health and welfare benefit plans](https://asc.understandingaccounting.org/glossary/h/#health-and-welfare-benefit-plans "Health and welfare benefit plans include plans that provide the following: Any of the following benefits: Medical, dental, visual, psychiatric, or long-term health care Life insurance (offered separately from a pension plan) Certain severance benefits Accidental death or dismemberment benefits. Benefits for unemployment, disability, vacations, or holidays Other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services."). (See paragraph [965-205-50-6](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-6).) #### Defined Contribution Health and Welfare Plans ##### [205-965-45-3](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:724f099a0ee4a9e7a33b1f0b007dbccc8ee08b0d299c7a18e34e8c0856dde591 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements of a [defined contribution health and welfare plan](https://asc.understandingaccounting.org/glossary/d/#defined-contribution-plan "A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account.") prepared in accordance with GAAP shall be prepared on the accrual basis of accounting and include both of the following: 1. a A statement of net assets available for benefits of the plan as of the end of the plan year (see Subtopic 965-30) 2. b A statement of changes in net assets available for benefits of the plan for the year then ended (see paragraphs [965-20-45-3 through 45-4](https://asc.understandingaccounting.org/asc/965/20/#965-20-45-3) ). ##### [205-965-45-4](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:bb04bd35d142afbc0a2614aceb261d845d42a9da5963bd6ee0d38297fcc831a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because a plan's obligation to provide [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") is limited to the amounts accumulated in an individual's account, information regarding benefit obligations is not applicable. #### Cash Flows ##### [205-965-45-5](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:40eab3d641ebdda6fcc78861609fd0190912a22bfce9bae1a11ffa093da7927e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [230-10-15-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-15-4) provides that employee benefit plans other than pension plans (such as health and welfare plans, both defined benefit and defined contribution) that provide information similar to that required by Topic 960 are not required to provide a statement of cash flows. However, that paragraph encourages inclusion of a statement of cash flows in the financial statements of an employee benefit plan if such a statement would provide relevant information about the ability of the plan to meet future obligations (for example, if the plan invests in assets that are not highly liquid or obtains financing for investments). #### 401(h) Accounts ##### [205-965-45-6](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:9d7854d675910f60a412c2d5b5ebf103dceda6649db2002b8044293f8b247240 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain retiree health benefits may be funded through a [401(h) account](https://asc.understandingaccounting.org/glossary/h/#401-h-accounts "A postretirement medical-benefit component provided in some defined benefit pension plans in addition to the normal retirement benefits of the plan, pursuant to Section 401(h) of the Internal Revenue Code.") in a defined benefit pension plan, pursuant to Section 401(h) of the Internal Revenue Code. The 401(h) account assets and liabilities used to fund retiree health benefits, and the changes in those assets and liabilities, shall be reported in the financial statements of the health and welfare benefit plan. ##### [205-965-45-7](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:111f0aed03347d862fb00f6345c98d70f06a830b630a93a63c424122996cf56c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The 401(h) account assets and liabilities and changes in them can be shown in the health and welfare benefit plan financial statements in either of the following ways: 1. a As a single line item on the face of the statements 2. b Included in individual line items with separate disclosure in the notes to financial statements about the 401(h) amounts included in those individual line items. ##### [205-965-45-8](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:9f958676a3f876cf51212a403b1cf5ad42a59ada4a49310156136aa79a261415 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the assets and liabilities are shown as a single line item in the statement of net assets, the changes in net assets also shall be shown as a single line item in the statement of changes in net assets. If the assets and liabilities are included in individual asset and liability line items in the statement of net assets, the changes in individual 401(h) amounts shall be included in the changes in the individual line items in the statement of changes in net assets, with separate disclosure in the notes about the 401(h) amounts included in those individual line items. The 401(h) obligations shall be reported in the health and welfare benefit plan's statement of benefit obligations. Likewise, the health and welfare benefit plan's statement of changes in benefit obligations shall include claims paid through the 401(h) account. ##### [205-965-45-9](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:7baa1874aac139c103b7ae1f23f632198824cd5a9af6acc4cd338b818cdc925f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Illustrative financial statements of a health and welfare benefit plan funded through a 401(h) account in a separate defined benefit pension plan are presented in Example 4 (see paragraph [965-205-55-8](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-8)). #### Employees' Beneficiary Association Trust ##### [205-965-45-10](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:3e14d0b8dc6a41188d8463c87aabf6a12a865de63a113267b2dc3241fa93bac8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the assets of more than one plan are held in a 501(c)(9) Voluntary Employees' Beneficiary Association trust, separate reports must be prepared for each plan. Some plans may pay only a portion of the plan's benefit payments and other expenses through the Association. #### Interests in Master Trusts ##### [205-965-45-11](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:51.585Z to 2026-09-09T22:57:51.585Z Record version: sha256:ffad07f7e4bb68341cd8b97ac3ff9236e58455b22e7bd0a869d23e34f3c8c7d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For each master trust in which a plan holds an interest, a plan shall present that interest and the change in that interest in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. See Section 965-325-50 for master trust disclosures. Source downloaded (UTC): 2026-09-09T22:57:55.221Z to 2026-09-09T22:57:55.221Z Record version: sha256:be4caad3ca79826ea5608c4ad82156b75dd311a54e7c569d0392914bb1d20260 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/965/#50-disclosure) SEC content: no ##### [205-965-50-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:55.221Z to 2026-09-09T22:57:55.221Z Record version: sha256:25dfd28df1e1c8c9ac9633be81bd73ffc53d8a6bc0897f712a0ea8bd0b284aeb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The plan's financial statements shall disclose other information as described in this Subtopic. Certain of the disclosures relate to plans with accumulated assets rather than those with trusts that act more as conduits for benefit payments or insurance premiums. Separate disclosures may be made to the extent that the plan provides both health and other welfare [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment."). The disclosures shall include, if applicable, all of the following: 1. a A brief, general description of the plan agreement, including, but not limited to, participants covered, vesting, and benefit provisions. If a plan agreement or a description thereof providing this information is otherwise published or made available, the description in the financial statement disclosures may be omitted, provided that a reference to the other source is made. 2. b A description of significant plan amendments adopted during the period, as well as significant changes in the nature of the plan (for example, a plan spinoff or merger with another plan) and changes in actuarial assumptions. 3. c The funding policy and any changes in the policy made during the plan year. If the benefit obligations exceed the net assets of the plan, the method of funding this deficit, as provided for in the plan agreement or collective bargaining agreement, also shall be disclosed. If significant plan administration or related costs are being borne by the employer, that fact shall be disclosed. For a contributory plan, the disclosure shall state the method of determining participants' contributions. For each year for which a year-end statement of net assets available for benefits is presented, the plan shall disclose a description of the portion of the plan's estimated cost of providing postretirement benefits funded by retiree contributions. The plan's estimated cost of postretirement benefits is the plan's expected claims cost for the year. It excludes benefit costs paid by Medicare and costs, such as deductibles and copayments, paid directly to the medical provider by participants. The portion of the plan's estimated cost that is funded by retiree contributions is determined at the beginning of the year based on the plan sponsor's cost-sharing policy. In determining that amount, the retirees' required contribution for the year shall be reduced by any amounts intended to recover a shortfall (or increased by amounts intended to compensate for an overcharge) in attaining the desired cost-sharing in prior year(s). If the plan terms provide that a shortfall in attaining the intended cost sharing in the prior year(s) is to be recovered by increasing the retiree contribution in the current year, that incremental contribution shall be separately disclosed. Similarly, if the plan terms provide that participant contributions in the current year are to be reduced by the amount by which participant contributions in the prior year exceeded the amount needed to attain the desired cost-sharing, the resulting reduction in the current year contribution shall be separately disclosed. The information about retiree contributions shall be provided for each significant group of retired participants to the extent their contributions differ. 4. d The federal income tax status of the plan. 5. e The policy regarding the purchase of contracts with insurance entities that are excluded from [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. Plan assets ordinarily cannot be withdrawn by the employer except under certain circumstances when a plan has assets in excess of obligations and the employer has taken certain steps to satisfy existing obligations. Securities of the employer held by the plan are includable in plan assets provided they are transferable. Assets not segregated in a trust, or otherwise effectively restricted, so that they cannot be used by the employer for other purposes are not plan assets, even though the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets."). Consideration should be given to disclosing the type and extent of insurance coverage, as well as the extent to which risk is transferred (for example, coverage period and claims reported or claims incurred). 6. f The amounts and types of securities of the employer and related parties included in plan assets, and the approximate amount of future annual benefits of plan participants covered by insurance contracts issued by the employer and related parties. 7. g Significant real estate or other transactions in which the plan and any of the following parties are jointly involved: 1. 1 The sponsor 2. 2 The plan administrator 3. 3 Employers 4. 4 Employee organizations. 8. h Unusual or infrequent events or transactions occurring after the financial statement date, but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), that might significantly affect the usefulness of the financial statements in an assessment of the plan's present and future ability to pay benefits. For example, all of the following shall be disclosed: 1. 1 A plan amendment adopted after the latest financial statement date that significantly increases future benefits attributable to an employee's service rendered before that date 2. 2 A significant change in the fair value of a significant portion of the plan's assets 3. 3 The emergence of a catastrophic claim. If reasonably determinable, the effects of such events or transactions shall be disclosed. If such effects are not reasonably determinable, the reasons why they are not quantifiable shall be disclosed. 9. i Any of the following commitments or contingencies: 1. 1 Material lease commitments 2. 2 Other commitments 3. 3 Contingent liabilities. 10. j The assumed health care cost-trend rate(s) used to measure the expected cost of benefits covered by the plan for the next year, including both of the following: 1. 1 A general description of the direction and pattern of change in the assumed trend rates thereafter 2. 2 The ultimate trend rate(s) and when that rate is expected to be achieved. 11. k For [health and welfare benefit plans](https://asc.understandingaccounting.org/glossary/h/#health-and-welfare-benefit-plans "Health and welfare benefit plans include plans that provide the following: Any of the following benefits: Medical, dental, visual, psychiatric, or long-term health care Life insurance (offered separately from a pension plan) Certain severance benefits Accidental death or dismemberment benefits. Benefits for unemployment, disability, vacations, or holidays Other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services.") providing postretirement health care benefits, the effect of a one-percentage-point increase in the assumed health care cost-trend rates for each future year on the postretirement benefit obligation 12. l Any modification of the existing cost-sharing provisions that are encompassed by the substantive plan(s) and the existence and nature of any commitment to increase monetary benefits provided by the plan and their effect on the plan's financial statements. 13. m Termination provisions of the plan and priorities for distribution of assets, if applicable. 14. n Restrictions, if any, on plan assets (for example, legal restrictions on multiple trusts) 15. o For a defined contribution health and welfare plan, the accounting policy for, and the amount and disposition of, forfeited nonvested accounts. Specifically, identification of whether those amounts will be used to reduce future employer contributions, employer expenses, or will be allocated to participants' accounts. #### 401(h) Accounts ##### [205-965-50-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:55.221Z to 2026-09-09T22:57:55.221Z Record version: sha256:b96b81999a2a35ae32a617e8b47756d4c01036b5269e8e4c4d08ace55a35e94c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [965-205-45-6 through 45-8](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-6) for disclosure requirements for [401(h) account](https://asc.understandingaccounting.org/glossary/h/#401-h-accounts "A postretirement medical-benefit component provided in some defined benefit pension plans in addition to the normal retirement benefits of the plan, pursuant to Section 401(h) of the Internal Revenue Code.") assets and liabilities and the changes thereto if such information is not presented separately in the financial statements. The notes to financial statements shall disclose the significant components of net assets and changes in net assets of the 401(h) account. ##### [205-965-50-3](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:55.221Z to 2026-09-09T22:57:55.221Z Record version: sha256:46a21c5321bb254c2c081bd0b30fd8352a675ca7bebf26a355176234aa6c8ace Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If retiree health benefit obligations are funded partially through a 401(h) account of the defined benefit pension plan, the plan shall also disclose the fact that the assets are available only to pay retiree health benefits. The notes to financial statements shall disclose the significant components of net assets and changes in net assets of the 401(h) account. Additionally, the notes shall include a reconciliation of amounts reported in the financial statements to the amounts reported in the Form 5500 of the Internal Revenue Service (IRS). ##### [205-965-50-4](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:55.221Z to 2026-09-09T22:57:55.221Z Record version: sha256:cab6dadd1ea620eb249c1b5d240a4f93fab93bb376ce7b9bfc8e9f6795b3e0f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the Employee Retirement Income Security Act requires 401(h) accounts to be reported as assets of the pension plan, a reconciliation of the net assets reported in the financial statements to those reported in the Form 5500 is required for the health and welfare benefit plan. ##### [205-965-50-5](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:55.221Z to 2026-09-09T22:57:55.221Z Record version: sha256:8636b9e599698b1b8e8f29d8b63acbbb46f26f1236910bcc755e265404ff8bfe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan is not required to provide investment disclosures (for example, the disclosures required by Topic 815 on derivatives and hedging and Topic 820 on fair value measurement) for 401(h) account assets. A plan shall disclose the name of the defined benefit pension plan that allocated the funds to the health and welfare benefit plan and that provides the related investment disclosures. #### Defined Benefit Health and Welfare Plans ##### [205-965-50-6](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:55.221Z to 2026-09-09T22:57:55.221Z Record version: sha256:1798243649e172ceb28cb438be117c6aa81ff8f9d1829741ef170cf267623cd6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information about the benefit obligations shall be presented in a separate statement, combined with other information on another financial statement, or disclosed in the notes to financial statements. Regardless of the format selected, the plan financial statements shall present the benefit obligations information in its entirety in the same location. The information shall be presented in such reasonable detail as is necessary to identify the nature and classification of the obligations. See Examples 1 through 3 (paragraphs [965-205-55-2 through 55-7](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-2) ) for illustrative financial statements of [health and welfare benefit plans](https://asc.understandingaccounting.org/glossary/h/#health-and-welfare-benefit-plans "Health and welfare benefit plans include plans that provide the following: Any of the following benefits: Medical, dental, visual, psychiatric, or long-term health care Life insurance (offered separately from a pension plan) Certain severance benefits Accidental death or dismemberment benefits. Benefits for unemployment, disability, vacations, or holidays Other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services."). (See paragraph [965-205-45-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-2).) Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:90324d1c8fe50ccff511ae474398138cb542317ce841702c2e72de5bb8d66ad3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/965/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [205-965-55-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:601c825a176ce4d7331fb0c743d3e49d242e6c00194b375574b5322776f48af6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section illustrates certain applications of the provisions of this Subtopic. It does not illustrate other provisions of this Subtopic that might apply in circumstances other than those assumed in these Examples. It also does not illustrate all disclosures required for a fair presentation in conformity with generally accepted accounting principles (GAAP). The formats presented and the wording of the accompanying notes are illustrative and are not necessarily the only possible presentations. ##### [205-965-55-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:51363a46d97ca684ef32d54e12e51c524cc5ded309ef7eeae1d305015ca8152a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [965-205-10-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-10-1) and [965-205-45-1 through 45-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-1) . ##### [205-965-55-3](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:8d52d886ad63348b51cb2e47603506d423238c0b356a96223327275576c5fb58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The plan in this Example pays all [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") directly from [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. Plan assets ordinarily cannot be withdrawn by the employer except under certain circumstances when a plan has assets in excess of obligations and the employer has taken certain steps to satisfy existing obligations. Securities of the employer held by the plan are includable in plan assets provided they are transferable. Assets not segregated in a trust, or otherwise effectively restricted, so that they cannot be used by the employer for other purposes are not plan assets, even though the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets."). It is assumed that the plan provides health benefits and life insurance coverage to both active and retired participants. This Example also assumes that the plan provides long-term disability benefits and limited coverage during periods of unemployment based on [accumulated eligibility credits](https://asc.understandingaccounting.org/glossary/a/#accumulated-eligibility-credits "Plan participants may qualify for a benefit in which eligibility credits or hours accumulate and result in the plan covering payment of insurance premiums or benefits for a period of time for those participants who have accumulated a sufficient number of such credits or hours to be eligible for the credits. Eligible participants are provided with insurance coverage during periods of unemployment, when employer contributions to the plan would not otherwise provide coverage or benefits. The accumulated eligibility credits are sometimes referred to as bank of hours."). ##### [205-965-55-4](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:f7384afd0da5d0f9474118ce7156a24b1c963609be2a6b02a2d4700e56cb2086 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. - ALLIED INDUSTRIES HEALTH CARE BENEFIT PLAN Allied Industries Health Care Benefit Plan Statements of Net Assets Available for Benefits December 31, 20X2 and 20X1 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-6CDA3D8C-7E8B-47DC-8C0C-DBC1930287A2-low.gif) Assets 20X2 20X1 "Investments, at fair value (see note 3)" U.S. government securities " $5,000,000 " " $4,000,000 " Corporate bonds and debentures " 2,000,000 " " 1,600,000 " Common stock " 1,000,000 " " 600,000 " Total investments " 8,000,000 " " 6,200,000 " Receivables: Participating employers' contributions " 500,000 " " 430,000 " Participants' contributions " 100,000 " " 80,000 " Accrued interest and dividends " 50,000 " " 40,000 " Total receivables " 650,000 " " 550,000 " Cash " 140,000 " " 115,000 " TOTAL ASSETS " 8,790,000 " " 6,865,000 " Liabilities Due to broker for securities purchased " 250,000 " " 240,000 " Accounts payable for administrative expenses " 25,000 " " 25,000 " TOTAL LIABILITIES " 275,000 " " 265,000 " NET ASSETS AVAILABLE FOR BENEFITS " $8,515,000 " " $6,600,000 " - The accompanying notes are an integral part of the financial statements. - Allied Industries Health Care Benefit Plan Statements of Changes in Net Assets Available for Benefits Years Ended December 31, 20X2 and 20X1 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-3BF23099-BF55-4E5C-8357-7E4CD1A8D01B-low.gif) 20X2 20XI Contributions Participating employers " $15,000,000 " " $14,500,000 " Participants " 3,000,000 " " 2,800,000 " Total contributions " 18,000,000 " " 17,300,000 " Investment income Net appreciation in fair value of investments " 300,000 " " 200,000 " Interest " 500,000 " " 450,000 " Dividends " 50,000 " " 50,000 " " 850,000 " " 700,000 " Less investment expenses " 15,000 " " 25,000 " Net investment income " 835,000 " " 675,000 " TOTAL ADDITIONS " 18,835,000 " " 17,975,000 " Benefits paid to participants Health care " 16,000,000 " " 15,750,000 " Disability and death " 770,000 " " 750,000 " " 16,770,000 " " 16,500,000 " Administrative expenses " 150,000 " " 175,000 " TOTAL DEDUCTIONS " 16,920,000 " " 16,675,000 " NET INCREASE DURING YEAR " 1,915,000 " " 1,300,000 " Net assets available for benefits Beginning of year " 6,600,000 " " 5,300,000 " End of year " $8,515,000 " " $6,600,000 " - The accompanying notes are an integral part of the financial statements. - Allied Industries Health Care Benefit Plan Statements of Plan's Benefit Obligations December 31, 20X1, and 20X0 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-63BAFB99-149F-4052-90A6-B49634BA9ACC-low.gif) 20X1 20X0 Amounts currently payable "Claims payable, claims incurred but not reported, and premiums due to insurers" " $1,200,000 " " $1,050,000 " "Postemployment benefit obligations, net of amounts currently payable" Death and disability benefits for inactive participants " 1,350,000 " " 1,000,000 " "Postretirement benefit obligations, net of amounts currently payable" Retired participants " 2,000,000 " " 1,900,000 " Other participants fully eligible for benefits " 4,000,000 " " 3,600,000 " Participants not yet fully eligible for benefits " 5,000,000 " " 4,165,000 " " 11,000,000 " " 9,665,000 " PLAN'S TOTAL BENEFIT OBLIGATIONS " $13,550,000 " " $11,715,000 " - The accompanying notes are an integral part of the financial statements. - Allied Industries Health Care Benefit Plan Statements of Changes in Plan's Benefit Obligations Year Ended December 31, 20X1 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-0A073797-6CD0-43A6-8797-4FBC15F664EB-low.gif) 20X1 Amounts currently payable Balance at beginning of year " $1,050,000 " "Claims reported and approved for payment, including benefits reclassified from benefit obligations" " 16,920,000 " Claims paid " (16,770,000)" Balance at end of year " 1,200,000 " "Postemployment benefit obligations, net of amounts currently payable" Balance at beginning of year " 1,000,000 " Increase (decrease) in postemployment benefits attributable to: Benefits earned " 600,000 " Benefits reclassified to amounts currently payable " (450,000)" Interest " 90,000 " Changes in actuarial assumptions and other actuarial gains and losses " 110,000 " Balance at end of year " 1,350,000 " "Postretirement benefit obligations, net of amounts currently payable" Balance at beginning of year " 9,665,000 " Increase (decrease) in postretirement benefits attributable to: Benefits earned " 1,150,000 " Benefits reclassified to amounts currently payable " (650,000)" Interest " 750,000 " Plan amendment " (175,000)" Changes in actuarial assumptions and other actuarial gains and losses " 260,000 " Balance at end of year " 11,000,000 " "PLAN'S TOTAL BENEFIT OBLIGATIONS AT END OF YEAR" " $13,550,000 " - The accompanying notes are an integral part of the financial statements. - Allied Industries Health Care Benefit Plan Notes to Financial Statements - NOTE 1: DESCRIPTION OF PLAN - The following description of the Allied Industries Benefit Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a complete description of the Plan's provisions. - General. The Plan provides health and other benefits covering all participants in the widgets industry in the Greater Metropolis area. The Plan and related trust were established on May 8, 1966, pursuant to a collective bargaining agreement between the Allied Employers' Trade Association and the Allied Union, Local 802. It is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. - Benefits. The Plan provides health benefits (medical, hospital, surgical, major medical, and dental), permanent disability benefits, and death benefits to full-time participants (with at least 450 hours of work in the industry during a consecutive3-month period) and to their beneficiaries and covered dependents. Retired employees are entitled to similar health benefits (in excess of Medicare coverage) provided they have attained at least age 62 and have 15 years of service with participating employers before retirement. - The Plan also provides health benefits to participants during periods of unemployment, provided they have accumulated in the current year or in prior years credit amounts (expressed in hours) in excess of the hours required for current coverage. Accumulated eligibility credits equal to one year's coverage may be carried forward. - Health, disability, and death claims of active and retired participants, dependents, and beneficiaries are processed by the Administrator Group, but the responsibility for payments to participants and providers is retained by the Plan. - In 20X2 the board of trustees amended the Plan to increase the deductible under major medical coverage from $100 to $300 and to extend dental coverage to employees retiring after December 31, 20X2. The amendment will not affect participating employers' contributions to the Plan in 20X3 under the current collective bargaining agreement. - Contributions. Participating employers contribute 5.5 percent of wages pursuant to the current collective bargaining agreement between employers and the union (expiring February 19, 20X5). Employees may contribute specified amounts, determined periodically by the Plan's actuary, to extend coverage to eligible dependents. The costs of the postretirement benefit plan are shared by the Plan's participating employers and retirees. In addition to deductibles and copayments, participant contributions in the current (and prior, if applicable) year were as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-A07B52F1-9359-4B5A-94DB-D80FCFDBCA93-low.gif) Participants Retiring 20X1 Retiree Contribution 20X0 Retiree Contribution (1) Pre-1990 (1) None (1) None (2) 1990-1994 (2) Retirees contribute 20% of estimated cost of providing their postretirement benefits (a) (2) Retirees contribute 20% of estimated cost of providing their postretirement benefits (3) 1995-1999 (3) Retirees pay the cost of providing their postretirement benefits in excess of $200 per month cap (approximately 60% of the estimated cost) (3) Retirees pay the cost of providing their postretirement benefits in excess of $200 per month cap (approximately 50% of the estimated cost) (4) 2000 and after (4 ) Retirees pay 100% of estimated cost of providing their postretirement benefits (4) Retirees pay 100% of estimated cost of providing their postretirement benefits (a) "Excluding $15 per month per capita increase in 20X1 due to adverse claims experience in 20X0. " - Other. The Plan's board of trustees, as Sponsor, has the right under the Plan to modify the benefits provided to active employees. The Plan may be terminated only by joint agreement between industry and union, subject to the provisions set forth in the Employee Retirement Income Security Act. - NOTE 2: SUMMARY OF ACCOUNTING POLICIES - A. Valuation of Investments. The Plan's investments are stated at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") less costs to sell, if significant. Securities traded on the national securities exchange are valued at the last reported sales price on the last business day of the plan year. Investments traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the average of the last reported bid and asked prices. The Plan also holds certain corporate bonds that do not have an observable price. These bonds have maturities ranging from 5 to 7 years, and a weighted average coupon rate of 9 percent. The Plan's board of trustees has measured fair value for these bonds using an income approach that discounts contractual cash flows at a weighted average yield of 12 percent, which is based on yields currently available on comparable securities of issuers with similar credit ratings. - B. Postretirement Benefits. The amount reported as the postretirement benefit obligation represents the actuarial present value of those estimated future benefits that are attributed by the terms of the plan to employees' service rendered to the date of the financial statements, reduced by the actuarial present value of contributions expected to be received in the future from current plan participants. Postretirement benefits include future benefits expected to be paid to or for both of the following: 1. a Currently retired or terminated employees and their beneficiaries and dependents 2. b Active employees and their beneficiaries and dependents after retirement from service with participating employers. - The postretirement benefit obligation represents the amount that is to be funded by contributions from the plan's participating employers and from existing plan assets. Before an active employee's full eligibility date, the postretirement benefit obligation is the portion of the expected postretirement benefit obligation that is attributed to that employee's service in the industry rendered to the valuation date. - The actuarial present value of the expected postretirement benefit obligation is determined by an actuary and is the amount that results from applying actuarial assumptions to historical claims-cost data to estimate future annual incurred claims costs per participant and to adjust such estimates for the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as those for death, disability, withdrawal, or retirement) between the valuation date and the expected date of payment. - For measurement purposes, a 9.5 percent annual rate of increase in the per capita cost of covered health care benefits was assumed for 20X3; the rate was assumed to decrease gradually to 8.0 percent for 20X8 and to remain at that level thereafter. These assumptions are consistent with those used to measure the benefit obligation at December 31, 20X1. - The following were other significant assumptions used in the valuations as of December 31, 20X2 and 20X1. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-2E3F9C70-12F7-4646-9826-8B13D5A468F4-low.gif) Weighted-average discount rate 8.0%—20X2; 8.25%—20X1 Average retirement age 60 Mortality 1971 Group Annuity Mortality Table - The foregoing assumptions are based on the presumption that the Plan will continue. Were the Plan to terminate, different actuarial assumptions and other factors might be applicable in determining the actuarial present value of the postretirement benefit obligation. - C. Other Plan Benefits. Plan obligations at December 31 for health claims incurred by active participants but not reported at that date, for accumulated eligibility of participants, and for future disability payments to members considered permanently disabled at December 31 are estimated by the Plan's actuary in accordance with accepted actuarial principles. Such estimated amounts are reported in the accompanying statement of the Plan's benefit obligations at present value, based on an 8.0 percent discount rate. Health claims incurred by retired participants but not reported at year end are included in the postretirement benefit obligation. - NOTE 3: INVESTMENTS - The Plan's investments are held by a bank-administered trust fund. (See paragraph [962-325-55-17](https://asc.understandingaccounting.org/asc/325/962/#325-962-55-17) for a detailed Example of plan investment disclosures.) - NOTE 4: BENEFIT OBLIGATIONS - The Plan's deficiency of net assets over benefit obligations at December 31, 20X2, and 20X1, relates primarily to the postretirement benefit obligation, the funding of which is not covered by the contribution rate provided by the current bargaining agreement. It is expected that the deficiency will be funded through future increases in the collectively bargained contribution rates. - The weighted-average health care cost-trend rate assumption (see note 2B) has a significant effect on the amounts reported in the accompanying financial statements. If the assumed rates increased by one percentage point in each year, it would increase the obligation as of December 31, 20X2, and 20X1, by $2,600,000 and $2,500,000, respectively. - NOTE 5: OTHER MATTERS - The trust established under the Plan to hold the Plan's assets is qualified pursuant to Section 501(c)9 of the Internal Revenue Code, and, accordingly, the trust's net investment income is exempt from income taxes. The Plan has obtained a favorable tax determination letter from the Internal Revenue Service (IRS), and the Plan sponsor believes that the Plan, as amended, continues to qualify and to operate as designed. ##### [205-965-55-5](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:3b83167b00bdd32b7cf3d16be48618066d19d249c179f9e15eb8c276185c85d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [965-205-10-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-10-1) and [965-205-45-1 through 45-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-1) . ##### [205-965-55-6](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:48257c9d42ec3270bbc02e6ebab6e85759fa936380574bbad36b00f2af3f9f78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The plan in this Example obtains insurance for current benefits from its assets and provides health benefits and life insurance coverage to both active and retired participants. - CLASSIC ENTERPRISES BENEFIT PLAN - Classic Enterprises Benefit Plan Statements of Benefit Obligations and Net Assets Available for Benefits December 31, 20X2, and 20X1 - ![](https://asc.understandingaccounting.org/asc-img/GUID-64CBCEFF-15E2-47E0-890D-D6E7429EE26D-low.gif) 20X2 20X1 Benefits Obligations (see note 4) Amounts due insurance companies " $1,200,000 " " $1,000,000 " Postretirement benefit obligations " 11,000,000 " " 9,665,000 " Total benefit obligations " 12,200,000 " " 10,665,000 " Net Assets Investments at fair value (see note 3) U.S. government securities " $5,000,000 " " $4,000,000 " Corporate bonds and debentures " 2,000,000 " " 1,600,000 " Common stock " 1,000,000 " " 600,000 " Total investments " 8,000,000 " " 6,200,000 " Receivables Sponsor's contributions " 500,000 " " 430,000 " Participants' contributions " 100,000 " " 80,000 " Accrued interest and dividends " 50,000 " " 40,000 " Total receivables " 650,000 " " 550,000 " Cash " 75,000 " " 60,000 " Insurance premium deposits " 65,000 " " 55,000 " TOTAL ASSETS " 8,790,000 " " 6,865,000 " Liabilities Due to broker for securities purchased " 250,000 " " 240,000 " Accounts payable for administrative expenses " 25,000 " " 25,000 " TOTAL LIABILITIES " 275,000 " " 265,000 " NET ASSETS AVAILABLE FOR BENEFITS " 8,515,000 " " 6,600,000 " EXCESS OF BENEFIT OBLIGATIONS OVER NET ASSETS AVAILABLE FOR BENEFITS " $3,685,000 " " $4,065,000 " - The accompanying notes are an integral part of the financial statements. - Classic Enterprises Benefit Plan Statement of Changes in Benefit Obligations and Net Assets Available for Benefits Years Ended December 31, 20X2, and 20X1 - ![](https://asc.understandingaccounting.org/asc-img/GUID-9C750BA4-CE2A-450D-AADE-5F9B6D679442-low.gif) 20X2 20X1 Net Increase in Benefit Obligations Increase (Decrease) during the year attributable to: Benefits earned and other changes " $1,510,000 " " $1,000,000 " Additional amounts payable to insurance company " 200,000 " " 100,000 " Plan amendment " (175,000)" - " 1,535,000 " " 1,100,000 " Net Increase in Net Assets Available for Benefits Contributions Sponsor " 15,000,000 " " 14,500,000 " Participants " 3,000,000 " " 2,800,000 " Total contributions " 18,000,000 " " 17,300,000 " Investment income Net appreciation in fair value of investments " 300,000 " " 200,000 " Interest " 500,000 " " 450,000 " Dividends " 50,000 " " 50,000 " " 850,000 " " 700,000 " Less investment expenses " 15,000 " " 25,000 " Net investment income " 835,000 " " 675,000 " TOTAL ADDITIONS " 18,835,000 " " 17,975,000 " "Insurance premiums paid for health benefits, net of experience-rating adjustments of $250,000 for 20X1 received in 20X2 and $275,000 for 20X0 received in 20X1" " 16,035,000 " " 15,750,000 " Insurance premiums paid for death benefits " 780,000 " " 750,000 " " 16,815,000 " " 16,500,000 " Administrative expenses " 105,000 " " 175,000 " TOTAL DEDUCTIONS " 16,920,000 " " 16,675,000 " NET INCREASE " 1,915,000 " " 1,300,000 " "Increase (Decrease) in Net Assets Available for Over Benefit Obligations" " (380,000)" " (200,000)" "Excess of Benefit Obligations Over Net Assets Available for Benefits" Beginning of year " 4,065,000 " " 4,265,000 " End of year " $3,685,000 " " $4,065,000 " - The accompanying notes are an integral part of the financial statements. - Classic Enterprises Benefit Plan Notes to Financial Statements - NOTE 1: DESCRIPTION OF PLAN - The following description of the Classic Enterprises Benefit Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a complete description of the Plan's provisions. - General. The Plan provides health and death benefits covering substantially all active and retired employees of Classic Enterprises (the Sponsor). It is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. - Benefits. The Plan provides health benefits (medical, hospital, surgical, major medical, and dental) and death benefits to full-time employees of the Sponsor (with at least 1,000 hours of service each year) and to their beneficiaries and covered dependents. Retired employees are entitled to similar health and death benefits provided they have attained at least age 55 and have at least10 years of service with the Sponsor. - Current health claims of active and retired participants and their dependents and beneficiaries are provided under group insurance contracts with ABC Carrier, which are experience rated after the anniversary dates of the policies (generally March 31). Death benefits are covered by a group-term policy with DEF Carrier. - Contributions. The Sponsor's policy is to contribute the maximum amounts allowed as a tax deduction by the Internal Revenue Code. Under present law, the Sponsor is not permitted to deduct amounts for future benefits to current employees and retirees. - Employees and retirees may contribute specified amounts, determined periodically by the Plan's insurance companies, to extend coverage to eligible dependents. - In 20X2 the Plan was amended to increase the deductible under major medical coverage from $100 to $300 and to extend dental coverage to employees retiring after December 31, 20X2. The amendment is not expected to significantly affect the Sponsor's contribution to the Plan in 20X3. - Other. Although it has not expressed any intention to do so, the Sponsor has the right under the Plan to modify the benefits provided to active employees, to discontinue its contributions at any time, and to terminate the Plan subject to the provisions set forth in the Employee Retirement Income Security Act. - NOTE 2: SUMMARY OF ACCOUNTING POLICIES - Valuation of Investments. The Plan's investments are stated at fair value. Securities traded on the national securities exchange are valued at the last reported sales price on the last business day of the plan year. Investments traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the average of the last reported bid and asked prices. The Plan also holds certain corporate bonds that do not have an observable price. These bonds have maturities ranging from 5 to 7 years, and a weighted average coupon rate of 9 percent. The Classic Enterprises Benefits Committee has measured fair value for these bonds using an income approach that discounts contractual cash flows at a weighted average yield of 12 percent, which is based on yields currently available on comparable securities of issuers with similar credit ratings. - B. Plan Benefits. The postretirement benefit obligation (see note 4) represents the actuarial present value of those estimated future benefits that are attributed to employee service rendered to December 31. Postretirement benefits include future benefits expected to be paid to or for both of the following: 1. 1 Currently retired employees and their beneficiaries and dependents 2. 2 Active employees and their beneficiaries and dependents after retirement from service with the Sponsor. Before an active employee's full eligibility date, the postretirement benefit obligation is the portion of the expected postretirement benefit obligation that is attributed to that employee's service rendered to the valuation date. - The actuarial present value of the expected postretirement benefit obligation is determined by an actuary and is the amount that results from applying actuarial assumptions to historical claims-cost data to estimate future annual incurred claims costs per participant and to adjust such estimates for the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as those for death, disability, withdrawal, or retirement) between the valuation date and the expected date of payment, and to reflect the portion of those costs expected to be borne by Medicare, the retired participants, and other providers. - For measurement purposes at December 31, 20X2, a 9.5 percent annual rate of increase in the per capita cost of covered health care benefits was assumed for 20X3; the rate was assumed to decrease gradually to 8.0 percent for 20X8 and to remain at that level thereafter. These assumptions are consistent with those used to measure the benefit obligation at December 31, 20X1. - The following were other significant assumptions used in the valuations as of December 31, 20X2, and 20X1. - ![](https://asc.understandingaccounting.org/asc-img/GUID-9663AD77-DE4A-421C-97DF-C73CDF1946A4-low.gif) Weighted-average discount rate 8.0% Average retirement age 60 Mortality 1971 Group Annuity Mortality Table - The foregoing assumptions are based on the presumption that the Plan will continue. Were the Plan to terminate, different actuarial assumptions and other factors might be applicable in determining the actuarial present value of the postretirement benefit obligation. - NOTE 3: INVESTMENTS - The Plan's investments are held by a bank-administered trust fund. (See paragraph [962-325-55-17](https://asc.understandingaccounting.org/asc/325/962/#325-962-55-17) for a detailed Example of plan investment disclosures.) - NOTE 4: BENEFIT OBLIGATIONS - Health costs incurred by participants and their beneficiaries and dependents are covered by insurance contracts maintained by the Plan. It is the present intention of the Sponsor and the Plan to continue obtaining insurance coverage for benefits. As stated in note 1, the Sponsor is not permitted under present tax law to deduct amounts for future benefits (beyond one year). Insurance premiums for future years in respect of the Plan's postretirement benefit obligation will be funded by Sponsor contributions to the Plan in those later years. - The postretirement benefit obligation at December 31, 20X2, and 20X1, principally health benefits, related to the following categories of participants (including their beneficiaries and dependents). - ![](https://asc.understandingaccounting.org/asc-img/GUID-44A96670-F5DB-4DEF-AF40-D860BDCA05E6-low.gif) 20X2 20X1 Current retirees " $3,900,000 " " $3,500,000 " Other participants fully eligible for benefits " 2,100,000 " " 2,000,000 " Participants not yet fully eligible for benefits " 5,000,000 " " 4,165,000 " " $11,000,000 " " $9,665,000 " - The health care cost-trend rate assumption (see note 2B) has a significant effect on the amounts reported. If the assumed rates increased by one percentage point in each year, that would increase the obligation as of December 31, 20X2, and 20X1, by $2,600,000 and $2,500,000, respectively. - NOTE 5: OTHER MATTERS - The trust established under the Plan to hold the Plan's net assets is qualified pursuant to Section 501(c)9 of the Internal Revenue Code, and, accordingly, the trust's net investment income is exempt from income taxes. The Sponsor has obtained a favorable tax determination letter from the Internal Revenue Service and the Sponsor believes that the Plan, as amended, continues to qualify and to operate as designed. ##### [205-965-55-7](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:4d3e18084753603bac87ac9b45cd29d9a0dbb2ff03bf4c3352d73b9e15266d53 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [965-205-10-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-10-1) and [965-205-45-1 through 45-2](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-1) . - ABC COMPANY SUPPLEMENTAL UNEMPLOYMENT BENEFIT PLAN - Supplemental Unemployment Benefit Plan for Employees of ABC Company Established Pursuant to Agreement With United Workers of America Statements of Net Assets Available for Benefits December 31, 20X1,and 20X0 - ![](https://asc.understandingaccounting.org/asc-img/GUID-7F84170C-133D-434A-875A-6A0A60DDA558-low.gif) 20X1 20X0 Assets Investments " $10,605 " " $80,750 " Cash and cash equivalents " 1,025 " " 19,400 " Accrued interest receivable 100 125 TOTAL ASSETS " 11,730 " " 100,275 " Liability Accrued investment trustee fees 265 265 NET ASSETS AVAILABLE FOR BENEFITS " $11,465 " " $100,010 " - The accompanying notes are an integral part of the financial statements. - Supplemental Unemployment Benefit Plan for Employees of ABC Company Established Pursuant to Agreement With United Workers of America Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 20X1 - ![](https://asc.understandingaccounting.org/asc-img/GUID-22E8FD36-759F-4474-BC15-5F5337743D51-low.gif) 20X1 Additions: Contributions " $1,366,065 " Interest Income " 1,960 " TOTAL ADDITIONS " 1,368,025 " Deductions: Benefit payments " 1,455,460 " Investment Trustee Fees " 1,110 " TOTAL DEDUCTIONS " 1,456,570 " NET DECREASE DURING THE YEAR " (88,545)" Net assets available for benefits Beginning of year " 100,010 " End of Year " $11,465 " - The accompanying notes are an integral part of the financial statements. - Supplemental Unemployment Benefit Plan for Employees of ABC Company Established Pursuant to Agreement With United Workers of America Notes to Financial Statements - NOTE 1: DESCRIPTION OF PLAN - In connection with a negotiated contract, the Supplemental Unemployment Benefit Plan for Employees of ABC Company Established Pursuant to Agreement with United Workers of America (the Plan) provides for payment of supplemental unemployment benefits to covered employees who have completed two years of continuous service. Payments are made to both of the following: 1. a Employees on layoff 2. b Certain employees who work less than 32 hours in any week. - The following description is provided for general information purposes. The Plan document should be referred to for specific information regarding benefits and other Plan matters. - NOTE 2: SUMMARY OF ACCOUNTING POLICIES - Basis of Accounting. The financial statements of the Plan are prepared under the accrual method of accounting. - Investment Valuation. The Plan's investments consist of shares of a money market portfolio. The investments are reported at fair value. - Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. - Benefit Obligations. The Plan's obligation for accumulated eligibility credits is discounted using a weighted-average assumed rate of 7.5 percent. - NOTE 3: FUNDING AND OPERATION OF THE PLAN - Funding of the Plan. Contributions funded by ABC Company, the Plan's sponsor, pursuant to the Plan are invested in assets held in a trust fund (the Fund). General Bank, the trustee of the Fund (the Trustee), invests the Fund's money as set forth in the Plan document. Investments consist of money market funds and are reported in the accompanying financial statements at fair value. Interest income from investments is recognized when earned. - The ABC Company Benefit Plan Administrative Committee has responsibility for administering the Plan. The ABC Company Benefit Plan Asset Review Committee has responsibility for the management and control of the assets of the Trust. - Benefits Under the Plan. The Plan provides for the payment of weekly and short-week supplemental unemployment benefits. The benefits payable are reduced by any state unemployment benefits or any other compensation received. Also, a waiting-week benefit of $100 will be payable if a participant fails to receive a state unemployment benefit solely because of the state's waiting-week requirement. Benefits paid for any week for which the employee received state unemployment benefits are limited to $180. Benefits paid for all other weeks are limited to $235. The Plan provides for a possible reduction of weekly benefits for employees with less than 20 years of service based on a percentage determined generally by dividing the net assets of the Plan, as defined in the Plan document, by the "maximum financing" (see "ABC's Obligations Under the Plan"). Employees earn one-half credit unit for each week in which hours are worked or, in some situations, in which hours are not worked (vacation, disability, serving on grievance committee, and so on) up to a maximum of 52 credit units for employees with less than 20 years of service and 104 credit units for employees with 20 or more years of service. Generally, one credit unit is cancelled for each weekly benefit paid and one-half credit unit is cancelled for each short-week benefit paid. - ABC's Obligations Under the Plan. The "maximum financing" of the Plan at any month end is the lesser of the following: 1. a The product of $.40 and the number of hours worked by covered employees during the first 12 of the 14 months next preceding the first day of the month 2. b 100 times the sum of the monthly benefits paid for the 60 of the preceding 62 months divided by 60. - ABC's monthly contribution to the Plan is computed as the lesser of the following: 1. a The product of $.175 and the number of hours worked by covered employees in the month 2. b The amount that, when added to the net assets of the Plan, as defined by the Plan document, as of the end of the preceding month, will equal the "maximum financing." In addition, ABC contributes an income security contribution of $.25 per hour worked by covered employees in the month. In the event of a plan deficit, ABC intends to make sufficient contributions to fund benefits as they become payable. - The following tables present the components of the plan's benefit obligations and the related changes in the plan's benefit obligations. - ![](https://asc.understandingaccounting.org/asc-img/GUID-D4A265D1-54EA-49AF-87CA-C68DB77EE51F-low.gif) Benefit Obligations "December 31, 20X1 and 20X0" 20X1 20X0 Accumulated eligibility credits and total benefit obligations " $1,107,777 " " $1,095,620 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-6D7190EE-3A51-48F1-B401-8FE3069B3BC0-low.gif) Changes in Benefit Obligations " Year Ended December 31, 20X1" "Benefit obligations, beginning of year" " $1,095,620 " Benefits earned " 1,390,330 " Interest " 77,287 " Claims paid " (1,455,460)" "Benefit obligations, end of year" " $1,107,777 " - Plan Expenses. ABC bears all administrative costs, except trustee fees, that are paid by the Plan. - NOTE 4: TAX STATUS - The Plan obtained its latest determination letter in 1990, in which the Internal Revenue Service (IRS) stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. Plan management and Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. - NOTE 5: TRANSACTIONS WITH PARTIES IN INTEREST - ABC provides to the Plan certain accounting and administrative services for which no fees are charged. - NOTE 6: TERMINATION OF THE PLAN - Under certain conditions, the Plan may be terminated. Upon termination, the assets then remaining shall be subject to the applicable provisions of the Plan then in effect and shall be used until exhausted to pay benefits to employees in the order of their entitlement. ##### [205-965-55-8](https://asc.understandingaccounting.org/asc/205/965/#205-965-55-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:57:57.986Z to 2026-09-09T22:57:57.986Z Record version: sha256:80495dfd65fd0efc1bdebc975c0ea573b84fcb9db9f18ad2e276b5ca7f44c4a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [965-205-45-6 through 45-8](https://asc.understandingaccounting.org/asc/205/965/#205-965-45-6) and [965-205-50-3](https://asc.understandingaccounting.org/asc/205/965/#205-965-50-3). - C&H Company Welfare Benefit Plan Statement of Net Assets Available for Plan Benefits - ![](https://asc.understandingaccounting.org/asc-img/GUID-25375A5A-16E7-441A-B449-7DDB2FF4F4F9-low.gif) "December 31," 20X1 20X0 Assets "Investments, at fair value" U.S. government securities " $5,000,000 " " $4,000,000 " Corporate bonds and debentures " 2,000,000 " " 1,600,000 " Common stock " 1,000,000 " " 600,000 " Total investments " 8,000,000 " " 6,200,000 " Net assets held in C&H Company defined benefit plan—restricted for 401(h) account (Notes A and E) " 1,072,000 " " 966,000 " Receivables Employer contribution " 500,000 " " 430,000 " Employee contributions " 100,000 " " 80,000 " Accrued interest and dividends " 50,000 " " 40,000 " Total receivables " 650,000 " " 550,000 " Cash " 110,000 " " 115,000 " Total assets " 9,832,000 " " 7,831,000 " Liabilities Due to broker for securities purchased " 250,000 " " 240,000 " Accounts payable for administrative expenses " 25,000 " " 25,000 " Total liabilities " 275,000 " " 265,000 " Net assets available for plan benefits " $9,557,000 " " $7,566,000 " - The accompanying notes are an integral part of the financial statements. - C&H Company Welfare Benefit Plan Statement of Changes in Net Assets Available for Plan Benefits - ![](https://asc.understandingaccounting.org/asc-img/GUID-DA6A6EB5-3DD7-4472-B14B-5D4F6E69F7D6-low.gif) "For the Year Ended December 31, 20X1" Additions Contributions Employer contributions " $15,000,000 " Employee contributions " 3,000,000 " Total contributions " 18,000,000 " Investment income Net appreciation in fair value of investments " 300,000 " Interest " 500,000 " Dividends " 50,000 " Total investment income " 850,000 " Less investment expense " 15,000 " Net investment income " 835,000 " Net increase in 401(h) account (Note E) " 106,000 " Total additions " 18,941,000 " Deductions Benefits paid directly to participants: Health care " 16,000,000 " Disability and death " 770,000 " Total benefits paid " 16,770,000 " Administrative expenses " 180,000 " Total deductions " 16,950,000 " Net increase during the year " 1,991,000 " Net assets available for benefits: Beginning of year " 7,566,000 " End of year " $9,557,000 " - The accompanying notes are an integral part of the financial statements. - C&H Welfare Benefit Plan Statement of Benefit Obligations - ![](https://asc.understandingaccounting.org/asc-img/GUID-9145DCDB-3E0B-4643-B801-EAC73172727A-low.gif) "For the Year Ended December 31, 20X1" "For the Year Ended December 31, 20X0" "Amounts currently payable to or for participants, beneficiaries, and dependents" Health claims payable " $1,100,000 " " $975,000 " Death and disability benefits payable " 100,000 " " 75,000 " Total amounts currently payable " 1,200,000 " " 1,050,000 " "Other obligations for current benefit coverage, at present value of estimated amounts" Claims incurred but not reported " 425,000 " " 390,000 " Long-term disability benefits " 925,000 " " 610,000 " Total other obligations for current benefit coverage " 1,350,000 " " 1,000,000 " Total obligations other than postretirement benefit obligations " 2,550,000 " " 2,050,000 " Postretirement benefit obligations Current retirees " 3,900,000 " " 3,500,000 " Other participants fully eligible for benefits " 2,100,000 " " 2,000,000 " "Other participants not yet fully eligible for benefits" " 5,000,000 " " 4,165,000 " Total postretirement benefit obligations " 11,000,000 " " 9,665,000 " Total benefit obligations " $13,550,000 " " $11,715,000 " - The accompanying notes are an integral part of the financial statements. - C&H Company Welfare Benefit Plan Statement of Changes in Benefit Obligations - ![](https://asc.understandingaccounting.org/asc-img/GUID-7458A7AB-32F2-42AC-8514-DDB6170E59A4-low.gif) "For the Year Ended December 31, 20X1" "Amounts currently payable to or for participants, beneficiaries, and dependents" " Balance, beginning of year" " $1,050,000 " Claims reported and approved for payment " 16,930,000 " Claims paid (including disability) " 16,770,000 " Claims paid through 401(h) account (Note E) " (10,000)" "Balance, end of year" " 1,200,000 " "Other obligations for current benefit coverage, at present value of estimated amounts" "Balance, beginning of year" " 1,000,000 " Net change during year: Long-term disability benefits " 315,000 " Other " 35,000 " "Balance, end of year" " 1,350,000 " Total obligations other than postretirement benefit obligations " 2,550,000 " Postretirement benefit obligations "Balance, beginning of year" " 9,665,000 " Increase (decrease) during the year attributable to: Benefits earned and other changes " 1,250,000 " Plan amendment " (175,000)" Changes in actuarial assumptions " 260,000 " "Balance, end of year" " 11,000,000 " "Total benefit obligations, end of year" " $13,550,000 " - The accompanying notes are an integral part of the financial statements. - Notes to Financial Statements - A. 401(h) Account - Effective January 1, 19X0, the \[Company's defined benefit pension plan\] was amended to include a medical-benefit component in addition to normal retirement benefits to fund a portion of the postretirement obligations for retirees and their beneficiaries in accordance with Section 401(h) of the Internal Revenue Code. A separate account has been established and maintained in the \[defined benefit pension plan\] for such contributions. In accordance with Internal Revenue Code Section 401(h), the Plan's investments in the 401(h) account may not be used for, or diverted to, any purpose other than providing health benefits for retirees and their beneficiaries. The related obligations for health benefits are not included in the \[defined benefit pension plan's\] obligations in the statement of accumulated plan benefits but are reported as obligations in the financial statements of the \[health and welfare benefit plan\]. - E. 401(h) Account - A portion of the Plan's obligations are funded through contributions to the Company's \[defined benefit pension plan\]in accordance with Internal Revenue Code Section 401(h). The following table presents the components of the net assets available for such obligations and the related changes in net assets available. - ![](https://asc.understandingaccounting.org/asc-img/GUID-4F943A98-D9A7-4C82-81B4-3F33A75F7C47-low.gif) "December 31," 20X1 20X0 Investments at fair value: U.S. government securities " $ 14,000 " " $ 150,000 " Money market fund " 900,000 " " 800,000 " " 1,040,000 " " 950,000 " Cash " 20,000 " " 10,000 " Employer's contribution receivable (a) " 20,000 " " 15,000 " Accrued interest " 7,000 " " 6,000 " Total assets " 1,087,000 " " 981,000 " Accrued administrative expenses " (15,000) " " (15,000)" Net assets available " $1,072,000 " " $ 966,000 " (a) A receivable from the employer must meet the requirements of paragraphs 960-310-25-1 through 25-2. - ![](https://asc.understandingaccounting.org/asc-img/GUID-0EC14343-DC23-4B79-B648-07EDC02736A1-low.gif) "For the Year Ended December 31, 20X1" Net appreciation in fair value of investments: U.S. government securities " $10,800 " Interest " 80,200 " " 91,000 " Employer contributions " 40,000 " Health and welfare benefits paid to retirees " (10,000)" Administrative expenses " (15,000)" Net increase in net assets available " $106,000 " - H. Reconciliation of Financial Statements to Form 5500 - The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500. - ![](https://asc.understandingaccounting.org/asc-img/GUID-07690705-8ADE-4600-A933-711A17DFD2F5-low.gif) Net assets available for benefits per the financial statements " $9,557,000 " Claims payable " (1,200,000)" Net assets held in defined benefit plan-401(h) account " (1,072,000)" Net assets available for benefits per Form 5500 " $7,285,000 " - The following is a reconciliation of claims paid per the financial statements and net investment income related to the changes in the investments of the 401(h) assets to the Form 5500. - ![](https://asc.understandingaccounting.org/asc-img/GUID-C9C65071-9DB4-4495-8B50-E08EDFD4EE1A-low.gif) Claims paid per the financial statements " $16,770,000 " "Add: Amounts payable at December 31, 20X1" " 1,200,000 " "Less: Amounts payable at December 31, 20X0" " (1,050,000)" Claims paid per Form 5500 " $16,920,000 " Net investment income per the financial statements " $835,000 " Less: Net investment income related to the changes in the investments of the 401(h) assets " 91,000 " Net investment income per Form 5500 " $744,000 " Source downloaded (UTC): 2026-09-09T22:58:00.033Z to 2026-09-09T22:58:00.033Z Record version: sha256:8b686284d4345dd8d2c5fdad61ee6841636f728563af086fca3970944d03b682 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-965-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/205/965/#60-relationships) SEC content: no #### Comprehensive Income ##### [205-965-60-1](https://asc.understandingaccounting.org/asc/205/965/#205-965-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:00.033Z to 2026-09-09T22:58:00.033Z Record version: sha256:410051c8e5ac4b78e0fa384e23428fe1ef49968151debbdb0b2a76ddf5367a04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For reporting requirements related to comprehensive income of a health and welfare benefit plan, see paragraphs [220-10-15-2 through 15-3](https://asc.understandingaccounting.org/asc/220/10/#220-10-15-2) . Source downloaded (UTC): 2026-09-09T22:58:02.817Z to 2026-09-09T22:58:14.869Z Record version: sha256:1ad41aa91dd3f70d95d62ace3e28b290c710ef8b8055f7a809b7fe461d75af1d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-972: Presentation of Financial Statements — Real Estate—Common Interest Realty Associations ### Machine-generated study aids ```json { "summary": "This Subtopic governs how common interest realty associations (CIRAs)—condominium and homeowners associations and cooperatives—present their financial statements, emphasizing fund reporting that segregates the operating fund from the fund for future major repairs and replacements. A full GAAP presentation requires a balance sheet, statement of revenues and expenses, statement of changes in fund balances (or members' equity under nonfund reporting), statement of cash flows, and notes; cooperatives instead present a statement of operations and statement of changes in shareholders' equity.", "key_points": [ "Amounts assessed for future major repairs and replacements must be reported separately from amounts assessed for normal operations, and under fund reporting are shown in the major repair and replacement (replacement) fund (205-972-45-2).", "Assets transferred to the CIRA by the developer and recognized on the balance sheet are reported as additions to the operating fund balance (or property fund) (205-972-45-1); a CIRA that does not assess for future major repairs and replacements may not need fund reporting.", "A full GAAP presentation includes a balance sheet, statement of revenues and expenses, statement of changes in fund balances (or members' equity), statement of cash flows, and notes (205-972-45-6); cooperatives present a balance sheet, statement of operations, statement of changes in shareholders' equity, statement of cash flows, notes, and the supplementary information required by 972-235-50-3 (205-972-45-14).", "The operating fund holds assets, liabilities, and fund balance tied to normal maintenance and service activities (cash, assessments receivable, prepaid expenses, trade payables, and generally property and equipment), while the replacement fund holds cash, marketable securities, and short-term investments for future replacements and related contract liabilities (205-972-45-7 through 45-8).", "Permanent transfers between funds are presented as interfund transfers in the statement of changes in fund balances and may not be reported as revenues or by reclassifying revenues (205-972-45-2, 45-10); depreciation is an expense of the fund in which the asset is reported (205-972-45-9).", "Corresponding interfund receivables and payables must be presented to highlight amounts assessed and collected that were not used in accordance with the budget (205-972-45-11 through 45-12).", "Components of retained earnings or deficit shall not be disclosed, and allocating retained earnings to an amount equal to accumulated depreciation is unacceptable (205-972-50-1); under nonfund reporting the replacement fund is presented as an appropriation of retained earnings (205-972-45-5)." ], "categories": [ "Presentation", "Financial statement presentation", "Industry-specific", "Disclosure" ], "audience_level": "intermediate", "student_note": "CIRA reporting is a rare GAAP survivor of fund accounting outside not-for-profits; the classic exam trap is treating a board's transfer of excess operating funds to the replacement fund as revenue instead of an interfund transfer in the statement of changes in fund balances.", "related_topics": [ "972-10", "972-205", "972-235", "958-205" ], "key_concepts": [ "common interest realty association", "fund reporting", "operating fund", "major repair and replacement fund", "interfund transfers", "interfund receivables and payables", "members' equity", "cooperative financial statements" ] } ``` Source downloaded (UTC): 2026-09-09T22:58:02.817Z to 2026-09-09T22:58:02.817Z Record version: sha256:35f2d91a584a671e850d5c8ef88b941ff8ae0f6b46f976cb31915b8eba8521b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-972-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/972/#05-overview-and-background) SEC content: no ##### [205-972-05-1](https://asc.understandingaccounting.org/asc/205/972/#205-972-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:02.817Z to 2026-09-09T22:58:02.817Z Record version: sha256:99a065d01dede2b012bbcbbf776d3e385c66406d06a18e1081a750faba4a2fdc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses fund reporting and financial statement requirements for [common interest realty associations](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute."). Source downloaded (UTC): 2026-09-09T22:58:06.282Z to 2026-09-09T22:58:06.282Z Record version: sha256:24a83f4e45bc8b709af7bcc77265d77809506a138d3b5526b04f48d3d13e7373 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-972-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/972/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [205-972-15-1](https://asc.understandingaccounting.org/asc/205/972/#205-972-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:06.282Z to 2026-09-09T22:58:06.282Z Record version: sha256:8e460ff40e87d26c66bf8843cdc74b981a33fbf203226571c776d46b0eec403f 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 972-10-15. Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:dc0cf5fbd6cf2f2ab7c5ef99d6b72ef6dc23ade5123da26f4c5ee95b076e1cba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-972-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/205/972/#45-other-presentation-matters) SEC content: no #### Fund Reporting ##### [205-972-45-1](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:442a2aee5abf4deb35974be32249aa94029f6a08045f9577bb2faa62314cafcd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assets transferred to the [common interest realty association](https://asc.understandingaccounting.org/glossary/c/#common-interest-realty-association "An association, also known as a community association, responsible for the governance of the common interest community, for which it was established to serve. A common interest realty association is generally funded by its members via periodic assessments by the common interest realty association so that it can perform its duties, which include management services and maintenance, repair, and replacement of the common property, among other duties established in the governing documents and by state statute.") by the developer and recognized in the balance sheet shall be reported as additions to the operating fund balance (or property fund, if such a fund is established). A common interest realty association may not need to use fund reporting if it does not assess for future major repairs and replacements. ##### [205-972-45-2](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:6b9fa0c6b0ab0244c98b3c7c6bc8e813d79df84a582efb17c612a0e7a51b977e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Common interest realty associations that assess owners annually for portions of future major repairs and replacements shall report those assessed amounts separately from amounts assessed for normal operations. If a common interest realty association uses fund reporting, amounts assessed for future major repairs and replacements shall be reported in the major repair and replacement fund separately from transactions in the operating fund. Transfers between funds that are not part of the current-period operating revenues shall be presented only in a statement of changes in fund balances or in a statement of changes in members' equity, if a nonfund reporting approach is used. (See paragraphs [972-235-50-2 through 50-3](https://asc.understandingaccounting.org/asc/235/972/#235-972-50-2) for recommended disclosures.) ##### [205-972-45-3](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:fa973b84246b8af7391735758859dac8beaa294186b4646dd60edd0104346285 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some common interest realty associations may also conduct commercial operations or separate business activities, such as rental operations, in addition to their primary activities. Such activities may be reported on as one or more additional funds. #### Nonfund Reporting ##### [205-972-45-4](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:3a436335530524685403d875ffc4674a15fcb16859fc2abbb4c17b9887e59f2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nonfund reporting is an alternative to fund reporting. However, fund reporting is more informative to users, because financial statements using nonfund reporting often do not disclose whether assessments have been used for purposes other than those for which they were designated. For example, if nonfund reporting is used, a user of financial statements may be unable to determine whether assessments for future major repairs and replacements have been used in current operations. ##### [205-972-45-5](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:f34fdf2aa7237abd573ce9be1486e7082a57ba996174c3f8e57d2c478163e8cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because this Subtopic primarily addresses the fund reporting approach, readers should substitute the term _members' equity_ for the term _fund balance_ if financial statements using nonfund reporting are presented. Furthermore, the fund for major repairs and replacements would be presented as an appropriation of retained earnings in such financial statements. #### Financial Statement Requirements ##### [205-972-45-6](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:68274e5f886f1cbe0b97155a8d5a3e6c9ae8710575332199a4ea2737b51905c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Full presentations of financial statements for common interest realty associations presented in conformity with generally accepted accounting principles (GAAP) shall include all of the following: 1. a A balance sheet 2. b A statement of revenues and expenses 3. c A statement of changes in fund balances or a statement of changes in members' equity if nonfund reporting is used 4. d A statement of cash flows 5. e Notes to financial statements. ##### [205-972-45-7](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:46a358ed63ed3cf5eba161228d471b38d70a961baef7cf269ec3a002e40c8063 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information about the operating fund shall present assets, liabilities, and the fund balance specifically associated with the common interest realty association's normal maintenance and service activities. For example, the operating fund shall include information about cash, assessments receivable, prepaid expenses, and trade payables. Property and equipment, if reported as assets, are generally reported in the operating fund. If the amount of property and equipment held by a common interest realty association is significant, the common interest realty association may account for it in a separate fund. ##### [205-972-45-8](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:ad3a0a747a4b1857012e3ce55844162a080695f14ae600931b43e3e657f8dac8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The presentation of information about the fund for major repairs and replacements (the replacement fund) shall include information about assets, liabilities, and the fund balance specifically associated with the common interest realty association's long-term major repair and replacement activities. The fund includes all assets that are held, for example, for the future replacement of roofs, roads, and furniture (some common interest realty associations may have a deferred maintenance fund which is used for painting or refinishing of building exteriors). Those assets usually consist of cash, marketable securities, and short-term investments. Liabilities in that fund generally are for work done on contracts for major repairs and replacements. ##### [205-972-45-9](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:f069109b8d335fb910b9d640e39c7ced34a0425fcbeb7c2e1d546d9b9c4f4d3e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The statement of revenues and expenses shall present information about all assessments, other revenues, and expenses. All common interest realty association activities, except for replacement fund activities, shall be presented in the operating fund in the statement of revenues and expenses unless the common interest realty association has other funds such as a deferred maintenance fund or a capital improvement fund, and so forth. Depreciation shall be reported as an expense of the fund in which the asset is reported. ##### [205-972-45-10](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:57fa8f15fad09f140cca245f3ec3737d3fe96569595d9e2e947409fef9f10c77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements shall include a statement of changes in fund balances, which reconciles beginning and ending fund balances with results of operations for the period. The statement may be presented separately or may be combined with the statement of revenues and expenses. Permanent transfers between funds shall be presented as interfund transfers in the statement of changes in fund balances, not as revenues. For example, if the board of directors transfers excess operating funds to the replacement fund at the end of an operating year, the interfund transfer shall be shown in the statement of changes in fund balances, not by reclassifying revenues. #### Interfund Receivables and Payables ##### [205-972-45-11](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:3b36b05fb6ce2a951a7a72ef428b588922dfd50cf930b98d74a8d0a726ca67d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Common interest realty associations may have interfund receivables and payables resulting from any of the following: 1. a Obligations of one fund are paid for with the assets of another fund. 2. b Amounts assessed for the activities of one fund are collected, but not transferred, by another fund. ##### [205-972-45-12](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-12) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:4f4d4797ea9115f2a249cf91ac2f1d3b3d397c92089a1892af446abb1280e719 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Corresponding interfund receivables and payables shall be presented to highlight the transactions resulting in those balances and to provide information about amounts assessed and collected that were not used in accordance with the budget. #### Unclassified Balance Sheets ##### [205-972-45-13](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-13) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:5a531b75dc8ed64dcc844833a9869a024e10c3f89d6708361719782c12491f18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Common interest realty associations can generally present unclassified balance sheets. Common interest realty associations having significant commercial operations, however, should consider presenting classified balance sheets. #### Cooperatives ##### [205-972-45-14](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-14) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:45c18ff5f5bfae04894d56b600bfe4f7b8e2dc41b7ed664aaf2f8ca004635ce7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Cooperatives](https://asc.understandingaccounting.org/glossary/c/#cooperative-housing-corporation "Also referred to as a coop, a cooperative housing corporation is an entity established as a corporation that owns the real estate, usually a multi-unit dwelling, and all improvements on it and is responsible for its maintenance and payment of debt service. Ownership in the corporation is evidenced by shares of stock owned by tenant-shareholders who are entitled to occupy a unit under a proprietary lease. The individual ownership interests in most cooperatives are structured as personal property interests, but some are structured as real property interests.") shall present all of the following: 1. a A balance sheet 2. b A statement of operations 3. c A statement of changes in shareholders' equity 4. d A statement of cash flows 5. e Notes to financial statements 6. f The supplementary information required by paragraph [972-235-50-3](https://asc.understandingaccounting.org/asc/235/972/#235-972-50-3). ##### [205-972-45-15](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-15) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:52fa2e869142b9ee3fbf9cdcf6f9d4eeae18d1a3aa6d52884f441c0e7d329c19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Statements of operations of cooperatives shall present information about all revenues and expenses. Reported revenues shall include all charges to tenant-shareholders and other income. If per-share data are deemed useful, they shall be considered for disclosure in the notes to the financial statements. ##### [205-972-45-16](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-16) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:10.732Z to 2026-09-09T22:58:10.732Z Record version: sha256:243d8bcf43105669441adf0ad468b4f9026a6f57ad039e3e3989e111cfa61cae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A statement of retained earnings (deficit) may be combined with the statement of operations. If there is activity in paid-in capital, a separate statement of shareholders' equity should be prepared. Source downloaded (UTC): 2026-09-09T22:58:14.869Z to 2026-09-09T22:58:14.869Z Record version: sha256:7fba39573ffc24bfeae903c3d38d240a492f9bf9c70b2f3df6db8ed6f7a04440 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-972-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/972/#50-disclosure) SEC content: no #### Cooperatives ##### [205-972-50-1](https://asc.understandingaccounting.org/asc/205/972/#205-972-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:14.869Z to 2026-09-09T22:58:14.869Z Record version: sha256:c8709ec815440dfb2d0d18b709d85f4dfff2fa4cdc64e1b881ca3157ebf49d62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Components of retained earnings or deficit shall not be disclosed. Allocating a portion of retained earnings to an amount equal to accumulated depreciation is an unacceptable practice. ##### [205-972-50-2](https://asc.understandingaccounting.org/asc/205/972/#205-972-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:14.869Z to 2026-09-09T22:58:14.869Z Record version: sha256:ffed6afb8cfcc5437d2726062293bf0fb88f39165ebc4d7dd5dd3b120b0f5748 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The notes to the financial statements should disclose a [cooperative's](https://asc.understandingaccounting.org/glossary/c/#cooperative-housing-corporation "Also referred to as a coop, a cooperative housing corporation is an entity established as a corporation that owns the real estate, usually a multi-unit dwelling, and all improvements on it and is responsible for its maintenance and payment of debt service. Ownership in the corporation is evidenced by shares of stock owned by tenant-shareholders who are entitled to occupy a unit under a proprietary lease. The individual ownership interests in most cooperatives are structured as personal property interests, but some are structured as real property interests.") funding policy, if any, for future major repairs and replacements, as discussed in paragraph [972-235-50-2](https://asc.understandingaccounting.org/asc/235/972/#235-972-50-2). #### Other Matters ##### [205-972-50-3](https://asc.understandingaccounting.org/asc/205/972/#205-972-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:58:14.869Z to 2026-09-09T22:58:14.869Z Record version: sha256:ae3f5bcd1339a98479e2c2d5f14f6d69f5f04dcb1425124abd18e33d264336f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [972-205-45-15](https://asc.understandingaccounting.org/asc/205/972/#205-972-45-15) for guidance on disclosing per-share information.