# ASC 220-958-05: Income Statement—Reporting Comprehensive Income — Not-for-Profit Entities — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/220/958/#05-overview-and-background)

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## ASC 220-958-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/220/958/#05-overview-and-background)

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##### [220-958-05-1](https://asc.understandingaccounting.org/asc/220/958/#220-958-05-1)

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This Subtopic provides guidance on a statement of activities 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). A statement of activities for NFPs is the financial statement that an NFP issues instead of a business entity's income statement.

##### [220-958-05-2](https://asc.understandingaccounting.org/asc/220/958/#220-958-05-2)

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The primary purpose of a statement of activities is to provide relevant information about all of the following items:

1.  a
    
    The effects of transactions and other events and circumstances that change the amount and nature of [net assets](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.")
    
2.  b
    
    The relationships of those transactions and other events and circumstances to each other
    
3.  c
    
    How the NFP's resources are used in providing various programs or services.

##### [220-958-05-3](https://asc.understandingaccounting.org/asc/220/958/#220-958-05-3)

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The information provided in a statement of activities, used with related disclosures and information in the other financial statements, helps donors, creditors, and others to do all of the following:

1.  a
    
    Evaluate the NFP's performance during a period
    
2.  b
    
    Assess an NFP's service efforts and its ability to continue to provide services
    
3.  c
    
    Assess how an NFP's managers have discharged their stewardship responsibilities and other aspects of their performance.