# ASC 220-958: Income Statement—Reporting Comprehensive Income — Not-for-Profit Entities

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/220/958/)

Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.

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Source downloaded (UTC): 2026-09-09T23:07:15.767Z to 2026-09-09T23:07:32.842Z

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## ASC 220-958: Income Statement—Reporting Comprehensive Income — Not-for-Profit Entities

### Machine-generated study aids

```json
{
  "summary": "ASC 220-958 governs the not-for-profit statement of activities — the NFP substitute for a business entity's income statement. It requires the statement to focus on the entity as a whole and report the change in total net assets, the change in net assets with donor restrictions, and the change in net assets without donor restrictions, with revenues, expenses, gains, losses, and reclassifications classified among those net asset classes. It addresses how to report these elements (including gross versus net display, investment return net of investment expenses, and optional intermediate measures of operations), but not when to recognize or how to measure them.",
  "key_points": [
    "A statement of activities must focus on the entity as a whole and report the change in net assets, the change in net assets with donor restrictions, and the change in net assets without donor restrictions, articulating to net assets in the statement of financial position (220-958-45-1 through 45-2).",
    "Revenues are reported as increases in net assets without donor restrictions unless the donor limits use; donor-restricted contributions are donor-restricted support increasing net assets with donor restrictions, though restrictions met in the same period may be reported without donor restrictions if the policy is consistent and disclosed (220-958-45-5 through 45-6; 45-24).",
    "Expenses are reported as decreases in net assets without donor restrictions, except investment expenses, which are netted against investment return in the net asset class where the return is reported (220-958-45-7).",
    "Gains and losses on investments and other assets increase or decrease net assets without donor restrictions unless restricted by explicit donor stipulation or by law extending donor restrictions (220-958-45-8; 45-22).",
    "Reclassifications between net asset classes are required when purposes are fulfilled, restrictions expire with time or death of a split-interest beneficiary, restrictions are removed by donor or court, or a donor imposes new restrictions (220-958-45-13).",
    "Revenues and expenses of ongoing major or central activities are generally reported gross; peripheral or incidental transactions (including qualifying special events, netting only direct costs) may be reported net, and non-programmatic investment return must be reported net of external and direct internal investment expenses (220-958-45-14 through 45-19).",
    "An intermediate measure of operations is optional but, if presented, must appear in a statement that at minimum reports the change in net assets without donor restrictions, must include impairment losses, exit/disposal costs, and certain long-lived asset gains/losses, must exclude non-service-cost pension components, and its nature must be disclosed if not apparent (220-958-45-10 through 45-12; 220-958-50-1)."
  ],
  "categories": [
    "Not-for-profit",
    "Presentation",
    "Financial statement presentation",
    "Disclosure"
  ],
  "audience_level": "intermediate",
  "student_note": "This is the NFP analog to the income statement, and exam questions almost always test the two-class net asset model plus the netting rules (investment return net of direct internal and external investment expenses; special events net only if peripheral). A common misunderstanding is thinking an \"operating\" subtotal is required — it is optional, but if used it triggers content constraints and note disclosure of what \"operations\" means.",
  "related_topics": [
    "958-205",
    "958-605",
    "958-720",
    "954-220",
    "958-320",
    "205-20"
  ],
  "key_concepts": [
    "statement of activities",
    "net assets with donor restrictions",
    "net assets without donor restrictions",
    "reclassification of net assets",
    "measure of operations",
    "net investment return",
    "direct internal investment expenses",
    "special events gross versus net reporting"
  ]
}
```

Source downloaded (UTC): 2026-09-09T23:07:15.767Z to 2026-09-09T23:07:15.767Z

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## ASC 220-958-00: 00 Status

[Read section](https://asc.understandingaccounting.org/asc/220/958/#00-status)

SEC content: no

##### [220-958-00-1](https://asc.understandingaccounting.org/asc/220/958/#220-958-00-1)

Pending content: no

Source downloaded (UTC): 2026-09-09T23:07:15.767Z to 2026-09-09T23:07:15.767Z

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The following table identifies the changes made to this Subtopic.

<table class="asc-table" id="SL114882929-224279"><tbody><tr><td class="entry"><strong class="ph b">Paragraph</strong></td><td class="entry"><strong class="ph b">Action</strong></td><td class="entry"><strong class="ph b">Accounting Standards Update</strong></td><td class="entry"><strong class="ph b">Date</strong></td></tr><tr><td class="entry"></td><td class="entry"></td><td class="entry"></td><td class="entry"></td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#affiliate" class="term" title="A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control."><span>Affiliate</span></a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-7EC309FA-3D05-4149-8A83-F72A48C06807.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2018-12 (PDF)</a></td><td class="entry">09/10/2018</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#affiliate" class="term" title="A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control."><span>Affiliate</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#agent" class="term" title="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."><span>Agent</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/b/#bankruptcy-code" class="term" title="A federal statute, enacted October 1, 1979, as title 11 of the United States Code by the Bankruptcy Reform Act of 1978, that applies to all cases filed on or after its enactment and that provides the basis for the current federal bankruptcy system."><span>Bankruptcy Code</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/b/#board-designated-endowment-fund" class="term" title="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."><span>Board-Designated Endowment Fund</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#chapter-11" class="term" title="A reorganization action, either voluntarily or involuntarily initiated under the provisions of the Bankruptcy Code, that provides for a reorganization of the debt and equity structure of the business and allows the business to continue operations. A debtor may also file a plan of liquidation under Chapter 11."><span>Chapter 11</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#conditional-contribution" class="term" title="A contribution that contains a donor-imposed condition."><span>Conditional Contribution</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2018-08/" class="xref">Accounting Standards Update No. 2018-08</a></td><td class="entry">06/21/2018</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#contribution" class="term" title="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."><span>Contribution</span></a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2018-08/" class="xref">Accounting Standards Update No. 2018-08</a></td><td class="entry">06/21/2018</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#contribution" class="term" title="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."><span>Contribution</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#disposal-group" class="term" title="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."><span>Disposal Group</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#donor-imposed-condition" class="term" title="A donor stipulation (donors include other types of contributors, including makers of certain grants) that represents a barrier that must be overcome before the recipient is entitled to the assets transferred or promised. Failure to overcome the barrier gives the contributor a right of return of the assets it has transferred or gives the promisor a right of release from its obligation to transfer its assets."><span>Donor-Imposed Condition</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2018-08/" class="xref">Accounting Standards Update No. 2018-08</a></td><td class="entry">06/21/2018</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction" class="term" title="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."><span>Donor-Imposed Restriction</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#donor-restricted-endowment-fund" class="term" title="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."><span>Donor-Restricted Endowment Fund</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#donor-restricted-support" class="term" title="Donor-restricted revenues or gains from contributions that increase net assets with donor restrictions (donors include other types of contributors, including makers of certain grants)."><span>Donor-Restricted Support</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#endowment-fund" class="term" title="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."><span>Endowment Fund</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#equity-transfer" class="term" title="An equity transfer is nonreciprocal. An equity transfer is a transaction directly between a transferor and a transferee. Equity transfers are similar to ownership transactions between a for-profit parent and its owned subsidiary (for example, additional paid-in capital or dividends). However, equity transfers can occur only between related not-for-profit entities (NFPs) if one controls the other or both are under common control. An equity transfer embodies no expectation of repayment, nor does the transferor receive anything of immediate economic value (such as a financial interest or ownership)."><span>Equity Transfer</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/f/#functional-expense-classification" class="term" title="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."><span>Functional Expense Classification</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/f/#funds-functioning-as-endowment" class="term" title="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.)"><span>Funds Functioning as Endowment</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/i/#inherent-contribution" class="term" title="A contribution that results if an entity voluntarily transfers assets (or net assets) or performs services for another entity in exchange for either no assets or for assets of substantially lower value and unstated rights or privileges of a commensurate value are not involved."><span>Inherent Contribution</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/i/#intermediary" class="term" title="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."><span>Intermediary</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#lead-interest" class="term" title="The right to the benefits (cash flows or use) of assets during the term of a split-interest agreement, which generally starts upon the signing of the agreement and terminates at either of the following times: After a specified number of years (period-certain) Upon the occurrence of a certain event, commonly either the death of the donor or the death of the lead interest beneficiary (life-contingent)."><span>Lead Interest</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#natural-expense-classification" class="term" title="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."><span>Natural Expense Classification</span></a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#natural-expense-classification" class="term" title="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."><span>Natural Expense Classification</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#net-assets" class="term" title="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."><span>Net Assets</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions" class="term" title="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)."><span>Net Assets with Donor Restrictions</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions" class="term" title="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)."><span>Net Assets without Donor Restrictions</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity" class="term" title="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."><span>Not-for-Profit Entity</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><strong class="ph b">Permanently Restricted Net Assets</strong></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2016-14/" class="xref">Accounting Standards Update No. 2016-14</a></td><td class="entry">08/18/2016</td></tr><tr><td class="entry"><strong class="ph b">Permanently Restricted Net Assets</strong></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/p/#programmatic-investing" class="term" title="The activity of making loans or other investments that are directed at carrying out a not-for-profit entity's purpose for existence rather than investing in the general production of income or appreciation of an asset (for example, total return investing). An example of programmatic investing is a loan made to lower-income individuals to promote home ownership."><span>Programmatic Investing</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/p/#promise-to-give" class="term" title="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."><span>Promise to Give</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2018-08/" class="xref">Accounting Standards Update No. 2018-08</a></td><td class="entry">06/21/2018</td></tr><tr><td class="entry"><strong class="ph b">Reclassification</strong></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2016-14/" class="xref">Accounting Standards Update No. 2016-14</a></td><td class="entry">08/18/2016</td></tr><tr><td class="entry"><strong class="ph b">Reclassification</strong></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/r/#reclassification-of-net-assets" class="term" title="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."><span>Reclassification of Net Assets</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/r/#remainder-interest" class="term" title="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."><span>Remainder Interest</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><strong class="ph b">Restricted Support</strong></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2016-14/" class="xref">Accounting Standards Update No. 2016-14</a></td><td class="entry">08/18/2016</td></tr><tr><td class="entry"><strong class="ph b">Restricted Support</strong></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#spending-rate" class="term" title="The portion of total return on investments used for fiscal needs of the current period, usually used as a budgetary method of reporting returns of investments. It is usually measured in terms of an amount or a specified percentage of a moving average market value. Typically, the selection of a spending rate emphasizes the use of prudence and a systematic formula to determine the portion of cumulative investment return that can be used to support fiscal needs of the current period and the protection of endowment gifts from a loss of purchasing power as a consideration in determining the formula to be used."><span>Spending Rate</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#split-interest-agreement" class="term" title="An agreement in which a donor enters into a trust or other arrangement under which a not-for-profit entity (NFP) receives benefits that are shared with other beneficiaries. A typical split-interest agreement has the following two components: A lead interest A remainder interest."><span>Split-Interest Agreement</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#stipulation" class="term" title="A statement by a donor that creates a condition or restriction on the use of transferred resources."><span>Stipulation</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><strong class="ph b">Temporarily Restricted Net Assets</strong></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2016-14/" class="xref">Accounting Standards Update No. 2016-14</a></td><td class="entry">08/18/2016</td></tr><tr><td class="entry"><strong class="ph b">Temporarily Restricted Net Assets</strong></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/t/#total-return" class="term" title="A measure of investment performance that focuses on the overall return on investments, including interest and dividend income as well as realized and unrealized gains and losses on investments. Frequently used in connection with a spending-rate formula to determine how much of that return will be used for fiscal needs of the current period."><span>Total Return</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/t/#trustee" class="term" title="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."><span>Trustee</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><strong class="ph b">Unrestricted Net Assets</strong></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2016-14/" class="xref">Accounting Standards Update No. 2016-14</a></td><td class="entry">08/18/2016</td></tr><tr><td class="entry"><strong class="ph b">Unrestricted Net Assets</strong></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><strong class="ph b">Unrestricted Support</strong></td><td class="entry">Superseded</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2016-14/" class="xref">Accounting Standards Update No. 2016-14</a></td><td class="entry">08/18/2016</td></tr><tr><td class="entry"><strong class="ph b">Unrestricted Support</strong></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/v/#variance-power" class="term" title="The unilateral power to redirect the use of the transferred assets to another beneficiary. A donor explicitly grants variance power if the recipient entity's unilateral power to redirect the use of the assets is explicitly referred to in the instrument transferring the assets. Unilateral power means that the recipient entity can override the donor's instructions without approval from the donor, specified beneficiary, or any other interested party."><span>Variance Power</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"></td><td class="entry"></td><td class="entry"></td><td class="entry"></td></tr><tr><td class="entry"><div class="xref-range displayInline"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-05-1" class="xref">958-220-05-1 through 05-3</a></div></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-15-1" class="xref">958-220-15-1</a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-15-2" class="xref">958-220-15-2</a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><div class="xref-range displayInline"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-45-1" class="xref">958-220-45-1 through 45-30</a></div></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-45-7" class="xref">958-220-45-7</a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2020-10/" class="xref">Accounting Standards Update No. 2020-10</a></td><td class="entry">10/29/2020</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-45-9" class="xref">958-220-45-9</a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-12/" class="xref">Accounting Standards Update No. 2025-12</a></td><td class="entry">12/17/2025</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-45-21" class="xref">958-220-45-21</a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2020-10/" class="xref">Accounting Standards Update No. 2020-10</a></td><td class="entry">10/29/2020</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-45-31" class="xref">958-220-45-31</a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2020-07/" class="xref">Accounting Standards Update No. 2020-07</a></td><td class="entry">09/17/2020</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-50-1" class="xref">958-220-50-1</a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr><tr><td class="entry"><div class="xref-range displayInline"><a href="https://asc.understandingaccounting.org/asc/220/958/#220-958-55-1" class="xref">958-220-55-1 through 55-20</a></div></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/asc-pdf/GUID-CE689F3C-8CB3-4F0C-9F3C-EEEF5ED9D6A5.pdf" class="pdf-link" target="_blank" rel="noopener">Maintenance Update 2017-19 (PDF)</a></td><td class="entry">11/15/2017</td></tr></tbody></table>

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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)

SEC content: no

##### [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)

Pending content: no

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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.

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## ASC 220-958-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/220/958/#15-scope-and-scope-exceptions)

SEC content: no

#### Overall Guidance

##### [220-958-15-1](https://asc.understandingaccounting.org/asc/220/958/#220-958-15-1)

Pending content: no

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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15. It addresses how to report revenues, expenses, gains, and losses in financial statements; however, it does not specify when to recognize or how to measure those elements.

#### Entities

##### [220-958-15-2](https://asc.understandingaccounting.org/asc/220/958/#220-958-15-2)

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The application of this Subtopic by not-for-profit, business-oriented health care entities as described in Section 954-10-05 is subject to additional guidance in Subtopic 954-220.

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## ASC 220-958-45: 45 Other Presentation Matters

[Read section](https://asc.understandingaccounting.org/asc/220/958/#45-other-presentation-matters)

SEC content: no

#### Totals and Format

##### [220-958-45-1](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-1)

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A statement of activities provided 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) shall focus on the entity as a whole and shall report the following amounts for the period:

1.  a
    
    The change in [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 change 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).")
    
3.  c
    
    The change 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).")
    
4.  d
    
    [Subparagraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/).

##### [220-958-45-2](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-2)

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The change in net assets shall articulate to the net assets or equity reported in the statement of financial position and it shall be referred to using a descriptive term such as change in net assets or change in equity.

##### [220-958-45-3](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-3)

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Revenues, expenses, gains, and losses increase or decrease net assets and shall be classified as provided in paragraphs

[958-220-45-4 through 45-12](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-4)

. [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."), such as expirations 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."), shall be reported as separate items.

#### Classification of Revenues, Expenses, Gains, and Losses

##### [220-958-45-4](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-4)

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Information about revenues, expenses, gains, losses, and [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.") generally is provided by aggregating items that possess similar characteristics into reasonably homogeneous groups.

##### [220-958-45-5](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-5)

Pending content: no

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A statement of activities shall report revenues as increases 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).") unless the use of the assets received is limited by [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."). For example, fees from rendering services and income from investments generally are without donor restrictions; however, income from donor-restricted perpetual or term endowments generally would increase [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).").

##### [220-958-45-6](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-6)

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Pursuant to the Contributions Received Subsections of Subtopic 958-605, in the absence of a donor's explicit [stipulation](https://asc.understandingaccounting.org/glossary/s/#stipulation "A statement by a donor that creates a condition or restriction on the use of transferred resources.") or circumstances surrounding the receipt of the [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.") that make clear the donor's implicit restriction on use, contributions are reported as revenues or gains without donor restrictions, which increase net assets without donor restrictions. The classification of contributions received as revenues or gains depends on whether the transactions are part of the NFP's ongoing major or central activities (revenues), or are peripheral or incidental to the NFP (gains). Donor-restricted contributions are reported as restricted revenues or gains ([donor-restricted support](https://asc.understandingaccounting.org/glossary/d/#donor-restricted-support "Donor-restricted revenues or gains from contributions that increase net assets with donor restrictions (donors include other types of contributors, including makers of certain grants).")), which increase net assets with donor restrictions. However, donor-restricted contributions whose restrictions are met in the same reporting period may be reported as support in net assets without donor restrictions, provided that an NFP has a similar policy for reporting investment gains and income, reports consistently from period to period, and discloses its accounting policy.

##### [220-958-45-7](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-7)

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A statement of activities shall report expenses as decreases in net assets without donor restrictions, with the exception of investment expenses, which shall be netted against investment return and reported in the net asset class in which the net investment return is reported (see Subtopic 958-720).

##### [220-958-45-8](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-8)

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A statement of activities shall report gains and losses recognized on investments and other assets (or liabilities) as increases or decreases in net assets without donor restrictions unless their use is restricted by explicit donor stipulations or by law that extends donor restrictions. For example, net gains on investment assets, to the extent recognized in financial statements, are reported as increases in net assets without donor restrictions unless their use is restricted by a donor to a specified purpose or future period or by law that extends donor restrictions. See paragraphs

[958-220-45-22 through 45-30](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-22)

for additional guidance about reporting investment gains and losses, and paragraphs [958-205-45-13 through 45-13H](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13) for additional guidance about reporting gains and losses on endowment funds. See paragraph [958-310-45-3](https://asc.understandingaccounting.org/asc/310/958/#310-958-45-3) for additional guidance about bad debt expenses and losses.

#### Measure of Operations

##### [220-958-45-9](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-9)

Pending content: yes

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Classifying revenues, expenses, gains, and losses within classes of net assets does not preclude incorporating additional classifications within a statement of activities. For example, within a class or classes of changes in net assets, an NFP may classify items as follows:

1.  a
    
    Operating and nonoperating
    
2.  b
    
    Expendable and nonexpendable
    
3.  c
    
    Recognized and unrecognized
    
4.  d
    
    Recurring and nonrecurring
    
5.  e
    
    In other ways.
    

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)Classifying revenues, expenses, gains, and losses within classes of net assets does not preclude incorporating additional classifications within a statement of activities. For example, within a class or classes of changes in net assets, an NFP may classify items as follows:

1.  a
    
    Operating and nonoperating
    
2.  b
    
    Expendable and nonexpendable
    
3.  c
    
    [Subparagraph superseded by Accounting Standards Update No. 2025-12.](https://asc.understandingaccounting.org/updates/asu-2025-12/)
    
4.  d
    
    Recurring and nonrecurring
    
5.  e
    
    In other ways.

##### [220-958-45-10](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-10)

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This Subtopic neither encourages nor discourages those further classifications. However, because terms such as operating income, operating profit, operating surplus, operating deficit, and results of operations are used with different meanings, if an intermediate measure of operations (for example, excess or deficit of operating revenues over expenses) is reported, it shall be in a financial statement that, at a minimum, reports the change 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).") for the period. Example 1 (see paragraph [958-220-55-5)](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-5) illustrates a statement of revenues, expenses, and other changes in net assets without donor restrictions that subdivides all transactions and other events and circumstances to make an operating and nonoperating distinction.

##### [220-958-45-11](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-11)

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Some limitations on an NFP's use of an intermediate measure of operations are imposed by other Subtopics. If a subtotal such as income from operations is presented, it shall include the following amounts:

1.  a
    
    An impairment loss recognized for a long-lived asset (asset group) to be held and used, pursuant to paragraph [360-10-45-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-4)
    
2.  b
    
    Costs associated with an exit or disposal activity that does not involve a discontinued operation, pursuant to paragraph [420-10-45-3](https://asc.understandingaccounting.org/asc/420/10/#420-10-45-3)
    
3.  c
    
    A gain or loss recognized on the sale of a long-lived asset ([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 is not a component of an entity that qualifies for discontinued operations treatment, as defined in Subtopic 205-20, and pursuant to paragraph [360-10-45-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-5).
    

In addition, the subtotal such as income from operations shall exclude the components of net periodic pension cost and net periodic postretirement benefit cost other than the service cost component, pursuant to paragraph [958-715-45-3](https://asc.understandingaccounting.org/asc/715/958/#715-958-45-3).

##### [220-958-45-12](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-12)

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Pursuant to paragraph [958-220-50-1](https://asc.understandingaccounting.org/asc/220/958/#220-958-50-1), if an NFP's use of the term _operations_ is not apparent from the details provided on the face of the statement, a note to financial statements shall describe the nature of the reported measure of operations or the items excluded from operations. If an NFP presents internal board designations, appropriations, and similar actions on the face of the financial statements, a note to financial statements shall provide an appropriate disaggregation and description by type of these actions if not provided on the face of the financial statements.

#### Reclassifications

##### [220-958-45-13](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-13)

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[Reclassifications 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.")—that is, simultaneous increases in one net asset class and decreases in another—shall be made if any of the following events occur:

1.  a
    
    The NFP fulfills the purposes for which the net assets were restricted.
    
2.  b
    
    [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.") expire with the passage of time or with the death of a [split-interest agreement](https://asc.understandingaccounting.org/glossary/s/#split-interest-agreement "An agreement in which a donor enters into a trust or other arrangement under which a not-for-profit entity (NFP) receives benefits that are shared with other beneficiaries. A typical split-interest agreement has the following two components: A lead interest A remainder interest.") beneficiary (if the net assets are not otherwise restricted).
    
3.  c
    
    A donor withdraws, or court action removes, previously imposed restrictions.
    
4.  d
    
    A donor imposes restrictions on [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 donor may make a restricted [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.") that is conditioned on the NFP restricting a stated amount of its net assets without donor restrictions. Such restrictions that are not reversible without donors' consent result in a reclassification of net assets without donor restrictions to [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).").
    

See paragraphs

[958-205-45-9 through 45-12](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-9)

for additional information about the expiration of donor-imposed restrictions.

#### Gross versus Net Reporting of Amounts

##### [220-958-45-14](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-14)

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Effective as of: not established by retrieval timestamps.


To help explain the relationships of an NFP's ongoing major or central operations and activities, a statement of activities generally shall report the gross amounts of revenues and expenses. However, investment return (related to total return investing and not [programmatic investing](https://asc.understandingaccounting.org/glossary/p/#programmatic-investing "The activity of making loans or other investments that are directed at carrying out a not-for-profit entity's purpose for existence rather than investing in the general production of income or appreciation of an asset (for example, total return investing). An example of programmatic investing is a loan made to lower-income individuals to promote home ownership.")) shall be reported net of external and direct internal investment expenses. An NFP may present the amounts of net investment return from portfolios that are managed differently or derived from different sources as separate, appropriately labeled line items on the statement of activities. For example, if an NFP has net investment return generated from operating cash, it may present that return separately from net investment return generated from its endowment. In addition, if appropriately labeled, an NFP may present the amounts of net investment return appropriated for spending separate from net investment return in excess of amounts appropriated for spending.

##### [220-958-45-15](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-15)

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Direct internal investment expenses involve the direct conduct or direct supervision of the strategic and tactical activities involved in generating investment return. These include, but are not limited to, both of the following:

1.  a
    
    Salaries, benefits, travel, and other costs associated with the officer and staff responsible for the development and execution of investment strategy
    
2.  b
    
    Allocable costs associated with internal investment management and supervising, selecting, and monitoring of external investment management firms.

##### [220-958-45-16](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-16)

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Direct internal investment expenses do not include items that are not associated with generating investment return. For example, the costs associated with unitization and other such aspects of endowment management would not be allocated.

##### [220-958-45-17](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-17)

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A statement of activities may report gains and losses as net amounts if they result from peripheral or incidental transactions or from other events and circumstances that may be largely beyond the control of the NFP and its management. Information about their net amounts generally is adequate to understand the NFP's activities. For example, an entity that sells land and buildings no longer needed for its ongoing activities commonly reports that transaction as a net gain or loss, rather than as gross revenues for the sales value and expense for the carrying value of the land and buildings sold. The net amount of those peripheral transactions, used with information in a statement of cash flows, usually is adequate to help assess how an entity uses its resources and how managers discharge their stewardship responsibilities.

##### [220-958-45-18](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-18)

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The frequency of the events and the significance of the gross revenues and expenses distinguish major or central events from peripheral or incidental events. Events are ongoing major and central activities if they are normally part of an NFP's strategy and it normally carries on such activities or if the event's gross revenues or expenses are significant in relation to the NFP's annual budget. Events are peripheral or incidental if they are not an integral part of an NFP's usual activities or if their gross revenues or expenses are not significant in relation to the NFP's annual budget. Accordingly, similar events may be reported differently by different NFPs based on the NFP's overall activities.

##### [220-958-45-19](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-19)

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An NFP may report net amounts for its special events if they result from peripheral or incidental transactions. However, so-called special events can be ongoing and major activities; if so, an NFP shall report the gross revenues and expenses of those activities. Costs netted against receipts from peripheral or incidental special events shall be limited to direct costs. See Example 4 (paragraph [958-220-55-11](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-11)) for three possible methods of complying with this requirement.

#### Equity Transfers

##### [220-958-45-20](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-20)

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[Equity transfers](https://asc.understandingaccounting.org/glossary/e/#equity-transfer "An equity transfer is nonreciprocal. An equity transfer is a transaction directly between a transferor and a transferee. Equity transfers are similar to ownership transactions between a for-profit parent and its owned subsidiary (for example, additional paid-in capital or dividends). However, equity transfers can occur only between related not-for-profit entities (NFPs) if one controls the other or both are under common control. An equity transfer embodies no expectation of repayment, nor does the transferor receive anything of immediate economic value (such as a financial interest or ownership).") are reported separately as changes in net assets and do not result in any step-up in basis of the underlying assets transferred. However, a service received from personnel of an [affiliate](https://asc.understandingaccounting.org/glossary/a/#affiliate "A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control.") that directly benefits the recipient NFP and for which the affiliate does not charge the recipient NFP may be recorded at the fair value of that service in the circumstances indicated in paragraph [958-720-30-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-30-3). Paragraph [958-20-55-2B](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-2B) describes the difference between an equity transfer and an equity transaction. Paragraph [954-220-45-2](https://asc.understandingaccounting.org/asc/220/954/#220-954-45-2) provides additional guidance on the reporting of equity transfers for not-for-profit, business-oriented health care entities.

##### [220-958-45-21](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-21)

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The increase in net assets associated with services received from personnel of an affiliate that directly benefit the recipient NFP and for which the affiliate does not charge the recipient NFP shall be reported as an equity transfer, regardless of whether those services are received from personnel of a not-for-profit affiliate or any other affiliate. The corresponding decrease in net assets or the creation or enhancement of an asset resulting from the use of services received from personnel of an affiliate shall be reported similar to how other such expenses or assets are reported. See paragraph [958-720-45-56](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-56) for presentation guidance on services received from personnel of an affiliate. Paragraphs

[954-220-45-2 through 45-3](https://asc.understandingaccounting.org/asc/220/954/#220-954-45-2)

provide additional guidance for not-for-profit, business-oriented health care entities.

#### Reporting Investment Gains, Losses, and Income

##### [220-958-45-22](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-22)

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Pursuant to paragraph [958-220-45-8](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-8), gains and losses on investments and dividends, interest, and other investment income shall be reported in the statement of activities as increases or decreases 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).") unless their use is limited by [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.") or by law that extends donor restrictions, in which case those amounts shall be reported as increases or decreases 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).").

##### [220-958-45-23](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-23)

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[Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/).

##### [220-958-45-24](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-24)

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Gains and investment income that are limited to specific uses by [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.") may be reported as increases in net assets without donor restrictions if the restrictions are met in the same reporting period as the gains and income are recognized, provided that the [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) has a similar policy for reporting [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.") received (see paragraphs

[958-605-45-3 through 45-5](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-3)

), reports consistently from period to period, and discloses its accounting policy.

##### [220-958-45-25](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-25)

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Pursuant to paragraphs

[958-220-45-14 through 45-16](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-14)

, investment return, other than that which is programmatic in nature, shall be reported net of external and direct internal investment expenses.

##### [220-958-45-26](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-26)

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Gains and losses on the investments of 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.") are classified in accordance with paragraphs [958-205-45-13 through 45-13H](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-13).

#### Presentation in a Statement of Activities with an Operating Measure

##### [220-958-45-27](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-27)

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Some NFPs, primarily health care entities, would like to compare their results to business entities in the same industry. An NFP with those comparability concerns may report in a manner similar to business entities by classifying debt securities as available for sale or held to maturity as described in paragraphs

[320-10-25-1 through 25-6](https://asc.understandingaccounting.org/asc/320/10/#320-10-25-1)

and excluding the unrealized gains and losses on those securities (which are recognized in accordance with Subtopic 958-320) from an operating measure within the statement of activities. Not-for-profit, business-oriented health care entities, however, are required to exclude certain gains and losses from a performance measure (see paragraph [954-220-45-9](https://asc.understandingaccounting.org/asc/220/954/#220-954-45-9)).

##### [220-958-45-28](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-28)

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In general, amounts reported in an NFP's financial statements shall be based on the nature of the underlying transactions rather than on budgetary designations.

##### [220-958-45-29](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-29)

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Amounts of investment return based on budgetary designations may be displayed. However, in accordance with paragraph [958-220-45-14](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-14), investment return, other than that which is programmatic in nature, shall be displayed net of external and direct internal investment expenses. Paragraph [958-320-55-7](https://asc.understandingaccounting.org/asc/320/958/#320-958-55-7) provides an example of how an NFP could present net investment return.

##### [220-958-45-30](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-30)

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Some NFPs, in managing their endowment funds, use a [spending-rate](https://asc.understandingaccounting.org/glossary/s/#spending-rate "The portion of total return on investments used for fiscal needs of the current period, usually used as a budgetary method of reporting returns of investments. It is usually measured in terms of an amount or a specified percentage of a moving average market value. Typically, the selection of a spending rate emphasizes the use of prudence and a systematic formula to determine the portion of cumulative investment return that can be used to support fiscal needs of the current period and the protection of endowment gifts from a loss of purchasing power as a consideration in determining the formula to be used.") or [total return](https://asc.understandingaccounting.org/glossary/t/#total-return "A measure of investment performance that focuses on the overall return on investments, including interest and dividend income as well as realized and unrealized gains and losses on investments. Frequently used in connection with a spending-rate formula to determine how much of that return will be used for fiscal needs of the current period.") policy. Those policies consider total investment return—investment income (interest, dividends, rents, and so forth) plus net realized and unrealized gains (or minus net losses). Typically, spending-rate or total return policies emphasize the use of prudence and a rational and systematic formula to determine the portion of cumulative investment return that can be used to support operations of the current period and the protection of endowment gifts from a loss of purchasing power as a consideration in determining the formula to be used. Example 1 (see paragraph [958-320-55-4](https://asc.understandingaccounting.org/asc/320/958/#320-958-55-4)) illustrates a statement of activities and example disclosures of an NFP that uses a spending-rate policy to include only a portion of its investment return in its operating measure.

#### Contributed Nonfinancial Assets

##### [220-958-45-31](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-31)

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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). See paragraph [958-605-50-1A](https://asc.understandingaccounting.org/asc/605/958/#605-958-50-1A) for disclosure requirements for contributed nonfinancial assets.

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## ASC 220-958-50: 50 Disclosure

[Read section](https://asc.understandingaccounting.org/asc/220/958/#50-disclosure)

SEC content: no

##### [220-958-50-1](https://asc.understandingaccounting.org/asc/220/958/#220-958-50-1)

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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) shall disclose the following information in the notes to financial statements:

1.  a
    
    If an NFP's use of the term _operations_ is not apparent from the details provided on the face of the statement of activities, a description of the nature of the reported measure of operations or the items excluded from operations (see Example 5 in paragraph [958-220-55-16](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-16) for a case in which this information is apparent on the face of the statement of activities and a case in which this information is disclosed in the notes to the financial statements).
    
2.  aa
    
    If an NFP presents internal board designations, appropriations, and similar actions on the face of the financial statements, an appropriate disaggregation and description by type of these actions if not provided on the face of the financial statements (see Example 5 in paragraph [958-220-55-16](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-16) for a case in which this information is apparent on the face of the financial statements and a case in which this information is disclosed in the notes to the financial statements).
    
3.  b
    
    [Subparagraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/).
    
4.  c
    
    If not provided on the face of the statement of activities or as a separate statement, all expenses in one location. The relationship between functional 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.") 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."). Investment expenses that are netted against investment return shall not be included (see paragraph [958-720-45-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-15)).
    
5.  d
    
    A qualitative description of the methods used to allocate costs among program and support functions (see paragraph [958-720-50-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-50-1)).

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## ASC 220-958-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/220/958/#55-implementation-guidance-and-illustrations)

SEC content: no

##### [220-958-55-1](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-1)

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This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used in the presentation of a statement of activities 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).

#### Implementation Guidance

##### [220-958-55-2](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-2)

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Entitywide totals are not necessary for individual line items of revenues, expenses, gains, or losses. Information about reasonably homogeneous components of revenues, such as [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 that are available to support current expenses and donor-restricted contributions that are restricted to acquiring land and buildings, generally is more meaningful than the aggregated total of those components.

##### [220-958-55-3](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-3)

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Disaggregated information that permits users of financial information to relate components of revenues to components of expenses also is often preferable to information provided by their aggregated amounts. For example, information that permits analysis of the levels of revenues from tuition in relation to expenses for instruction and other academic services and of revenues from room and board fees in relation to expenses for housing and food services generally is more meaningful than totals of aggregated items of revenues, such as student tuition and fees, or aggregated items of expenses, such as salaries, heat, electricity, or supplies. Those who prepare financial statements generally are best able to make judgments about the extent to which financial statements or notes to financial statements should provide disaggregated information about various items of revenues or expenses and this Subtopic need not limit those judgments.

#### Illustrations

##### [220-958-55-4](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-4)

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In addition to the following illustrations, guidance in paragraphs

[958-205-55-10 through 55-17](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-10)

illustrates three formats of statements of activities. Paragraph [958-205-55-5](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-5) provides the facts and transactions that are reflected in those illustrative statements.

##### [220-958-55-5](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-5)

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This Example illustrates a statement of revenues, expenses, and other changes 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).") that subdivides all transactions and other events and circumstances to make an operating and nonoperating distinction pursuant to paragraphs

[958-220-45-9 through 45-12](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-9)

. This Example uses part 1 of 2 of Format C in paragraph [958-205-55-15](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-15) to show a measure of operations—change in net assets without donor restrictions from operations.

##### [220-958-55-6](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-6)

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The shaded areas depict the constraints imposed by this Subtopic and by generally accepted accounting principles (GAAP) to report appropriately labeled subtotals for changes in classes 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.") before the effects of discontinued operating segments, if any. The unshaded areas depict areas within the statement for which there is latitude to sequence and classify items of revenues and expenses. Other formats also may be used. For example, the single-statement Format B approach of paragraph [958-205-55-14](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-14) may be helpful in describing an NFP's ongoing major or central operations if that NFP's view of operating activities includes receiving donor-restricted revenues from contributions and investment income.

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-96A5F614-8049-4F04-AC16-23592B024E8A-low.gif)
    
    Other Not-for-Profit Organization " Statement of Revenues, Expenses, and" Other Changes in Net Assets without Donor Restrictions " Year Ended June 30, 20X1" (in thousands) Operating revenues and support: Fees from providing services "$ X,XXX" Operating support "X,XXX" Net assets released from restrictions " X,XXX" Total operating revenues and support "XX,XXX" Operating expenses: Programs "XX,XXX" Management and general "X,XXX" Fund raising " X,XXX" Total operating expenses " XX,XXX" Change in net assets from operations "X,XXX" Other changes: \[Items considered to be nonoperating\] "X,XXX" Change in net assets before effects of discontinued operating segments "XX,XXX" Discontinued operations "X,XXX" Change in net assets "XX,XXX" Net assets at beginning of year "XXX,XXX" Net assets at end of year "$XXX,XXX"

##### [220-958-55-7](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-7)

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This Example illustrates the application of paragraph [958-205-45-5](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-5), as generally accepted accounting principles (GAAP) requires the display of an appropriately labeled subtotal for change in a class of net assets before the effects of a discontinued operation (see paragraph [205-20-45-1A](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A)). For instance, using the columnar format, a statement of activities would report the effects of a discontinued operation as follows.

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C9F8BCB8-608A-44FB-81B6-0534916253DC-low.gif)
    
    Without Donor Restrictions With Donor Restrictions Total Change in net assets before discontinued operations " $11,558 " " $3,892 " " $15,450 " Discontinued operations (Note X) XXX XXX XXX Change in net assets " $ XX,XXX " " $ X,XXX " " $ XX,XXX "

##### [220-958-55-8](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-8)

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This Example provides three possible methods of displaying fundraising efforts in the revenue section of the statement of activities, while still conforming to the requirements of paragraph [958-605-45-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-10). Methods 2 and 3 display the total amounts raised.

##### [220-958-55-9](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-9)

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Entity A raises $6,000 of [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."), $100 of other support, and $4,000 accounted for as [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.") transactions because donors have specified beneficiaries without granting [variance power](https://asc.understandingaccounting.org/glossary/v/#variance-power "The unilateral power to redirect the use of the transferred assets to another beneficiary. A donor explicitly grants variance power if the recipient entity's unilateral power to redirect the use of the assets is explicitly referred to in the instrument transferring the assets. Unilateral power means that the recipient entity can override the donor's instructions without approval from the donor, specified beneficiary, or any other interested party."). Of the $4,000 accounted for as agent, trustee, or intermediary transactions, Entity A pays out $3,600 to specified beneficiaries and retains $400 as its administrative fee.

##### [220-958-55-10](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-10)

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Each of the methods reports Entity A's revenues ($6,500) in a way that is both easily understood by users of the financial statements and representationally faithful.

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-78EA70F9-5C41-40AB-B00E-EEE3144FE98D-low.gif)
    
    Method 1 Contributions " $6,000 " Other support 100 Total support " 6,100 " Administrative fees retained on amounts designated by donors for specific organizations 400 Total support and revenue " $6,500 " Method 2 Contributions " $6,000 " Other support 100 Total support " 6,100 " Other revenue: Amounts designated by donors for specific organizations " $4,000 " Less: Amounts held for or remitted to those organizations " 3,600 " Administrative fees retained on amounts designated by donors for specific organizations 400 Total support and revenue " $6,500 " Method 3 Total amounts raised (a) " $10,000 " Less: Amounts designated by donors for specific organizations " 4,000 " Total contributions " 6,000 " Other revenue: Other support 100 Administrative fees retained on amounts designated by donors for specific organizations 400 Total support and revenue " $6,500 " (a) "Other terms, such as campaign results or campaign efforts, may be used."

##### [220-958-55-11](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-11)

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This Example illustrates the guidance in paragraph [958-220-45-19](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-19). It provides three possible methods to display in the statement of activities a special event that is an ongoing and major activity.

##### [220-958-55-12](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-12)

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Cases A, B, and C share the following assumptions:

1.  a
    
    Not-for-Profit Entity B (NFP B) has a special event that is an ongoing and major activity with ticket revenue of $100.
    
2.  b
    
    The activity does not meet the audience criterion in paragraphs
    
    [958-720-45-48 through 45-49](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-48)
    
    , and, therefore, all costs of the activity, other than the direct donor benefits, should be reported as fundraising.
    
3.  c
    
    The event includes a dinner that costs NFP B $25 and that has a fair value of $30.
    
4.  d
    
    In addition, NFP B incurs other direct costs of the event of $15 in connection with promoting and conducting the event, including incremental direct costs incurred in transactions with independent third parties and the payroll and payroll-related costs for the activities of employees who are directly associated with, and devote time to, the event. These other direct costs have been included in fundraising expenses. The other direct costs are unrelated to the direct benefits to donors and, accordingly, should not be included as costs of benefits to donors. The other direct costs include $5 that otherwise might be considered management and general costs if they had been incurred in a different activity, and fundraising costs of $10.
    
5.  e
    
    In addition, NFP B has all of the following transactions, which are unrelated to the special event:
    
    1.  1
        
        [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 $200
        
    2.  2
        
        Program expenses of $60
        
    3.  3
        
        Management and general expenses of $20
        
    4.  4
        
        Fundraising expenses of $20.

##### [220-958-55-13](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-13)

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NFP B may report the gross revenues of special events and other fundraising activities with the cost of direct benefits to donors (meals and facilities rental) displayed as a line item deducted from the special event revenues, as follows:

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C4FA10CF-606E-422D-84B2-D6CE269F4806-low.gif)
    
    Changes in net assets without donor restrictions: Contributions $200 Special event revenue 100 Less: Costs of direct benefits to donors (25) Net revenues from special events 75 Contributions and net revenues from special events 275 Other expenses: Program 60 Management and general 20 Fundraising 35 Total other expenses 115 Increase in net assets without donor restrictions $160

##### [220-958-55-14](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-14)

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NFP B may report the gross revenues of special events and other fundraising activities with the cost of direct benefits to donors (meals and facilities rental) displayed in the same section of the statement of activities as are other programs or supporting services and allocated, if necessary, among those various functions, as follows:

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-79DC0A7B-3F76-4B18-9347-9DA8245F64A0-low.gif)
    
    Changes in net assets without donor restrictions: Revenues: Contributions $200 Special event revenue 100 Total revenues 300 Expenses: Program 60 Costs of direct benefits to donors 25 Management and general 20 Fundraising 35 Total other expenses 140 Increase in net assets without donor restrictions $160

##### [220-958-55-15](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-15)

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NFP B may report the gross revenue from special events and other fundraising activities as part exchange (for the fair value the participant received) and part contribution (for the excess of the payment over that fair value), as follows:

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1E253B69-3788-4FDF-A1B4-523AEF50DCB9-low.gif)
    
    Changes in net assets without donor restrictions: Contributions $270 Dinner sales 30 Less: Costs of direct benefits to donors (25) Gross profit on special events 5 Contributions and net revenues from special events 275 Other expenses: Program 60 Management and general 20 Fundraising 35 Total other expenses 115 Increase in net assets without donor restrictions $160

##### [220-958-55-16](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-16)

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This Example illustrates the disclosures required in accordance with paragraph [958-220-50-1(a) through (aa)](https://asc.understandingaccounting.org/asc/220/958/#220-958-50-1) if an entity elects to present a measure of operations. It provides a case in which the disclosures are apparent on the face of the statement of activities and a case in which the disclosures are provided in the notes to the financial statements. There are multiple ways in which an NFP could present this information. The cases provided are two alternatives presented for illustration purposes.

##### [220-958-55-17](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-17)

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The following Case is an example of a statement of activities of Not-for-Profit Entity A (NFP A) in which the disclosures required in paragraph [958-220-50-1(a) through (aa)](https://asc.understandingaccounting.org/asc/220/958/#220-958-50-1) are apparent from the details provided on the face of the statement of activities. This Case illustrates one way in which an NFP can present governing board actions on a statement of activities and is not meant to be prescriptive of a specific format.

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1A6E526D-618D-4027-8972-4A1595925F81-low.gif)
    
    Not-for-Profit Entity A Statement of Activities "Year Ended June 30, 20X1" Without Donor Restrictions With Donor Restrictions Total "Operating revenues, gains, and other support:" Contributions " $X,XXX " " $ X,XXX " " $XX,XXX " Less: Contributions designated by board for capital projects " (3,000)" " (3,000)" Contributions and bequests designated by board for quasi-endowment " (5,000)" " (5,000)" Investment returns appropriated from quasi-endowment " 1,025 " " 1,025 " Fees " X,XXX " " X,XXX " Programmatic investing return XX XX Other XXX XXX Net assets released from restrictions Investment return appropriated and released for current operations from donor-restricted endowment " X,XXX " " (X,XXX) " \[Other net assets released from restrictions\] " X,XXX " " (X,XXX) " "Total operating revenues, gains, and other support" " XX,XXX " " X,XXX " " XX,XXX " Operating expenses: Program A " XX,XXX " Program B " X,XXX " Program C " X,XXX " Management and general " X,XXX " Fundraising " X,XXX " Total operating expenses " XX,XXX " " XX,XXX " Operating revenues and support in excess of operating expenses " XX,XXX " " X,XXX " " X,XXX " "Investment return, net" " X,XXX " " XX,XXX " " XX,XXX " \[Other items considered to be nonoperating\] " X,XXX " " X,XXX " " X,XXX " Investment returns appropriated for current operations from quasi-endowment " (1,025)" " (1,025)" Contributions designated by board for capital projects " 3,000 " " 3,000 " Contributions and bequests designated by board for quasi-endowment " 5,000 " " 5,000 " Loss on extinguishment of debt " (X,XXX) " " (X,XXX) " Change in fair value of interest rate swap " X,XXX " " X,XXX " Change in net assets " $XX,XXX " " $ X,XXX " " $XX,XXX "

##### [220-958-55-18](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-18)

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Source downloaded (UTC): 2026-09-09T23:07:32.842Z to 2026-09-09T23:07:32.842Z

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The following Case is an example of a statement of activities of NFP A in which the disclosures required in paragraph [958-220-50-1(a) through (aa)](https://asc.understandingaccounting.org/asc/220/958/#220-958-50-1) are not apparent from the details provided on the face of the statement of activities.

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    Not-for-Profit Entity A Statement of Activities "Year Ended June 30, 20X1" Without Donor Restrictions With Donor Restrictions Total "Operating revenues, gains, and other support:" Contributions " $X,XXX " " $ X,XXX " " $XX,XXX " Fees " X,XXX " " X,XXX " Programmatic investing return XX XX Other XXX XXX Net assets released from restrictions Investment return appropriated and released for current operations from donor-restricted endowment " X,XXX " " (X,XXX) " \[Other net assets released from restrictions\] " X,XXX " " (X,XXX) " "Total operating revenues, gains, and other support" " XX,XXX " " X,XXX " " XX,XXX " Operating expenses: Program A " XX,XXX " Program B " X,XXX " Program C " X,XXX " Management and general " X,XXX " Fundraising " X,XXX " Total operating expenses " XX,XXX " " XX,XXX " Net transfer of funds from operations " (6,975)" " (6,975)" Operating revenues in excess of operating expenses and transfers " XX,XXX " " X,XXX " " XX,XXX " Other changes: "Investment return, net" " X,XXX " " X,XXX " " X,XXX " Contributions " X,XXX " " X,XXX " Other " X,XXX " " X,XXX " Net transfer of funds to operations " 6,975 " " 6,975 " Change in net assets " $XX,XXX " " $ X,XXX " " $XX,XXX "

##### [220-958-55-19](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-19)

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Source downloaded (UTC): 2026-09-09T23:07:32.842Z to 2026-09-09T23:07:32.842Z

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NFP A would add the following illustrative text to its note to financial statements that describes the nature of the reported measure of operations or the items excluded from operations and provides an appropriate disaggregation and description by type of internal board designations, appropriations, and similar actions.

-   Measure of Operations
    
-   NFP A's operating revenues in excess of expenses and transfers include all operating revenues and expenses that are an integral part of its programs and supporting activities, net assets released from donor restrictions to support operating expenditures, and transfers from Board-designated and other nonoperating funds to support current operating activities. The measure of operations includes support for operating activities from both donor-restricted net assets and net assets without donor restrictions designated for long-term investment (the donor-restricted and quasi-endowment) according to NFP A's spending policy, which is detailed in Note X. The measure of operations excludes investment return in excess of (less than) amounts made available for current support, gains and losses on extinguishment of debt, and changes in fair value of the interest rate swap. Included in the line items _net transfer of funds to operations_ and _net transfer of funds from operations_ is investment return appropriated from quasi-endowment to operations of $1,025, contributions designated by the Board of Trustees for capital projects from operations of $3,000, and contributions and bequests designated by the Board of Trustees for quasi-endowment from operations of $5,000.

##### [220-958-55-20](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-20)

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Source downloaded (UTC): 2026-09-09T23:07:32.842Z to 2026-09-09T23:07:32.842Z

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The following is an Example of a statement of activities in which NFP A presents net investment return in separate, appropriately labeled line items in accordance with paragraph [958-220-45-14](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-14). In this Example, NFP A presents net investment return in two separate line items to distinguish net investment return appropriated for current operations from net investment return for use in future periods. There may be other cases in which an NFP may present net investment return in separate line items in accordance with paragraph [958-220-45-14](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-14).

-   ![ ](https://asc.understandingaccounting.org/asc-img/GUID-77A20D98-DE95-40C0-8E82-7BA6F019998A-low.gif)
    
    Not-for-Profit Entity A Statement of Activities "Year Ended June 30, 20X1" Without Donor Restrictions With Donor Restrictions Total "Operating revenues, gains, and other support:" Contributions " $X,XXX " " $ X,XXX " " $XX,XXX " Other XXX XXX "Investment return, net, appropriated for spending" " X,XXX " "X,XXX" " X,XXX " Net assets released from restrictions "X,XXX" "(X,XXX)" "Total operating revenues, gains, and other support" " XX,XXX " " X,XXX " " XX,XXX " Operating expenses "XX,XXX" "XX,XXX" "Total operating revenues, gains, and other support in excess of operating expenses" " XX,XXX " "X,XXX" " XX,XXX " Other changes: "Investment return, net, in excess of amounts appropriated for spending" " X,XXX " " X,XXX " " X,XXX " Other " X,XXX " " X,XXX " Change in net assets " $XX,XXX " " $ X,XXX " " $XX,XXX "