ASC 230-958

Not-for-Profit Entities

230 Statement of Cash Flows

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In brief

IntermediatePresentation Cash flows Not-for-profit Disclosure

This subtopic provides implementation guidance for how not-for-profit entities (NFPs) prepare a statement of cash flows under Topic 230. It addresses when otherwise-qualifying short-term investments cannot be treated as cash equivalents because of donor restrictions, how donor-restricted contributions for long-term purposes must be reclassified as financing inflows, and how agency transactions, noncash contributions, and collection items are reported.

Key points (7)

Assets meeting the definition of cash equivalents are not cash equivalents for an NFP if restrictions prevent that classification—for example, short-term highly liquid investments purchased with resources carrying donor-imposed restrictions limiting their use to long-term investment (230-958-55-2).
Cash received with a donor-imposed restriction limiting its use to long-term purposes (per 958-210-45-6) must be presented as a financing cash inflow under 230-10-45-14(c), so under the indirect method an adjustment to the change in net assets is required to reconcile to net cash flows from operating activities (230-958-55-3).
This reclassification also applies to cash receipts from the sale of donated financial assets or crypto assets under Subtopic 350-60 that upon receipt were directed without NFP-imposed limitations for sale and converted nearly immediately into cash (230-958-55-3; 230-10-45-21A).
Cash received and paid in agency transactions is reported as operating activities, and under the indirect method may be reported either gross or net (230-958-55-4).
Noncash investing and financing activities—such as contributions of buildings, securities, or recognized collection items—must be separately disclosed under 230-10-50-3 (230-958-55-5).
Cash flows from purchases, sales, and insurance recoveries of unrecognized, noncapitalized collection items are reported as investing activities (230-958-55-5A).
Illustrations of both the direct and indirect methods for NFP operating cash flows appear in 958-205-55-18 through 55-20, based on facts in 958-205-55-5 (230-958-55-6).

For students. Exam questions love the trap that a donor-restricted contribution for endowment or plant is a financing inflow, not operating—and that donor-restricted short-term liquid investments are not cash equivalents even though they look like them. Remember agency transactions run through operating (gross or net under the indirect method), while unrecognized, noncapitalized collection item transactions run through investing.

statement of cash flows cash equivalents donor-imposed restrictions financing activities agency transactions noncash investing and financing activities collection items indirect method

Machine-generated study aid for ASC 230-958. Check the source paragraphs below.

230-958-00Status

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230-958-00-1

The following table identifies the changes made to this Subtopic.

Paragraph	Action	Accounting Standards Update	Date

Agency Transaction	Added	Accounting Standards Update No. 2015-10	06/12/2015
Agency Transactions (Not for Profits)	Superseded	Accounting Standards Update No. 2015-10	06/12/2015
Conditional Contribution	Added	Accounting Standards Update No. 2018-08	06/21/2018
Contribution	Amended	Accounting Standards Update No. 2018-08	06/21/2018
Contribution	Amended	Accounting Standards Update No. 2010-07	01/28/2010
Donor-Imposed Condition	Added	Accounting Standards Update No. 2018-08	06/21/2018
Donor-Imposed Restriction	Amended	Accounting Standards Update No. 2016-14	08/18/2016
Financial Asset (1st def.)	Superseded	Accounting Standards Update No. 2016-19	12/14/2016
Financial Asset (1st def.)	Added	Accounting Standards Update No. 2012-05	10/22/2012
Financial Asset (2nd def.)	Added	Accounting Standards Update No. 2016-19	12/14/2016
Promise to Give	Added	Accounting Standards Update No. 2018-08	06/21/2018

958-230-55-3	Amended	Accounting Standards Update No. 2023-08	12/13/2023
958-230-55-3	Amended	Accounting Standards Update No. 2016-19	12/14/2016
958-230-55-3	Amended	Accounting Standards Update No. 2016-18	11/17/2016
958-230-55-3	Amended	Accounting Standards Update No. 2012-05	10/22/2012
958-230-55-4	Amended	Accounting Standards Update No. 2015-10	06/12/2015

230-958-05Overview and Background

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230-958-05-1

This Subtopic provides implementation guidance related to the statement of cash flows for not-for-profit entities (NFPs).

230-958-05-2

The primary purpose of a statement of cash flows is to provide relevant information about the cash receipts and cash payments of an entity during a period. Topic 230 discusses how that information helps investors, creditors, and others and establishes standards for the information to be provided in a statement of cash flows.

230-958-15Scope and Scope Exceptions

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Overall Guidance

230-958-15-1

This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15.

230-958-55Implementation Guidance and Illustrations

Source downloaded: 2026-09-09T23:13:43.817Z.Record version 9460a4476632. Effective date must be checked in the source.

Implementation Guidance

230-958-55-1

This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used by not-for-profit entities (NFPs) in the preparation of a statement of cash flows.

230-958-55-2

Not all assets of NFPs that meet the definition of cash equivalents are cash equivalents for purposes of preparing statements of financial position and cash flows. Restrictions can prevent them from being included as cash equivalents even if they otherwise qualify. For example, short-term highly liquid investments are not cash equivalents if they are purchased with resources that have donor-imposed restrictions that limit their use to long-term investment.

230-958-55-3

When an NFP reports cash received (or cash receipts from the sale of donated financial assets or crypto assets accounted for in accordance with Subtopic 350-60 that upon receipt were directed without any NFP-imposed limitations for sale and were converted nearly immediately into cash as discussed in paragraph 230-10-45-21A) with a donor-imposed restriction that limits its use to long-term purposes in conformity with paragraph 958-210-45-6, an adjustment to the change in net assets to reconcile to net cash flows from operating activities is necessary when using the indirect method of reporting cash flows in order to present those cash receipts as cash inflows from financing activities as required by paragraph 230-10-45-14(c).

230-958-55-4

Cash received and paid in agency transactions shall be reported as cash flows from operating activities in a statement of cash flows. If the statement of cash flows is presented using the indirect method, cash received and paid in such transactions is permitted to be reported either gross or net.

230-958-55-5

Separate disclosure of noncash investing and financing activities (for example, receiving contributions of buildings, securities, or recognized collection items) is required by paragraph 230-10-50-3.

230-958-55-5A

Cash flows from purchases, sales, and insurance recoveries of unrecognized, noncapitalized collection items shall be reported as investing activities in a statement of cash flows.

Illustrations

230-958-55-6

Guidance in paragraphs

958-205-55-18 through 55-20

illustrates both the direct and indirect methods of reporting cash flows from operating activities in a statement of cash flows. Paragraph 958-205-55-5 provides the facts and transactions that are reflected in those illustrative statements.