ASC

ASC 325-958

Not-for-Profit Entities

325 Investments—Other

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In brief

IntermediateNot-for-profitSubsequent measurementInitial measurementDisclosure

ASC 325-958 governs how not-for-profit entities account for "other investments"—those that are neither debt nor equity securities, derivatives, equity-method or consolidated investees, nor investments held by a financially interrelated entity—such as real estate, non-security mortgage notes, and oil and gas interests. Purchased other investments are initially measured at acquisition cost (including transaction fees) and contributed or agency-acquired ones at fair value. Subsequent measurement depends on the type of NFP: higher education institutions and voluntary health and welfare entities may elect carrying value or fair value, while other NFPs elect fair value or the lower of cost or fair value, applied consistently to all other investments.

Key points (7)
  • The Subtopic covers investments in real estate, mortgage notes that are not debt securities, and oil and gas interests, but excludes equity securities (958-321), debt securities (958-320), Topic 815 derivatives, equity-method and consolidated for-profit or NFP investees, and interests held by a financially interrelated entity (958-20) (325-958-15-2 through 15-3).
  • An investment acquired by contribution is recognized as an asset and as revenues or gains in the period received under 958-605-25-2 (325-958-25-1).
  • If the NFP acquires or holds an investment as an agent with little or no discretion over use of the income and gains and losses, the transaction is reported as an agency transaction—changes in assets and liabilities rather than changes in net assets (325-958-25-2; 325-958-35-16).
  • Other investments are initially measured at acquisition cost including brokerage and other transaction fees if purchased, and at fair value if received as a contribution or through an agency transaction; credit losses within Topic 326 are measured under that Topic (325-958-30-1).
  • Colleges, universities, and community or junior colleges and voluntary health and welfare entities report other investments at either carrying value (cost if purchased, fair value at gift date if contributed) or fair value, with the same measurement attribute used for all other investments except those measured at fair value under 815-15-25 or the 825-10 fair value option; wasting assets are usually reported net of an allowance for depreciation or depletion (325-958-35-1 through 35-4).
  • NFPs that are not colleges, universities, voluntary health and welfare entities, or health care entities report other investments at fair value or at the lower of cost or fair value, recognizing declines when aggregate fair value is below carrying amount and recoveries in later periods up to original cost (325-958-35-6 through 35-7); NFP business-oriented health care entities instead apply 954-325-35 (325-958-35-5A).
  • Disclosures follow Section 958-320-50 and, for each statement of financial position presented, must include the basis for determining the carrying amount of other investments and the methods and significant assumptions used to estimate fair values of investments other than financial instruments reported at fair value (325-958-50-1 through 50-2).

For students. The trap here is assuming all NFP investments are carried at fair value: only equity and debt securities get that automatic treatment—"other investments" like real estate and oil and gas interests carry a measurement policy election that varies by type of NFP, and the same attribute must be applied consistently across the portfolio. Also watch the agency-transaction rule, which keeps the investment off the statement of activities entirely.

other investmentsnot-for-profit entitiescarrying value vs fair valueagency transactioncontributed investmentslower of cost or fair valueallowance for credit losseswasting assets

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325-958-00Status

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325-958-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Agency TransactionAddedAccounting Standards Update No. 2015-1006/12/2015
Agency Transactions (Not for Profits)SupersededAccounting Standards Update No. 2015-1006/12/2015
Conditional ContributionAddedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2010-0701/28/2010
Donor-Imposed ConditionAddedAccounting Standards Update No. 2018-0806/21/2018
Promise to GiveAddedAccounting Standards Update No. 2018-0806/21/2018
Readily Determinable Fair ValueSupersededAccounting Standards Update No. 2016-0101/05/2016
Readily Determinable Fair ValueAmendedAccounting Standards Update No. 2015-1006/12/2015
Readily Determinable Fair ValueAmendedAccounting Standards Update No. 2014-0603/14/2014
958-325-05-1AmendedAccounting Standards Update No. 2016-0101/05/2016
958-325-05-2AmendedMaintenance Update 2018-12 (PDF)09/10/2018
958-325-05-2AmendedAccounting Standards Update No. 2016-0101/05/2016
958-325-15-2AmendedAccounting Standards Update No. 2016-0101/05/2016
958-325-15-3AmendedAccounting Standards Update No. 2016-0101/05/2016
958-325-30-1AmendedAccounting Standards Update No. 2016-1306/16/2016
958-325-35-1AmendedAccounting Standards Update No. 2025-1212/17/2025
958-325-35-1AmendedAccounting Standards Update No. 2016-1306/16/2016
958-325-35-1AmendedAccounting Standards Update No. 2012-0410/01/2012
958-325-35-3AmendedAccounting Standards Update No. 2012-0410/01/2012
958-325-35-5AmendedAccounting Standards Update No. 2025-1212/17/2025
958-325-35-5AmendedAccounting Standards Update No. 2012-0410/01/2012
958-325-35-5AAddedAccounting Standards Update No. 2012-0410/01/2012
958-325-35-7AmendedAccounting Standards Update No. 2025-1212/17/2025
958-325-35-7AmendedAccounting Standards Update No. 2012-0410/01/2012
958-325-35-8 through 35-13
SupersededAccounting Standards Update No. 2016-0101/05/2016
958-325-35-16AmendedAccounting Standards Update No. 2015-1006/12/2015
958-325-45-1AmendedAccounting Standards Update No. 2016-0101/05/2016
958-325-45-2SupersededAccounting Standards Update No. 2016-1408/18/2016
958-325-50-2AmendedAccounting Standards Update No. 2016-0101/05/2016
958-325-50-3SupersededAccounting Standards Update No. 2016-0101/05/2016
958-325-50-6SupersededAccounting Standards Update No. 2016-1408/18/2016
958-325-60-2SupersededAccounting Standards Update No. 2025-1212/17/2025

325-958-05Overview and Background

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325-958-05-1
The Not-for-Profit Topic contains several Subtopics for investments held by not-for-profit entities (NFPs), because the guidance differs by form of the investment. The Subtopics are:
  1. a
    Financially Interrelated Entities
  2. b
    Investments—Debt Securities
  3. bb
    Investments—Equity Securities
  4. c
    Investments—Other
  5. d
    Consolidation.
325-958-05-2
This Subtopic provides guidance for investments other than the following:
  1. a
    Equity securities
  2. b
    Debt securities
  3. c
    Investments in derivative instruments, including embedded derivatives, that are subject to the requirements of Topic 815
  4. d
    Investments in for-profit entities that are accounted for under the equity method
  5. e
    Investments in for-profit consolidated subsidiaries
  6. f
    Investments in not-for-profit consolidated subsidiaries
  7. g
    Investments held for the NFP by a financially interrelated entity.
Thus, this Subtopic provides guidance for investments of the following types, among others, unless because of their characteristics they are included in the above list: investments in real estate, mortgage notes, and oil and gas interests.

325-958-15Scope and Scope Exceptions

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Overall Guidance

325-958-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15, with specific instrument exceptions noted below.

Instruments

325-958-15-2
The guidance in this Subtopic applies to other investments held by not-for-profit entities (NFPs) of the following types, among others, unless because of their characteristics they are included in paragraph 958-325-15-3:
  1. a
    Investments in real estate
  2. b
    Mortgage notes that are not debt securities
  3. c
    Subparagraph superseded by Accounting Standards Update No. 2016-01.
  4. d
    Subparagraph superseded by Accounting Standards Update No. 2016-01.
  5. e
    Oil and gas interests
  6. f
    Subparagraph superseded by Accounting Standards Update No. 2016-01.
325-958-15-3
The guidance in this Subtopic does not apply to the following investments:
  1. a
    Equity securities, which are subject to the requirements of Subtopic 958-321
  2. b
    Debt securities, which are subject to the requirements of Subtopic 958-320
  3. c
    Derivative instruments, including embedded derivatives, that are subject to the requirements of Topic 815
  4. d
    Investments in for-profit entities that are accounted for using the equity method in accordance with paragraph 958-810-15-4
  5. e
    Investments in for-profit subsidiaries that are consolidated in accordance with paragraph 958-810-15-4
  6. f
    Interests in NFPs that are consolidated in accordance with paragraph 958-810-25-2, 958-810-25-3, or 958-810-25-4
  7. g
    Interests in investments held for the NFP by a financially interrelated entity, which are subject to the requirements of Subtopic 958-20.

325-958-25Recognition

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325-958-25-1
If an investment is acquired by contribution, it shall be recognized as an asset and as revenues or gains in the period received, pursuant to paragraph 958-605-25-2.
325-958-25-2
If a not-for-profit entity (NFP) acquires an investment as an agent and has little or no discretion in determining how the investment income, unrealized gains and losses, and realized gains and losses resulting from that investment will be used, the investment's acquisition shall be reported as an agency transaction. That is, the NFP agent recognizes the acquisition as an asset and a liability rather than as a change in net assets. See paragraphs
958-605-25-23 through 25-24
for additional guidance.

325-958-30Initial Measurement

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325-958-30-1
Other investments shall be initially measured at their acquisition cost (including brokerage and other transaction fees) if they are purchased. They shall be initially measured at fair value if they are received as a contribution or through an agency transaction. Credit losses on financial instruments within the scope of Topic 326 shall be measured in accordance with that Topic.

325-958-35Subsequent Measurement

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Institutions of Higher Education

325-958-35-1
Institutions of higher education, including colleges, universities, and community or junior colleges, shall subsequently report other investments at either of the following measures:
  1. a
    Carrying value—that is, those that were acquired by purchase are reported at cost, and those that were contributed are reported at their fair value at the date of the gift. However, the carrying value shall be reduced by an allowance for credit losses (if applicable) under Topic 326.
  2. b
    Fair value.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
105-10-65-10Institutions of higher education, including colleges, universities, and community or junior colleges, shall subsequently report other investments at either of the following measures:
  1. a
    Carrying value—that is, those that were acquired by purchase are reported at cost, and those that were contributed are reported at their fair value at the date of the gift. If an asset is subject to the impairment provisions of other generally accepted accounting principles (GAAP), the carrying value shall be reduced in accordance with the guidance in the applicable Subtopic. An allowance for credit losses shall be recognized (if applicable) for financial assets subject to the guidance in Topic 326.
  2. b
    Fair value.
325-958-35-2
The same measurement attribute shall be used for all other investments excluding those for which the institution chose, at a specified election date, to measure at fair value pursuant to Section 815-15-25 or to the Fair Value Option Subsections of Subtopic 825-10. Investments in wasting assets are usually reported net of an allowance for depreciation or depletion.

Voluntary Health and Welfare Entities

325-958-35-3
Voluntary health and welfare entities shall subsequently report other investments at either of the following measures:
  1. a
    Carrying value—that is, cost if purchased and fair value at the date of the contribution if contributed
  2. b
    Fair value.
325-958-35-4
The same measurement attribute shall be used for all other investments excluding those for which the voluntary health and welfare entity chose, at a specified election date, to measure at fair value pursuant to Section 815-15-25 or the Fair Value Option Subsections of Subtopic 825-10.
325-958-35-5
If other investments are not equity securities and the fair value of the portfolio of those investments is below the recorded amount, it may be necessary to reduce the carrying amount of the portfolio to fair value or to provide an allowance for decline in fair value. If it can reasonably be expected that the voluntary health and welfare entity will suffer a loss on the disposition of an investment, an impairment loss shall be recognized in the period in which the decline in fair value occurs.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
105-10-65-10If the fair value of the portfolio of other investments is below the recorded amount, it may be necessary to reduce the carrying amount of the portfolio to fair value or to provide an allowance for decline in fair value. If it can reasonably be expected that the voluntary health and welfare entity will suffer a loss on the disposition of an investment, an impairment loss shall be recognized in the period in which the decline in fair value occurs.

Health Care Entities

325-958-35-5A
Not-for-profit, business-oriented health care entities shall apply the guidance in Section 954-325-35.

Other Not-for-Profit Entities

325-958-35-6
Not-for-profit entities (NFPs) that are not colleges, universities, voluntary health and welfare entities, or health care entities (see paragraph 958-10-15-3) shall report other investments using one of the following measures:
  1. a
    Fair value
  2. b
    The lower of cost or fair value.
The same measurement attribute shall be used for all other investments excluding those for which the NFP chose, at a specified election date, to measure at fair value pursuant to Section 815-15-25 or the Fair Value Option Subsections of Subtopic 825-10.
325-958-35-7
If other investments are not equity securities and are carried at the lower of cost or fair value, declines in the value of those investments shall be recognized if their aggregate fair value is less than their carrying amount; recoveries of aggregate fair value in subsequent periods shall be recorded in those periods subject only to the limitation that the carrying amount shall not exceed the original cost.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
105-10-65-10If other investments are carried at the lower of cost or fair value, declines in the value of those investments shall be recognized if their aggregate fair value is less than their carrying amount; recoveries of aggregate fair value in subsequent periods shall be recorded in those periods subject only to the limitation that the carrying amount shall not exceed the original cost.

All Not-for-Profit Entities

325-958-35-16
If an NFP is holding an investment as an agent and has little or no discretion in determining how the investment income, unrealized gains and losses, and realized gains and losses resulting from that investment will be used, those investment activities shall be reported as agency transactions and, therefore, as changes in assets and liabilities, rather than as changes in net assets. See paragraphs
958-605-25-23 through 25-24
for additional guidance.

325-958-45Other Presentation Matters

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325-958-45-1
The reporting standards of Section 958-220-45 apply to other investments and the investment return generated by other investments held by not-for-profit entities (NFPs).

325-958-50Disclosure

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325-958-50-1
The disclosure standards of Section 958-320-50 apply to other investments and the investment return generated by other investments held by not-for-profit entities (NFPs).
325-958-50-2
For each period for which a statement of financial position is presented, an NFP shall disclose all of the following:
  1. a
    The basis for determining the carrying amount for other investments
  2. b
    The method(s) and significant assumptions used to estimate the fair values of investments other than financial instruments if those other investments are reported at fair value
  3. c
    Subparagraph superseded by Accounting Standards Update No. 2016-01.
  4. d
    Subparagraph superseded by Accounting Standards Update No. 2016-01.
325-958-50-4
For guidance on disclosures about fair value measurements, see Topic 820.
325-958-50-5
For guidance on disclosures about the fair value election under Section 815-15-25 or the Fair Value Option Subsections of Subtopic 825-10, see the Fair Value Option Subsection of Section 825-10-50.

325-958-60Relationships

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Derivatives and Hedging

325-958-60-1
For guidance on recognition by an NFP of the gain or loss on a hedging instrument or a nonhedging derivative instrument, see paragraphs 815-25-35-19 and 815-10-35-3, respectively.

Financial Services—Insurance

325-958-60-2
For equity securities held by NFPs that conduct insurance activities, see Subtopic 944-325.
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
105-10-65-10Paragraph superseded by Accounting Standards Update No. 2025-12.

Related subtopics