# ASC 325-958-25: Investments—Other — Not-for-Profit Entities — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/325/958/#25-recognition) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:47:24.080Z to 2026-09-09T23:47:24.080Z Record version: sha256:e9a2cdddc3ee1eccc9435df35188b8c2bf51b0d7309e5af19a46f2ae237e402f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 325-958-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/325/958/#25-recognition) SEC content: no ##### [325-958-25-1](https://asc.understandingaccounting.org/asc/325/958/#325-958-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:47:24.080Z to 2026-09-09T23:47:24.080Z Record version: sha256:21ff00ef71dbbb6c5b3d067c2aa1d06751cf908cef92265fe24df4e20900aa4b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an investment is acquired by [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."), it shall be recognized as an asset and as revenues or gains in the period received, pursuant to paragraph [958-605-25-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-2). ##### [325-958-25-2](https://asc.understandingaccounting.org/asc/325/958/#325-958-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:47:24.080Z to 2026-09-09T23:47:24.080Z Record version: sha256:e9dbe7fbddc7cb69d60c65bd86f51f575c74b16498513f6098d83a41ab5b04ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If 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) acquires an investment as an [agent](https://asc.understandingaccounting.org/glossary/a/#agent "An entity that acts for and on behalf of another. Although the term agency has a legal definition, the term is used broadly to encompass not only legal agency, but also the relationships described in Topic 958. A recipient entity acts as an agent for and on behalf of a donor if it receives assets from the donor and agrees to use those assets on behalf of or transfer those assets, the return on investment of those assets, or both to a specified beneficiary. A recipient entity acts as an agent for and on behalf of a beneficiary if it agrees to solicit assets from potential donors specifically for the beneficiary's use and to distribute those assets to the beneficiary. A recipient entity also acts as an agent if a beneficiary can compel the recipient entity to make distributions to it or on its behalf.") 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](https://asc.understandingaccounting.org/glossary/a/#agency-transaction "A type of exchange transaction in which the reporting entity acts as an agent, trustee, or intermediary for another party that may be a donor or donee."). 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](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-23) for additional guidance.