# ASC 405-958-05: Liabilities — Not-for-Profit Entities — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/405/958/#05-overview-and-background)

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## ASC 405-958-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/405/958/#05-overview-and-background)

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##### [405-958-05-1](https://asc.understandingaccounting.org/asc/405/958/#405-958-05-1)

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This Subtopic provides guidance about [promises to give](https://asc.understandingaccounting.org/glossary/p/#promise-to-give "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.") made by [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). NFPs also shall comply with the applicable standards in Subtopic 720-25. This Subtopic also identifies the Sections within the Not-For-Profit Entities Topic that provide guidance on accounting for liabilities.