{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/450/958/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"450","topic_title":"Contingencies","subtopic":"450-958","subtopic_title":"Not-for-Profit Entities","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"450-958-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_37A55B0D-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">In conformity with Subtopic <a altsource=\"GUID-E13146CA-1337-48D7-BF5C-574604DA8631.ditamap\" class=\"ditamap\">450-20</a>, a liability may have to be accrued for <a href=\"/glossary/l/#loss-contingency\" class=\"term\" title=\"An existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses.\"><span>loss contingencies</span></a>. </span></span><span class=\"sfragment\" id=\"sfr_37A55C70-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"> Examples of circumstances that may result in such contingencies include the following: </span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_37A55DBD-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Noncompliance with <a href=\"/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 restrictions</span></a> on contributed assets, </span></span><span class=\"sfragment\" id=\"sfr_37A55F08-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">which, although rare, does occur, sometimes as a result of events occurring subsequent to receiving a <a href=\"/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> </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_37A56040-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">A problem with the <a href=\"/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's</span></a> (NFP's) tax-exempt status, or that a determination letter regarding that status has not been received. </span></span></div></li></ol><span class=\"sfragment\" id=\"sfr_37A56126-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Section <a altsource=\"GUID-6542BDA9-F133-4EFC-9114-CE7EC1619A82.ditamap\" class=\"ditamap\">450-20-25</a> applies if one of these circumstances raises the possibility that an NFP may have incurred a loss. </span></span>Additionally, see Subtopic <a altsource=\"GUID-F515E730-63B5-4638-AFD8-A6EE535FF646.ditamap\" class=\"ditamap\">740-20</a> about tax positions taken when classifying an entity as tax-exempt if there is a problem with an NFP's tax-exempt status or if a determination letter has not been received.</div></div>","snippet":"In conformity with Subtopic 450-20, a liability may have to be accrued for loss contingencies. Examples of circumstances that may result in such contingencies include the following:\n(a) Noncompliance with donor-imposed r…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b3add84f19443ee85bc11063354da1f454ce4dea97b177cb4cd1a32d3f4f0509","downloaded_from":"2026-09-10T00:29:10.116Z","last_downloaded_at":"2026-09-10T00:29:10.116Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479004","source_sha256":"14a0e603dbc0c3ef08411d8d5e1b3e5101a7a891bb69cd81ea2a1c1a6921ccbc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e3c7802de4d59d7852a9e3e7c3ebc5eaa81a6fb2d8361c8270d0441d2b70610e","downloaded_from":"2026-09-10T00:29:10.116Z","last_downloaded_at":"2026-09-10T00:29:10.116Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479004","source_sha256":"14a0e603dbc0c3ef08411d8d5e1b3e5101a7a891bb69cd81ea2a1c1a6921ccbc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3fc8c5a24b46d61255b6bcd7b2b9c4adfe5ab964a3eeaffe2df0f3b378c32a9e","downloaded_from":"2026-09-10T00:29:10.116Z","last_downloaded_at":"2026-09-10T00:29:10.116Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479004","source_sha256":"14a0e603dbc0c3ef08411d8d5e1b3e5101a7a891bb69cd81ea2a1c1a6921ccbc"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3fc8c5a24b46d61255b6bcd7b2b9c4adfe5ab964a3eeaffe2df0f3b378c32a9e","downloaded_from":"2026-09-10T00:29:10.116Z","last_downloaded_at":"2026-09-10T00:29:10.116Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479004","source_sha256":"14a0e603dbc0c3ef08411d8d5e1b3e5101a7a891bb69cd81ea2a1c1a6921ccbc"}}