# ASC 450-958-50: Contingencies — Not-for-Profit Entities — 50 Disclosure

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/450/958/#50-disclosure)

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## ASC 450-958-50: 50 Disclosure

[Read section](https://asc.understandingaccounting.org/asc/450/958/#50-disclosure)

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##### [450-958-50-1](https://asc.understandingaccounting.org/asc/450/958/#450-958-50-1)

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In conformity with Section 450-20-50, the notes to financial statements may have to include information about [loss contingencies](https://asc.understandingaccounting.org/glossary/l/#loss-contingency "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.").

##### [450-958-50-2](https://asc.understandingaccounting.org/asc/450/958/#450-958-50-2)

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For example, noncompliance with [donor-imposed restrictions](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction "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.") shall be disclosed if either of the following is true:

1.  a
    
    There is a reasonable possibility that a material contingent liability has been incurred at the date of the financial statements.
    
2.  b
    
    There is at least a reasonable possibility that the noncompliance could lead to a material loss of revenue or could cause an entity to be unable to continue as a going concern.

##### [450-958-50-3](https://asc.understandingaccounting.org/asc/450/958/#450-958-50-3)

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If the noncompliance results from a [not-for-profit entity's](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's) failure to maintain an appropriate composition of assets in amounts needed to comply with all donor restrictions, the amounts and circumstances shall be disclosed.