# ASC 450-958: Contingencies — Not-for-Profit Entities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/450/958/) 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): 2026-09-10T00:28:58.769Z to 2026-09-10T00:29:12.159Z Record version: sha256:a37c925f139e0d91e9c4dd1da53695837ffe29bb002a25a3f16fc978aac2643d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 450-958: Contingencies — Not-for-Profit Entities ### Machine-generated study aids ```json { "summary": "This Subtopic applies the general loss contingency model of Topic 450 to not-for-profit entities. It identifies two NFP-specific triggers — noncompliance with donor-imposed restrictions on contributed assets and problems with (or absence of a determination letter for) tax-exempt status — that may require accrual of a loss contingency under Subtopic 450-20 and disclosure under Section 450-20-50.", "key_points": [ "NFPs must comply with the general contingency standards in Topic 450 in addition to this Subtopic (450-958-05-1).", "A liability may have to be accrued for loss contingencies arising from noncompliance with donor-imposed restrictions on contributed assets or from a problem with the NFP's tax-exempt status or a missing determination letter (450-958-25-1).", "Section 450-20-25 governs whether an NFP has incurred a loss when one of these circumstances arises (450-958-25-1).", "Tax positions taken in classifying an entity as tax-exempt are addressed in Subtopic 740-20 when there is a tax-exempt status problem or no determination letter (450-958-25-1).", "Noncompliance with donor-imposed restrictions must be disclosed if there is a reasonable possibility a material contingent liability was incurred at the financial statement date, or at least a reasonable possibility the noncompliance could cause a material loss of revenue or inability to continue as a going concern (450-958-50-2).", "If the noncompliance results from failure to maintain an appropriate composition of assets in amounts needed to comply with all donor restrictions, the amounts and circumstances must be disclosed (450-958-50-3)." ], "categories": [ "Contingencies and guarantees", "Not-for-profit", "Recognition", "Disclosure" ], "audience_level": "intermediate", "student_note": "Remember that this Subtopic adds nothing to the probable/reasonably possible/remote framework — it just names the NFP-specific fact patterns that trigger it. A common misunderstanding is thinking donor-restriction noncompliance is only a disclosure matter; it can require accrual of a liability, and separate disclosure is required when the NFP failed to keep assets composed in amounts needed to satisfy donor restrictions.", "related_topics": [ "450-20", "958-10", "740-20", "958-605", "958-210", "205-40" ], "key_concepts": [ "loss contingency", "donor-imposed restrictions", "tax-exempt status", "determination letter", "reasonable possibility", "going concern", "composition of assets", "accrual of liability" ] } ``` Source downloaded (UTC): 2026-09-10T00:28:58.769Z to 2026-09-10T00:28:58.769Z Record version: sha256:0c7d616ece20ea78915803b44a37b558f298852d65d1af020e5ed06f3ac9040d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 450-958-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/450/958/#00-status) SEC content: no ##### [450-958-00-1](https://asc.understandingaccounting.org/asc/450/958/#450-958-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:28:58.769Z to 2026-09-10T00:28:58.769Z Record version: sha256:3a98b4fbf2d2e678c3bc722d8dc8b9dfbdd00374946af3ff0f1a2e50002b721c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
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
Donor-Imposed RestrictionAmendedAccounting Standards Update No. 2016-1408/18/2016
Promise to GiveAddedAccounting Standards Update No. 2018-0806/21/2018
Source downloaded (UTC): 2026-09-10T00:29:01.058Z to 2026-09-10T00:29:01.058Z Record version: sha256:10038204553444074fd6278fadd2edd5e0987378b3b23f0a333d38078ab310fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 450-958-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/450/958/#05-overview-and-background) SEC content: no ##### [450-958-05-1](https://asc.understandingaccounting.org/asc/450/958/#450-958-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:01.058Z to 2026-09-10T00:29:01.058Z Record version: sha256:05a609256c5d8faf174049a8b2e4f78d443057393b5d06c65f156a125f36077a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on contingencies for [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 Topic 450. Source downloaded (UTC): 2026-09-10T00:29:02.739Z to 2026-09-10T00:29:02.739Z Record version: sha256:ccc9cce4d83b8e480ba411e624f535f402567066ee1b408d2ccdab4fa35dcb4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 450-958-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/450/958/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [450-958-15-1](https://asc.understandingaccounting.org/asc/450/958/#450-958-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:02.739Z to 2026-09-10T00:29:02.739Z Record version: sha256:4ef4f2f61690d72e1c156aca1b9fd588ff496fae19becbeedd1d012ca68fd581 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15. Source downloaded (UTC): 2026-09-10T00:29:10.116Z to 2026-09-10T00:29:10.116Z Record version: sha256:3fc8c5a24b46d61255b6bcd7b2b9c4adfe5ab964a3eeaffe2df0f3b378c32a9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 450-958-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/450/958/#25-recognition) SEC content: no ##### [450-958-25-1](https://asc.understandingaccounting.org/asc/450/958/#450-958-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:10.116Z to 2026-09-10T00:29:10.116Z Record version: sha256:b3add84f19443ee85bc11063354da1f454ce4dea97b177cb4cd1a32d3f4f0509 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In conformity with Subtopic 450-20, a liability may have to be accrued for [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."). Examples of circumstances that may result in such contingencies include the following: 1. a 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.") on contributed assets, which, although rare, does occur, sometimes as a result of events occurring subsequent to receiving a [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.") 2. b A problem with the [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) tax-exempt status, or that a determination letter regarding that status has not been received. Section 450-20-25 applies if one of these circumstances raises the possibility that an NFP may have incurred a loss. Additionally, see Subtopic 740-20 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. Source downloaded (UTC): 2026-09-10T00:29:12.159Z to 2026-09-10T00:29:12.159Z Record version: sha256:ad721dfcba2589d96fc0406255cc0feebfc4c87e28e20fcb13f91203aa9fa333 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 450-958-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/450/958/#50-disclosure) SEC content: no ##### [450-958-50-1](https://asc.understandingaccounting.org/asc/450/958/#450-958-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:12.159Z to 2026-09-10T00:29:12.159Z Record version: sha256:a31007a05910d0bd4f2aa3ed8bab191660cc2e344168babadf94ee1764903149 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:12.159Z to 2026-09-10T00:29:12.159Z Record version: sha256:cc795468870de421cb5aaca00761ccf65a6adee170c29198c2ee0f4f82b97ded Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) Pending content: no Source downloaded (UTC): 2026-09-10T00:29:12.159Z to 2026-09-10T00:29:12.159Z Record version: sha256:2fd580a359cfeacd7b0cdeaaf0b6936d4ef5739c0c5f41a762450654a685ed07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.