{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/605/958/#05-overview-and-background","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":"605","topic_title":"Revenue Recognition","subtopic":"605-958","subtopic_title":"Not-for-Profit Entities","section":{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"605-958-05-1","para":"05-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Subtopic provides guidance on revenue recognition by <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 entities</span></a> (NFPs). NFPs also shall comply with the applicable standards in Topic <a altsource=\"GUID-90450890-CA59-4C9A-A88C-D53D3DE3192F.ditamap\" class=\"ditamap\">606</a>. The guidance is presented in the following three Subsections: <ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\">General</div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\">Contributions Received</div></li><li class=\"li-norm\"><span class=\"linum\">c</span><div class=\"p\">Transfers of Assets to a Not-for-Profit Entity or Charitable Trust that Raises or Holds Contributions for Others.</div></li></ol></div></div>","snippet":"This Subtopic provides guidance on revenue recognition by not-for-profit entities (NFPs). NFPs also shall comply with the applicable standards in Topic 606. The guidance is presented in the following three Subsections:\n(…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bb81e497ee646f56146a2e2fc0075a863ece8e38f52d9158a433abfd0abb525f","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}},{"citation":"605-958-05-2","para":"05-2","html":"<div class=\"asc-body\"><div class=\"norm-text\">The General Subsections provide guidance on the presentation of exchange transactions in a statement of activities. They also provide implementation guidance for distinguishing <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> transactions from exchange transactions.</div></div>","snippet":"The General Subsections provide guidance on the presentation of exchange transactions in a statement of activities. They also provide implementation guidance for distinguishing contribution transactions from exchange tra…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bbba5d69fd2a39abca5633fe731e0a87ba1a86a0bbe43cb65e2824f3c3d51308","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1f7ab2eb128d0fe793905e52d454b4d069adad7f721d64a572fc36073d3a1c9b","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}},{"block":"Contributions Received","heading":null,"paragraphs":[{"citation":"605-958-05-3","para":"05-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_382AABAC-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The Contributions Received Subsections establish standards of financial accounting and reporting for <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>contributions</span></a> received. </span></span><span class=\"sfragment\" id=\"sfr_382AAD41-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">They also establish standards for <a href=\"/glossary/c/#collections\" class=\"term\" title=\"Works of art, historical treasures, or similar assets that meet all of the following criteria: They are held for public exhibition, education, or research in furtherance of public service rather than financial gain. They are protected, kept unencumbered, cared for, and preserved. They are subject to an organizational policy that requires the use of proceeds from items that are sold to be for the acquisitions of new collection items, the direct care of existing collections, or both. Collections generally are held by museums; botanical gardens; libraries; aquariums; arboretums; historic sites; planetariums; zoos; art galleries; nature, science, and technology centers; and similar educational, research, and public service organizations that have those divisions; however, the definition is not limited to those entities nor does it apply to all items held by those entities.\"><span>collections</span></a> of works of art, historical treasures, and similar assets acquired by contribution. </span></span></div></div>","snippet":"The Contributions Received Subsections establish standards of financial accounting and reporting for contributions received. They also establish standards for collections of works of art, historical treasures, and simila…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8b057b4114323a50e0275a1b18a9e81f31756a5b754e1cefc21784e99da52979","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:091ae3ea22abee4bc8d439e6012c2714ac9b0c4771515f9ef1495d573d022997","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}},{"block":"Transfers of Assets to a Not-for-Profit Entity or Charitable Trust That Raises or Holds Contributions for Others","heading":null,"paragraphs":[{"citation":"605-958-05-4","para":"05-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_3833ED59-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The Transfers of Assets to a Not-for-Profit Entity or Charitable Trust that Raises or Holds Contributions for Others Subsections provide guidance for transfers of assets for which it may be unclear as to who should report 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> because a donor uses a <a href=\"/glossary/r/#recipient-entity\" class=\"term\" title=\"A not-for-profit entity (NFP) or charitable trust that accepts assets from a donor or other resource provider and agrees to use those assets on behalf of or transfer those assets, the return on investment of those assets, or both to a beneficiary that is specified by the donor or resource provider.\"><span>recipient entity</span></a> as its <a href=\"/glossary/i/#intermediary\" class=\"term\" title=\"Although in general usage the term intermediary encompasses a broad range of situations in which an entity acts between two or more other parties, in this usage, it refers to situations in which a recipient entity acts as a facilitator for the transfer of assets between a potential donor and a potential beneficiary (donee) but is neither an agent or trustee nor a donee and donor.\"><span>intermediary</span></a>, <a href=\"/glossary/a/#agent\" class=\"term\" title=\"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.\"><span>agent</span></a>, or <a href=\"/glossary/t/#trustee\" class=\"term\" title=\"An entity that has a duty to hold and manage assets for the benefit of a specified beneficiary in accordance with a charitable trust agreement. In some states, not-for-profit entities (NFPs) are organized under trust law rather than as corporations. Those NFPs are not trustees as defined because, under those statutes, they hold assets in trust for the community or some other broadly described group, rather than for a specific beneficiary.\"><span>trustee</span></a> to transfer assets to a third-party donee. </span></span><span class=\"sfragment\" id=\"sfr_3833EEED-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Although the transaction between the donor and the donee may be a contribution, in many instances, the transfer of assets from the donor is not a contribution received by the recipient entity, and the transfer of assets to the donee is not a contribution made by the recipient entity. </span></span></div></div>","snippet":"The Transfers of Assets to a Not-for-Profit Entity or Charitable Trust that Raises or Holds Contributions for Others Subsections provide guidance for transfers of assets for which it may be unclear as to who should repor…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b19615fba6ac5211f86c071571f76bfe3e79b777bb90c64ca48f177926a4f499","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5436819c9e65df6917ed7198104e811d0c04614e23187033ccb5fb9676ea9fb0","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc8ed38c8e7d7f33cb40a165d411d9a681ad11461f39d5926549e724b56fe5b3","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc8ed38c8e7d7f33cb40a165d411d9a681ad11461f39d5926549e724b56fe5b3","downloaded_from":"2026-09-10T00:51:22.187Z","last_downloaded_at":"2026-09-10T00:51:22.187Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478693","source_sha256":"2ba641848d0c9ac9d2d83de0d381bc5adb3f6c3527c2f3731503146e03eb43b0"}}