# ASC 605-958-55: Revenue Recognition — Not-for-Profit Entities — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/605/958/#55-implementation-guidance-and-illustrations) 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): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3ea113f8b3b77a536b81e73e4af689355a9891e71cfa4d94f311cdafebddad7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-958-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/605/958/#55-implementation-guidance-and-illustrations) SEC content: no ##### [605-958-55-1](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:f81fed91d60b4a005990f1def056a58c9ef7e59334c619a9008101333bee7dbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used in distinguishing [contributions](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.") from exchange transactions, including membership dues and [agency transactions](https://asc.understandingaccounting.org/glossary/a/#agency-transaction "A type of exchange transaction in which the reporting entity acts as an agent, trustee, or intermediary for another party that may be a donor or donee."). ##### [605-958-55-1A](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-1A) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e4abfca9629641441f1b55f5a407f6f4edf035ceb36b636d1feabae4f7e90aca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following diagram illustrates the process for determining whether a transfer of assets to a recipient is a contribution, an exchange transaction, or another type of transaction and whether a contribution is conditional. The diagram also illustrates whether there is an associated donor restriction with a contribution. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-601D41EE-6C65-45FF-BCA4-AAF7D8694239-low.gif) Is the transaction one in which each party directly receives commensurate value? It is an exchange transaction. Apply Topic 606 on revenue from contracts with customers or other applicable Topics. Is the payment a transfer of assets that is part of an existing exchange transaction between a recipient and an identified customer or another transaction outside the scope of contributions received (see paragraph 958-605-15-6)? Outside the scope of this Subtopic. Apply other Topics. It is a nonreciprocal transaction. Apply contribution (nonexchange) guidance. Is there a donor-imposed condition or conditions present (a barrier and a right of return/right of release must exist)? It is conditional. Recognize revenue when the condition or conditions are met. It is unconditional. Recognize revenue in appropriate net asset class. Are restrictions present (that is, limited purpose or timing)? It is unconditional and with donor restrictions. It is unconditional and without donor restrictions. #### Implementation Guidance ##### [605-958-55-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:38cc78ca67dc0dda83a1c921f611de0b7cd9e766ace84bc0c7ab42275a5887b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accounting and reporting of grants, membership dues, and sponsorships is determined by the underlying substance of the transaction. Those terms are broadly used to refer not only to contributions but also to assets transferred in exchange transactions. A grant, sponsorship, or membership may be entirely a contribution, entirely an exchange, or a combination of the two; therefore, care must be taken in evaluating each grant, sponsorship, or membership agreement. In addition, those resource transfers may also have the characteristics of agency transactions. ##### [605-958-55-2A](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-2A) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:d0ad6fed18b9d901a131db78463898fc4e608e432c1aa7272c2cbfe28f491a11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The implementation guidance is organized as follows: 1. a Distinguishing contributions from exchange transactions (see paragraphs [958-605-55-3A through 55-7](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-3A) ) 2. b Distinguishing the contribution portion of membership dues (see paragraphs [958-605-55-9 through 55-12](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-9) ) 3. c Distinguishing contributions from agency transactions (see paragraph [958-605-55-13](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-13)). ##### [605-958-55-3](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:137be1924644df399b62f967e1257f82fe8fbdd7d96a9f384b99c831b9dfe1e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-08](https://asc.understandingaccounting.org/updates/asu-2018-08/). ##### [605-958-55-3A](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-3A) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:6379e666f12562c2cb89d09e73be98b89d03f73be12e5d5801512436c3469df2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic about distinguishing between contributions and exchange transactions applies to both a resource provider (for example, a corporate foundation, a corporation, or a [not-for-profit entity](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.") \[NFP\]) and a recipient. ##### [605-958-55-4](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:f1e9f7a8892c3ed008529d49ad10acf1596c70904726c516a3c60119871f5fb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foundations, business entities, and other types of entities may provide resources to NFPs or business entities under programs referred to as grants, awards, or sponsorships. Those asset transfers are contributions if the resource providers do not receive commensurate value in exchange for the assets transferred or if the value received by the resource providers is incidental to the potential public benefit from using the assets transferred. A grant made by a resource provider to an NFP would likely be a contribution if the activity specified by the grant is to be planned and carried out by the NFP and the NFP has the right to the benefits of carrying out the activity. If, however, the grant is made by a resource provider that provides materials to be tested in the activity and that retains the right to any patents or other results of the activity, the grant would likely be an exchange transaction. A careful assessment of the characteristics of the transaction, from the perspectives of both the resource provider and the recipient, is necessary to determine whether a contribution has occurred. ##### [605-958-55-5](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:f9c2eb75b1e90af693eebe424df23fc706f3df0c315b33426413d8dcf93511e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a resource provider may sponsor research and development activities at a research university and retain proprietary rights or other privileges, such as patents, copyrights, or advance and exclusive knowledge of the research outcomes. The research outcomes may be intangible, uncertain, or difficult to measure, and may be perceived by the university as a sacrifice of little or no value; however, their value often is commensurate with the value that a resource provider expects in exchange. Similarly, a resource provider may sponsor research and development activities and specify the protocol of the testing so the research outcomes are particularly valuable to the resource provider. Those transactions are not contributions if their potential public benefits are secondary to the potential proprietary benefits to the resource providers. ##### [605-958-55-6](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:942c4f71226c360e6b7399f4ac65a91a27920c30a7a37550f601a21b988523d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Moreover, a single transaction may be in part an exchange and in part a contribution. For example, if a donor transfers a building to an entity at a price significantly lower than its fair value and no unstated rights or privileges are involved, the transaction is in part an exchange of assets and in part a contribution to be accounted for as required by the Contributions Received Subsections of this Subtopic. See paragraphs [958-720-45-18 through 45-19](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-18) for premiums provided to donors and Example 4 (paragraphs [958-220-55-11 through 55-15](https://asc.understandingaccounting.org/asc/220/958/#220-958-55-11) ) for direct benefits provided to donors at special events. ##### [605-958-55-7](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ea5dbb90a230db1d69fb03398c12461813dacae46492d974f5e5b0b130255362 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 1 (see paragraph [958-30-55-2](https://asc.understandingaccounting.org/asc/958/30/#958-30-55-2)) and paragraphs [958-605-55-13A through 55-14I](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-13A) illustrate the need to assess the relevant facts and circumstances to distinguish between the receipt of resources in an exchange and the receipt of resources in a contribution. ##### [605-958-55-8](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e353e1af0813b5677ade0f3799112dffee06bcb6afbf295d85e75775336e2d71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-08](https://asc.understandingaccounting.org/updates/asu-2018-08/). ##### [605-958-55-9](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ff5686e947a3316525c2619daca4a93cb778e0a59b17d7dc577a891417fec571 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The term _members_ is used broadly by some NFPs to refer to their donors and by other NFPs to refer to individuals or other entities that pay dues in exchange for a defined set of benefits. Some NFPs receive dues from their members. These transfers often have elements of both a contribution and an exchange transaction because members receive tangible or intangible benefits from their membership in the NFP. Usually, the determination of whether membership dues are contributions rests on whether the value received by the member is commensurate with the dues paid. ##### [605-958-55-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:d393b2720793c48d65c9a61d71895ff461956a9983d334ac578ce484bbde17cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if an NFP has annual dues of $100 and the only benefit members receive is a monthly newsletter with a [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of $25, $25 of the dues are received in an exchange transaction and should be recognized as revenue as the earnings process is completed and $75 of the dues are a contribution. (See paragraph [958-605-25-1](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-1) for recognition of the exchange portion of membership dues. See the Contributions Received Subsections of this Subtopic for the reporting of the contribution portion.) ##### [605-958-55-11](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e1dadc0f4fafd35520ebfac90bf7a16d5a43cf0f5e44a94cd2fa8d970f96b769 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Member benefits generally have value regardless of how often (or whether) the benefits are used. For example, most would agree that a health club membership is an exchange transaction, even if the member stops using the facilities before the completion of the membership period. It may be difficult, however, to measure the benefits members receive and to determine whether the value of those benefits is approximately equal to the dues paid by the members. ##### [605-958-55-12](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3f43c6e208ae266a0d757957f40d27dc17d6264b032d31f5e7df8564444a73c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table contains a list of indicators that may be helpful in determining whether membership dues are contributions, exchange transactions, or a combination of both. Depending on the facts and circumstances, some indicators may be more significant than others; however, no single indicator is determinative of the classification of a particular transaction. - Indicators Useful for Determining the Contribution and Exchange Portions of Membership Dues ![ ](https://asc.understandingaccounting.org/asc-img/GUID-81D7D693-CD93-4566-9312-4E17B4AF1479-low.gif) Indicator Contribution Exchange Transaction Recipient not-for-profit entity's (NFP's) expressed intent concerning purpose of dues payment The request describes the dues as being used to provide benefits to the general public or to the NFP's service beneficiaries. The request describes the dues as providing economic benefits to members or to other organizations or individuals designated by or related to the members. Extent of benefits to members The benefits to members are negligible. "The substantive benefits to members (for example, publications, admissions, educational programs, and special events) may be available to nonmembers for a fee." NFP's service efforts The NFP provides service to members and nonmembers. The NFP benefits are provided only to members. Duration of benefits The duration is not specified. The benefits are provided for a defined period; additional payment of dues is required to extend benefits. Expressed agreement concerning refundability of the payment The payment is not refundable to the resource provider. The payment is fully or partially refundable if the resource provider withdraws from membership. Qualifications for membership Membership is available to the general public. "Membership is available only to individuals who meet certain criteria (for example, requirements to pursue a specific career or to live in a certain area)." ##### [605-958-55-13](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:8536137f44ffe6b4e07b407d2938151f928e7454741d17883a72ebb3cf8a31d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transfer of assets may appear to be a contribution if a donor uses a [recipient entity](https://asc.understandingaccounting.org/glossary/r/#recipient-entity "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.") as its intermediary, agent, or trustee to transfer assets to a third-party donee, particularly if the recipient entity indirectly achieves its mission by disbursing the assets. Although the transaction between the donor and the donee may be a contribution, 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. (See the [Transfers of Assets to a Not-for-Profit Entity or Charitable Trust that Raises or Holds Contributions for Others](https://asc.understandingaccounting.org/updates/page-2147480428/) Subsection of this Section for implementation guidance on and illustrations of agency transactions.) #### Illustrations ##### [605-958-55-13A](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-13A) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:2da813588f72635f33c8bccfd33750d84b4c2cb59676b5172c91046e3edf617a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples 1 through 5 illustrate the guidance in Section 958-605-15 for determining whether a transaction is an exchange or a contribution. The analysis in each Example is not intended to represent the only manner in which the guidance could be applied, and the Examples are not intended to apply to only a specific illustration. Although some aspects of the Examples may be present in actual fact patterns, all relevant facts and circumstances of a particular fact pattern should be evaluated when applying the guidance in this Subtopic. The guidance in these Examples about distinguishing between contributions and exchange transactions applies to both a resource provider (for example, a corporate foundation, a corporation, or an NFP) and a recipient. ##### [605-958-55-14](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:56d9e93b0b94d45e9a7c19b43b74b3cbf240e509b2b9affac62e3eb2ac0c6d2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity A (NFP A) is a large research university with a cancer research center. NFP A regularly conducts research to discover more effective methods of treating cancer and often receives contributions to support its efforts. NFP A receives resources from a pharmaceutical entity to finance the costs of a clinical trial of an experimental cancer drug the pharmaceutical entity developed. The pharmaceutical entity specifies the protocol of the testing, including the number of participants to be tested, the dosages to be administered, and the frequency and nature of follow-up examinations. The pharmaceutical entity requires a detailed report of the test outcome within two months of the test's conclusion. Additionally, the rights to the results of the study belong to the pharmaceutical entity. ##### [605-958-55-14A](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14A) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:6be6af67240af4cb63cb32de1e2621dadb58c2fce1d49bc4d565319cda25f08e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the results of the clinical trial have particular commercial value for the pharmaceutical entity, the pharmaceutical entity is receiving commensurate value as the resource provider. Therefore, the receipt of the resources is not a contribution received by NFP A, nor is the disbursement of the resources a contribution made by the pharmaceutical entity. See paragraph [958-605-15-5A](https://asc.understandingaccounting.org/asc/605/958/#605-958-15-5A). ##### [605-958-55-14B](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14B) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:7d326119c46010df64477670ff9deb0812e85b0d2761f3f2ff114bc218cb10af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Student L is enrolled at University A. Student L's total tuition charged for the semester is $30,000. Student L received a grant in the amount of $2,000 to use toward the tuition fee, which is paid directly by the grantor to University A. ##### [605-958-55-14C](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14C) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e9db6dc40dbcb7df47ac61bbc4530fcbdcb9b528c8504226b4efe32e337d2dc2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The grant was awarded to Student L, not to University A. University A entered into an exchange transaction with Student L and accounts for the $30,000 of revenue in accordance with the guidance in the appropriate Subtopic. The $2,000 grant does not create additional revenue but, rather, serves as a partial payment against the $30,000 due to University A. Student L is an identified customer of University A who is receiving the benefit from the grant transaction. See paragraph [958-605-15-6(e)](https://asc.understandingaccounting.org/asc/605/958/#605-958-15-6). ##### [605-958-55-14D](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14D) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:f573528682245ed82a9bff225fb39b0f4f08cfd034e1a5e04ced72b2ed00d2d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Patient R is a patient at Hospital B. The total amount due for services rendered is $10,000. Patient R has Medicare, and it covers $8,000 of the services, which is paid directly by the government to Hospital B. Hospital B bills Patient R for $2,000. ##### [605-958-55-14E](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14E) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3313c4dea6fb5576044222cc69ccefe95be4b44b230603f8108cca33364e5e5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Medicare is a form of insurance. Hospital B has a contract with a customer (Patient R) and determines that the $10,000 should be accounted for as an exchange transaction in accordance with the guidance in the appropriate Topic. The Medicare payment of $8,000 and Patient R's payment of $2,000 serve as a payment source for services rendered in the amount of $10,000 owed to Hospital B. The payment to Hospital B relates to an existing exchange transaction between Hospital B and an identified customer (Patient R). See paragraph [958-605-15-6(e)](https://asc.understandingaccounting.org/asc/605/958/#605-958-15-6). ##### [605-958-55-14F](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14F) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:b57550d582cdf70d16875d7ae54dc312baa93df970d759beb2dc5d0fb6fd76a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The local government provided funding to NFP C to perform a research study on the benefits of a longer school year. The agreement requires NFP C to plan the study, perform the research, and summarize and submit the research to the local government. The local government retains all rights to the study. ##### [605-958-55-14G](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14G) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:9315d0f4e3f8805c956414ef1a19f1c7034e1501896b232574ebf2c4f2b21b61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP C concludes that this is a procurement arrangement in which commensurate value is being exchanged between two parties and that it should follow the relevant guidance for exchange transactions. NFP C is to perform a research study for the local government and turn over a summary of the study's findings to the local government. The local government retains the rights to the study. See paragraph [958-605-15-5A(c)](https://asc.understandingaccounting.org/asc/605/958/#605-958-15-5A). ##### [605-958-55-14H](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14H) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:41a6afd4c4dca02730bff23666fc7572a57b5d3e99c3c379c7f0dce6a7871027 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. University D applied for and was awarded a grant from the federal government. University D must follow the rules and regulations established by the Office of Management and Budget of the federal government and the federal awarding agency. University D is required to incur qualifying expenses to be entitled to the assets. Any unspent money during the grant period is forfeited, and University D is required to return any advanced funding that does not have related qualifying expenses. University D also is required to submit a summary of research findings to the federal government, but University D retains the rights to the findings and has permission to publish the findings if it desires. ##### [605-958-55-14I](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-14I) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e522288b45c36ac39261080effd4026e5ce0ef6a867f143a476ad0771e6a24df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. University D concludes that this grant is not a transaction in which there is commensurate value being exchanged. The federal government, as the resource provider, does not receive direct commensurate value in exchange for the assets provided to University D because University D retains all rights to the research and findings. University D and the public receive the primary benefit of any findings, and the federal government receives an indirect benefit because the research and findings serve the general public. Thus, University D determines that this grant should be accounted for under the contribution guidance in this Subtopic. See paragraph [958-605-15-5A(a)](https://asc.understandingaccounting.org/asc/605/958/#605-958-15-5A). ### Contributions Received #### Implementation Guidance ##### [605-958-55-15](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e5c81de042859442f2e44bba57f5df2a1c1c9353e142db80b6576b129dc67360 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Distinguishing between a condition stipulated by a donor and a restriction on the use of 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.") imposed by a donor may require the exercise of judgment. A [donor-imposed condition](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-condition "A donor stipulation (donors include other types of contributors, including makers of certain grants) that represents a barrier that must be overcome before the recipient is entitled to the assets transferred or promised. Failure to overcome the barrier gives the contributor a right of return of the assets it has transferred or gives the promisor a right of release from its obligation to transfer its assets.") depends on whether the agreement includes a barrier that must be overcome before a recipient is entitled to the assets transferred or promised. The agreement also must give either the contributor a right of return of the assets it has transferred or the promisor a right of release from its obligation to transfer assets. Donor-imposed conditions should be substantially met by the entity before the receipt of assets (including contributions receivable) is recognized as a contribution. In contrast to donor-imposed conditions, donor-imposed restrictions limit the use of the contribution, but they do not affect whether the recipient is entitled to the contribution. ##### [605-958-55-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:5822c9770abbd8ac6c28aaf5fee1e8c5ef0a8231ccb77b6d44757108cbce81ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If donor stipulations do not clearly state whether the right to receive or retain payment or take delivery depends on meeting those stipulations, or if those stipulations are ambiguous, distinguishing a [conditional promise to give](https://asc.understandingaccounting.org/glossary/c/#conditional-promise-to-give "A promise to give that is subject to a donor-imposed condition.") from an [unconditional promise to give](https://asc.understandingaccounting.org/glossary/u/#unconditional-promise-to-give "A promise to give that depends only on passage of time or demand by the promisee for performance.") may be difficult. If the ambiguity cannot be resolved by reviewing the facts and circumstances surrounding the contribution and communicating with the donor, presume that a promise containing [stipulations](https://asc.understandingaccounting.org/glossary/s/#stipulation "A statement by a donor that creates a condition or restriction on the use of transferred resources.") that are not clearly unconditional is a conditional [promise 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."). However, if the stipulation is not related to the purpose of the agreement (generally stipulations that are administrative or trivial), that stipulation is not indicative of a barrier (for example, a stipulation that an annual report must be provided by the donee to receive subsequent annual payments on a multiyear promise is not a barrier if the administrative requirement is not related to the purpose of the agreement.) ##### [605-958-55-17](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3b96eabc44e0f49245db4b7300275f6718b57d0392446c7e10fa263f4c8c21c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A challenge (matching) grant is a common form of a conditional promise to give. For example, a resource provider promises to contribute $1 for each $1 of contributions received by a [not-for-profit entity](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), up to $100,000, over the next 6 months. As contributions are received from other resource providers, the conditions would be met and the promise would become unconditional. For example, if $10,000 is received in the first month from donors, $10,000 of the conditional promise would become unconditional and should be recognized as contribution revenue. ##### [605-958-55-17A](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-17A) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:bdf36178346f6554b90baf25462ac3ceee3ad85ed5b0905c42d947e01700dd50 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A donor-imposed condition must have both: 1. a One or more barriers that must be overcome before a recipient is entitled to the assets transferred or promised. 2. b A right of return to the contributor for assets transferred (or for a reduction, settlement, or cancellation of liabilities) or a right of release of the promisor from its obligation to transfer assets (or to reduce, settle, or cancel liabilities). See paragraphs [958-605-55-70A through 55-70T](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70A) for examples. ##### [605-958-55-17B](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-17B) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:96b3ea92c7a5596b2eadecbc1524a4d1044fad64229eaec17edb1d9219cb30c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It is possible that some agreements that do not contain any barriers could contain either a right of return of assets transferred or a right of release from obligation. For example, some foundations include a right-of-return or a right-of-release-from-obligation clause in their agreements as a matter of policy and standard wording but impose no barriers that must be achieved before a recipient is entitled to the resources. The resources would be considered unconditional, and revenue would be recognized immediately. ##### [605-958-55-17C](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-17C) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:a799f2022ea7e09c736e0f9429531540d3419f167fb841694345107e4769ade0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some agreements include multiple requirements that must be overcome before an entity is entitled to transferred assets or a future transfer of assets. An entity must consider facts and circumstances and use judgment to determine which stipulations, if any, of an agreement are deemed to be a barrier or barriers that must be achieved before an entity is entitled to assets. ##### [605-958-55-17D](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-17D) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:b14f787cc129f46b6e05af9080dee1375daf620f39bc4f2c2ebbe9ddf473a276 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As described in paragraph [958-605-25-5D](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-5D), a measurable performance-related barrier or other measurable barrier may be indicative of a donor-imposed condition. Examples of measurable performance-related barriers or other measurable barriers could include: 1. a Specified level of service. An entity is given assets, and the resource provider stipulates that the assets must be used to provide a specific level of service (for example, 1,000 meals per week for a soup kitchen). The barrier that must be overcome before the recipient is entitled to the resources is the specified level of service that must be achieved. 2. b Specific output or outcome. An entity is given assets, entitlement to which is contingent upon producing a specific output or achieving a measurable outcome stemming from the entity's activities (for example, students achieving a minimum standardized test score, a decline in drop-out rates following an entity's educational efforts, and community residents exhibiting a decline in symptoms of malnutrition following an entity's efforts in providing meals). 3. c Matching. A resource provider specifies the ratio or amount of a matching contribution. The recipient is not entitled to receive the promised assets until it has met the required match (the barrier or hurdle that must be overcome). 4. d Outside event. Agreements may include requirements that are imposed on, and would need to be overcome by, other parties, including the resource provider. A resource provider specifies that a certain outside event needs to occur for the recipient to be entitled to receive the assets (for example, a resource provider promises to contribute a certain amount of assets if the resource provider's net worth reaches a specified level). ##### [605-958-55-17E](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-17E) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:0851a310949fcc3aacd76f2e5e9e68189fbdcc935bacbaf1e5a41f10b904ceef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As described in paragraph [958-605-25-5D](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-5D), limited discretion may be indicative of a donor-imposed condition. Limited discretion of the recipient on the conduct of an activity is more specific than a donor-imposed restriction. Restrictions limit the use of a contribution to a specific activity or time but do not necessarily place limitations on how the activity is performed. This indicator focuses on limitations concerning specific requirements about how an activity must be conducted for a recipient to be entitled to the resources. For example, an agreement might specify that the recipient should incur qualifying expenses in compliance with established rules and regulations. This is in contrast to a restriction, which typically places limits only on a specific activity that is being funded and does not affect the extent to which a recipient is entitled to the resources (for example, a requirement that a contribution be used to fund one of an organization's programs). ##### [605-958-55-17F](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-17F) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:4864c622f750b567a39f502adbbeebec387b25d35512a4d52eefbee7fc0468ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An indicator noting that a stipulation is related to the purpose of the agreement could be helpful in the context of considering the agreement collectively with the other indicators. If a stipulation is unrelated to the purpose of the agreement (for example, trivial or administrative stipulations), the stipulation would not be indicative of a barrier. If administrative tasks are required that are unrelated to the purpose of the agreement, there most likely would be other requirements that would be more indicative of a barrier that must be overcome before the recipient is entitled to the resources (for example, a specific event or activity to occur). Producing an annual report is a common requirement in contribution agreements; however, the annual report typically is not related to the underlying purpose of the agreement. Generally, a report is administrative in nature and is intended to provide a resource provider with information to confirm that the transferred assets were used in accordance with the purpose of the agreement and is not intended to affect the extent to which the recipient is entitled to the contribution. ##### [605-958-55-18](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:bf86f0401dfbd493ffed6dd9cfebe3ead31b706cccc147b28c5df07ca189112a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A promise to give is a written or oral agreement to contribute cash or other assets to another entity. The Contributions Received Subsections of this Subtopic avoid using the term _pledge_ because that term is used to describe not only promises to give but also plans or intentions to give that are not promises. There are other terms used to describe promises to give such as _subscriptions_, _awards_, _appropriations_, or _grants_. A communication received from a potential donor must be carefully evaluated to determine if it is a promise to give, since a communication that clearly is not a promise is not recognized in the financial statements. ##### [605-958-55-19](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3cb2d226fd28e725a0e176a107c5dbe594b8bd90dfb9210863e7725b37fb6d46 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to paragraph [958-605-25-8](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-8), to be recognized in financial statements there must be sufficient evidence in the form of verifiable documentation that a promise to give was made and received. That requirement does not preclude recognition of verifiable oral promises, such as those documented by tape recordings, written registers, or other means that permit subsequent verification. ##### [605-958-55-20](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:76597fb29067af42dc751dbc0e2572e23cde1ec72cdf0e4b6f0d8242cfed668f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Promises to give services generally involve personal services that, if not explicitly conditional, are often implicitly conditioned upon the future and uncertain availability of specific individuals whose services have been promised. ##### [605-958-55-21](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e7dad034098752326c10ade5634ecaf139fa46df4c9f6e21c54d43781d2ff59d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain promises become unconditional in stages because they are dependent on several or a series of conditions—milestones—rather than on a single condition and are recognized in increments as each of the conditions is met. Similarly, other promises are conditioned on promisees' incurring certain qualifying expenses (or costs). Those promises become unconditional and are recognized to the extent that the expenses are incurred. A portion of those [contributions](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.") should be recognized as revenue as each of those stages is met. ##### [605-958-55-22](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:bc5ed9db4290739fab7ca6635c41ddc02f984e043ceb5dd0f272f4fd74dd4a76 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The present value of the future cash flows is one valuation technique for measuring the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of contributions arising from unconditional promises to give cash; other valuation techniques also are available, as described in Topic 820. The following table illustrates the use of present value techniques for initial recognition and measurement of unconditional promises to give cash that are expected to be collected one year or more after the financial statement date. - Initial Recognition of Unconditional Promises to Give Cash ![](https://asc.understandingaccounting.org/asc-img/GUID-B5193363-1BAD-4690-8DE4-ED45A6DFA3B1-low.gif) Facts "Assume that a not-for-profit entity receives a promise (or promises from a group of homogeneous donors) to give $100 in five years, that the anticipated future cash flows from the promise(s) are $70, and that the present value of the future cash flows is $50." Solution dr. Contributions Receivable $70 cr. Contribution Revenue—Donor-Restricted Support $50 cr. Discount on Contributions Receivable $20 (To report contributions receivable and revenue using a present value technique to measure fair value.) Note: Some entities may use a subsidiary ledger to retain information concerning the $100 face amount of contributions promised in order to monitor collections of contributions promised. ##### [605-958-55-23](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:9b446b9b26ac52debe2f0bfaed2fece2b0979c8a713d314e94ef5d8f85244628 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The use of property, utilities, or advertising time is considered to be forms of contributed assets, rather than contributed services. Pursuant to paragraph [958-605-25-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-2), an NFP would recognize the fair value of the use of property, utilities, or advertising time as both revenue and expense in the period received and used. Fair value could be estimated by using billing rates normally charged to other customers under similar circumstances. Whether those [contributions](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.") should be reported is unaffected by whether the NFP could afford to purchase the utilities or facilities at their fair value. If the transaction is an unconditional promise to give electric, telephone, or other utilities for a specified number of periods, the promise should be reported as a [contribution receivable](https://asc.understandingaccounting.org/glossary/c/#contributions-receivable "Contributions receivable are the amounts due, as of the date of the financial statements, to the plan from employers, participants, and other sources of funding (for example, state subsidies or federal grants). They include amounts due pursuant to firm commitments, as well as legal or contractual requirements.") and as [donor-restricted support](https://asc.understandingaccounting.org/glossary/d/#donor-restricted-support "Donor-restricted revenues or gains from contributions that increase net assets with donor restrictions (donors include other types of contributors, including makers of certain grants).") that increases [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants)."), pursuant to paragraph [958-605-25-8](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-8). ##### [605-958-55-24](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:aab0ee3bbc9658da72304ebb17c49c07ea154030097d14a42fcfaeb778d035ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unconditional promises to give the use of long-lived assets (such as a building or other facilities) for a specified number of periods in which the donor retains legal title to the long-lived asset may be received in connection with leases or may be similar to leases but have no lease payments. For example, an NFP may use facilities under a lease agreement that calls for lease payments at amounts below the fair rental value of the property. In circumstances in which an NFP receives an unconditional promise to give for a specified number of periods, the promise should be reported as revenue and as a contribution receivable for the difference between the fair rental value of the property and the stated amount of the lease payments. In other words, if a donor promises that the NFP can use a facility for 10 years, the NFP has received a multiyear promise to give and should report the fair value of that promise as a contribution with a [donor-imposed restriction](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.") in Year 1. Amounts reported as contributions shall not exceed the fair value of the long-lived asset at the time the NFP receives the unconditional promise to give. The contribution receivable may be described in the financial statements based on the item whose use is being contributed, such as a building, rather than as contributions receivable. ##### [605-958-55-25](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-25) Pending content: yes Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:80df9014a1ac724e6cb2924f5216dfcd58ad5e15d7d922980458d26804383995 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Property and equipment used in exchange transactions (other than lease transactions), such as federal contracts, in which the resource provider retains legal title during the term of the arrangement should be reported as a contribution at fair value at the date received by the NFP only if it is probable that the NFP will be permitted to keep the assets when the arrangement terminates. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)[Paragraph superseded by Accounting Standards Update No. 2025-12.](https://asc.understandingaccounting.org/updates/asu-2025-12/) ##### [605-958-55-26](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ed9dd55d0a33fe9b1a2d733badafcfcdfc16a75a4160cdd651df1f358ccf6192 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Contributions are received in several different forms. Most often the item contributed is an asset, but it also can be forgiveness of a liability. The types of assets commonly contributed include cash, marketable securities, land, buildings, use of facilities or utilities, materials and supplies, intangible assets, other goods or services, and unconditional promises to give those items in the future. The [Contributions Received Subsection](https://asc.understandingaccounting.org/updates/page-2147480553/) of Section 958-605-30 requires NFPs receiving contributions to recognize them at the fair values of the assets received. However, recognition of contributions of works of art, historical treasures, and similar assets is not required if the donated items are added to collections (see paragraph [958-360-25-1](https://asc.understandingaccounting.org/asc/360/958/#360-958-25-1)), and recognition of contributions of services is prohibited if the services do meet any of the criteria in paragraph [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16). ##### [605-958-55-27](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:6c2371b69711b6ab95436887cee3248ccc3bf61e306648792b88bbe25b14201f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples 1 through 6 (see paragraphs [958-605-55-32 through 55-51](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-32) ) provide illustrations on different types of contributed assets, including the following: 1. a Real property 2. b Works of art 3. c Historical objects 4. d Utilities 5. e Use of property 6. f Interest in an estate. ##### [605-958-55-28](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:d638c3a268c71d79a4646aa8e6898c04abeb78b018688adb334b623ab03a76fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Recognition of contributions of services is required for those contributed services received that meet any of the specified conditions of paragraph [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) and is precluded for contributed services that do not. The criterion in paragraph [958-605-25-16(b)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16)requires that recognized services be [specialized skills](https://asc.understandingaccounting.org/glossary/s/#specialized-skills "Services that require expertise that is not possessed by most members of the general public or that require an individual to be licensed to practice the profession or craft.") provided by individuals possessing those skills. An individual who receives some training does not necessarily possess a specialized skill. For example, if a volunteer receives some training from an NFP to learn how to help other people learn to read, that volunteer does not possess the specialized skills that a reading teacher possesses. ##### [605-958-55-29](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:cc942693868da074c5788227115768d01113f0f42404fc0d56ca281657741e38 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples 7 through 11 (see paragraphs [958-605-55-52 through 55-65](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-52) ) provide illustrations on different types of contributed services, including the following: 1. a Construction services 2. b Teaching services 3. c Board of trustee services 4. d Companion services 5. e Fundraising services. ##### [605-958-55-30](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:75fabef3e73c573e28d7957a68ff5d7d4c50e9088c750e791d8f5b5392667629 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [275-10-50-18](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-18) for guidance on disclosures about risk concentrations. ##### [605-958-55-31](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:68b5e4ad055ab5e350f2d9d0283d934432f8f7e9ed078df1e65cc142a815de0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 12 (see paragraph [958-605-55-69](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-69)) illustrates the situation in which an NFP relies on specific donors for contributions. #### Illustrations ##### [605-958-55-32](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:5d703934ea427256b88f0b096b9322b03e2201c2fb76c14fde89f7e732bebb88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-2) and [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2). ##### [605-958-55-33](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:541fb7f30d048f9f0c373e5866dd5d9a5b75f1eb4cd955fda11e1a99a72cd961 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Mission A, a religious NFP, receives a building (including the land on which it was constructed) as a gift from a local corporation with the understanding that the building will be used principally as an education and training center for Mission A's members or for any other purpose consistent with Mission A's plans. ##### [605-958-55-34](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e99e9247f7802e87976f1b6e10b6f76953397082a8962856d4f02dc5a3b318c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Mission A would recognize the contributed property as an asset and as support and measure that property at its fair value (see paragraph [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2)). Information necessary to estimate the fair value of that property could be obtained from various sources, including amounts recently paid for similar properties in the locality, and estimates of its replacement cost adjusted to reflect the price that would be received for the contributed property. This [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.") is revenue without donor restrictions because the donated assets may be used for any purpose and the donor did not impose a time restriction. ##### [605-958-55-35](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:00459b1f0991247973e40f197f31fd0bbc6ea20ef590dc4df7db301f90fa7602 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraph [958-605-25-19](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-19). ##### [605-958-55-36](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:6310af871cf65d720888b8970ef87c95b4393f59dd8305c80bf8ff5a8992788d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Museum B, which preserves its collections as described in paragraph [958-605-25-19](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-19), receives a gift of a valuable painting from a donor. The donor obtained an independent appraisal of the fair value of the painting for tax purposes and furnished a copy to the museum. The museum staff evaluated the painting to determine its authenticity and worthiness for addition to the museum's collection. The staff recommended that the gift be accepted, adding that it was not aware of any evidence contradicting the fair value provided by the donor and the donor's appraiser. ##### [605-958-55-37](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:a33346d8eb6d28798e37588ed8766cc14c4292d9fbe995c3302d5e2a95abb77f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If Museum B capitalizes its collections, Museum B would recognize the fair value of the contributed work of art received as revenue and capitalize it as an asset at its fair value (see paragraph [958-605-25-19](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-19)). If Museum B does not capitalize its collections, Museum B is precluded from recognizing the [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.") (see that paragraph) and would provide the information required by paragraphs [958-360-45-3](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-3) and [958-360-45-5](https://asc.understandingaccounting.org/asc/360/958/#360-958-45-5). ##### [605-958-55-38](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e08fd506a682079d2d97e13c880937a19a8408191256bb070d150a26cc53c8d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If Museum B accepted the painting with the donor's understanding that it would be sold rather than added to its collection, Museum B would recognize the contribution of the painting received as revenue without donor restrictions and as an asset at its fair value (see paragraphs [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2) and [958-605-45-6](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-6)). ##### [605-958-55-39](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:34fe01cb3c5a3659686fb75fe9bc5896b1e2582da5e89c8b9bbd51c07fe5362c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraph [958-605-25-19](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-19). ##### [605-958-55-40](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:4e763ffb0e49dc839549ee78fb82628d3ebd983d8bc18ae5f25717db81c18c79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Historical Society C receives several old photographs as a gift from a long-time local resident. The photographs depict a particular area as it was 75 years ago. After evaluating whether the photographs were worthy of addition to the historical society's [collection](https://asc.understandingaccounting.org/glossary/c/#collections "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."), the staff concluded the photographs should be accepted solely because of their potential historical and educational use; that is, the photographs may be of interest to future researchers, historians, or others interested in studying the area. The photographs are not suitable for display and no alternative use exists. ##### [605-958-55-41](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:861409cd0a4cab8c18c71f2023d0161957b8f4ab8fb1ba51da42144edee27500 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Regardless of whether Historical Society C capitalizes its collections, Historical Society C would not recognize the contributed photographs as assets because there is major uncertainty about the existence of value and no alternative use exists (see paragraph [958-605-25-4](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-4)). ##### [605-958-55-42](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:09e2e95db90790fa343cc105251c809c33076370a7dd2254543073dbbcacea79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-2) and [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2). ##### [605-958-55-43](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:dbb74905de7ae5c863179951b78fd704a991dd04414040424c76a914abf1e742 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foundation D operates from a building it owns. The holding company of a local utility has been contributing electricity on a continuous basis subject to the donor's cancellation. ##### [605-958-55-44](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:820ae6bb0b57214ece5c611376755f067865d2d0f77d79f518638a3adb134fb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The simultaneous receipt and use of electricity or other utilities is a form of contributed assets and not services. Foundation D would recognize the fair value of the contributed electricity as both revenue and expense in the period it is received and used (see paragraph [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2)). Foundation D could estimate the fair value of the electricity received by using rates normally charged to a consumer of similar usage requirements. ##### [605-958-55-45](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:558588f3eeb40512aa08e0c42090e6cf9ae24342868d65ed9c390f37481501f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-2) and [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2). ##### [605-958-55-46](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:517c0b8c1dc5813796b1f54667ff5711192c446e1f169f246b7a4472039c8cea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Charity E receives the free use of 10,000 square feet of prime office space provided by a local entity. The local entity has informed Charity E that it intends to continue providing the space as long as it is available, and although it expects it would be able to give the charity 30 days advance notice, it may discontinue providing the space at any time. The local entity normally rents similar space for $14 to $16 annually per square foot, the going market rate for office space in the area. Charity E decides to accept this gift—the free use of office space—to conduct its daily central administrative activities. ##### [605-958-55-47](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:d1f423cbb17b2439cba731fda9bfd2f5e2163c7bead964725b0900ee544931f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The simultaneous receipt and use of facilities is a form of contributed assets and not services. Charity E would recognize the fair value of the contributed use of facilities as both revenue and expense in the period it is received and used (see paragraph [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2)). ##### [605-958-55-48](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:c73717b6772fe08416a2b04af42943454c72f10a5c4a863b481e2d8586638f90 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the local entity explicitly and unconditionally promises the use of the facility for a specified period of time (for example, five years), the promise would be an unconditional promise to give. In that case, Charity E would recognize the receipt of the unconditional promise as a receivable and as [donor-restricted support](https://asc.understandingaccounting.org/glossary/d/#donor-restricted-support "Donor-restricted revenues or gains from contributions that increase net assets with donor restrictions (donors include other types of contributors, including makers of certain grants).") at its fair value. The donor would recognize the unconditional promise when made as a payable and an expense at its fair value (see paragraph [720-25-25-1](https://asc.understandingaccounting.org/asc/720/25/#720-25-25-1)). ##### [605-958-55-49](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:fae98d1d54253f341ba91a39d5e86b3203cbec796b5239cb3d6e6a179b46a166 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-2) and [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2). ##### [605-958-55-50](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:18bac72f7eb5dd018f719f925576540b72a9c50b33a6a0e0cd057f8e56ad419a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 19X0, Individual notifies Church F that she has remembered the church in her will and provides a written copy of the will. In 19X5, Individual dies. In 19X6, Individual's last will and testament enters probate and the probate court declares the will valid. The executor informs Church F that the will has been declared valid and that it will receive 10 percent of Individual's estate, after satisfying the estate's liabilities and certain specific bequests. The executor provides an estimate of the estate's assets and liabilities and the expected amount and time for payment of Church F's interest in the estate. ##### [605-958-55-51](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:db2ada1ad53085b5a3caabefe29904ec176320600abacda1ef84468bf46d34d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The 19X0 communication between Individual and Church F specified an intention to give. The ability to modify a will at any time prior to death is well established; thus in 19X0 Church F did not receive a promise to give and did not recognize a contribution received. When the probate court declares the will valid, Church F would recognize a receivable and revenue for an unconditional promise to give at the fair value of its interest in the estate (see paragraphs [958-310-35-6](https://asc.understandingaccounting.org/asc/310/958/#310-958-35-6), [958-605-30-5](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-5), and [958-605-30-6](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-6)). If the promise to give contained in the valid will was instead conditional based on a barrier that must be overcome for Church F to be entitled to the assets, Church F would recognize the contribution when the condition was substantially met. A conditional promise in a valid will would be disclosed in notes to financial statements (see paragraph [958-310-50-4](https://asc.understandingaccounting.org/asc/310/958/#310-958-50-4)). ##### [605-958-55-52](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-52) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:d12fce13b0c58250a28fc4ccb778465a99451bf579b67b67b14a430ed1d8c3c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) and [958-605-30-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-10). ##### [605-958-55-53](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-53) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:268b63a05ec50ae11e1e3d48d4202af893f5b9d1960d7cc39e2295f9b46bcf1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Institute G decides to construct a building on its property. It obtains the necessary architectural plans and specifications and purchases the necessary continuing architectural services, materials, permits, and so forth at a total cost of $400,000. A local construction entity contributes the necessary labor and equipment. An independent appraisal of the building (exclusive of land), obtained for insurance purposes, estimates its fair value at $725,000. ##### [605-958-55-54](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-54) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:bc575534d5012c79fa4e287ec8407e3d7bf434cdc234c95b5ba1b1902d530179 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Institute G would recognize the services contributed by the construction entity because the contributed services received meet the condition in paragraph [958-605-25-16(a)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) (the services received create or enhance [nonfinancial assets](https://asc.understandingaccounting.org/glossary/n/#nonfinancial-asset "An asset that is not a financial asset. Nonfinancial assets include land, buildings, use of facilities or utilities, materials and supplies, intangible assets, or services.")) or because the services meet the condition in paragraph [958-605-25-16(b)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) (the services require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation). Contributions of services that create or enhance nonfinancial assets may be measured by referring to either the fair value of the services received or the fair value of the asset or of the asset enhancement resulting from the services (see paragraph [958-605-30-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-10)). In this Example, the fair value of the contributed services received could be determined by subtracting the cost of the purchased services, materials, and permits ($400,000) from the fair value of the asset created ($725,000), which results in contributed services received of $325,000. Alternatively, the amount the construction entity would have charged could be used if more readily available. ##### [605-958-55-55](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-55) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:07ea1fc3af1b7e27dd6bc317e2536e8b94e930df211fcc691ea52b291b86cfad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If some of the labor did not require specialized skills and was provided by volunteers, those services still would be recognized because they meet the condition in paragraph [958-605-25-16(a)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16). ##### [605-958-55-56](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-56) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:7aff6810a8ab35b2e2ba2b9ad595d93d6b74caf15ddf64e22c15e6b6888ecd47 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) and [958-605-30-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-10). ##### [605-958-55-57](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-57) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3f3dd725204753b3970de676084ed7f2ba1ff60bcb89337bfbbd812020ed35c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Faculty salaries are a major expense of University H. The faculty includes both compensated faculty members (approximately 80 percent) and uncompensated faculty members (approximately 20 percent) who are associated with religious orders and contribute their services to the university. The performance of both compensated and uncompensated faculty members is regularly and similarly evaluated; both must meet the university's standards and both provide services in the same way. ##### [605-958-55-58](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-58) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:03b0c0309ea4bd0947cbb95bab52098c7da4af91b9dbb0510a8430a5ee57841f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. University H would recognize both revenue and expense for the services contributed by the uncompensated faculty members because the contribution meets the condition in paragraph [958-605-25-16(b)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16). Teaching requires specialized skills; the religious personnel are qualified and trained to provide those skills; and University H typically would hire paid instructors if the religious personnel did not donate their services. University H could refer to the salaries it pays similarly qualified compensated faculty members to determine fair value of the services received. ##### [605-958-55-59](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-59) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:a26daf343d271046842eeef04be4bef6d1c353e6d72e702d2824cd51de0ce780 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Similarly, if the uncompensated faculty members were given a nominal stipend to help defray certain of their out-of-pocket expenses, University H still would recognize both revenue and expense for the services contributed. The contribution received would be measured at the fair value of the services received less the amount of the nominal stipend paid. ##### [605-958-55-60](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-60) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:48890b5c1103b8bebed2f4350b2e83367eaa5cc5b022dbc65f8a3be0c78840bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) and [958-605-30-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-10). ##### [605-958-55-61](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-61) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:c23f6436b00bc7fd6eccb541c7ffb548cd660b203849aa8676be8fe02d24926a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A member of the board of [trustees](https://asc.understandingaccounting.org/glossary/t/#trustee "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.") of Civic Organization I is a lawyer and from time to time in the capacity of a trustee provides advice on general business matters, including questions about business opportunities and risks and ethical, moral, and legal matters. The advice provided on legal matters is provided as a trustee in the role of a trustee, not as a lawyer, and the opinions generally are limited to routine matters. Generally, the lawyer suggests that Civic Organization I seek the opinion of its attorneys on substantive or complex legal questions. All of Civic Organization I's trustees serve without compensation, and most trustees have specialized expertise (for example, a chief executive officer, a minister, a physician, a professor, and a public accountant) that makes their advice valuable to Civic Organization I. The trustee-lawyer also serves without compensation as a trustee for two other charitable organizations. ##### [605-958-55-62](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-62) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:da0a6f2bfe950ecc029a6dc1ebf45259b2db763c3e6e34f6d64d36339ad41489 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Civic Organization I would be precluded from recognizing the contributed services it receives from its trustee-lawyer or its other trustees because the services contributed do not meet either of the conditions in paragraph [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16). The condition in (a) in that paragraph is not relevant. The trustee-lawyer's services do not meet the condition in (b) in that paragraph because the substantive or complex legal questions that require the specialized skills of a lawyer are referred to Civic Organization I's attorneys or because the advice provided by trustees typically would not be purchased if not provided by donation. ##### [605-958-55-63](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-63) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:2c1c95bc01acbcf9e3333b686898ba24f4b86e6ac5242c398cf66304d02683a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) and [958-605-30-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-10). ##### [605-958-55-64](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-64) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:dcd3394be560cf714e97bca4c76be5e31ce00dfd5c13f67e4c88c540ed2ab7c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Hospital J provides short-term inpatient and outpatient care and also provides long-term care for the elderly. As part of the long-term care program, the hospital has organized a program whereby local high school students may contribute a minimum of 10 hours a week, from 3:00 p.m. to 6:00 p.m., to the hospital. These students are assigned various duties, such as visiting and talking with the patients, distributing books and magazines, reading, playing chess, and similar activities. Hospital J does not pay for these services or similar services. The services are accepted as a way of enhancing or supplementing the quality of care and comfort provided to the elderly long-term care patients. ##### [605-958-55-65](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-65) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:4d2f017d793e3edd48f5d753628754c90f6dd741f958b5ff779abddf280f1f8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Hospital J would be precluded from recognizing the contributed services because the services contributed do not meet either of the conditions in paragraph [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16). The condition in (a) in that paragraph is not relevant. The condition in (b) in that paragraph has not been met because the services the students provide do not require specialized skills nor would they typically need to be purchased if not provided by donation. ##### [605-958-55-66](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-66) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:5b88712c09c14e12b54a11af075703a41c3e438d87d61361d6ad8757ee1a97c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the recognition and measurement principles of paragraphs [958-605-25-16](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) and [958-605-30-10](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-10). ##### [605-958-55-67](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-67) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:17e5827d914687ed0de420c204f64cc22c8cafdb08492d5659af2465d02ce1c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. College K conducts an annual fund-raising campaign to solicit contributions from its alumni. In prior years, College K recruited unpaid student volunteers to make phone calls to its alumni. This year, a telemarketing entity, whose president is an alumnus of College K, contributed its services to College K for the annual alumni fundraising campaign. The entity normally provides telemarketing services to a variety of clients on a fee basis. College K provided the entity with a list of 10,000 alumni, several copies of a typed appeal to be read over the phone, and blank contribution forms to record pledges received. The entity contacted most of the 10,000 alumni. ##### [605-958-55-68](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-68) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:b4406aa0b0082438eec9df9b03d8664aa49c3c4f04fc4d92dd02b4a70d2083ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. College K would be precluded from recognizing the contributed services of the telemarketing entity. The condition in paragraph [958-605-25-16(a)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) is not relevant. The condition in paragraph [958-605-25-16(b)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-16) has not been met because the services do not require specialized skills or because College K typically would not need to purchase the services if they were not provided by donation. College K normally conducts its campaign with untrained students in a manner similar to the manner used by the telemarketing firm. ##### [605-958-55-69](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-69) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:6953ab4cf4f42204383f1281047a52876b36f67d2b228912a34c0da2a8b3cbf5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosure requirements of paragraphs [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16). ##### [605-958-55-70](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:8d1eb0c34e5368f79f9e4354fdc074b22adb00db4f4718c218911fd398649502 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Zebra Zoo is supported by contributions from the public. In the current year, 2 contributors provided 35 percent of Zebra Zoo's combined revenues. The following disclosure is required (see paragraph [275-10-50-16](https://asc.understandingaccounting.org/asc/275/10/#275-10-50-16)) because the two contributors provided a significant portion of Zebra Zoo's revenues. It is always considered reasonably possible that a customer, grantor, or contributor will be lost in the near term. - Approximately 35 percent of Zebra Zoo's combined revenues were provided by 2 contributors. ##### [605-958-55-70A](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70A) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:fc21eeab1c49b3a709b4783d978f411212a7ee89424ab0110d8d83d657373c79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples 13 through 21 (paragraphs [958-605-55-70C through 55-70T](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70C) ) illustrate how an entity might apply certain aspects of the guidance in this Subtopic in determining whether a contribution is conditional (all fact patterns are considered to be contributions or conditional contributions within the scope of this Subtopic). The analysis in each Example is not intended to represent the only manner in which the guidance could be applied, and the Examples are not intended to apply to only a specific illustration. Although some aspects of the Examples may be present in actual fact patterns, all relevant facts and circumstances of a particular fact pattern would need to be evaluated when applying the guidance in this Subtopic (for guidance on release from restrictions, see Section 958-605-45). Some examples are presented from the perspective of a resource provider (for example, an individual, a business corporation, a foundation, or an other NFP), and other examples are presented from the perspective of a resource recipient. The guidance in this Subtopic on determining whether a contribution is conditional applies to both contributions made by a resource provider and contributions received by a recipient. ##### [605-958-55-70B](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70B) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ee0e2d003cc89c3239bdd3bd024a536fa8de2229119a01584c9b32dad46301b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many agreements include a requirement that assets must be used for allowable and reasonable qualifying expenses (or costs) that are based on specific requirements of an agreement about the conduct of an activity (for example, in compliance with principles issued by the Office of Management and Budget or other similarly restrictive grant documents) that results in limited discretion by a recipient on the conduct of an activity and, thus, is indicative of a donor-imposed condition. These agreements often are paid on a cost-reimbursement basis that requires a recipient to incur specific qualifying expenses to be entitled to the promised resources. The specific requirements about allowable qualifying expenses are often accompanied by very close cost reporting and monitoring by the resource provider. ##### [605-958-55-70C](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70C) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:14745ff03becf2a4ec7fab301e580e7e63535366c64411fa0bb1a7ca739c432d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foundation A gives NFP D a grant in the amount of $400,000 to provide specific career training to disabled veterans. The grant requires NFP D to provide training to at least 8,000 disabled veterans during the next fiscal year (2,000 during each quarter), with specific minimum targets that must be met each quarter. Foundation A specifies a right of release from the obligation in the agreement that it will only give NFP D $100,000 each quarter if NFP D demonstrates that those services have been provided to at least 2,000 disabled veterans during the quarter. ##### [605-958-55-70D](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70D) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:9908e79c01c98af2c8f4e6adc45b0e0f0dab05de76bdb785563698d3347beb1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foundation A determines that it should account for this grant as conditional. The agreement contains a right of release from obligation because the resource provider will only transfer assets if NFP D provides training to at least 8,000 disabled veterans during the year (with a minimum requirement of 2,000 disabled veterans per quarter) as specified in the agreement. Foundation A requires NFP D to achieve a specific level of service that would be considered a measurable performance-related barrier (in the form of milestones by specifying 2,000 disabled veterans per quarter). In this Example, NFP D's entitlement to the transferred assets is contingent upon serving at least 2,000 disabled veterans. The likelihood of serving at least 2,000 disabled veterans for the quarter is not a consideration from the perspective of either Foundation A or NFP D when assessing whether the contribution contains a barrier and is deemed conditional. ##### [605-958-55-70E](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70E) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:0ceea51766e675de869c2a10af91a9297daeab030a6fe0b5d40262c3e5192bc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B is a hospital that has a research program. NFP B receives a $300,000 grant from the federal awarding agency to fund thyroid cancer research. The terms of the grant specify that NFP B must incur certain qualifying expenses (or costs) in compliance with rules and regulations established by the Office of Management and Budget and the federal awarding agency. The grant is paid on a cost-reimbursement basis by NFP B initiating drawdowns of the grant assets. Any unused assets are forfeited, and any unallowed costs that have been drawn down by NFP B are required to be refunded. ##### [605-958-55-70F](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70F) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3159de944afc85b809cb8f5b0d9247d5f4336c426e284e4af4cb1133257fdcf0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B determines that this grant is conditional. The grant agreement limits NFP's discretion as a result of the specific requirements on how NFP B may spend the assets (incurring certain qualifying expenses in accordance with the Office of Management and Budget rules and regulations). The grant also includes a release from the promisor's obligation for unused assets. The requirement to spend the assets on qualifying expenses is a barrier to entitlement because the requirement limits NFP B's discretion about how to use the assets, and the assets would need to be spent on specific items on the basis of the requirements of the agreement (for example, adherence to cost principles) before NFP B is entitled to the assets. This is in contrast to a restriction that typically places limits only on a specific activity that is being funded. NFP B records revenue during the grant period when the barriers have been overcome as it incurs qualifying expenses. The likelihood of incurring qualifying expenses is not a consideration when assessing whether the contribution is deemed conditional. ##### [605-958-55-70G](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70G) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:b6ddd6f3f63177cdc54f2bc43f2b266f51fca0a377bef6534eaf68052ae76eb2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP E is a public charity that performs research on various diseases and allergies, including gluten-related allergies, as part of its overall mission. It receives a $100,000 grant from a foundation to perform research on gluten-related allergies over the next year. The grant agreement includes a right of return as part of the foundation's standard wording and a requirement that at the end of the grant period a report must be filed with the foundation that explains how the assets were spent. ##### [605-958-55-70H](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70H) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:485599d417ad4afd8a81178130261d004c5f52624c5101c7170deeb2aecd71e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP E determines that the grant is not a conditional contribution. The purpose of research on gluten-related allergies results in donor-restricted revenue because the purpose of the grant (working on gluten-free allergies) is narrower than the overall mission of the entity. There are no requirements in the agreement that would indicate that a barrier exists, which must be overcome before the recipient is entitled to the resources. NFP E also determines that the reporting requirement alone is not a barrier because it is an administrative requirement and not related to the purpose of the agreement, which is the actual research. This is an example in which a grant including a right of return could not be considered conditional because the return clause is not coupled with a barrier to be overcome, as determined by NFP E using judgment to assess the indicators of a barrier. ##### [605-958-55-70I](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70I) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e4cd0f8138a63edfa7aa11c2def50965b528a1f029686325834f44e7bde07045 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP DD is a hospital that received an upfront cash contribution from an individual to perform research on Alzheimer's disease during NFP DD's next fiscal year. The agreement does not include a right of return or a barrier that must be overcome to be entitled to the funds. ##### [605-958-55-70J](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70J) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:15e0ce9508a3bfbc4588e198c18f90c5d2cd04db3f79686fd4f90d57951be0b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP DD determines that this contribution is not conditional because it does not include a right of return (or similar language) of the assets that have been transferred upfront. NFP DD concludes that it should recognize the revenue upon receipt of the assets from the individual as donor-restricted because it is required to use the assets for Alzheimer's research, which is narrower than NFP DD's overall mission, during the next fiscal year. ##### [605-958-55-70K](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70K) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:bd643bdacf8c9db0f77ebfb1015c1df966cf3359e9fd59450ff4ba47807754c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foundation B receives a grant proposal from an animal rescue facility, NFP F, which requests a 2-year grant in the amount of $500,000 upfront to be used to expand its operations. The agreement indicates that NFP F must expand its facility by at least 5,000 square feet to accommodate additional animals by the end of the 2 years. The grant contains a right of return if the minimum expansion target is not achieved. ##### [605-958-55-70L](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70L) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:6f1f51004a42c718ffabb5ff39e3805088fc099f5c7d6aadf8ef13d4b49a2a09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Foundation B determines that this grant is conditional. The grant includes a measurable barrier (5,000 additional square feet) that must be achieved by NFP F to be entitled to the assets and a right of return for unused assets or unmet requirements. ##### [605-958-55-70M](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70M) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:17e60254706d37942515adebbf6fef34f5ef6b93f97b229e68e16924d60e8606 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP G is a university that is conducting a capital campaign to build a new building to house its school of mathematics and to make capital improvements to existing buildings on campus, including a new heating system and an upgraded telephone and computer network. NFP G receives an upfront grant in the amount of $10,000 from a foundation as part of its capital campaign. The agreement contains a right of return requiring that the assets be reimbursed to the resource provider if the assets are not used for the purposes outlined in the capital campaign solicitation materials. The resource provider does not include any specifications in the agreement about how the building should be constructed or on how other improvements should be made. ##### [605-958-55-70N](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70N) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:12c4c33003db92a69aa3420e04a91e04e05ce5923080383acf4c9c8f821658c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP G determines that this grant is not conditional because the agreement places limits only on the specific activity that is being funded (for example, the assets can be used toward the new building or toward other capital improvements such as the heating system and an upgraded telephone and computer network within existing buildings on campus). The resource provider does not include any specifications about how the building should be constructed, and the agreement only indicates that NFP G must use the grant for the purpose outlined in the capital campaign materials. NFP G recognizes this grant as donor-restricted revenue because it must be used for capital purposes, which is narrower than NFP G's overall mission. This Example illustrates a fact pattern in which a grant can include a right of return and would be deemed a contribution that does not contain a donor-imposed condition because the return clause is not coupled with a barrier to be overcome, as determined by NFP G using judgment to assess the indicators of a barrier. ##### [605-958-55-70O](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70O) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e3ae6f54a15cfb949e823b8748250c1db3f844e9252496188cf044c7aa178d4e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP I is a museum that receives a grant from an individual donor to build a new wing on the existing museum building. The agreement contains a $1 million multiyear promise to give the money to be used for the new wing on the building. The agreement also includes specific building requirements, including square footage and that the new wing must be environmentally friendly with Leadership in Energy and Environmental Design certification. The first installment of the gift will not be paid until NFP I submits architectural designs that meet the building requirements. Additional installments of the grant will be paid in specified increments upon achieving other milestones identified in the grant agreement. If a particular milestone is not achieved, the donor is released from its obligation to make installment payments. ##### [605-958-55-70P](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70P) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:2494e2f7ae7ca25530fe33b06853ed3986e9f3159cb2ee3fb92da8277ec4b39b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP I determines that this agreement is conditional because NFP I is not entitled to the assets until a milestone is met (for example, an architectural plan including square footage and Leadership in Energy and Environmental Design certification). In this example, a milestone is deemed a measurable performance barrier because NFP I's entitlement to the transferred assets is contingent upon the completion of a milestone. In addition, the agreement includes a release of the resource provider's obligation to transfer assets if the stipulations are not met. NFP I recognizes the revenue as the barriers are overcome, which is upon meeting the specific requirements as NFP I builds the new wing. The likelihood of meeting a milestone is not a consideration when assessing whether the contribution is deemed conditional. ##### [605-958-55-70Q](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70Q) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:fced7e34512ae7fea79f49098c8c3ccc3d19a918a288a7561ac3f5afb307b9da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP J operates as a homeless shelter that provides individuals with temporary accommodations, meals, and counseling. NFP J receives an upfront grant of $75,000 from the city for its meals program. The grant requires NFP J to use the assets to provide at least 5,000 meals to the homeless. The grant contains a right of return for meals not served. ##### [605-958-55-70R](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70R) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:6cd0dfb8e8b657413fe7cc097931b94ead21c5da749cbacf3ce91a384635cd83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP J determines that this grant is conditional because it contains a measurable performance-related barrier (to provide 5,000 meals) and a right of return. NFP J recognizes assets received in advance of satisfying the conditions as a refundable advance liability and will then recognize $75,000 as donor-restricted revenue when at least 5,000 meals are served because the purpose of the grant is narrower than the overall purpose of NFP J. The likelihood of providing the meals is not a consideration when assessing whether the contribution is deemed conditional. ##### [605-958-55-70S](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70S) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ecca7f3ac317041c96405c5d7c101498ff8dbabb94ec9ea005bc3da467a233cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP H is a recreational organization that provides various sports programs to children that live in the community. NFP H receives an upfront grant in the amount of $40,000 from a foundation to be used toward its tennis program. Consistent with NFP H's grant proposal, the agreement includes specific guidelines for which NFP H could use the assets (for example, to hire 10 tennis instructors or to provide a summer camp for 9 weeks) but does not specify that NFP H's entitlement to the $40,000 is dependent upon NFP H meeting any of the specific indicated guidelines in the agreement. The grant contains a right of return for funds not spent on the tennis program. ##### [605-958-55-70T](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70T) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:f430ac1ef37d3357193e6b48f3d759543871377cfd8b5b62051327a0ee854a17 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP H determines that this grant is not conditional because it does not contain a barrier to overcome to be entitled to the transferred assets. Although the grant agreement contains guidelines for how NFP H could spend the $40,000, the agreement does not specify that entitlement to the transferred assets are dependent upon meeting any of the guidelines. Because the guidelines in the grant agreement were not required to be met to be entitled to the funding, the agreement does not contain a barrier to overcome. NFP H should recognize the revenue upon receipt of the assets as donor restricted because it is required to use the assets for the tennis program, which is narrower than NFP H's overall mission. ##### [605-958-55-70U](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70U) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e917a1b5e57ec335728872aebb9c700362eeea0220a4d4bce8e1fc1cbcb53479 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the requirements described in paragraph [958-605-50-1A](https://asc.understandingaccounting.org/asc/605/958/#605-958-50-1A). Those disclosure requirements are not prescriptive on how the information should be disclosed; therefore, this Example demonstrates two alternative formats. This Example does not illustrate all categories of contributed nonfinancial assets, such as intangible assets. An NFP may be required to include disclosure information about valuation techniques and inputs, including assumptions and judgments that an NFP makes, in addition to those included in this Example, which is consistent with the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") disclosures required by Topic 820. The valuation language used in this Example is not intended to provide guidance on how contributions of nonfinancial assets should be valued, including whether the principal market (or most advantageous market) disclosed is appropriate in the circumstances. While not illustrated in this Example, there may be additional information about the nature and extent of contributed services, including nonrecognized contributed services, that an entity may disclose in accordance with paragraph [958-605-50-1B](https://asc.understandingaccounting.org/asc/605/958/#605-958-50-1B). ##### [605-958-55-70V](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70V) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:86e6757ab8579937c548730707ee9b28559d44cd4106a34a4b0c56d28f9be6f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustration includes a table disclosing the amounts recognized within the statement of activities by category as well as a narrative disclosure about donor-imposed restrictions and valuation techniques and inputs for each category of contributed nonfinancial asset. - ![](https://asc.understandingaccounting.org/asc-img/GUID-8BCAEEFA-ADE2-40C5-98FE-23DE703C5DEC-low.gif) Contributed Nonfinancial Assets "For the years ended December 31, contributed nonfinancial assets recognized within the statement of activities included:" 20X9 20X8 Building Building " $550,000 " $ - Household goods Household goods " 95,556 " " 100,486 " Food Food " 85,407 " " 86,633 " Medical supplies Medical Supplies " 90,389 " " 115,173 " Pharmaceuticals Pharmaceuticals " 111,876 " " 113,982 " Clothing Clothing " 85,765 " " 83,890 " Vehicles Vehicles " 127,900 " - Services Services " 73,890 " " 65,392 " " $1,220,783 " " $565,556 " - NFP K recognized contributed nonfinancial assets within revenue, including a contributed building, vehicles, household goods, food, medical supplies, pharmaceuticals, clothing, and services. Unless otherwise noted, contributed nonfinancial assets did not have donor-imposed restrictions. - It is NFP K's policy to sell all contributed vehicles immediately upon receipt at auction or for salvage unless the vehicle is restricted for use in a specific program by the donor. No vehicles received during the period were restricted for use. All vehicles were sold and valued according to the actual cash proceeds on their disposition. - The contributed building will be used for general and administrative activities. In valuing the contributed building, which is located in Metropolitan Area B, NFP K estimated the fair value on the basis of recent comparable sales prices in Metropolitan Area B's real estate market. - Contributed food was utilized in the following programs: natural disaster services, domestic community development, and services to community shelters. Contributed household goods were used in domestic community development and services to community shelters. Contributed clothing was used in specific community shelters. Contributed medical supplies were utilized in natural disaster services. In valuing household goods, food, clothing, and medical supplies, NFP K estimated the fair value on the basis of estimates of wholesale values that would be received for selling similar products in the United States. - Contributed pharmaceuticals were restricted by donors to use outside the United States and were utilized in international health services and natural disaster services. In valuing contributed pharmaceuticals otherwise legally permissible for sale in the United States, NFP K used the Federal Upper Limit based on the weighted average of the most recently reported monthly Average Manufacturer Prices (AMP) that approximate wholesale prices in the United States (that is, the principal market). In valuing pharmaceuticals not legally permissible for sale in the United States (and primarily consumed in developing markets), NFP K used third-party sources representing wholesale exit prices in the developing markets in which the products are approved for sale (that is, the principal markets). - Contributed services recognized comprise professional services from attorneys advising NFP K on various administrative legal matters. Contributed services are valued and are reported at the estimated fair value in the financial statements based on current rates for similar legal services. ##### [605-958-55-70W](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70W) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:09214e7ab02680b579efdc7fcdd530d895d73fdc7c815328e649f1f38ec1777b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table illustrates the disclosures in paragraph [958-605-55-70V](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-70V) for each category of contributed nonfinancial asset. It includes both amounts and narrative disclosure. For illustrative purposes, only one year is presented. - ![](https://asc.understandingaccounting.org/asc-img/GUID-BFA3E992-3F81-4CA1-8DE7-06845A6E93AC-low.gif) Contributed Nonfinancial Assets "Revenue Recognized" Utilization in Programs/Activities Donor Restrictions Valuation Techniques and Inputs Building "$550,000" General and Administrative No associated donor restrictions "In valuing the contributed building, which is located in Metropolitan Area B, NFP K estimated the fair value on the basis of recent comparable sales prices in Metropolitan Area B's real estate market. " Household goods "$95,556" Domestic Community Development; Community Shelters No associated donor restrictions NFP K estimated the fair value on the basis of estimates of wholesale values that would be received for selling similar products in the United States. Food "$85,407" Natural Disaster Services; Domestic Community Development; Community Shelters No associated donor restrictions NFP K estimated the fair value on the basis of estimates of wholesale values that would be received for selling similar products in the United States. Medical supplies "$90,389" Natural Disaster Services No associated donor restrictions NFP K estimated the fair value on the basis of estimates of wholesale values that would be received for selling similar products in the United States. Pharmaceuticals "$111,876" International Health Services; Natural Disaster Services Restricted to use outside the United States "In valuing contributed pharmaceuticals otherwise legally permissible for sale in the United States, NFP K used the Federal Upper Limit based on the weighted average of the most recently reported monthly Average Manufacturer Price (AMP), that approximate wholesale prices in the United States (that is, the principal market). In valuing pharmaceuticals not legally permissible for sale in the United States (and primarily consumed in developing markets), NFP K used third-party sources representing wholesale exit prices in the developing markets in which the products are approved for sale." Clothing "$85,765" Natural Disaster Services; Domestic Community Development; Community Shelters No associated donor restrictions "In valuing clothing, NFP K estimated the fair value on the basis of estimates of wholesale values that would be received for selling similar products in the United States. " Vehicles "$127,900" It is NFP K's policy to sell all contributed vehicles immediately upon receipt unless the vehicle is restricted for use in a specific program by the donor. All vehicles received were sold. No associated donor restrictions Proceeds from vehicles sold are valued according to the actual cash proceeds on their disposition. Services "$73,890" Various Administrative legal matters No associated donor restrictions Contributed services from attorneys are valued at the estimated fair value based on current rates for similar legal services. ### Transfers of Assets to a Not-for-Profit Entity or Charitable Trust That Raises or Holds Contributions for Others #### Implementation Guidance ##### [605-958-55-71](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-71) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:de462ca87f03f6b7e54dff4900ba61efc052cc2feac090d503a83060166adc6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transfer of assets may appear to be 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.") when a donor uses an [agent](https://asc.understandingaccounting.org/glossary/a/#agent "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."), a [trustee](https://asc.understandingaccounting.org/glossary/t/#trustee "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."), or an [intermediary](https://asc.understandingaccounting.org/glossary/i/#intermediary "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.") to transfer assets to a donee. Receipts of resources as an agent, trustee, or intermediary of a donor are not contributions received to the agent because the recipient of assets who is an agent or trustee has little or no discretion in determining how the assets transferred will be used. For the same reason, deliveries of resources as an agent, trustee, or intermediary of a donor are not contributions made by the agent. Similarly, contributions of services (time, skills, or expertise) between donors and donees that are facilitated by an intermediary are not contributions received or contributions made by the intermediary. ##### [605-958-55-72](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-72) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:3530b486af0325c62c5415491a6dc1dc1906ab57d3f228bca42a0aa9ee68b8c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples 1 through 11 (see paragraphs [958-605-55-80 through 55-115](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-80) ) illustrate the need to assess the relevant facts and circumstances to distinguish between the receipt of resources as a donee and the receipt of resources as an agent, a trustee, or an intermediary organization. ##### [605-958-55-73](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-73) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:22847cfdacc67527d951cc09efd2ac1586f5b772b3335023f95bf35ddaca7883 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following flowchart is a visual supplement to the written standards. It should not be interpreted to alter any requirements of the Transfers of Assets to a Not-for-Profit Entity or Charitable Trust that Raises or Holds Contributions for Others Subsections or of Subtopic 958-20, nor should it be considered a substitute for those requirements. The relevant paragraphs of the standards are identified in the parenthetical notes. Examples 1 through 11 (see paragraphs [958-605-55-80 through 55-115](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-80) ) illustrate the application of the standards in specific situations. ##### [605-958-55-74](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-74) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:475ff78c389fbae32ea2b6588ffa1f88f39716aba7d41c589ba7f6bb3ee82649 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The diagram depicts the process for determining the appropriate accounting for a transfer of assets from a donor to a [recipient entity](https://asc.understandingaccounting.org/glossary/r/#recipient-entity "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.") that accepts the assets and agrees to use those assets on behalf of a beneficiary specified by the donor or transfer those assets, the return on investment of those assets, or both to a beneficiary specified by the donor. (For additional information about how a beneficiary is specified, see paragraphs [958-605-55-76 through 55-78](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-76) .) The diagram also depicts the process for determining the appropriate accounting for a transfer from a resource provider that takes place in a similar manner but is not a contribution because the transfer is revocable, repayable, or reciprocal. - ![](https://asc.understandingaccounting.org/asc-img/GUID-7149F8AF-4D56-4C5F-AF0A-2014F2B31A06-low.gif) RESOURCE PROVIDER OR DONOR RECIPIENT ENTITY SPECIFIED BENEFICIARY "Transfer assets, including unconditional promises to give, to the recipient entity." Does the resource provider retain the right to redirect the assets to another beneficiary? Yes Debit: Refundable advance Debit: Asset No entry Credit: Asset or payable (paragraph 958-605-25-33) Credit: Refundable advance (paragraph 958-605-25-33) No Is the transfer accompanied by a conditional promise to give or otherwise revocable or repayable? Yes Debit: Refundable advance Debit: Asset No entry "Credit: Asset (paragraph 958-605-25-33)" Credit: Refundable advance (paragraph 958-605-25-33) No Does the resource provider control the recipient entity and specify an unaffiliated beneficiary? Yes Debit: Refundable advance Debit: Asset No entry Credit: Asset or payable (paragraph 958-605-25-33)(a) Credit: Refundable advance (paragraph 958-605-25-33)(a) No " No" Does the resource provider control the recipient entity and specify an unaffiliated beneficiary? Yes Does the transfer meet all of the criteria in paragraphs 958-605-25-4 through 25-7 (an equity transaction)? Yes Debit: Asset Debit: Asset No entry except the one on the books of the resource provider when it is also the beneficiary "Credit: Asset or payable (paragraph 958-605-25-33) " Credit: Liability to resource provider (paragraph 958-605-25-33) Yes Did the resource provider specify itself as beneficiary? Yes Debit: Interest in net assets of recipient entity Debit: Asset No entry except the one on the books of the resource provider "Credit: Equity transaction (a separate line item in its statement of activities) (paragraphs 958-605-45-1 through 45-2)" Credit: Asset or payable (paragraphs 958-605-25-4 through 25-7) No The resource provider specifies its affiliate as beneficiary. Debit: Equity transaction Debit: Asset Debit: Interest in net assets of recipient entity Credit: Credit: Asset or payable (a separate line item in its statement of activities) (paragraphs 958-605-45-1 through 45-2) "Credit: Equity transaction (a separate line item in its statement of activities) (paragraphs 958-605-45-1 through 45-2)" "Credit: Equity transaction (a separate line item in its statement of activities) (paragraphs 958-605-45-1 through 45-2)" Did the donor grant variance power to the recipient entity? Yes Debit: Expense Debit: Asset "No entry (paragraph 958-605-25-31)" "Credit: Asset or payable (Section 720-25-25)" "Credit: Contribution revenue (paragraphs 958-605-25-25 through 25-26)" No Are the recipient entity and the specified beneficiary financially interrelated entities? Yes Debit: Expense Debit: Asset Debit: Interest in net assets of recipient entity "Credit: Asset or payable (Section 720-25-25)" Credit: Contribution revenue (paragraph 958-20-25-1) (no entry is specified if the recipient entity is a trustee) "Credit: Change in interest in recipient entity (this entry is generally recorded periodically rather than contemporaneously \[paragraphs 958-605-25-28 through 25-30\])" No Is the asset transferred to the recipient entity cash or another financial asset? Yes Debit: Expense Debit: Asset Debit: Receivable or beneficial interest "Credit: Asset or payable (Section 720-25-25)" Credit: Liability (paragraph 958-605-25-23 or 958-605-25-24) (no entry is specified if the recipient entity is a trustee) Credit: Contribution revenue (paragraphs 958-605-25-28 through 25-30) No The transferred asset is a nonfinancial asset. Debit: Expense "No entry necessary (paragraph 958-605-25-23 or 958-605-25-24)" Debit: Receivable or beneficial interest "Credit: Asset or payable (Section 720-25-25)" Credit: Contribution revenue paragraphs 958-605-25-28 through 25-30) (a) "Until the transferred assets are beyond the control of the resource provider, the transaction shall be reported as an asset by the resource provider and a liability by the recipient entity (for example, as a refundable advance)." ##### [605-958-55-75](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-75) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ec3a47b42fb79ae683da8c1f605f589ff41933137c8db479f1b218135f070a20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Discretion to determine the timing of the distribution to the specified beneficiary, by itself, does not give the recipient entity discretion sufficient to recognize a contribution. That limited discretion is not sufficient. The ability to choose a payment date does not relieve an entity from its obligation to pay. ##### [605-958-55-76](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-76) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:52dc6163050d2509504fba2f81f81152c8e741a0f504ecf3e85059533d1e004c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A recipient entity has discretion sufficient to recognize a contribution received if it can choose the beneficiaries of the assets. For example, if a recipient receives cash that it must disburse to any who meet guidelines specified by a resource provider or return the cash, those receipts may be deposits held by the recipient as an agent rather than contributions received as a donee. Similarly, if a recipient receives cash that it must disburse to individuals identified by a resource provider or return the cash, neither the receipt nor the disbursement is a contribution for the agent, trustee, or intermediary. In contrast, if a resource provider allows the recipient to establish, define, and carry out the programs that disburse the cash, products, or services to the recipient's beneficiaries, the recipient generally is involved in receiving and making contributions. ##### [605-958-55-77](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-77) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:1dd25b0712529fb469e4ca0b6c3e1460448f41040674ec3301727bada86904ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, if a donor uses broad generalizations to describe beneficiaries or to indicate a field of interest, such as Midwestern flood victims, homeless individuals, or teenaged children, the recipient entity has the ability to choose the beneficiaries of the assets and is a donee. Similarly, the recipient entity has the ability to choose the beneficiaries if neither the language used by the donor nor the representations of the recipient entity cause the donor to believe that it can direct the gift to a specified beneficiary. For example, a recipient entity might request that a donor indicate a [not-for-profit entity](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) that best serves the needs of the community and tell the donor that the information will be considered by the allocation committee when it makes its distributions to NFPs in the community. If that request is conveyed in a manner that leads a donor to reasonably conclude that its role is merely to propose a possible allocation, the recipient entity has the discretion to choose the beneficiary of the assets. ##### [605-958-55-78](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-78) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:d0ef8a1b9ecc145361bb41c30835422d1572e0ac8217bb25214840316930005e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Conversely, if that request is conveyed in a manner that creates a donor's reasonable expectation that the gift will be used for the benefit of or will be transferred to the indicated beneficiary, the recipient entity does not have discretion to choose the beneficiary unless the donor explicitly grants [variance power](https://asc.understandingaccounting.org/glossary/v/#variance-power "The unilateral power to redirect the use of the transferred assets to another beneficiary. A donor explicitly grants variance power if the recipient entity's unilateral power to redirect the use of the assets is explicitly referred to in the instrument transferring the assets. Unilateral power means that the recipient entity can override the donor's instructions without approval from the donor, specified beneficiary, or any other interested party."). (See the following paragraph and paragraph [958-605-25-25](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-25).) A donor may specify the beneficiary by name, by stating that all entities that meet a set of donor-defined criteria are beneficiaries, or by actions surrounding the transfer that make clear the identity of the beneficiary, such as by responding to a request from a recipient entity that exists to raise assets for the beneficiary. ##### [605-958-55-79](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-79) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:db4a92087baa477af9d00e2d91e860449475d69692be951535b0fd91dc8d2d53 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A recipient entity may obtain the power to redirect the use of assets transferred to it through various means, including standard provisions in donor-choice forms or explicit donor [stipulation](https://asc.understandingaccounting.org/glossary/s/#stipulation "A statement by a donor that creates a condition or restriction on the use of transferred resources.") in gift instruments. For example, a community foundation may obtain the unilateral power to redirect the use of assets transferred to them through explicit reference to the variance power granted to them by donors in written gift instruments. The variance power may be explicitly referred to in the terms of the gift instrument and further explained in the community foundation's declaration of trust, articles of incorporation, or governing instruments. #### Illustrations ##### [605-958-55-80](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-80) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:9c487a46e234c44aa901aeae60b35fae5b14f5ee77a55ce11802b65dd63a5ca3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-605-25-28 through 25-32](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-28) . Not-for-Profit Entity A (NFP A) receives relief supplies from Individual with instructions to deliver the supplies to specified third-party beneficiaries. NFP A accepts responsibility for delivering those supplies because it has a distribution network and a mutual interest in serving the needs of the specified beneficiaries. NFP A has no discretion in determining the parties to be benefited; it must deliver the resources to the specified beneficiaries. Receipt of those goods is not a contribution received to NFP A, nor is the delivery of those goods to the beneficiaries a contribution made by NFP A. Rather, a contribution of goods is made by Individual and received by the third-party beneficiaries. ##### [605-958-55-81](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-81) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:fe107d3ed9745f7012f6192ba54d89c189f8c41f9094b62b4ea85832cf273d53 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [958-605-25-23](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-23). Not-for-Profit Entity B (NFP B) develops and maintains a list of lawyers and law firms that are interested in providing services without charge to charitable organizations and certain individuals. NFP B encourages individuals in need of free legal services to contact NFP B for referral to lawyers in the individual's community that may be willing to serve them. The decision about whether and how to serve a specific individual rests with the lawyer. Under those circumstances, NFP B merely acts as an intermediary in bringing together a willing donor and donee. The free legal services are not a contribution received by NFP B. ##### [605-958-55-82](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-82) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:4f93b996412e0380b08817c488f835e446c89d2ba288a80304f1feb24178688d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-08](https://asc.understandingaccounting.org/updates/asu-2018-08/). ##### [605-958-55-83](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-83) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:66ac0d27fb1b32b7345c5fe13a4a8a37daf6b530411bc8cba1e8041a6eb77add Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-605-25-24 through 25-25](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-24) . ##### [605-958-55-84](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-84) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:c316de58a1ad30e013bdf1816e9740ae9a728b3c1f814039029cbf281fd03f68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Federated Fundraising Organization D provides three choices to donors in its annual workplace campaign. Donors can give without restriction, direct their gifts to one of four community needs identified by Federated Fundraising Organization D, or specify that their gifts be transferred to an NFP of their choice. The campaign literature informs donors that if they choose to specify an NFP to which their gift should be transferred, the NFP must be a social welfare organization within the community that has tax-exempt status under Internal Revenue Code Section 501(c)(3). The campaign literature also provides a schedule of the administrative fees that will be deducted from all gifts that are to be transferred to the donor's chosen beneficiary. ##### [605-958-55-85](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-85) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ee783aa2770c988d4114bed07eba7df288deb1a0da1c06c591344c82d6fa76bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Federated Fundraising Organization D would recognize the following transactions: 1. a It would recognize the fair values of the gifts without donor restrictions as [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.") revenue that increases [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants)."). 2. b It would recognize the fair values of the gifts targeted to the four specified community needs as contribution revenue that increases [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants)."). 3. c It would recognize the fair values of gifts that are to be transferred to beneficiaries chosen by the donors as increases in its assets and as liabilities to those specified beneficiaries (see paragraph [958-605-25-24](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-24)). 4. d It would recognize as revenue the administrative fees withheld from amounts to be transferred to the donors' chosen beneficiary. However, if some of the gifts that are intended for specified beneficiaries are gifts of nonfinancial assets, Federated Fundraising Organization D would recognize those nonfinancial assets and its liability to transfer them to the specified beneficiaries if that were its policy; otherwise, it would recognize neither the nonfinancial assets nor a liability (see paragraph [958-605-25-24](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-24)). ##### [605-958-55-86](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-86) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:94835658e25e245412cc79dd6eb48f25107330b84c13785e2d40282c0c0a4ae6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The beneficiaries chosen by the donors would recognize the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of the transferred assets as contribution revenue in accordance with the provisions of paragraph [958-605-45-6](https://asc.understandingaccounting.org/asc/605/958/#605-958-45-6) for [unconditional promises to give](https://asc.understandingaccounting.org/glossary/u/#unconditional-promise-to-give "A promise to give that depends only on passage of time or demand by the promisee for performance."). Thus, the revenue would increase net assets with donor restrictions or net assets without donor restrictions, depending on the existence or absence of [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."). For example, if a donor specified that the transferred assets must be maintained in perpetuity, the revenue would increase net assets with donor restrictions. However, if the donor specified that the transferred assets are for current-period use, the revenue would increase net assets without donor restrictions. In accordance with paragraph [958-220-45-14](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-14), the beneficiaries would report the gross amounts of the gifts as contribution revenue and the administrative fees withheld by Federated Fundraising Organization D as expenses. The net amount would be recognized as a receivable (see paragraph [958-605-25-28](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-28)). ##### [605-958-55-87](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-87) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:1f42f65e9ee8afa84a0738249b7b4cce134674654c9e44d8aeb3c7959da174af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Instead of conducting the campaign as described in this Example, Federated Fundraising Organization D's campaign literature, including the form that donors use to specify a beneficiary, clearly states that if donors choose to give and specify a beneficiary, the allocation committee has the authority to redirect their gifts if the committee perceives needs elsewhere in the community that are greater. By giving under those terms, donors explicitly grant Federated Fundraising Organization D variance power. Thus, Federated Fundraising Organization D would recognize as contribution revenue without donor-imposed restrictions (see paragraph [958-605-25-25](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-25)), and the specified beneficiaries would be precluded from recognizing their potential for future distributions from the assets (see paragraph [958-605-25-31](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-31)). ##### [605-958-55-88](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-88) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:0c7be8355f86c3e0aa5ef8e3ec4a98dd2fa9684558e43adc0feac090cd67133b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-605-25-24 through 25-25](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-24) . ##### [605-958-55-89](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-89) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:2d595057c4908495ec80111d19fc1958f896dd63165336cdaf78336649d703db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The governing board of City Botanical Society E decides to raise funds to build an endowment. The governing board signs an agreement to establish a fund at Community Foundation F. Community Foundation F and City Botanical Society E are not [financially interrelated entities](https://asc.understandingaccounting.org/glossary/f/#financially-interrelated-entities "A recipient entity and a specified beneficiary are financially interrelated entities if the relationship between them has both of the following characteristics: One of the entities has the ability to influence the operating and financial decisions of the other. One of the entities has an ongoing economic interest in the net assets of the other."). City Botanical Society E solicits gifts to the fund. The campaign materials inform donors that the endowment will be owned and held by Community Foundation F. The materials explain that the gifts will be invested and that the return from their investment will be distributed to City Botanical Society E, subject to Community Foundation F's spending policy and to Community Foundation F's right to redirect the return to another beneficiary without the approval of the donor, City Botanical Society E, or any other party if distributions to City Botanical Society E become unnecessary, impossible, or inconsistent with the needs of the community. The donor-response card also clearly describes Community Foundation F's right to redirect the return of the fund. The campaign materials indicate that donors should send their contributions to Community Foundation F using a preaddressed envelope included for that purpose. ##### [605-958-55-90](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-90) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:d69c568bd5d6b15f0f63fb0ca2b9da16e6364db83f78d35eac51ffeba3021a91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Community Foundation F would recognize the fair value of gifts received as assets and as contribution revenue. The donors explicitly granted variance power by using a donor-response card that clearly states that gifts are subject to Community Foundation F's unilateral power to redirect the return to another beneficiary (see paragraph [958-605-25-25](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-25)). ##### [605-958-55-91](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-91) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:21635aed7a025201fd1c6e46761cff46f2ff5d9c61c76860c601fdbbedc110e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. City Botanical Society E is precluded from recognizing its potential rights to the assets held by Community Foundation F because the donors explicitly granted variance power (see paragraph [958-605-25-31](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-31)). City Botanical Society E would recognize only its annual grants from Community Foundation F as contributions. ##### [605-958-55-92](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-92) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:0b097b9be6704c8476d30c07ae04d54ec096aadf73e3e4d60ce1cd2fd6f16983 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether a donor intended to make a contribution to Community Foundation F may not be clear if the donor responds to the campaign materials by sending a contribution and the donor-response card directly to City Botanical Society E. City Botanical Society E could resolve the ambiguity by a review of the facts and circumstances surrounding the gift, communications with the donor, or both. If it is ultimately determined that the donor intended to make a gift to the fund owned and held by Community Foundation F and to explicitly grant variance power, City Botanical Society E would be an agent responsible for transferring that gift to Community Foundation F (see paragraph [958-605-25-24](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-24)). ##### [605-958-55-93](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-93) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:58a46b3192abac53d1fe8bc4805a50751daadc08c9d5a2ce8bb268130242488e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [958-605-25-23](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-23). ##### [605-958-55-94](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-94) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ebd461826e1466a102e5c97a4da78ff9e2d5d40d79c00288afe9f458f9384bf7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Local Church G transfers cash to Seminary H and instructs Seminary H to use the money to grant a scholarship to Individual, who is a parishioner of Local Church G. ##### [605-958-55-95](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-95) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:1e4220675c545210b717fd2c690e7359578e5ae3fc519ccf4cfee6b38f8e9a0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Seminary H would recognize the cash and a liability to Individual in the same amount because it merely is facilitating the cash transfer from Local Church G to Individual (see paragraph [958-605-25-23](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-23)). ##### [605-958-55-96](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-96) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:5fdb1e0eadacb3e04567bb96a6ec1015f80d9f81f895ef4c55fd829b409d0048 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [958-605-15-9](https://asc.understandingaccounting.org/asc/605/958/#605-958-15-9). ##### [605-958-55-97](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-97) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:2df73ddc380664eb0c783f8efd87d27d48c2426e22f67aa91db225f0284348f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Individual transfers assets to National Bank J to establish an irrevocable charitable trust for the sole benefit of Museum I. National Bank J will serve as trustee. Individual sets forth in the trust agreement the policies that direct the economic activities of the trust. The trust term is five years. Each year, the income received on the investments of the trust will be distributed to Museum I. At the end of Year 5, the corpus of the trust (original assets and net appreciation on those assets) will be paid to Museum I. ##### [605-958-55-98](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-98) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:0a3e3fae0958aef85288a151ed665401170e8afd604cba55d36d933ae24fe26c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Contribution Received Subsections of this Subtopic do not establish standards for the trustee, National Bank J (see paragraph [958-605-15-9](https://asc.understandingaccounting.org/asc/605/958/#605-958-15-9)). Because Museum I is unable to influence the operating or financial decisions of the trustee, Museum I and National Bank are not financially interrelated entities. Therefore, Museum I would recognize its asset (a beneficial interest in the trust) and contribution revenue that increases [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") (see paragraph [958-605-35-3](https://asc.understandingaccounting.org/asc/605/958/#605-958-35-3)). Museum I would measure its beneficial interest at fair value. That value generally can be measured by the fair value of the assets contributed to the trust. ##### [605-958-55-99](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-99) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:36d3b6a6d378dda6f236d3ae7d58c665e60a8f1c2df59d93de496410dab91a56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [958-20-15-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2). ##### [605-958-55-100](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-100) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:1adc3546112987a842b6e6269a9bda1840e4575ab58c913fe5c1ed9204746c99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some foundations and associations raise [contributions](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.") for a large number of unaffiliated NFPs, often referred to as member organizations. By virtue of their numbers, those member organizations generally do not individually influence the operating and financial decisions of the foundation (or association). Thus, any one member organization and the foundation (or association) are not financially interrelated entities (see paragraph [958-20-15-2\[a\]](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). Because the entities are not financially interrelated, the foundation (or association) recognizes a liability if a donor to the foundation (or association) specifies that the gift should be transferred to a particular member organization (see paragraph [958-605-25-4](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-4)). The specified member organization would recognize a receivable and contribution revenue that increases [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") or [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants)."), depending on the existence or absence of [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."). ##### [605-958-55-101](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-101) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:0a822ebc77f321ad944abb7fead0ea92db76875febb1b5e9f4c9f45eb1731d1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [958-605-25-4](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-4). ##### [605-958-55-102](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-102) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:af45a04a0b196b8bb3ccfbae4c2395093cf6fff651ee02bae109da1e93addd9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Individual transfers a car to Federated Fundraising Organization K and requests that the car be transferred to Local Daycare Center L. Individual specifies that Federated Fundraising Organization K may use the car for one year before transferring it to Local Daycare Center L. Local Daycare Center L is a member organization of Federated Fundraising Organization K, but that status does not confer any ability to actively participate in the policymaking processes of Federated Fundraising Organization K. ##### [605-958-55-103](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-103) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:ef0cc4c90c54ebc4b28b0a224e97221174021f254c6517a3b90a747b0ebf175d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because Federated Fundraising Organization K and Local Daycare Center L are not financially interrelated entities, Federated Fundraising Organization K would recognize the car as an asset and a liability to Local Daycare Center L if its policy were to recognize nonfinancial assets; otherwise, it would recognize neither the nonfinancial assets nor a liability (see paragraph [958-605-25-24](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-24)). ##### [605-958-55-104](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-104) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:212cf4adfe03225bd382cb74d056abd2e8afce0bd4d4f6b84d01d592e45944bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, instead of refusing the gift of the use of the car, Federated Fundraising Organization K decides to use it for a year before transferring it to Local Daycare Center L, Federated Fundraising Organization K would recognize the fair value of the gift of one-year's use of the car in accordance with paragraph [958-605-30-2](https://asc.understandingaccounting.org/asc/605/958/#605-958-30-2). The use of a car is a contributed asset and not a contributed service. ##### [605-958-55-105](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-105) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:0e0e05f78b1060f6022819417f21c899743024af4abf4e1bedf7de76b3c155c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Local Daycare Center L would recognize a receivable and [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.") revenue that increases [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") (see paragraph [958-605-25-30](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-30)). It would measure the contribution received at the fair value of the car; however, if Federated Fundraising Organization L chooses to use the car for a year before transferring it, the fair value would be reduced accordingly. ##### [605-958-55-106](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-106) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:e4a8593488070d53661d90980d2fef267702517bd304f1afab06d122da1388f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [958-605-25-33](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-33). ##### [605-958-55-107](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-107) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:65daa4bd9d17dd99f2c905941b1da5530b8d027c5fc626570c605916f9272795 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Symphony Orchestra M receives a large gift without donor restrictions of securities from Individual. Because it has no investment expertise, Symphony Orchestra M transfers the securities to Community Foundation N to establish an [endowment fund](https://asc.understandingaccounting.org/glossary/e/#endowment-fund "An established fund of cash, securities, or other assets to provide income for the maintenance of a not-for-profit entity (NFP). The use of the assets of the fund may be with or without donor-imposed restrictions. Endowment funds generally are established by donor-restricted gifts and bequests to provide a source of income in perpetuity or for a specified period. See Donor-Restricted Endowment Fund. Alternatively, an NFP's governing board may earmark a portion of its net assets as a Board-Designated Endowment Fund. See Funds Functioning as Endowment."). The agreement between Symphony Orchestra M and Community Foundation N states that the transfer is irrevocable and that the transferred assets will not be returned to Symphony Orchestra M. However, Community Foundation N will make annual distributions of the income earned on the endowment fund, subject to Community Foundation N's spending policy. The agreement also permits Community Foundation N to substitute another beneficiary in the place of Symphony Orchestra M if Symphony Orchestra M ceases to exist or if the governing board of Community Foundation N votes that support of Symphony Orchestra M either is no longer necessary or is inconsistent with the needs of the community. (That is, Symphony Orchestra M explicitly grants variance power to Community Foundation N.) The agreement does not permit either entity to appoint members to the other entity's governing board or otherwise participate in the policymaking processes of the other. ##### [605-958-55-108](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-108) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:2d53f34cdfc9738dffb2ec4a82b0245dc3943cd1cdb5902b86376591fecc18bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Community Foundation N would recognize the fair value of the transferred securities as an increase in investments and a liability to Symphony Orchestra M because Symphony Orchestra M transferred assets to Community Foundation N and specified itself as beneficiary (see paragraph [958-605-25-33(d)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-33)). The transfer is not an equity transaction because Community Foundation N and Symphony Orchestra M are not financially interrelated entities (see paragraph [958-20-25-4(b)](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4)). Symphony Orchestra M is unable to influence the operating or financial decisions of Community Foundation N (see paragraph [958-20-15-2(a)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). ##### [605-958-55-109](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-109) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:45019e78249a8e55713fc0f504e7be35781876a4537ea2899d692b2c9e67da7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Symphony Orchestra M would recognize the fair value of the gift of securities from Individual as contribution revenue. When it transfers the securities to Community Foundation N, it would recognize the transfer as a decrease in investments and an increase in an asset, for example, as a beneficial interest in assets held by Community Foundation N (see paragraph [958-605-25-33(d)](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-33)). Also, Symphony Orchestra M would disclose in its financial statements the identity of Community Foundation N, the terms under which Community Foundation N will distribute amounts to Symphony Orchestra M, a description of the variance power granted to Community Foundation N, and the aggregate amount reported in the statement of financial position and how that amount is described (see paragraph [958-605-50-6](https://asc.understandingaccounting.org/asc/605/958/#605-958-50-6)). ##### [605-958-55-110](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-110) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:1a163ae11270f34192db9a676b66cc9fcef83ddec46a97c9762a8e8213fd7c34 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a resource provider transfers assets to a recipient entity and specifies itself or its [affiliate](https://asc.understandingaccounting.org/glossary/a/#affiliate "A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control.") as the beneficiary, a presumption that the transfer is reciprocal, and therefore not 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."), is necessary even if the resource provider explicitly grants the recipient entity variance power. Thus, Symphony Orchestra M would recognize an asset and Community Foundation N would recognize a liability because the transaction is deemed to be reciprocal. Symphony Orchestra M transfers its securities to Community Foundation N in exchange for future distributions. Community Foundation N, by its acceptance of the transfer, agrees that at the time of the transfer distributions to Symphony Orchestra M are capable of fulfillment and consistent with the foundation's mission. Although the fair value of those future distributions may not be commensurate with the fair value of the securities given up (because Symphony Orchestra M is at risk of cessation of the distributions), the transaction is accounted for as though those values are commensurate. In comparison, the donors to Community Foundation F in Example 5 (see paragraph [958-605-55-88](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-88)) explicitly grant variance power to Community Foundation F in a [nonreciprocal transfer](https://asc.understandingaccounting.org/glossary/n/#nonreciprocal-transfer "A transaction in which an entity incurs a liability or transfers an asset to another entity (or receives an asset or cancellation of a liability) without directly receiving (or giving) value in exchange."). In that Example, it is clear that the donors have made a contribution because they retain no beneficial interests in the transferred assets. Because the donors in that Example explicitly grant variance power to Community Foundation F, it, rather than City Botanical Society E, is the recipient of that contribution. ##### [605-958-55-111](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-111) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:73375ca0e5c2735613fce86b34899369559232d59315b8423be1d07beee4b9c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [958-605-25-33](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-33). ##### [605-958-55-112](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-112) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:aa6ed1a1e827df18aeebb53ec37710b95ac40654bac733eec52ea5f23c2d4660 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The governing board of Private Elementary School O creates a foundation to hold and manage the school's investments. It transfers its investment portfolio to the newly created PES Foundation P. An agreement between Private Elementary School O and PES Foundation P allows the school to request distributions from both the original investments and the return on those investments, subject to approval by the governing board of PES Foundation P, which will not be unreasonably withheld. The agreement also permits Private Elementary School O to transfer additional investments in the future. ##### [605-958-55-113](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-113) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:f961a56762fb899a1e15d31a35175dcc59b48ad8ec9f778f77cc7f639c43f4be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. PES Foundation P would recognize the fair value of the investments as assets and a liability to Private Elementary School O because Private Elementary School O transferred assets to PES Foundation P and specified itself as beneficiary (see paragraph [958-605-25-33\[d\]](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-33)). The transfer of assets is not an equity transaction because Private Elementary School O expects repayment of the transferred assets, and thus the transaction does not meet the criterion in paragraph [958-20-25-4(c)](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4). ##### [605-958-55-114](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-114) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:5c634febf52fc38e06c35b31023587a68bf60c929cf44f89b135919d42e06683 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Private Elementary School O would decrease its investments and recognize another asset, for example, a beneficial interest in assets held by PES Foundation P (see paragraph [958-605-25-33\[d\]](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-33)). Also, Private Elementary School O would disclose in its financial statements the identity of PES Foundation P, the terms of the agreement under which it can receive future distributions, including the fact that the distributions are not subject to variance power, and the aggregate amount reported in the statement of financial position and how that amount is described (see paragraph [958-605-50-6](https://asc.understandingaccounting.org/asc/605/958/#605-958-50-6)). ##### [605-958-55-115](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-115) Pending content: no Source downloaded (UTC): 2026-09-10T00:51:49.276Z to 2026-09-10T00:51:49.276Z Record version: sha256:c37a42457ccc142a4df72854ca7be1776d23425c37d537ff25f5f828d74ec460 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Subtopic 958-20 if Private Elementary School O and PES Foundation P are financially interrelated entities.