# ASC 720-958: Other Expenses — Not-for-Profit Entities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/958/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:12:58.744Z to 2026-09-10T01:13:26.933Z Record version: sha256:40a7cc616233b1442f0332c9302595ce1441d284f2a5089af20741dd5fde63df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958: Other Expenses — Not-for-Profit Entities ### Machine-generated study aids ```json { "summary": "ASC 720-958 (cross-referenced as 958-720) governs how not-for-profit entities report expenses: by functional classification (program services and supporting activities such as management and general, fundraising, and membership development) and by natural classification, with a required analysis linking the two. It also sets the purpose/audience/content criteria that must all be met before joint costs of an activity that includes fundraising may be allocated to program or management and general rather than charged entirely to fundraising, and requires a recipient NFP to recognize services received from personnel of an affiliate that the affiliate does not charge for.", "key_points": [ "An NFP must report information about all expenses in one location—on the face of the statement of activities, in a note schedule, or in a separate statement—in an analysis that disaggregates functional expense classifications by natural classifications such as salaries, rent, interest, and depreciation (958-720-45-15).", "Costs of fundraising activities, including special fundraising events and direct-response solicitations that will generate future contributions, are expensed as incurred (958-720-25-4); fundraising by NFPs is not advertising (958-720-25-5).", "Costs representing direct conduct or direct supervision of program or other supporting activities must be allocated out of management and general, and shared costs such as information technology are allocated among the functions receiving direct benefit (958-720-45-2A; 958-720-45-8).", "For joint activities, if the purpose, audience, and content criteria are all met, identifiable costs are charged to their function and joint costs are allocated between fundraising and program or management and general; if any criterion fails, all costs are charged to fundraising except costs of goods or services provided in exchange transactions such as direct donor benefits (958-720-45-29).", "The purpose criterion requires a call for specific action by the audience that helps accomplish the mission (educating the public about causes or asking for contributions is not enough) and is tested in order: compensation or fees test, separate and similar activities test, then other evidence test (958-720-45-33 through 45-47).", "A rebuttable presumption exists that the audience criterion is not met if the audience includes prior donors or is selected based on ability or likelihood to contribute; it is overcome only if the audience is also selected for the reasons in 958-720-45-49 (958-720-45-48).", "Services received from personnel of an affiliate that the affiliate does not charge for must be recognized and measured at the affiliate's cost (including direct personnel costs), with an election to use fair value if cost would significantly over- or understate the service, and may not be presented as a contra-expense or contra-asset (958-720-25-9; 30-2; 30-3; 45-56)." ], "categories": [ "Not-for-profit", "Presentation", "Disclosure", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "Exam questions almost always hinge on the joint-cost allocation gate: all three criteria (purpose, audience, content) must be met or 100% of the activity's cost is charged to fundraising. The most common misunderstanding is thinking \"educating the public about causes\" counts as a program call to action—it does not; the message must ask the audience to take a specific mission-advancing action, and disclosure of allocated joint costs is mandatory.", "related_topics": [ "958-205", "958-220", "958-605", "720-35", "720-25", "850-10" ], "key_concepts": [ "functional expense classification", "natural expense classification", "joint costs", "purpose audience and content criteria", "fundraising expense", "management and general activities", "services received from personnel of an affiliate", "program services" ] } ``` Source downloaded (UTC): 2026-09-10T01:12:58.744Z to 2026-09-10T01:12:58.744Z Record version: sha256:ca1d7d41493709e546ea0c13be621d959fee513dbc8d27f7a4db8494f75ed351 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/720/958/#00-status) SEC content: no ##### [720-958-00-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:12:58.744Z to 2026-09-10T01:12:58.744Z Record version: sha256:e0578c087a3c363c82613ac3a086220e5b96f7b22188912f39f8f6a1ed31022b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
AffiliateAmendedMaintenance Update 2018-12 (PDF)09/10/2018
AffiliateAddedAccounting Standards Update No. 2013-0604/19/2013
Conditional ContributionAddedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2010-0701/28/2010
Donor-Imposed ConditionAddedAccounting Standards Update No. 2018-0806/21/2018
Functional ClassificationSupersededAccounting Standards Update No. 2016-1408/18/2016
Functional Expense ClassificationAddedAccounting Standards Update No. 2016-1408/18/2016
Management and General ActivitiesAmendedAccounting Standards Update No. 2016-1408/18/2016
Natural Expense ClassificationAmendedAccounting Standards Update No. 2024-0311/04/2024
Natural Expense ClassificationAmendedAccounting Standards Update No. 2016-1408/18/2016
Natural Expense ClassificationAddedAccounting Standards Update No. 2014-0603/14/2014
Unconditional Promise to GiveSupersededAccounting Standards Update No. 2018-0806/21/2018
958-720-05-1AmendedAccounting Standards Update No. 2013-0604/19/2013
958-720-05-7AddedAccounting Standards Update No. 2013-0604/19/2013
958-720-15-6 through 15-8
AddedAccounting Standards Update No. 2013-0604/19/2013
958-720-25-1AmendedAccounting Standards Update No. 2018-0806/21/2018
958-720-25-2SupersededAccounting Standards Update No. 2018-0806/21/2018
958-720-25-5AmendedAccounting Standards Update No. 2014-0905/28/2014
958-720-25-6SupersededAccounting Standards Update No. 2014-0905/28/2014
958-720-25-8SupersededAccounting Standards Update No. 2014-0905/28/2014
958-720-25-9AddedAccounting Standards Update No. 2013-0604/19/2013
958-720-30-1AmendedAccounting Standards Update No. 2018-0806/21/2018
958-720-30-2AddedAccounting Standards Update No. 2013-0604/19/2013
958-720-30-3AddedAccounting Standards Update No. 2013-0604/19/2013
958-720-45-1 through 45-3
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-720-45-2AmendedMaintenance Update 2020-18 (PDF)11/25/2020
958-720-45-2AmendedMaintenance Update 2015-11 (PDF)06/19/2015
958-720-45-2AAddedAccounting Standards Update No. 2016-1408/18/2016
958-720-45-7AmendedAccounting Standards Update No. 2016-1408/18/2016
958-720-45-7AmendedAccounting Standards Update No. 2012-0410/01/2012
958-720-45-8AmendedAccounting Standards Update No. 2016-1408/18/2016
958-720-45-13AmendedAccounting Standards Update No. 2012-0410/01/2012
958-720-45-14AmendedAccounting Standards Update No. 2012-0410/01/2012
958-720-45-15AmendedAccounting Standards Update No. 2018-0907/16/2018
958-720-45-15AmendedAccounting Standards Update No. 2016-1408/18/2016
958-720-45-15AmendedAccounting Standards Update No. 2014-0603/14/2014
958-720-45-16SupersededAccounting Standards Update No. 2016-1408/18/2016
958-720-45-16AmendedAccounting Standards Update No. 2014-0603/14/2014
958-720-45-23AmendedMaintenance Update 2018-12 (PDF)09/10/2018
958-720-45-56AmendedAccounting Standards Update No. 2020-1010/29/2020
958-720-45-56AddedAccounting Standards Update No. 2013-0604/19/2013
958-720-50-1AmendedAccounting Standards Update No. 2016-1408/18/2016
958-720-50-3AddedAccounting Standards Update No. 2013-0604/19/2013
958-720-55-1SupersededAccounting Standards Update No. 2018-0806/21/2018
958-720-55-1AAddedAccounting Standards Update No. 2018-0806/21/2018
958-720-55-1BAddedAccounting Standards Update No. 2018-0806/21/2018
958-720-55-166AmendedAccounting Standards Update No. 2016-1408/18/2016
958-720-55-169AmendedAccounting Standards Update No. 2016-1408/18/2016
958-720-55-171 through 55-176
AddedAccounting Standards Update No. 2016-1408/18/2016
958-720-65-1AddedAccounting Standards Update No. 2013-0604/19/2013
Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:7a88cb4352b4a16f4ed6f1fd8bfba1ba43b633a6e8f5a5692cde1d961eeae973 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/720/958/#05-overview-and-background) SEC content: no ##### [720-958-05-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:d7018b36b358c6ed983aac1642c4329895255ae6cb731611533560a50a8c208e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on reporting expenses for [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs). The guidance in this Subtopic is presented in the following three Subsections: 1. a General 2. b Accounting for Costs of Activities that Include Fundraising 3. c Services Received from Personnel of an Affiliate. ##### [720-958-05-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:3fe8a25bb98f8a9669e5cca899980d06dd6668e94ea7326cb85005918124ba67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide incremental guidance on the following subjects: 1. a The functional classification of expenses 2. b The natural classification of expenses 3. c [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.") made 4. d Fundraising costs 5. e Premium costs 6. f Advertising costs 7. g Reductions in amounts charged for goods and services (discounts) 8. h Cost of sales 9. i Costs of occupancy and maintenance 10. j Interest costs 11. k Payments to affiliated NFPs 12. l Expenses of federated fundraising organizations. ##### [720-958-05-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:807f7652ae7b4989cf61ecd0ab7ae05b78577cd61f4127b227b8f2d5a841cd73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For additional information about the presentation of expenses in a statement of activities, see Section 958-220-45. ##### [720-958-05-4](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:5b95f63fb1ab10a455df65ff15c5e42b6bdd43e16717007e8f10105f2c37cc3e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP produces and distributes goods and services by using resources. It obtains some of the resources it uses by paying cash, some by incurring liabilities, and some by contribution. Some of its resources (assets) are used up in providing services at the time they are received, others are used up at a later date, and still others are used up gradually over time. Using up assets in providing services (or otherwise) has a cost whether those assets have been acquired in prior periods or in the current period and whether acquired by paying cash, incurring liabilities, or by contribution. To help explain the relationships of an NFP's ongoing major or central operations and activities, a statement of activities shall report the gross amounts of revenues and expenses pursuant to paragraph [958-220-45-14](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-14). To help donors, creditors, and others in assessing an NFP's service efforts, including the costs of its services and how it uses resources, a statement of activities or notes to financial statements shall provide information about expenses reported by their functional classification such as major classes of [program services](https://asc.understandingaccounting.org/glossary/p/#program-services "The activities that result in goods and services being distributed to beneficiaries, customers, or members that fulfill the purposes or mission for which the not-for-profit entity (NFP) exists. Those services are the major purpose for and the major output of the NFP and often relate to several major programs.") and [supporting activities](https://asc.understandingaccounting.org/glossary/s/#supporting-activities "Supporting activities are all activities of a not-for-profit entity (NFP) other than program services. Generally, they include the following: Management and general activities Fundraising activities Membership development activities."). ### Accounting for Costs of Activities that Include Fundraising ##### [720-958-05-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:5aaeadf93abe677c2954c22119b41cec58c9d98dd03b327fed3b7f3d1aaeeab6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Accounting for Costs of Activities that Include Fundraising Subsections provide guidance for reporting costs as program or management and general in circumstances in which those [activities](https://asc.understandingaccounting.org/glossary/a/#activities "Activities are efforts to accomplish specific objectives. Some activities include producing and distributing materials. For example, if a not-for-profit entity (NFP) undertakes a mass mailing that includes a letter and a pamphlet, producing and distributing the letter and pamphlet are part of the activity. Other activities may include no materials, such as an annual dinner or a radio commercial.") are combined with [fundraising activities](https://asc.understandingaccounting.org/glossary/f/#fundraising-activities "Activities undertaken to induce potential donors to contribute money, securities, services, materials, facilities, other assets, or time."). Some [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs) solicit support through a variety of fundraising activities, including the following: 1. a Direct mail 2. b Telephone solicitation 3. c Door-to-door canvassing 4. d Telethons 5. e Special events 6. f Others. Sometimes fundraising activities are conducted with activities related to other functions, such as program activities or supporting services, such as [management and general activities](https://asc.understandingaccounting.org/glossary/m/#management-and-general-activities "Supporting activities that are not directly identifiable with one or more program, fundraising, or membership-development activities."). Sometimes fundraising activities include components that would otherwise be associated with program or supporting services, but in fact support fundraising. The Accounting for Costs of Activities that Include Fundraising Subsections establish financial accounting standards for accounting for costs of those joint activities and require financial statement disclosures about the nature of the activities for which [joint costs](https://asc.understandingaccounting.org/glossary/j/#joint-costs "The costs of conducting joint activities that are not identifiable with a particular component of the activity. For example, the cost of postage for a letter that includes both fundraising and program components is a joint cost. Joint costs may include the following costs: Salaries Contract labor Consultants Professional fees Paper Printing Postage Event advertising Telephones Airtime Facility rentals.") have been allocated and the amounts of joint costs. ##### [720-958-05-6](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:fc24c20acfb576b0ea909aab9eeb6add5e4176bd2a2d20bd8dc0360c9abfc4ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The functional classifications of fundraising, program, and management and general are discussed throughout the Accounting for Costs of Activities that Include Fundraising Subsections for purposes of illustrating how the guidance in these Subsections would be applied by NFPs that use those functional classifications. Some entities have a functional structure that does not include fundraising, program, or management and general, or that includes other functional classifications, such as membership development. Use of those functional classifications is not intended to require reporting the functional classifications of fundraising, program, and management and general. ### Services Received from Personnel of an Affiliate ##### [720-958-05-7](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:01.081Z to 2026-09-10T01:13:01.081Z Record version: sha256:997858e94ba702b7127c7b9eaf4278fbd1a84ab3b1304b12365b9a55daa1af98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Services Received from Personnel of an Affiliate Subsections provide guidance for reporting services 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) from personnel of an [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.") that directly benefit the recipient NFP and for which the affiliate does not charge the recipient NFP. Charging the recipient NFP means requiring payment from the recipient NFP at least for the approximate amount of the direct personnel costs (for example, compensation and any payroll-related fringe benefits) incurred by the affiliate in providing a service to the recipient NFP or the approximate fair value of that service. Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:77492de3c92ba64acdf92b7508b3997f1d12abad60c75db7adc03de4d3730fe7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/720/958/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [720-958-15-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:101b7eeadcfc2f6ea2fd2c3b6b30b9f5afa082cb9d01cac4a1b16c4cb5c68df2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15. ##### [720-958-15-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:d6ecf34d6b65a9f29e8d88e872cc3fd483f50ba1d13f2c1f262616e63c0575f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific exceptions noted in the other Subsections of this Section. ### Accounting for Costs of Activities that Include Fundraising ##### [720-958-15-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:6267ae528ce701645248a9fe29fafe84b042060df4cb4e94436efe3491fd84ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Accounting for Costs of Activities that Include Fundraising Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [958-720-15-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-1), with specific exceptions noted below. #### Entities ##### [720-958-15-4](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:c0aa01323acc93a06d034e80604cb53cebf74c25b282dca85e9c3d07b7ec79fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Accounting for Costs of Activities that Include Fundraising Subsections applies to all [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs) that solicit [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."). #### Transactions ##### [720-958-15-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:062e056e907e3505ad58d35bb36444f3a2d71284bcfa418c93f565a3f7ade4f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Accounting for Costs of Activities that Include Fundraising Subsections applies only to [costs of joint activities](https://asc.understandingaccounting.org/glossary/c/#costs-of-joint-activities "Costs incurred for a joint activity. Costs of joint activities may include joint costs and costs other than joint costs. Costs other than joint costs are costs that are identifiable with a particular function, such as fundraising, program, management and general, and cost of sales. For example, some costs incurred for printing, paper, professional fees, and salaries to produce donor cards are not joint costs, although they may be incurred in connection with conducting joint activities."). The guidance does not address allocations of costs in other circumstances. ### Services Received from Personnel of an Affiliate #### Overall Guidance ##### [720-958-15-6](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:42234c755c385e790b7c45f31541260feb844937d285317e7aa5ad9cf2a36ec9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Services Received from Personnel of an Affiliate Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsections of this Subtopic, see paragraph [958-720-15-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-1), with specific exceptions noted below. #### Entities ##### [720-958-15-7](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:0a45c641381259dfbd88724b3b612d2816f78f3662bbc7ec249f1b09fb79490f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Services Received from Personnel of an Affiliate Subsections applies to all [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs) that receive services from personnel of an [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.") that directly benefit the recipient NFP and for which the affiliate does not charge the recipient NFP. #### Transactions ##### [720-958-15-8](https://asc.understandingaccounting.org/asc/720/958/#720-958-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:02.797Z to 2026-09-10T01:13:02.797Z Record version: sha256:2fb27f5cf30ad7c4c383372f098ed29bd181b0eaccaaf9425fd8528a099cfeec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Services Received from Personnel of an Affiliate Subsections applies to services received from personnel of an affiliate that directly benefit the recipient NFP and for which the affiliate does not charge the recipient NFP. Charging the recipient NFP means requiring payment from the recipient NFP at least for the approximate amount of the direct personnel costs (for example, compensation and any payroll-related fringe benefits) incurred by the affiliate in providing a service to the recipient NFP or the approximate fair value of that service. The guidance does not address transactions between affiliates for which the affiliate charges the recipient NFP at least for the approximate amount of direct personnel costs or the approximate fair value of the services provided. Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:8457f605a1c36127d084a8fc79924adf44946cb2d80afe5aa7c4b99a636a5bb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/720/958/#25-recognition) SEC content: no #### Contributions Made ##### [720-958-25-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:1c51ef3ce0d6eb2f205dd4c6fa9c754557c97008572439aa0808f6dadbce85ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) shall comply with the applicable guidance in Subtopic 720-25, as well as the following guidance. For guidance on promises to give, see Subtopic 958-405 on not-for-profit entities—liabilities. ##### [720-958-25-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:217e4540adace6a6d1b8dd3808a6155afe92b4fc50d243fc575284426089da63 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/). ##### [720-958-25-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:faa73d8097e2b1dc12e28981e7da927326d01cb48863d24dcfa7d17f66c0e5ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an NFP makes [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.") or awards grants to other NFPs upon specific requests of others, the NFP may be acting as 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."), [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 [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.") in a transfer between the donor and the beneficiary specified by the donor ([agency transaction](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.")) (see paragraph [958-605-25-24](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-24)). #### Fundraising Costs ##### [720-958-25-4](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:33b2a437df17f53452df7065acd97b6b25bc71207f56aa9967e89954852acdd0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs of [fundraising activities](https://asc.understandingaccounting.org/glossary/f/#fundraising-activities "Activities undertaken to induce potential donors to contribute money, securities, services, materials, facilities, other assets, or time."), including the cost of special fundraising events, shall be expensed as incurred. Costs are incurred when the item or service has been received. Fundraising costs incurred in one period, such as those made to obtain bequests, compile a mailing list of prospective contributors, or solicit contributions in a direct-response activity, may result in contributions that will be received in future periods. Those costs also shall be expensed as incurred. #### Advertising Costs ##### [720-958-25-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:0b731d5c8ca48ff76149824ce6a8d72d8776cff7c1e5b619035fc24165950d57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP shall comply with the guidance in Subtopic 720-35 applicable to its advertising [activities](https://asc.understandingaccounting.org/glossary/a/#activities "Activities are efforts to accomplish specific objectives. Some activities include producing and distributing materials. For example, if a not-for-profit entity (NFP) undertakes a mass mailing that includes a letter and a pamphlet, producing and distributing the letter and pamphlet are part of the activity. Other activities may include no materials, such as an annual dinner or a radio commercial."). Fundraising by NFPs is not considered advertising and is not within the scope of that Subtopic. ##### [720-958-25-6](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:63128fb2f7dd68d00cdbe10e7d32014b82b2b2e2178c36ba0205837bd00c8275 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). #### Reductions in Amounts Charged for Goods or Services ##### [720-958-25-7](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:174ba85bb1b14871d69796d7e2a2bf6c2be79d974a3ce740c486be6410f5f878 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Reductions in amounts charged for goods or services provided by an NFP shall be reported as expenses if such reductions are given in exchange for goods or services provided to the NFP, such as part of a [compensation](https://asc.understandingaccounting.org/glossary/c/#compensation "Reciprocal transfers of cash or other assets in exchange for services performed.") package. ##### [720-958-25-8](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:b1b6b4ffd3c32619d157b7cc1369f7d7a1c42e36dab910a3f5481be167bb1a38 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ### Services Received from Personnel of an Affiliate ##### [720-958-25-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:10.551Z to 2026-09-10T01:13:10.551Z Record version: sha256:6fbc1e6ddaa36c2480f692ae7aef5e776331fb211ad89263ca9e331605a18513 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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) shall recognize all services received from personnel of an [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.") that directly benefit the recipient NFP (that is, are similar to personnel directly engaged by the recipient NFP). For example, that would include services performed by personnel of an affiliate for and under the direction of the recipient NFP and shared services. Shared services generally refers to services provided by a centralized function of one or more individuals within the affiliate group that the recipient NFP would otherwise typically need to purchase or have donated, if not provided by those personnel. Source downloaded (UTC): 2026-09-10T01:13:13.365Z to 2026-09-10T01:13:13.365Z Record version: sha256:53ae16cdf720d344c300664f21ba78013722c2045b288f3383533a1213910d61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/720/958/#30-initial-measurement) SEC content: no #### Contributions Made ##### [720-958-30-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:13.365Z to 2026-09-10T01:13:13.365Z Record version: sha256:2a098b5c19d44ab74eceb874c658d306b0fb0721ca36daa2126822eca3491cba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability and an expense recognized under paragraph [958-720-25-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-1) shall be measured initially at [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."). ### Services Received from Personnel of an Affiliate ##### [720-958-30-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:13.365Z to 2026-09-10T01:13:13.365Z Record version: sha256:306780ce90efb35ac0df5cf82274da36ac1e5669f1401a7cfe8fc1fbe2cdc39b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Services received from personnel of an [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.") that directly benefit the recipient [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 for which the affiliate does not charge the recipient NFP shall be measured by the recipient NFP at the cost recognized by the affiliate in providing those services, except as provided in the following paragraph. Although the components of cost would depend on the nature and type of services provided and could vary from entity to entity, cost should include the direct personnel costs (for example, compensation and any payroll-related fringe benefits) incurred by the affiliate in providing the services to the recipient NFP. ##### [720-958-30-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:13.365Z to 2026-09-10T01:13:13.365Z Record version: sha256:9cd2858501a7b17c96a750b978656e5227ed1dc28e1f09b9127962109c35aa66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If recording a service received from personnel of an affiliate at the cost recognized by the affiliate for the personnel providing that service will significantly overstate or understate the value of the service received, the recipient NFP may elect to recognize that service at either of the following: 1. a The cost recognized by the affiliate for the personnel providing that service 2. b The fair value of that service. Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:ee89d5b7482540fa97ccb58b9e2261aeee64628b1f29bda306a112a2ba29c28f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/720/958/#45-other-presentation-matters) SEC content: no ##### [720-958-45-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:88f05c931a81c8543a300e302614e388c1c336dcefd722168354e2e6e6a72bdb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection provides guidance on the reporting of expenses incurred by [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs) as follows: 1. a Functional classification of expenses 2. b Analysis of expenses by their nature and function 3. c Classification of particular costs. For additional guidance on reporting under these classifications see Section 958-205-45. #### Functional Classification of Expenses ##### [720-958-45-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:c3a07993981e99f6bed8cdc7d539a64e0bf66b5efd37700ac18ed56acf2dc81f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To help donors, creditors, and others in assessing an NFP's service efforts, including the costs of its services and how it uses resources, a statement of activities or notes to financial statements shall provide information about expenses reported by their [functional expense classification](https://asc.understandingaccounting.org/glossary/f/#functional-expense-classification "A method of grouping expenses according to the purpose for which costs are incurred. The primary functional classifications of a not-for-profit entity are program services and supporting activities."), such as major classes of [program services](https://asc.understandingaccounting.org/glossary/p/#program-services "The activities that result in goods and services being distributed to beneficiaries, customers, or members that fulfill the purposes or mission for which the not-for-profit entity (NFP) exists. Those services are the major purpose for and the major output of the NFP and often relate to several major programs.") and [supporting activities](https://asc.understandingaccounting.org/glossary/s/#supporting-activities "Supporting activities are all activities of a not-for-profit entity (NFP) other than program services. Generally, they include the following: Management and general activities Fundraising activities Membership development activities."), for example: 1. a Program services 2. b Supporting activities, which often include one or more of the following: 1. 1 [Management and general activities](https://asc.understandingaccounting.org/glossary/m/#management-and-general-activities "Supporting activities that are not directly identifiable with one or more program, fundraising, or membership-development activities.") 2. 2 [Fundraising activities](https://asc.understandingaccounting.org/glossary/f/#fundraising-activities "Activities undertaken to induce potential donors to contribute money, securities, services, materials, facilities, other assets, or time.") 3. 3 [Membership development activities](https://asc.understandingaccounting.org/glossary/m/#membership-development-activities "Membership development activities include soliciting for prospective members and membership dues, membership relations, and similar activities. However, if there are no significant benefits or duties connected with membership, the substance of membership development activities may, in fact, be fundraising."). ##### [720-958-45-2A](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-2A) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:3e8fd289299ba50060d506c1b02f7100468807924e15de51c775eb7f07e9392f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Activities that represent direct conduct or direct supervision of program or other supporting activities require allocation from management and general activities. Additionally, certain costs benefit more than one function and, therefore, shall be allocated. For example, information technology generally can be identified as benefiting various functions, such as management and general (for example, accounting and financial reporting and human resources), fundraising, and program delivery. Therefore, information technology costs generally would be allocated among the functions receiving direct benefit. ##### [720-958-45-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:04181ca172ebcecd3f8b4a99d743c279ca73e6d9b237cfedb660fb1bfb3e7a31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Program services are the activities that result in goods and services being distributed to beneficiaries, customers, or members that fulfill the purposes or mission for which the NFP exists. Those services are the major purpose for and the major output of the NFP and often relate to several major programs. For example, a large university may have programs for student instruction, research, and patient care, among others. Similarly, a health and welfare entity may have programs for health or family services, research, disaster relief, and public education, among others. A federated fundraising entity's programs may include making [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.") to NFPs supported by the federated fundraising entity. Paragraphs [280-10-50-1 through 50-19](https://asc.understandingaccounting.org/asc/280/10/#280-10-50-1) , although not required of NFPs, may be helpful in determining what constitutes major classes of programs and supporting activities. ##### [720-958-45-4](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:27fdce3163cc86a74ebf2a0ae890e5e2bb7e48f94ddbeab41fdba94836c781b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information about an NFP's major programs (or segments) can be enhanced by reporting the interrelationships of program expenses and program revenues. For example, a university might report expenses for its instruction and other academic services with related revenues from student tuition and expenses for its housing and food services with related revenues from room and board [fees](https://asc.understandingaccounting.org/glossary/f/#fees "See Compensation."). Related nonmonetary information about program inputs, outputs, and results also is helpful; for example, information about applications, acceptances, admissions, enrollment and occupancy rates, and degrees granted. Generally, reporting that kind of information is feasible only in supplementary information or management explanations or by other methods of financial reporting. ##### [720-958-45-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:085223b37243086b32d51c6b77bf7e9b29bbb0b9979468141344896561428ba5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The components of total program expenses shall be evident from the details provided on the face of the statement of activities, unless the notes to financial statements provide the information in paragraph [958-720-50-1(b)](https://asc.understandingaccounting.org/asc/720/958/#720-958-50-1). ##### [720-958-45-6](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:0b56fc50b0c81226685acfc3121746a6f3e89e970f8b5ab9b5322e16b040f5bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Supporting activities are all activities of an NFP other than program services. Generally, supporting activities include the following activities: 1. a [Management and general activities](https://asc.understandingaccounting.org/glossary/m/#management-and-general-activities "Supporting activities that are not directly identifiable with one or more program, fundraising, or membership-development activities.") 2. b [Fundraising activities](https://asc.understandingaccounting.org/glossary/f/#fundraising-activities "Activities undertaken to induce potential donors to contribute money, securities, services, materials, facilities, other assets, or time.") 3. c [Membership development activities](https://asc.understandingaccounting.org/glossary/m/#membership-development-activities "Membership development activities include soliciting for prospective members and membership dues, membership relations, and similar activities. However, if there are no significant benefits or duties connected with membership, the substance of membership development activities may, in fact, be fundraising."). ##### [720-958-45-7](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:0454309a876c5c792f1a3c9ee6b2dc699a2b10ab0151abfeccfb2451e0919bdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management and general activities include the following: 1. a Oversight 2. b Business management 3. c General recordkeeping and payroll 4. d Budgeting 5. e Financing, including unallocated interest costs pursuant to paragraph [958-720-45-24](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-24) 6. f Soliciting funds other than [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.") and membership dues, for example, the costs associated with: 1. 1 Promoting the sale of goods or services to customers, including advertising costs 2. 2 Responding to government, foundation, and other requests for proposals for customer-sponsored contracts for goods and services 7. ff Administering government, foundation, and similar customer-sponsored contracts, including billing and collecting fees and grant and contract financial reporting 8. g Disseminating information to inform the public of the NFP's stewardship of contributed funds 9. h Making announcements concerning appointments 10. i Producing and disseminating the annual report 11. j [Subparagraph superseded by Accounting Standards Update No. 2012-04](https://asc.understandingaccounting.org/updates/asu-2012-04/). 12. jj Employee benefits management and oversight (human resources) 13. k All other management and administration except for direct conduct of program services (see paragraphs [958-720-45-3 through 45-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-3) ), fundraising activities (see paragraphs [958-720-45-9 through 45-10](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-9) ), or membership development activities (see paragraphs [958-720-45-11 through 45-14](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-11) ). See paragraphs [958-720-55-171 through 55-176](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-171) for examples on which activities would constitute direct conduct or supervision of program or support functions and an example footnote disclosure on the cost allocation method used to allocate costs among functions. ##### [720-958-45-8](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:63bddf0e393ec35699bb383466b1fa3790dfa3ea7cd45f8256336d91ba21f6ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The costs of oversight and management usually include the salaries and expenses of the governing board, the chief executive officer of the NFP, and the supporting staff. If such staff spend a portion of their time directly conducting or supervising program services or categories of other supporting services, however, their salaries and expenses shall be allocated among those functions (see paragraph [958-720-45-2A](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-2A)). See paragraphs [958-720-55-171 through 55-176](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-171) for examples on which activities would constitute direct conduct or supervision of program or support functions and an example note disclosure on the method used to allocate costs among functions. ##### [720-958-45-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:dc1a59b6730403eee5ca9c2824079a23f9a656265805ef6800f540fe32e5a425 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fundraising activities include the following: 1. a Publicizing and conducting fundraising campaigns 2. b Maintaining donor mailing lists 3. c Conducting special fundraising events 4. d Preparing and distributing fundraising manuals, instructions, and other materials 5. e Conducting other activities involved with soliciting contributions from individuals, foundations, government agencies, and others. ##### [720-958-45-10](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:942fdd4e3df3ac868d04ac7e2c57ec389611a0a17e9c30cf8ff5e8c869422957 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fundraising activities include soliciting contributions of services from individuals, regardless of whether those services meet the recognition criteria for contributions in the [Contributions Received Subsection](https://asc.understandingaccounting.org/updates/page-2147480583/) of Section 958-605-25. ##### [720-958-45-11](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:c7cef90009bdce2e18979ee01e08916f94f346e87c6a90d8eab6aec3941fa436 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Membership development activities include the following: 1. a Soliciting for prospective members and membership dues 2. b Membership relations 3. c Similar activities. ##### [720-958-45-12](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:b1c16cef57065c5d3164577aa5d2ad6eb463061b78ebc0a3fdf690af5f9e5100 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If there are no significant benefits or duties connected with membership, however, the substance of membership development activities may, in fact, be fundraising, and the related costs shall be reported as fundraising costs. (See paragraphs [958-605-55-9 through 55-12](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-9) for indicators useful in determining the contribution and exchange portions of membership dues.) ##### [720-958-45-13](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:23668e663aaaffa5609cdc5eba5ac04473e4136e578dcdc06c7231519a568fb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Membership development activities may be conducted in conjunction with other activities. In circumstances in which membership development is in part soliciting membership dues and in part soliciting contributions, the activity is a [joint activity](https://asc.understandingaccounting.org/glossary/j/#joint-activity "An activity that is part of the fundraising function and has elements of one or more other functions, such as program, management and general, membership development, or any other functional category used by the entity."), as discussed in the Accounting for Costs of Activities that Include Fundraising Subsections of this Subtopic beginning with paragraph [958-720-45-28](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-28). ##### [720-958-45-14](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:aa8e349fb859f8630da3373f022ec3f26f9fe8438236586a397200f21398e44a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances in which membership development is conducted in conjunction with other activities but does not include soliciting contributions, the activity is not a joint activity, and the costs shall be allocated to membership development and one or more other functions. For example, if an activity involves costs to solicit new members (membership development) and direct costs of providing goods or services to existing members, in accordance with paragraph [958-720-45-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-3), an appropriate part of the costs of soliciting members shall be allocated to the membership development function and a part to program services. #### Analysis of Expenses by Their Nature and Function ##### [720-958-45-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:5b8ae3b66483da687bed1d0db2125c2e0830a8912d0cba4c4924bf8bad108098 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All NFPs shall report information about all expenses in one location on the face of the statement of activities, as a schedule in the notes to financial statements, or in a separate financial statement, as discussed in paragraph [958-205-45-6](https://asc.understandingaccounting.org/asc/205/958/#205-958-45-6). The relationship between functional classification and natural classification for all expenses shall be presented in an analysis that disaggregates [functional expense classifications](https://asc.understandingaccounting.org/glossary/f/#functional-expense-classification "A method of grouping expenses according to the purpose for which costs are incurred. The primary functional classifications of a not-for-profit entity are program services and supporting activities."), such as major classes of [program services](https://asc.understandingaccounting.org/glossary/p/#program-services "The activities that result in goods and services being distributed to beneficiaries, customers, or members that fulfill the purposes or mission for which the not-for-profit entity (NFP) exists. Those services are the major purpose for and the major output of the NFP and often relate to several major programs.") and [supporting activities](https://asc.understandingaccounting.org/glossary/s/#supporting-activities "Supporting activities are all activities of a not-for-profit entity (NFP) other than program services. Generally, they include the following: Management and general activities Fundraising activities Membership development activities."), by their [natural expense classifications](https://asc.understandingaccounting.org/glossary/n/#natural-expense-classification "A method of grouping expenses according to the kinds of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, professional services, supplies, interest expense, rent, utilities, and depreciation. (P) December 16, 2026; (N) December 16, 2026220-40-65-1A method of grouping expenses according to the types of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, nonemployee professional services, supplies, interest expense, rent, utilities, and depreciation."), such as salaries, rent, electricity, interest expense, supplies, depreciation, awards and grants to others, and professional fees. To the extent that expenses are reported by other than their natural classification (such as salaries included in cost of goods sold or facility rental costs of special events reported as direct benefits to donors), they shall be reported by their natural classification in the analysis of expenses by nature and function. For example, salaries, wages, and fringe benefits that are included as part of the cost of goods sold on the statement of activities shall be included with other salaries, wages, and fringe benefits in the analysis of expenses by nature and function. External and direct internal investment expenses that have been netted against investment return shall not be included in the analysis of expenses by nature and function. Certain items that are typically excluded from net income and that are included in other comprehensive income of business entities such as those items listed in paragraph [220-10-45-10A](https://asc.understandingaccounting.org/asc/220/10/#220-10-45-10A), are considered gains or losses and, like other gains and losses, shall not be included in the analysis of expenses by nature and function. See Note F in paragraph [958-205-55-21](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-21) for an example of how to report expenses by nature and function. ##### [720-958-45-16](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:bf2f8592e516ba6cfd98adc2ae4aabb779540989656beebb27641608560190ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-14](https://asc.understandingaccounting.org/updates/asu-2016-14/). #### Classification of Particular Costs ##### [720-958-45-17](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:762819eac2dd07b292f13d47f89b70ffbdd107937c6cc8efb14af043a2718cd8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection provides classification guidance for the following specific costs: 1. a Cost of premiums 2. b Cost of sales 3. c Reductions in amounts charged for goods and services 4. d Interest costs 5. e Cost of occupancy and maintenance 6. f Payments to affiliated NFPs 7. g Expenses of federated fundraising organizations. ##### [720-958-45-18](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:9edad955600fe8ae8fda43c2772209f9736a842fac7fcce4be74b86ab8e47724 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of premiums (such as postcards or calendars) given to potential donors as part of mass fundraising appeals is a fundraising expense, and the classification of the donations received from the appeal as contributions is unaffected by the fact that premiums were given to potential donors. The premiums are not provided to potential donors in exchange for the assets contributed; they can be kept by all those from whom funds are solicited, regardless of whether a contribution is made. ##### [720-958-45-19](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:e7db54f45504df3cf18af238896cf68cd6e51435673c27fb8521f10ac8a39654 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of premiums (such as coffee mugs) that are given to resource providers to acknowledge receipt of a contribution shall also be reported as fundraising expenses if those costs are nominal in value compared with the value of the goods or services donated by the resource provider. For example, an NFP may provide a coffee mug to people making a contribution of $50 or more; the mug costs the NFP $1. The NFP shall recognize contributions for the total amount contributed and fundraising expense of $1 for each mug provided to donors. The cost of premiums that are greater than nominal in value shall be reported as cost of sales. If premiums are greater than nominal in value, transactions shall be reported as part exchange transaction and part contribution. ##### [720-958-45-20](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:b4cc37c8b6a22c6b17e0861136dd2acc143d7cf985ba9f20ee7fca8056922682 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The way that costs related to sales of goods and services are displayed depends on whether the sales constitute a major or central activity of the NFP or a peripheral or incidental activity. ##### [720-958-45-21](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:d88cba69cb23de8826f457d91b1b46bd38a40c1d64e3f557920913e7ea5d61d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a not-for-profit museum that has a store that is a major or central activity shall report and display separately the revenues from the store's sales and the related cost of sales. Cost of sales is permitted to be reported immediately after revenues from sale of merchandise, and may be followed by a descriptive subtotal, or cost of sales may be reported with other expenses. If the store sells merchandise that is related to the museum's program, the store would be a program service and the cost of the store's sales would be reported as a program expense. In other circumstances, cost of sales could be reported as a separate supporting service. For example, if operating a cafeteria is a major or central activity but is not related to the NFP's programs, the cafeteria's cost of sales would be reported as supporting services. ##### [720-958-45-22](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:e42c14b2727b232b7975d47b62a5d6429f9a87275e7c65c7857dcf9301ab17e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In contrast, a not-for-profit church that occasionally produces and sells a cookbook (considered to be a peripheral or incidental activity) has gains (or losses) from those sales, and the receipts and related costs are permitted to be offset and only the net gains (or losses) are reported. ##### [720-958-45-23](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:acf397bedac1f0d845d132fc4e78bd238169ddda2456b80c18c5e5176c2c0ee2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a reduction in the amount charged for goods and services is reported as an expense in accordance with paragraph [958-720-25-7](https://asc.understandingaccounting.org/asc/720/958/#720-958-25-7), the expense shall be reported in the same functional classification in which the cost of the goods or services provided to the NFP are reported. ##### [720-958-45-24](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:b4ac625158fea6749e113dc502c7838e5914b9d616d36c79caa69ae334c5aec3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Interest costs, including interest on a building's mortgage, shall be allocated to specific programs or supporting services to the extent possible. Interest costs that cannot be allocated shall be reported as part of the management and general function. ##### [720-958-45-25](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:7b22b7f2521ff7cccc52ae50e530d6771ef47101a5afeb9214f5f1f31748de3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Occupying and maintaining a building is not a separate supporting service. ##### [720-958-45-26](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:e8f397c87358356504b01b73857834ae34b18807d4575ba645808fcfc1ec2357 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Payments to related local and national NFPs shall be reported by their functional classification to the extent that it is practicable and reasonable to do so and the necessary information is available, even if it is impossible to allocate the entire amount of such payments to functions. Payments to those entities that cannot be allocated to functions shall be treated as a separate supporting service, reported on a statement of activities as a separate line item, and labeled unallocated payments to local (or national) organizations. ##### [720-958-45-27](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:a989fd0f099f9282504225cc2899d2854dd866ac8d089486e01d91bc6aec58b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Federated fundraising entities solicit and receive designated and undesignated contributions and make grants and awards to other NFPs. The fundraising activities of federated fundraising entities, including activities related to fundraising on behalf of others, shall be reported as fundraising expenses. ### Accounting for Costs of Activities that Include Fundraising ##### [720-958-45-28](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:e9c9c7fb9e47af3ce75b5ab26dbc6e5c8619a5b11e8304b569d19f6a92f48d4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection provides guidance on the following: 1. a Classification of the costs of a joint activity 2. b Allocation methods 3. c Incidental activities. #### Classification of the Costs of a Joint Activity ##### [720-958-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:57c70e448cd9c49a7a04f2b460f46313601441c7b8d8a7f5983f5028b2040f2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the criteria of purpose, audience, and content are met, the costs of a [joint activity](https://asc.understandingaccounting.org/glossary/j/#joint-activity "An activity that is part of the fundraising function and has elements of one or more other functions, such as program, management and general, membership development, or any other functional category used by the entity.") shall be classified as follows: 1. a The costs that are identifiable with a particular function shall be charged to that function. 2. b [Joint costs](https://asc.understandingaccounting.org/glossary/j/#joint-costs "The costs of conducting joint activities that are not identifiable with a particular component of the activity. For example, the cost of postage for a letter that includes both fundraising and program components is a joint cost. Joint costs may include the following costs: Salaries Contract labor Consultants Professional fees Paper Printing Postage Event advertising Telephones Airtime Facility rentals.") shall be allocated between fundraising and the appropriate program or management and general function. If any of the criteria are not met, all costs of the joint activity shall be reported as fundraising costs, including costs that otherwise might be considered program or management and general costs if they had been incurred in a different [activity](https://asc.understandingaccounting.org/glossary/a/#activities "Activities are efforts to accomplish specific objectives. Some activities include producing and distributing materials. For example, if a not-for-profit entity (NFP) undertakes a mass mailing that includes a letter and a pamphlet, producing and distributing the letter and pamphlet are part of the activity. Other activities may include no materials, such as an annual dinner or a radio commercial."), subject to the exception in the following sentence. Costs of goods or services provided in exchange transactions that are part of joint activities, such as costs of direct donor benefits of a special event (for example, a meal), shall not be reported as fundraising. ##### [720-958-45-30](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:6841ce1f6dd601861fdc8f0979c6cb2493b34dfb9b21b4ff9df7f8e198ea214c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances in which 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 conducts joint activities has a functional structure that includes functional classifications other than fundraising, program, and management and general (see paragraph [958-720-05-6](https://asc.understandingaccounting.org/asc/720/958/#720-958-05-6)), all costs of those joint activities shall be charged to fundraising (or the category in which fundraising is reported), unless the purpose, audience, and content of those joint activities are appropriate for achieving those other functions. ##### [720-958-45-31](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:46f99cd1e7976da114d9b485649102d7b74ef1d2774facdcf416cbc0bcd9c0da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Classification of costs incurred by an NFP for joint activities is based on the following criteria: 1. a The purpose criterion 2. b The audience criterion 3. c The content criterion. ##### [720-958-45-32](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:e4eb0291f9c542c67e3d2b73038339992a3ccc908102635f22fa67c3dcc0513a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples 1 through 16 (see paragraphs [958-720-55-36 through 55-159](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-36) ) provide illustrations of the tests and analysis that are used to determine whether the criteria listed in the preceding paragraph are met. ##### [720-958-45-33](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:19799ead7be508aed97d2467b47a2a1ad67a1e94aac081043412e84982fdec7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met if the purpose of the joint activity includes accomplishing program or management and general functions. ##### [720-958-45-34](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:a2ff396f27b6a263f118c8b1eb6631cfcefa5e9071bb0737f56b83bd8e100d80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [958-720-45-35 through 45-39](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-35) provide guidance that shall be considered in determining whether the purpose criterion is met, specifically: 1. a If program functions are combined with [fundraising activities](https://asc.understandingaccounting.org/glossary/f/#fundraising-activities "Activities undertaken to induce potential donors to contribute money, securities, services, materials, facilities, other assets, or time."), paragraphs [958-720-45-35 through 45-39](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-35) provide guidance pertaining to program functions only. 2. b If program functions, management and general functions, or both are combined with fundraising activities, paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) provides guidance pertaining to both program and management and general functions. ##### [720-958-45-35](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:0d6fcd2de54712449f44988ea1c9d3594405d34a0ce6ac31f2002ebbf01a1321 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To accomplish program functions, the activity shall call for specific action by the audience that will help accomplish the NFP's mission. Actions that help accomplish the NFP's mission are actions that do either of the following: 1. a Benefit the recipient (such as by improving the recipient's physical, mental, emotional, or spiritual health and well-being) 2. b Benefit society (by addressing societal problems). ##### [720-958-45-36](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:52f2ca4ef1aa48122ee393ec0931e1b486f067d43c94b2a67dfffc2f6161db2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [958-720-55-4 through 55-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-4) , which provide implementation guidance for determining whether an activity includes a call for a specific action. If the activity calls for specific action by the audience that will help accomplish the NFP's mission, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) shall also be considered in determining whether the purpose criterion is met. ##### [720-958-45-37](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:9585e58066f1c87a3f3d90dcf7bf18f675ad256609beba0edc9cdd80488722f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances in which joint activities are conducted, a presumption exists that expenses shall be reported as fundraising rather than as program or management and general. The following circumstances are insufficient to overcome that presumption: 1. a The purpose of the activity includes educating the public about [causes](https://asc.understandingaccounting.org/glossary/c/#causes "The causes, conditions, needs, or concerns that a not-for-profit entity's (NFP's) programs are designed to address."). 2. b The audience has a need or reasonable potential for use of any educational component of the activity pertaining to causes. 3. c The audience has the ability to assist the NFP in meeting the goals of the program component of the activity by becoming educated about causes. To conclude that the criteria of purpose, audience, and content are met, program activities shall call for specific action by the recipient (other than becoming educated about causes) that will help accomplish the NFP's mission. ##### [720-958-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:b96531997329c3e995f435215aaff97c3add2d3ce8be20ed886b38e37bb5efb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following factors shall be considered, in the order in which they are listed, to determine whether the purpose criterion is met: 1. a The compensation or fees test 2. b The separate and similar activities test 3. c The other evidence test. ##### [720-958-45-39](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-39) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:77949bb24a6c227c59336d87bc0b145920e3b6fa622bbbc2cba686a0e9b28262 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Examples 1 through 16 (paragraphs [958-720-55-36 through 55-159](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-36) ), which provide implementation guidance for these three tests. ##### [720-958-45-40](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:4e0aaf3916b1d199c24d0e92b6f299a9c6b24e3c3ea4485adf74b39be8345060 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is not met if a majority of compensation or fees for any party's performance of any component of the discrete joint activity varies based on [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.") raised for that discrete joint activity. ##### [720-958-45-41](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-41) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:e3e71f5108d7e6ed2d463ab92c8e16551fc791d076daa1a2a00b4088b86fbdd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some compensation contracts provide that compensation for performing the activity is based on a factor other than contributions raised, but not to exceed a specified portion of contributions raised. For example, a contract may provide that compensation for performing the activity is $10 per contact hour, but not to exceed 60 percent of contributions raised. In such circumstances, compensation is not considered based on amounts raised, unless the stated maximum percentage is met. In circumstances in which it is not yet known whether the stated maximum percentage is met, compensation is not considered based on amounts raised, unless it is probable that the stated maximum percentage will be met. ##### [720-958-45-42](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-42) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:174c2f47bc4f92ae6fb7bad2453a16c511211e7689c0a3856417e5ede35108e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The compensation or fees test is a negative test in that it either: 1. a Results in failing the purpose criterion 2. b Is not determinative of whether the purpose criterion is met. ##### [720-958-45-43](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-43) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:80b065558988a2593c73f0bdc1e7cbe28bd8067749411d44f858d9c46f144ef7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In considering the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38), compensation or fees test is the preeminent guidance. Therefore, if the activity fails the compensation or fees test, the activity fails the purpose criterion and the separate and similar activities test shall not be considered. ##### [720-958-45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-44) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:23eabe431df3c2227fee53d5a7c6347c82590e4b14ab7a3f80eac8de7c068e84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the purpose criterion is not failed based on the compensation or fees test, this factor is not determinative of whether the purpose criterion is met, and the factor in the following paragraph and paragraph [958-720-45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-46) (the separate and similar activities test) shall be considered. ##### [720-958-45-45](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:aa6130e32b87c1a62a1ff6e9ccba13deee12353e19959c904a165e820e28c2cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met if a similar program or management and general activity is conducted separately and on a similar or greater scale. That is, the purpose criterion is met if either of the following conditions is met: 1. a The first condition is met if both of the following are true: 1. 1 The program component of the joint activity calls for specific action by the recipient that will help accomplish the NFP's mission (see paragraphs [958-720-45-35 through 45-37](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-35) ). 2. 2 A similar program component is conducted without the fundraising component using the same [medium](https://asc.understandingaccounting.org/glossary/m/#medium "A means of mass communication, such as direct mail, direct response advertising, or television.") and on a scale that is similar to or greater than the scale on which it is conducted with the fundraising. Determining the scale on which an activity is conducted may be subjective. Factors to consider in determining the scale on which an activity is conducted may include dollars spent, the size of the audience reached, and the degree to which the characteristics of the audience are similar to the characteristics of the audience of the activity being evaluated. 2. b The second condition is met if a management and general activity that is similar to the management and general component of the joint activity being accounted for is conducted without the fundraising component using the same medium and on a scale that is similar to or greater than the scale on which it is conducted with the fundraising. ##### [720-958-45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-46) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:39c1ab08f15b2358abed37f784faabbd8a04f460fdb45d871fc2fc8a10221c06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the purpose criterion is met based on the separate and similar activities test, the other evidence test shall not be considered. If the separate and similar activities test is not determinative, the other evidence test shall be considered. ##### [720-958-45-47](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-47) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:4a6046f6954d7c9429bdd9f8ba21c25a806e91e041f60a549dd6ff299abab725 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The compensation or fees test and the separate and similar activities test may not always be determinative because the attributes that they consider may not be present. If the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) or [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) do not determine whether the purpose criterion is met, other evidence may determine whether the criterion is met. All available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, the purpose criterion is met. See paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , which provide implementation guidance for applying the other evidence test. ##### [720-958-45-48](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-48) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:08f2fb48e7dcef804d05aeca88b47bd87032f72fc82f0d53b33da8f2d759b508 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A rebuttable presumption exists that the audience criterion is not met if the audience includes prior donors or is otherwise selected based on its ability or likelihood to contribute to the NFP. That presumption can be overcome if the audience is also selected for any of the reasons in the following paragraph. In determining whether that presumption is overcome, an NFP shall consider the extent to which the audience is selected based on its ability or likelihood to contribute to the NFP and contrast that with the extent to which it is selected for one or more of the reasons in the following paragraph. For example, if the audience's ability or likelihood to contribute is a significant factor in its selection and it has a need for the action related to the program component of the joint activity, but having that need is an insignificant factor in its selection, the presumption would not be overcome. ##### [720-958-45-49](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-49) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:a72a0411621678d79600a5740151c010595babdb9dc2d4ba0704d3473f693dd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances in which the audience includes no prior donors and is not otherwise selected based on its ability or likelihood to contribute to the NFP, the audience criterion is met if the audience is selected for any of the following reasons: 1. a The audience's need to use or reasonable potential for use of the specific action called for by the program component of the joint activity 2. b The audience's ability to take specific action to assist the NFP in meeting the goals of the program component of the joint activity 3. c The NFP is required to direct the management and general component of the joint activity to the particular audience or the audience has reasonable potential for use of the management and general component. ##### [720-958-45-50](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-50) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:672d4f9519aa73c5b0fcc282d1e73514078923aaac5bad18377bc6d572ff1e91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met if the joint activity supports program or management and general functions, as follows: 1. a Program. The joint activity calls for specific action by the recipient that will help accomplish the NFP's mission (see paragraph [958-720-45-35](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-35)). If the need for and benefits of the action are not clearly evident, information describing the action and explaining the need for and benefits of the action is provided. 2. b Management and general. The joint activity fulfills one or more of the NFP's management and general responsibilities through a component of the joint activity. ##### [720-958-45-51](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-51) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:e7485d97e835e3a6571ce30d520e9a78bd549e52c5d248af591655188c581c00 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information identifying and describing the NFP, its causes, or how the contributions provided will be used is considered in support of fundraising. ##### [720-958-45-52](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-52) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:157e0420f5cc7217cc9a1742d33cfea8ebb9c6d7fb5e1517249249fd1bab972c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Activities that are undertaken as a result of receiving contributions are [management and general activities](https://asc.understandingaccounting.org/glossary/m/#management-and-general-activities "Supporting activities that are not directly identifiable with one or more program, fundraising, or membership-development activities."). For example, activities conducted to comply with requirements of regulatory bodies concerning contributions that have been received are management and general activities. ##### [720-958-45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-53) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:3b04dbb3889627e8e384e691bc8011db014eb79551c3ed3e575e7d744dfc98ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Activities that are undertaken in order to solicit contributions are fundraising activities. For example, activities conducted to comply with requirements of regulatory bodies concerning soliciting contributions, such as the requirement by some states or other regulatory bodies that certain disclosures be included when soliciting contributions, are fundraising activities. For purposes of applying this guidance, communications that include such required disclosures are considered fundraising activities and are not considered management and general activities. #### Allocation Methods ##### [720-958-45-54](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-54) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:4a485af0bece5cfdcc326f33dcf3d968031453e79875bacfd07078c4687211f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost allocation methodology used shall be rational and systematic, it shall result in an allocation of joint costs that is reasonable, and it shall be applied consistently given similar facts and circumstances. See paragraphs [958-720-55-25 through 55-31](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-25) , which provide explanations and illustrations of some acceptable allocation methods. The allocation of joint costs shall be based on the degree to which costs were incurred for the functions to which the costs are allocated (that is, program, management and general, or fundraising). For purposes of determining whether the allocation methodology for a particular joint activity is consistent with methodologies used for other particular joint activities, facts and circumstances that may be considered include factors related to the content and relative costs of the components of the activity. The audience shall not be considered in determining whether the facts and circumstances are similar for purposes of determining whether the allocation methodology for a particular joint activity is consistent with methodologies used for other particular joint activities. A change in cost allocation methodology shall be evaluated in accordance with Topic 250 to determine if it is a change in accounting principle. #### Incidental Activities ##### [720-958-45-55](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-55) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:6f8a9767ab5ee99de3634c575774eb1783ac28f5d1bd50c5935386ed73a087a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some fundraising activities conducted in conjunction with program or management and general activities are incidental to such program or management and general activities. In circumstances in which a fundraising, program, or management and general activity is conducted in conjunction with another activity and is incidental to that other activity, and the criteria in paragraph [958-720-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29) for allocation are met, joint costs are permitted but not required to be allocated and may therefore be charged to the functional classification related to the activity that is not the incidental activity. However, in circumstances in which the program or management and general activities are incidental to the fundraising activities, it is unlikely that the criteria in that paragraph to permit allocation of joint costs would be met. See paragraphs [958-720-55-161](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-161), [958-720-55-163](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-163), and [958-720-55-165](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-165) for implementation guidance for incidental activities. ### Services Received from Personnel of an Affiliate ##### [720-958-45-56](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-56) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:16.668Z to 2026-09-10T01:13:16.668Z Record version: sha256:f67eab80499f796d84c8976484e9c7c93877c572dd951f663b146a7a5a0d8c03 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The increase in net assets associated with services received from personnel of an [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.") that directly benefit the recipient [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 for which the affiliate does not charge the recipient NFP shall not be presented as a contra-expense or a contra-asset. The corresponding decrease in net assets or the creation or enhancement of an asset resulting from the use of services received from personnel of an affiliate that directly benefit the recipient NFP and for which the affiliate does not charge the recipient NFP shall be presented similar to how other such expenses or assets are presented. See paragraph [958-220-45-21](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-21) for presentation guidance on services received from personnel of an affiliate. Source downloaded (UTC): 2026-09-10T01:13:20.026Z to 2026-09-10T01:13:20.026Z Record version: sha256:5a6d8ddb8247d2b3239b94e2ec3016217fc7835b29769f7496253fae384444fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/720/958/#50-disclosure) SEC content: no ##### [720-958-50-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:20.026Z to 2026-09-10T01:13:20.026Z Record version: sha256:413062df704c95a233d9f4234d20df1945d78f6648556851290b5f92c0bb7435 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements of 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) shall disclose the following information: 1. a Total fundraising expenses. 2. b Total program expenses and information about why total program expenses disclosed in the notes do not articulate with the statement of activities. Pursuant to paragraph [958-720-45-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-5), this disclosure is only required if the components of total program expenses are not evident from the details provided on the face of the statement of activities (for example, if cost of sales is not identified as either program or supporting services). 3. bb The relationship between functional classification and natural classification for all expenses in an analysis that disaggregates functional expense classifications by their natural expense classifications in accordance with paragraph [958-720-45-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-15). 4. c The amount of income tax expense and the nature of the activities that generated the taxes, which is only required if the NFP incurs income tax expense. 5. d A description of the methods used to allocate costs among program and support functions. See paragraph [958-720-55-176](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-176) or Note F in paragraph [958-205-55-21](https://asc.understandingaccounting.org/asc/205/958/#205-958-55-21) for examples of note disclosures on the cost allocation methods used. ### Accounting for Costs of Activities that Include Fundraising ##### [720-958-50-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:20.026Z to 2026-09-10T01:13:20.026Z Record version: sha256:ce55e2d0a8f5df1377473bf67f83fd63dbddb2213856466206f860085647ec97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 allocates [joint costs](https://asc.understandingaccounting.org/glossary/j/#joint-costs "The costs of conducting joint activities that are not identifiable with a particular component of the activity. For example, the cost of postage for a letter that includes both fundraising and program components is a joint cost. Joint costs may include the following costs: Salaries Contract labor Consultants Professional fees Paper Printing Postage Event advertising Telephones Airtime Facility rentals.") shall disclose all of the following in the notes to its financial statements: 1. a The types of [activities](https://asc.understandingaccounting.org/glossary/a/#activities "Activities are efforts to accomplish specific objectives. Some activities include producing and distributing materials. For example, if a not-for-profit entity (NFP) undertakes a mass mailing that includes a letter and a pamphlet, producing and distributing the letter and pamphlet are part of the activity. Other activities may include no materials, such as an annual dinner or a radio commercial.") for which joint costs have been incurred 2. b A statement that such costs have been allocated 3. c The total amount allocated during the period and the portion allocated to each functional expense category. An NFP is also encouraged, but not required, to disclose the amount of joint costs for each kind of [joint activity](https://asc.understandingaccounting.org/glossary/j/#joint-activity "An activity that is part of the fundraising function and has elements of one or more other functions, such as program, management and general, membership development, or any other functional category used by the entity."), if practical. See Example 20 (paragraph [958-720-55-166](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-166)) for illustrative disclosures. ### Services Received from Personnel of an Affiliate ##### [720-958-50-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:20.026Z to 2026-09-10T01:13:20.026Z Record version: sha256:0c9a06bd2daddf9cc5fffffacd9999b99ce295013bc8c1741bc682ebf50a1967 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosures in Subtopic 850-10 shall be provided for services 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) from personnel of an [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."). Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cbaf34fc9399d64f461d46ca724dd5b4227d0f71baf15cb0305c36e677fe037d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/720/958/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [720-958-55-1A](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:192903867e24a9c85b12d475c7e8ced89b37699a1073b8f5a2d9b7a9ec8af083 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](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.") or an exchange transaction and how to determine whether a contribution is conditional. Further guidance on what is an exchange transaction or a contribution as well as guidance on what is a [conditional contribution](https://asc.understandingaccounting.org/glossary/c/#conditional-contribution "A contribution that contains a donor-imposed condition.") can be found in Subtopic 958-605 on not-for-profit entities—revenue recognition. - ![](https://asc.understandingaccounting.org/asc-img/GUID-3831DC44-E925-4BD3-BF7E-BB0243B8A31F-low.gif) Is the transaction one in which each party directly receives commensurate value? It is an exchange transaction. Apply Topic 720 on other expenses or other applicable Topics. It is a nonreciprocal transaction. Not-for-profit entities should apply this Subtopic. All other entities should apply Subtopic 720-25 on contribution expenses. 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 expense when the condition or conditions are met. Meeting of Condition. It is unconditional. Recognize expense. See paragraph 958-605-55-6 for guidance about transactions that are in part an exchange and in part a contribution. ### Accounting for Costs of Activities That Include Fundraising ##### [720-958-55-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:bc7e2685fa4032979de1bb6045709af614ae275a99d8431582bd845732dbc294 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/). #### Implementation Guidance ##### [720-958-55-1B](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-1B) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:60c380467c22b8d3336255aa9fdb91953686831ec95bbf56dd54b10f2f6631c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection, which is an integral part of the requirements of the Accounting for Costs of Activities That Include Fundraising Subsections of this Subtopic, provides general guidance to be used in the classification and allocation of costs incurred in [activities](https://asc.understandingaccounting.org/glossary/a/#activities "Activities are efforts to accomplish specific objectives. Some activities include producing and distributing materials. For example, if a not-for-profit entity (NFP) undertakes a mass mailing that includes a letter and a pamphlet, producing and distributing the letter and pamphlet are part of the activity. Other activities may include no materials, such as an annual dinner or a radio commercial.") that include fundraising. ##### [720-958-55-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:f062ca2110d58610829ce331684eb188fb37bf275e138872670219d5e8ce6620 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following flowchart summarizes the guidance in paragraphs [958-720-45-29 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29) and is not intended as a substitute for the guidance therein. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F156DE18-EB50-4B2B-B9DA-139083AB72D0-low.gif) ##### [720-958-55-3](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:591a0c388e760009adf5e14f286dec101768d6b734f054c638643725d3864f2b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance related to paragraph [958-720-45-35](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-35). ##### [720-958-55-4](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:76952f51a92a5c66da8308b8e7a443409267d3d16081c262d619ec29d18fec3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of activities that call for specific action by the audience that will help accomplish the [not-for-profit entity's](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP's) mission: 1. a An NFP's mission includes improving individuals' physical health. For that NFP, motivating the audience to take specific action that will improve their physical health is a call for specific action by the audience that will help accomplish the NFP's mission. An example of an activity that motivates the audience to take specific action that will improve their physical health is sending the audience a brochure that urges them to stop smoking and suggests specific methods, instructions, references, and resources that may be used to stop smoking. 2. b An NFP's mission includes educating individuals in areas other than the [causes](https://asc.understandingaccounting.org/glossary/c/#causes "The causes, conditions, needs, or concerns that a not-for-profit entity's (NFP's) programs are designed to address."), conditions, needs, or concerns that the NFP's programs are designed to address (referred to as causes). For that NFP, educating the audience in areas other than causes or motivating the audience to otherwise engage in specific activities that will educate them in areas other than causes is a call for specific action by the audience that will help accomplish the NFP's mission. Examples of NFPs whose mission includes educating individuals in areas other than causes are universities and possibly other NFPs. An example of an activity motivating individuals to engage in education in areas other than causes is a university inviting individuals to attend a lecture or class in which the individuals will learn about the solar system. 3. c Some educational activities that might otherwise be considered as educating the audience about causes may implicitly call for specific action by the audience that will help accomplish the NFP's mission. For example, activities that educate the audience about environmental problems caused by not recycling implicitly call for that audience to increase recycling. If the need for and benefits of the specific action are clearly evident from the educational message, the message is considered to include an implicit call for specific action by the audience that will help accomplish the NFP's mission. ##### [720-958-55-5](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:7df17ab75102508dd62c94471f946c59530d765f1b67146dd08f87c4663f15c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of activities that fail to call for a specific action by the audience that will help accomplish the NFP's mission: 1. a Educating the audience about causes or motivating the audience to otherwise engage in specific activities that will educate them about causes is not a call for specific action by the audience that will help accomplish the NFP's mission. Such activities are considered in support of fundraising. 2. b Asking the audience to make [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.") is not a call for specific action by the audience that will help accomplish the NFP's mission. ##### [720-958-55-6](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d051d9a803a1c147ac93f7ea26f50666b8d3e0455a717f170bf9b5cd7ad827c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance related to paragraph [958-720-45-47](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-47). ##### [720-958-55-7](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9700849bfa6d5c5ea41c84f0d7dbad4b5de7ea02b6aafbbc41b51e472068c883 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of indicators that provide evidence that the purpose criterion may be met: 1. a Measuring program results and accomplishments of the activity. The facts may indicate that the purpose criterion is met if the NFP measures program results and accomplishments of the activity (other than measuring the extent to which the public was educated about causes). 2. b [Medium](https://asc.understandingaccounting.org/glossary/m/#medium "A means of mass communication, such as direct mail, direct response advertising, or television."). The facts may indicate that the purpose criterion is met if the program component of the [joint activity](https://asc.understandingaccounting.org/glossary/j/#joint-activity "An activity that is part of the fundraising function and has elements of one or more other functions, such as program, management and general, membership development, or any other functional category used by the entity.") calls for specific action by the recipient that will help accomplish the NFP's mission and if the NFP conducts the program component without a significant fundraising component in a different medium. Also, the facts may indicate that the purpose criterion is met if the NFP conducts the management and general component of the joint activity without a significant fundraising component in a different medium. ##### [720-958-55-8](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:eaf3f15163027bb2e2847115b8616232822f76e8277eaeb808dc934f16cd9be7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of indicators that provide evidence that the purpose criterion may not be met: 1. a Evaluation. The facts may indicate that the purpose criterion is not met if the evaluation of any party's performance of any component of the discrete joint activity varies based on contributions raised for that discrete joint activity. 2. b [Compensation](https://asc.understandingaccounting.org/glossary/c/#compensation "Reciprocal transfers of cash or other assets in exchange for services performed."). The facts may indicate that the purpose criterion is not met if some, but less than a majority, of compensation or [fees](https://asc.understandingaccounting.org/glossary/f/#fees "See Compensation.") for any party's performance of any component of the discrete joint activity varies based on contributions raised for that discrete joint activity. ##### [720-958-55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b2c291503c48fb7f04384a8284cfc00f34e3e16d9c828ed80d5e3e9e49b4b426 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of indicators that provide evidence that the purpose criterion may be either met or not met: 1. a Evaluation of measured results of the activity. The NFP may have a process to evaluate measured program results and accomplishments of the activity (other than measuring the extent to which the public was educated about causes). If the NFP has such a process, in evaluating the effectiveness of the joint activity, the NFP may place significantly greater weight on the activity's effectiveness in accomplishing program goals or may place significantly greater weight on the activity's effectiveness in raising contributions. The former may indicate that the purpose criterion is met. The latter may indicate that the purpose criterion is not met. 2. b Qualifications. The following qualifications and duties of those performing the joint activity should be considered: 1. 1 If a third party, such as a consultant or contractor, performs part or all of the joint activity, such as producing brochures or making telephone calls, the third party's experience and the range of services provided to the NFP should be considered in determining whether the third party is performing fundraising, program (other than educating the public about causes), or [management and general activities](https://asc.understandingaccounting.org/glossary/m/#management-and-general-activities "Supporting activities that are not directly identifiable with one or more program, fundraising, or membership-development activities.") on behalf of the NFP. 2. 2 If the NFP's employees perform part or all of the joint activity, the full range of their job duties should be considered in determining whether those employees are performing fundraising, program (other than educating the public about causes), or management and general activities on behalf of the NFP. For example, employees who are not members of the fundraising department and employees who are members of the fundraising department but who perform non-[fundraising activities](https://asc.understandingaccounting.org/glossary/f/#fundraising-activities "Activities undertaken to induce potential donors to contribute money, securities, services, materials, facilities, other assets, or time.") are more likely to perform activities that include program or management and general functions than are employees who otherwise devote significant time to fundraising. 3. c Tangible evidence of intent. Tangible evidence indicating the intended purpose of the joint activity should be considered. Examples of such tangible evidence include the following: 1. 1 The NFP's written mission statement, as stated in its fundraising activities, bylaws, or annual report 2. 2 Minutes of board of directors, committee, or other meetings 3. 3 Restrictions imposed by donors (who are not related parties) on gifts intended to fund the joint activity 4. 4 Long-range plans or operating policies 5. 5 Written instructions to other entities, such as script writers, consultants, or list brokers, concerning the purpose of the joint activity, audience to be targeted, or method of conducting the joint activity 6. 6 Internal management memoranda. ##### [720-958-55-10](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:bc3a361f5beb545e0f3d510d0c506d9636adde9382dffd98af8916a7d3ed0e78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance related to paragraphs [958-720-45-48 through 45-49](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-48) . ##### [720-958-55-11](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:6e41e925a1c78981d25e86db7c47d27cb96b70cfbd0f901059e1de5d413efbb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some NFPs conduct joint activities that are special events, such as symposia, dinners, dances, and theater parties, in which the attendee receives a direct benefit (for example, a meal or theater ticket) and for which the admission price includes a contribution. For example, it may cost $500 to attend a dinner 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 $50. In that case, the audience is required to make a $450 contribution in order to attend. ##### [720-958-55-12](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cf81a083d6551e489bf77bf329c1651dfcd45a80f579daedf48d0d8bb8d45cbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances in which the audience is required to make a contribution to participate in a joint activity, such as attending a special event, the audience's ability or likelihood to contribute is a significant factor in its selection. Therefore, in circumstances in which the audience is required to make a contribution to participate in a joint activity, the extent to which the audience is selected for the program or management and general reasons in paragraph [958-720-45-49](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-49) must be overwhelmingly significant in order to rebut the presumption that the audience criterion is not met. ##### [720-958-55-13](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3396f61a6fb0fe56c76aaa80a06a32ade271b4a7b21cac4b08635e3a739c0f35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The source of the names and the characteristics of the audience should be considered in determining the reason for selecting the audience. Some NFPs use lists compiled by others to reach new audiences. The source of such lists may indicate the purpose or purposes for which they were selected. For example, lists acquired from entities with similar or related programs are more likely to meet the audience criterion than are lists acquired from entities with dissimilar or unrelated programs. Also, the characteristics of those on the lists may indicate the purpose or purposes for which they were selected. For example, a list based on a consumer profile of those who buy environmentally friendly products may be useful to an NFP whose mission addresses environmental concerns and could therefore indicate that the audience was selected for its ability to take action to assist the NFP in meeting program goals. However, a list based on net worth would indicate that the audience was selected based on its ability or likelihood to contribute, unless there was a correlation between net worth and the program or management and general components of the activity. ##### [720-958-55-14](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:09f3dfa72ee0cceae28d96611d8bba064b696f6c3ec9599c4cc05e2a26f713e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some audiences may be selected because they have an interest in or affinity to the program. For example, homeowners may have an interest in the homeless because they are sympathetic to the plight of the homeless. Nevertheless, including homeowners in the audience of a program activity to provide services to the homeless would not meet the audience criterion, because they do not have a need or reasonable potential for use of services to the homeless. ##### [720-958-55-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b4b6ad686edf04238c2ed527603be8db5d35f2633422370883f51ccec4067cf2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [958-720-45-49(c)](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-49) provides that the audience criterion is met if the NFP is required to direct the management and general component of the joint activity to the particular audience or the audience has reasonable potential for use of the management and general component. An example of a joint activity in which the audience is selected because the NFP is required to direct the management and general component of the joint activity to the particular audience is an activity in which the NFP sends a written acknowledgment or other information to comply with requirements of the Internal Revenue Service (IRS) to prior donors and includes a request for contributions. An example of a joint activity in which the audience is selected because the audience has reasonable potential for use of the management and general component is an activity in which the NFP sends its annual report to prior donors and includes a request for contributions. ##### [720-958-55-16](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:897bbc27b3d1c7703a1a25d3b44f11300a5802a26cf3037d5444cd7f6d5055a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance related to paragraphs [958-720-45-50 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-50) . ##### [720-958-55-17](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:96103b234ec2adaa35cb3652ca43c55a850ec8632a68e82e1e29313f3aed92eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [958-720-45-50(a)](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-50) provides that, to meet the content criterion, program activities should call for specific action by the recipient that will help accomplish the NFP's mission. As discussed in paragraph [958-720-45-35](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-35), the action should benefit the recipient or society. Examples of actions that benefit the recipient (such as by improving the recipient's physical, mental, emotional, or spiritual health and well-being) or society (such as by addressing societal problems) include the following: 1. a Actions that benefit the recipient include the following: 1. 1 Stop smoking. Specific methods, instructions, references, and resources should be suggested. 2. 2 Do not use alcohol or drugs. Specific methods, instructions, references, and resources should be suggested. 2. b Actions that benefit society include the following: 1. 1 Write or call. The party to communicate with and the subject matter to be communicated should be specified. 2. 2 Complete and return the enclosed questionnaire. The results of the questionnaire should help the NFP achieve its mission. For example, if the NFP discards the questionnaire, it does not help the NFP achieve its mission. 3. 3 Boycott. The particular product or entity to be boycotted should be specified. ##### [720-958-55-18](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:4a1d899b29cf65d602e931e3b84619749a23ddcd7a26282e4dcb4eb3c64e22d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [958-720-45-50(b)](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-50) provides that to meet the content criterion, management and general functions are required to fulfill one or more of the NFP's management and general responsibilities through a component of the joint activity. Some states or other regulatory bodies require that certain disclosures be included when soliciting contributions. Paragraph [958-720-45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-53) provides that for purposes of applying this guidance, communications that include such required disclosures are considered fundraising activities and are not considered management and general activities. Some examples of such disclosures include the following: - Information filed with the attorney general concerning this charitable solicitation may be obtained from the attorney general of \[the state\] by calling 123-4567. Registration with the attorney general does not imply endorsement. - A copy of the registration and financial information may be obtained from the Division of Consumer Services by calling toll-free, within \[the state\], 1-800-123-4567. Registration does not imply endorsement, approval, or recommendation by \[the state\]. - Information about the cost of postage and copying, and other information required to be filed under \[the state\] law, can be obtained by calling 123-4567. - The entity's latest annual report can be obtained by calling 123-4567. ##### [720-958-55-19](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:ebcc9b0f5816b5de6b185a930457274e887761ca7165385b85cd875bd976a04c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFPs that do not use the functional classifications of fundraising, program, and management and general shall apply the guidance in the Accounting for Costs of Activities that Include Fundraising Subsections of this Subtopic, for purposes of accounting for joint activities, using their reporting model. ##### [720-958-55-20](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:c5b2fcb895660d0180e24c5b431937b4771461f073db20f828c12c2a8a694e83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some NFPs may conduct [membership development activities](https://asc.understandingaccounting.org/glossary/m/#membership-development-activities "Membership development activities include soliciting for prospective members and membership dues, membership relations, and similar activities. However, if there are no significant benefits or duties connected with membership, the substance of membership development activities may, in fact, be fundraising."). If there are no significant benefits or duties connected with membership, the substance of the membership development activities may, in fact, be fundraising. In such circumstances, the costs of those activities shall be charged to fundraising. To the extent that member benefits are received, membership is an exchange transaction. ##### [720-958-55-21](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d8fa60c458d8937a0ee39e12f1d90c4fd911113b69e1466c22142dd3dd39ee92 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances in which membership development is in part soliciting revenues from exchange transactions and in part soliciting contributions and the purpose, audience, and content of the activity are appropriate for achieving membership development, [joint costs](https://asc.understandingaccounting.org/glossary/j/#joint-costs "The costs of conducting joint activities that are not identifiable with a particular component of the activity. For example, the cost of postage for a letter that includes both fundraising and program components is a joint cost. Joint costs may include the following costs: Salaries Contract labor Consultants Professional fees Paper Printing Postage Event advertising Telephones Airtime Facility rentals.") should be allocated between fundraising and the exchange transaction. ##### [720-958-55-22](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d7844e2bfc71baa12e0a0684fa06f41f588b97186d51bf21166025b768322c25 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Most transactions in which a student attends a lecture or class are exchange transactions and are not joint activities. Such transactions are joint activities only if the activity includes fundraising. ##### [720-958-55-23](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e6f5120086260c89f6794769ce2580e6de25d03229559d22d230b48988c3ed07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some NFPs have missions that include educating the public (students) in areas other than causes. Paragraph [958-720-55-4](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-4) provides that, for those entities, educating the audience in areas other than causes or motivating the audience to engage in specific activities, such as attending a lecture or class, that will educate them in areas other than causes is considered a call for specific action by the recipients that will help accomplish the NFP's mission. Educating the audience about causes or motivating the audience to engage in specific activities that will educate them about causes without educating them in other subjects is not considered a call for specific action by the audience that will help accomplish the NFP's mission. ##### [720-958-55-24](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:64877019061afa80d2b8d4175367beb240c85e1b9bf53ddc636e99253c50caa7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An example of a lecture or class that will educate students in an area other than causes is a lecture on the nesting habits of the bald eagle, given by the Save the Bald Eagle Society, an NFP whose mission is to save the bald eagle from extinction and educate the public about the bald eagle. An example of a lecture or class that will address particular causes is a lecture by the Bald Eagle Society on the potential extinction of bald eagles and the need to raise contributions to prevent their extinction. For purposes of applying this guidance, motivating the audience to attend a lecture on the nesting habits of the bald eagle is a call for specific action that will help accomplish the NFP's mission. If the lecture merely addresses the potential extinction of bald eagles and the need to raise contributions to prevent their extinction, without addressing the nesting habits of the bald eagle, motivating the audience to attend the lecture is not considered a call for specific action by the recipient that will help accomplish the NFP's mission. ##### [720-958-55-25](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:2ba483ac6f3ea9ed822521123164a8e8655faf958c5b41fa6c381b3a93d62b7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [958-720-55-26 through 55-31](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-26) provide some commonly used cost allocation methods. ##### [720-958-55-26](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9d2bb9d5fc9af778a89ebaafd7ef0d8f5a4f8da8ee38b92f9dd456fa4ab59123 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Joint costs are allocated to materials and activities in proportion to the number of units of output that can be attributed to each of the materials and activities. Examples of units of output are lines, square inches, and physical content measures. This method assumes that the benefits received by the fundraising, program, or management and general component of the materials or activity from the joint costs incurred are directly proportional to the lines, square inches, or other physical output measures attributed to each component of the activity. This method may result in an unreasonable allocation of joint costs if the units of output (for example, line counts) do not reflect the degree to which costs are incurred for the joint activity. Use of the physical units method may also result in an unreasonable allocation if the physical units cannot be clearly ascribed to fundraising, program, or management and general. For example, direct mail and telephone solicitations sometimes include content that is not identifiable with fundraising, program, or management and general; or the physical units of such content are inseparable. ##### [720-958-55-27](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9ea4c7918eb13727b628c12825ecc535b0cedf0cec4c8b9e9d14a85143061c82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, assume a direct mail campaign is used to conduct programs of the NFP and to solicit contributions to support the NFP and its programs. Further, assume that the appeal meets the criteria for allocation of joint costs to more than one function. The letter and reply card include a total of 100 lines; 45 lines pertain to program because they include a call for action by the recipient that will help accomplish the NFP's mission, while 55 lines pertain to the fundraising appeal. Accordingly, 45 percent of the costs are allocated to program and 55 percent to fundraising. ##### [720-958-55-28](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:051cfaeba9abcbf13c78a4ec82fd8c55d9a6d281bc87f2696cbe4023e45d5fb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Joint costs are allocated to each of the components on the basis of their respective direct costs. Direct costs are those costs that are incurred in connection with the multipurpose materials or activity and that are specifically identifiable with a function (program, fundraising, or management and general). This method may result in an unreasonable allocation of joint costs if the joint costs of the materials and activity are not incurred in approximately the same proportion and for the same reasons as the direct costs of the materials and activity. For example, if a relatively costly booklet informing the reader about the NFP's mission (including a call for action by the recipient that will help accomplish the NFP's mission) is included with a relatively inexpensive fundraising letter, the allocation of joint costs based on the cost of these pieces may be unreasonable, particularly if the booklet and letter weigh approximately the same and therefore contribute equally to the postage costs. ##### [720-958-55-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:c0cb92ebc611c04b4d60add767ed3874bdf65973d8ce931ddb4dc5b3166af114 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, the costs of a direct mail campaign that can be specifically identified with [program services](https://asc.understandingaccounting.org/glossary/p/#program-services "The activities that result in goods and services being distributed to beneficiaries, customers, or members that fulfill the purposes or mission for which the not-for-profit entity (NFP) exists. Those services are the major purpose for and the major output of the NFP and often relate to several major programs.") are the costs of separate program materials and a postcard that calls for specific action by the recipient that will help accomplish the NFP's mission. They total $20,000. The direct costs of the fundraising component of the direct mail campaign consist of the costs to develop and produce the fundraising letter. They total $80,000. Joint costs associated with the direct mail campaign total $40,000 and would be allocated as follows under the relative direct cost method: 1. a Program services: $20,000/$100,000 x $40,000 = $8,000 2. b Fundraising: $80,000/$100,000 x $40,000 = $32,000. ##### [720-958-55-30](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9a64344b7c468f95d95d7ff1e49617a90e7680996b0179dec67dd547850e4b95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Joint costs are allocated to each component of the activity based on a ratio that uses estimates of costs of items included in joint costs that would have been incurred had the components been conducted independently. The numerator of the ratio is the cost (of items included in joint costs) of conducting a single component independently. The denominator is the cost (of items included in joint costs) of conducting all components independently. This method assumes that efforts for each component in the standalone situation are proportionate to the efforts actually undertaken in the joint cost situation. This method may result in an unreasonable allocation because it ignores the effect of each function, which is performed jointly with other functions, on other such functions. For example, the programmatic impact of a direct mail campaign or a telemarketing phone message may be significantly lessened when performed in conjunction with a fundraising appeal. ##### [720-958-55-31](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:577a43a519c33a1cb27bdab7a30777a9da6b25d9327a866080e6e64b2dfcf8d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, assume that the joint costs associated with a direct mail campaign including both program and fundraising components are the costs of stationery, postage, and envelopes at a total of $100,000. The costs of stationery, postage, and envelopes to produce and distribute each component separately would have been $90,000 for the program component and $70,000 for the fundraising component. Under the standalone joint cost allocation method, the $100,000 in joint costs would be allocated as follows: 1. a Program services: $90,000/$160,000 x $100,000 = $56,250 2. b Fundraising: $70,000/$160,000 x $100,000 = $43,750. ##### [720-958-55-32](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:6e0dac23b604b7c6fa62a6f2b5514a4a983242a57d0a800eeb12105f143d2c3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some costs, such as utilities, rent, and insurance, commonly referred to as indirect costs, may be joint costs. For example, the telephone bill for a department that, among other things, prepares materials that include both fundraising and program components may commonly be referred to as an indirect cost. Such telephone bills may also be joint costs. ##### [720-958-55-33](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:376d87a4f23bbfb83af1ec3c111fcf1bdbea81c7514d98581b4efb22ecc11d39 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, for some NFPs, it is impracticable to measure and allocate the portion of the costs that are joint costs. Considerations about which joint costs should be measured and allocated, such as considerations about materiality and the costs and benefits of developing and providing the information, are the same as considerations about cost allocations in other circumstances. ##### [720-958-55-34](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:30cbbaf3f28426713f4dd63dbe891353d4c3ba86476609aa2d333d2d9a62a2d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose for which costs other than joint costs are incurred may be fundraising, program, or management and general, depending on the context in which they are used in the activity undertaken. For example, a program-related pamphlet may be sent to an audience in need of the program. In that context, the pamphlet is used for program purposes. However, in order to demonstrate to potential donors that the NFP's programs are worthwhile, that same pamphlet may be sent to an audience that is likely to contribute, but that has no need or reasonable potential for use of the program. In that context, the pamphlet is used for fundraising. The classification of the cost of the pamphlets depends upon the use of the pamphlets and the application of the criteria in paragraph [958-720-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29), as follows: 1. a If some program-related pamphlets are used in program activities that include no fundraising, the cost of the pamphlets used in those separate program activities that include no fundraising should be charged to program. 2. b If some pamphlets are included in a joint activity and the criteria in paragraph [958-720-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29) are met, the costs of materials that accomplish program goals and that are unrelated to fundraising, including the costs of the program-related pamphlet, should be charged to program, while joint costs, such as postage, should be allocated between fundraising and program. 3. c If the program-related pamphlet is used in fundraising packets and the criteria in paragraph [958-720-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29) are not met, the costs of the pamphlets used in the fundraising packets, as well as the joint costs, should be charged to fundraising. #### Illustrations ##### [720-958-55-35](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:535c153419c5bd2e5515423fdd27eafd387e2837fe391ef4754fdfee94960e3c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [958-720-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29) provides that all [costs of joint activities](https://asc.understandingaccounting.org/glossary/c/#costs-of-joint-activities "Costs incurred for a joint activity. Costs of joint activities may include joint costs and costs other than joint costs. Costs other than joint costs are costs that are identifiable with a particular function, such as fundraising, program, management and general, and cost of sales. For example, some costs incurred for printing, paper, professional fees, and salaries to produce donor cards are not joint costs, although they may be incurred in connection with conducting joint activities."), except for costs of goods or services provided in exchange transactions that are part of joint activities, such as costs of direct donor benefits of a special event (for example, a meal), shall be charged to fundraising if any of the criteria of purpose, audience, or content are not met. Accordingly, if one or more criteria are not met, the other criteria need not be considered. The following Examples provide conclusions about whether each of the criteria would be met in circumstances in which one or more criteria are not met in order to provide further guidance. ##### [720-958-55-36](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:85bb3cc76a1da278c12017c90b4f454f5adb0826796b00d9fab59b2fa8a181b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-37](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d7a2cb1415a96b8589fb619752a3d669c25653cd791975cfe58a5170c84c9540 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity A's (NFP A's) mission is to prevent drug abuse. NFP A's annual report states that one of its objectives in fulfilling that mission is to assist parents in preventing their children from abusing drugs. ##### [720-958-55-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:101f28ed8e86d65bfd828f8b85d9a33ddfbcdeaf522c643e7b2b25e617b8053f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP A mails informational materials to the parents of all junior high school students explaining the prevalence and dangers of drug abuse. The materials encourage parents to counsel children about the dangers of drug abuse and inform them about how to detect drug abuse. The mailing includes a request for contributions. NFP A conducts other activities informing the public about the dangers of drug abuse and encouraging parents to counsel their children about drug abuse that do not include requests for contributions and that are conducted in different media. NFP A's executive director is involved in the development of the informational materials as well as the request for contributions. The executive director's annual compensation includes a significant bonus if total annual contributions exceed a predetermined amount. ##### [720-958-55-39](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:251624a32e6bcd10648462e5e5d2e0bced8de9b1a56eb0ffaa3b05cdd2b57140 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-40](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e9f5b744e991b8aecad93ea72004a9d2f3c85a58eb503377fa24b1a24f0bf6df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (encouraging parents to counsel children about the dangers of drug abuse and informing them about how to detect drug abuse) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. (Although NFP A's executive director's annual compensation varies based on annual contributions, the executive director's compensation does not vary based on contributions raised for this discrete joint activity.) Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-41](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e261ea13de580fe8b5da60a5d225b16d74d05e6945f0ac119ef69864b956b9fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a The program component of this activity calls for specific action by the recipient (encouraging parents to counsel children about the dangers of drug abuse) that will help accomplish the NFP's mission, and it otherwise conducts the program activity in this Example without a request for contributions. 2. b Performing such programs helps accomplish NFP A's mission. (Note that had NFP A conducted the activity using the same medium on a scale that is similar to or greater than the scale on which it is conducted with the request for contributions, the purpose criterion would have been met under paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) .) ##### [720-958-55-42](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e7454ac72a1263804767537e978f5466eec61ac3d48bc652860b46979a924654 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (parents of junior high school students) is selected based on its need to use or reasonable potential for use of the action called for by the program component. ##### [720-958-55-43](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:bc8a90e1b332242defebb40ee8e3039ac563ea347a113a81104105db1b06ab65 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (encouraging parents to counsel children about the dangers of drug abuse and informing them about how to detect drug abuse) that will help accomplish the NFP's mission (assisting parents in preventing their children from abusing drugs), and it explains the need for and benefits of the action (the prevalence and dangers of drug abuse). ##### [720-958-55-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:f1d745f5ba178a1611ebcc732b5c0c7c19e92f45f3745c78b1504a73ca4634cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-45](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9371ca0ce093491d8f591843b28284e12be5b344d380e15f2100e81c679614d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity B's (NFP B's) mission is to reduce the incidence of illness from ABC disease, which afflicts a broad segment of the population. One of NFP B's objectives in fulfilling that mission is to inform the public about the effects and early warning signs of the disease and specific action that should be taken to prevent the disease. ##### [720-958-55-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d06a649531d9d5fb3b1ea364bcd3170206c17fe41aeff0d8a83cf6172fa91565 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP B maintains a list of its prior donors and sends them donor renewal mailings. The mailings include messages about the effects and early warning signs of the disease and specific action that should be taken to prevent it. That information is also sent to a similar-sized audience but without the request for contributions. Also, NFP B believes that recent donors are more likely to contribute than nondonors or donors who have not contributed recently. Prior donors are deleted from the mailing list if they have not contributed to NFP B recently, and new donors are added to the list. There is no evidence of a correlation between recent contributions and participation in the program component of the activity. Also, the prior donors' need to use or reasonable potential for use of the messages about the effects and early warning signs of the disease and specific action that should be taken to prevent it is an insignificant factor in their selection. ##### [720-958-55-47](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:07e9de59ae2c33407e87482205ef70813e019ef01dfdca4945f78c8550e5733c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose and content criteria are met. The audience criterion is not met. All costs, including those that might otherwise be considered program or management and general costs if they had been incurred in a different activity, should be charged to fundraising. ##### [720-958-55-48](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:13b167cce346061f90e953ae151ce9a0708646d8856d290fcdb5dc4fb6d1b411 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (action that should be taken to prevent ABC disease) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. ##### [720-958-55-49](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:5acb8481d104923996965c2b924f9ee67d0789816f2993898010179ed9b4ceee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met because: 1. a The program component of the activity calls for specific action by the recipient that will help accomplish the NFP's mission (to reduce the incidence of illness from the disease). 2. b The program is also conducted using the same medium on a scale that is similar to or greater than the scale on which it is conducted with the request for contributions (a similar mailing is done without the request for contributions, to a similar-sized audience). ##### [720-958-55-50](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b8ea25ec0e1c1ce086ea9e58dc8a4df30b77f7c4c7180daf13d83a9bd5086ee7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is not met. The rebuttable presumption that the audience criterion is not met because the audience includes prior donors is not overcome in this Example. Although the audience has a need to use or reasonable potential for use of the program component, that was an insignificant factor in its selection. ##### [720-958-55-51](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:0f9a5e34d46da05d8466435630e50d2eed2c9322a98615581000b35168f9d1e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (actions to prevent ABC disease) that will help accomplish the NFP's mission (to reduce the incidence of ABC disease), and it explains the need for and benefits of the action (to prevent ABC disease). ##### [720-958-55-52](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-52) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b86be82ba10c39c3049d429d006e3e975679cb1c12a404d4e9d92e9d3ed6b322 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-53) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:6d93a4db9aa95eb1ea7f2d7679c1ce841a1d323616725a498b87f6730d3918aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity C's (NFP C's) mission is to reduce the incidence of illness from ABC disease, which afflicts a broad segment of the population. One of NFP C's objectives in fulfilling that mission is to increase governmental funding for research about ABC disease. ##### [720-958-55-54](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-54) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:2f0155a13d98d9f9ae093f2e71c01e3b2da14e5a2d46197af9d143610c5d4832 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP C maintains a list of its prior donors and its employees call them on the telephone reminding them of the effects of ABC disease, asking for contributions, and encouraging them to contact their elected officials to urge increased governmental funding for research about ABC disease. The callers are educated about ABC, do not otherwise perform fundraising functions, and are not compensated or evaluated based on contributions raised. NFP C's research indicates that recent donors are likely to contact their elected officials about such funding while nonrecent donors are not. Prior donors are deleted from the calling list if they have not contributed to NFP C recently, and new donors are added to the list. ##### [720-958-55-55](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-55) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:f4d4be3078ea900c78db9edfd9a8fc1a85c8c38fbc8387d90efdb85770df215d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-56](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-56) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:1cb8cc7744f5f0abc93d391d60d9c2df80bb2b03f33defaf320965c357c64cca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (contacting elected officials concerning funding for research about ABC disease) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-57](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-57) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:0dd40907a8a61aa770aaea701d9b87b458c4b22c42bbee294f26a15f833c0b42 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a The qualifications and duties of the personnel performing the activity indicate that it is a program activity (the callers are educated about ABC and do not otherwise perform fundraising functions). 2. b The method of compensation for performing the activity does not indicate that it is a fundraising activity (the employees are not compensated or evaluated based on contributions raised). 3. c Performing such programs helps accomplish NFP C's mission. ##### [720-958-55-58](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-58) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:8c1646b4e907b8ba873619128e8e0562830677034ab65217e3d83f13dac2ab80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (recent donors) is selected based on its ability to assist NFP C in meeting the goals of the program component of the activity (recent donors are likely to contact their elected officials about such funding while nonrecent donors are not). ##### [720-958-55-59](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-59) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:82c2f6311ff93a78299da2a14891c952388037b2d2f755e6cf249683df3ba604 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (contacting elected officials concerning funding for research about ABC disease) that will help accomplish the NFP's mission (to reduce the incidence of ABC disease), and it explains the need for and benefits of the action (to prevent ABC disease). ##### [720-958-55-60](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-60) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:78cf8341c7e045fbc5fbc5dd0de21ed01bda622021e27989f3d0d5eebbf32fbf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) : 1. a The purpose criterion is met (Case A). 2. b The purpose criterion is not met (Case B). ##### [720-958-55-61](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-61) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:fb712ce77271c33f99e575b75956ec8be36694d7be50ffd10db3bb3ec4abef36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A and B have the following assumptions. ##### [720-958-55-62](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-62) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b22da9ee27f7a8479381946af5fc81ec01fe46584530f350e813d71c59502a5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity D's (NFP D's) mission is to improve the quality of life for senior citizens. One of NFP D's objectives included in that mission is to increase the physical activity of senior citizens. One of NFP D's programs to attain that objective is to send representatives to speak to groups about the importance of exercise and to conduct exercise classes. ##### [720-958-55-63](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-63) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:341c0def5bf051545fd633d77c0909539b5138a3f2e09392c44c5ccdeaa53220 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP D mails a brochure on the importance of exercise that encourages exercise in later years to residents over the age of 65 in 3 ZIP code areas. The last two pages of the four-page brochure include a perforated contribution remittance form on which NFP D explains its program and makes an appeal for contributions. The content of the first two pages of the brochure is primarily educational; it explains how seniors can undertake a self-supervised exercise program and encourages them to undertake such a program. In addition, NFP D includes a second brochure on various exercise techniques that can be used by those undertaking an exercise program. ##### [720-958-55-64](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-64) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:8214495749c267317a04aaf3ab6f0bbdddcf1f0cf0d9f2fe62a2362e2b141d10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The brochures are distributed to educate people in this age group about the importance of exercising, to help them exercise properly, and to raise contributions for NFP D. These objectives are documented in a letter to the public relations firm that developed the brochures. The audience is selected based on age, without regard to ability to contribute. NFP D believes that most of the recipients would benefit from the information about exercise. ##### [720-958-55-65](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-65) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b941bd6aa21b4fbf44536f6dfa44298fbfcc1a7c99a38c770d82b4575988181f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. (Note that the costs of the second brochure should be charged to program because all the costs of the brochure are identifiable with the program function.) ##### [720-958-55-66](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-66) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d433a35be0ffd05b95f16def691188cc3513c85ca1edb21184309d96c69eaf81 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (exercising) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-67](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-67) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:588815cb27fab83525b4c80e94841f8d6fdd54279dfe6afe61ee36e1b45e1144 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a Performing such programs helps accomplish Entity D's mission. 2. b The objectives of the program are documented in a letter to the public relations firm that developed the brochure. ##### [720-958-55-68](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-68) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:f8e50c8aa3cbe2d49773d554d9d0630448c6d678769b4807620de0b61c316a0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (residents over 65 in certain ZIP codes) is selected based on its need to use or reasonable potential for use of the action called for by the program component. ##### [720-958-55-69](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-69) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:02ed446693130a8f3b6572356cd0fe8567d8f5b54a4b253d7dbdc95702646674 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (exercising) that will help accomplish the NFP's mission (increasing the physical activity of senior citizens), and the need for and benefits of the action are clearly evident (explains the importance of exercising). ##### [720-958-55-70](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-70) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:28aee124d94dd2d2a335503e0ceff8fa28ed73c3abdad670728df81e58552f0e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, NFP D employs a fundraising consultant to develop the first brochure and pays that consultant 30 percent of contributions raised. ##### [720-958-55-71](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-71) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cbcdfd61ad14740385c4dff63779cf46e9231e81fd2b582ba6d04cb5b4ed11dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content and audience criteria are met. ##### [720-958-55-72](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-72) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:977cbe79d9f1b856ca5609652f218868d59526b7379c3c40ccec1a942b213683 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is not met, however, because a majority of compensation or fees for the fundraising consultant varies based on contributions raised for this discrete joint activity (the fundraising consultant is paid 30 percent of contributions raised). All costs should be charged to fundraising, including the costs of the second brochure and any other costs that otherwise might be considered program or management and general costs if they had been incurred in a different activity. ##### [720-958-55-73](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-73) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d5ff973d7f7590f412a34d63d4fb4349c6bca77eeedd64a3a540a084fe343292 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-74](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-74) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9343bce8d9eccf7d2312a60b05213eaf6501a4207ed102768aee840068ed8c22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity E's (NFP E's) mission is to protect the environment. One of NFP E's objectives included in that mission is to take action that will increase the portion of waste recycled by the public. ##### [720-958-55-75](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-75) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:032f1c2271a53766859f28d080a2a1ff298db60bf4a9a5202777fe39e030c7b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP E conducts a door-to-door canvass of a community that recycles a low portion of its waste. The purpose of the activity is to help increase recycling by educating the community about environmental problems created by not recycling, and to raise contributions. Based on the information communicated by the canvassers, the need for and benefits of the action are clearly evident. The ability or likelihood of the residents to contribute is not a basis for communities selected, and all neighborhoods in the geographic area are covered if their recycling falls below a predetermined rate. The canvassers are selected from individuals who are well-informed about NFP E's environmental concerns and programs and who previously participated as volunteers in program activities such as answering environmental questions directed to NFP E and developing program activities designed to influence legislators to take actions addressing those concerns. The canvassers have not previously participated in fundraising activities. ##### [720-958-55-76](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-76) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3220820dfec1bd17c6a2a9ce20842e890b5221f7eeed8a4d6155eb9fefa4e290 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-77](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-77) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:533d611b71752f90825b50a8832bd18b778a0897d5ead611241ccdd646b12795 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (implicitly—to help increase recycling) that will help accomplish the entity's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-78](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-78) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:bbfe6cc6fa14f35b801904ce56ba5376eb58d9b9db76791cb337998177080941 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a The qualifications and duties of the personnel performing the activity indicate that it is a program activity (the canvassers are selected from individuals who are well-informed about NFP E's environmental concerns and programs and who previously participated as volunteers in program activities such as answering environmental questions directed to NFP E and developing program activities designed to influence legislators to take actions addressing those concerns). 2. b Performing such programs helps accomplish NFP E's mission (to protect the environment). ##### [720-958-55-79](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-79) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3cc12bd26a0b139ad0b2eb65e7a080e6d67d4f996df58a80215fd1bee4d38a66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (neighborhoods whose recycling falls below a predetermined rate) is selected based on its need to use or reasonable potential for use of the action called for by the program component. ##### [720-958-55-80](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-80) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:958cfa2c65a388a7f22b728739bd894f1e2cb2ad05ce9c31bc691de83eb524d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (implicitly—to help increase recycling) that will help accomplish the NFP's mission (to protect the environment), and the need for and benefits of the action are clearly evident (increased recycling will help alleviate environmental problems). ##### [720-958-55-81](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-81) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:7632ea83ddde83ddc842000986720da8e98ed9af8d3f3146a958fedfef5c93ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-82](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-82) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:bac882583e59439c052de9eb5370aac4cb9113c7c011d7ea90b0ec4e03ca3c38 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity F's (NFP F's) mission is to provide summer camps for economically disadvantaged youths. Educating the families of ineligible youths about the camps is not one of the program objectives included in that mission. ##### [720-958-55-83](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-83) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d551b30c96db0d7fe2695cf25a4fe43d1b6a6fc3b074d9e02247bd5b0532b084 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP F conducts a door-to-door solicitation campaign for its camp programs. In the campaign, volunteers with canisters visit homes in middle-class neighborhoods to collect contributions. NFP F believes that people in those neighborhoods would not need the camp's programs but may contribute. The volunteers explain the camp's programs, including why the disadvantaged children benefit from the program, and distribute leaflets to the residents regardless of whether they contribute to the camp. The leaflets describe the camp, its activities, who can attend, and the benefits to attendees. Requests for contributions are not included in the leaflets. ##### [720-958-55-84](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-84) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:37522b87564e86210d22416a6f00524f7b2981735194f73584f85ae6270c09da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are not met. All costs should be charged to fundraising. ##### [720-958-55-85](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-85) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:85a18ad2718e7ab1314bf7cef76e78f032aba5ac2422e4d969846cd03ebfe1fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity does not include a call for specific action because it only educates the audience about causes (describing the camp, its activities, who can attend, and the benefits to attendees). Therefore, the purpose criterion is not met. ##### [720-958-55-86](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-86) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:0ed29fc77080cc267d3480543f64d46196e659c3eaaee8ed3a46f1f309572940 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is not met, because the audience is selected based on its ability or likelihood to contribute, rather than based on its need to use or reasonable potential for use of the action called for by the program component, or its ability to take action to assist the NFP in meeting the goals of the program component of the activity. (NFP F believes that people in those neighborhoods would not need the camp's programs but may contribute.) ##### [720-958-55-87](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-87) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:17afb4818fd0ebeb2f880ce118f1997c76ee295cef6e2c1769be76ee43936b0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is not met because the activity does not call for specific action by the recipient. (The content educates the audience about causes that the program is designed to address without calling for specific action.) ##### [720-958-55-88](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-88) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:03a9009ff722f38ac64a49c0058c9662ec56602d2b5b0abfe4cf2accee4b3b34 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-89](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-89) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:7ebe5edce815d28dc01059a0e6b4d6ca5ea37c779fd0a4e57516fd7f28bc0f0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity G's (NFP G's) mission is to educate the public about lifesaving techniques in order to increase the number of lives saved. One of NFP G's objectives in fulfilling that mission, as stated in the minutes of the board's meetings, is to produce and show television broadcasts including information about lifesaving techniques. ##### [720-958-55-90](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-90) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:c65ab471cac21e8cf59ee454296dc4c062914b1564631fb0e24219b9c306bbcf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP G conducts an annual national telethon to raise contributions and to reach the American public with lifesaving educational messages, such as summary instructions concerning dealing with certain life-threatening situations. Based on the information communicated by the messages, the need for and benefits of the action are clearly evident. The broadcast includes segments describing NFP G's services. NFP G broadcasts the telethon to the entire country, not merely to areas selected on the basis of giving potential or prior fundraising results. Also, NFP G uses national television broadcasts devoted entirely to lifesaving educational messages to conduct program activities without fundraising. ##### [720-958-55-91](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-91) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:ae6f67d5ec1b9222578d685cc5690f0f004ad3c7465b53b4fbb4f7ea150c9303 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-92](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-92) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3429e168090aadc8d182f84dd739224df40825ee67cc93abdba3a4af6ab4bf7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (implicitly—to save lives) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. ##### [720-958-55-93](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-93) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3acc2d36cdd4094aea0a2a4d31bfb4b9ef0c24ceadf9c68c3cf465e66f5eee9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met because: 1. a The program component of the activity calls for specific action by the recipient that will help accomplish NFP G's mission (to save lives by educating the public). 2. b A similar program activity is conducted without the fundraising using the same medium and on a scale that is similar to or greater than the scale on which it is conducted with the appeal (NFP G uses national television broadcasts devoted entirely to lifesaving educational messages to conduct program activities without fundraising). ##### [720-958-55-94](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-94) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:daed504a2eac557b1b3ea8af4b2f4bdfae29c04a33b859fe036e7f892b6f2820 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (a broad segment of the population) is selected based on its need to use or reasonable potential for use of the action called for by the program activity. ##### [720-958-55-95](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-95) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:0ab10a14f0121b99f772960db487e463bf702bfaec6a807bbbb64f8a309acf9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (implicitly—to save lives) that will help accomplish the NFP's mission (to save lives by educating the public), and the need for and benefits of the action are clearly evident (saving lives is desirable). ##### [720-958-55-96](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-96) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3b4e75fb4d694d731c7593e54ae85d323110a0cc824780236ad8b2571181f10b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-97](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-97) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:0f45e49d9c5a4ebb1c0fc553d92dcd0b8e7988bd4c575a9b91e7e936999be316 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity H's (NFP H's) mission is to provide food, clothing, and medical care to children in developing countries. ##### [720-958-55-98](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-98) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:4ebce416724f7ea344e6b4e0ee87964212dfc1bafb93d0089cd8b9d22bbed7e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP H conducts television broadcasts in the United States that describe its programs, show the needy children, and end with appeals for contributions. NFP H's operating policies and internal management memoranda state that these programs are designed to educate the public about the needs of children in developing countries and to raise contributions. The employees producing the programs are trained in audiovisual production and are familiar with NFP H's programs. Also, the executive producer is paid $25,000 for this activity, with a $5,000 bonus if the activity raises over $1,000,000. ##### [720-958-55-99](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-99) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:56a2da40d72e9e91e2148f00d2cb8d43095b280b5443fd84f87058c533ce5fc6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are not met. All costs should be charged to fundraising. ##### [720-958-55-100](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-100) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d5b1883cf6d2340e81da88f51969e2e29a42fd13f57d3901563886fb9771458a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity does not include a call for specific action because it only educates the audience about causes (describing its programs and showing the needy children). Therefore, the purpose criterion is not met. Also, note that if the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) were considered, it would not be determinative of whether the purpose criterion is met. Although the executive producer will be paid $5,000 if the activity raises over $1,000,000, that amount would not be a majority of the executive producer's total compensation for this activity, because $5,000 would not be a majority of the executive producer's total compensation of $30,000 for this activity. Also, note that if other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , were considered, the purpose criterion would not be met based on the other evidence. Although the qualifications and duties of the personnel performing the activity indicate that the employees producing the program are familiar with NFP H's programs, the facts that some, but less than a majority, of the executive producer's compensation varies based on contributions raised, and that the operating policies and internal management memoranda state that these programs are designed to educate the public about the needs of children in developing countries (with no call for specific action by recipients) and to raise contributions, indicate that the purpose is fundraising. ##### [720-958-55-101](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-101) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:2691e1e9fd1b9fe4feaaab96b0f71beaa2a8fcfbd64710959bf21f50d9c5f1dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is not met because the audience is selected based on its ability or likelihood to contribute, rather than based on its need to use or reasonable potential for use of the action called for by the program component, or its ability to take action to assist the NFP in meeting the goals of the program component of the activity. (The audience is a broad segment of the population of a country that is not in need of or has no reasonable potential for use of the program activity.) ##### [720-958-55-102](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-102) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:723143a360dd924f5781a4eed1d9a9f4e63e455e065ac84dedcdf7fa44113706 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is not met because the activity does not call for specific action by the recipient that will help accomplish the NFP's mission. (The content educates the audience about the causes without calling for specific action.) ##### [720-958-55-103](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-103) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:1b091fc1e5e7a25033dee9e0076bb70df4b2094795d9c5ece15ef70c2e35a8c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-104](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-104) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:c68254f77a8d64ff73112bc8330bbf4304899e81f68836f04322caf491541e6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity I (NFP I) is a university that distributes its annual report, which includes reports on mission accomplishments, to those who have made significant contributions over the previous year, its board of trustees, and its employees. The annual report is primarily prepared by management and general personnel, such as the accounting department and executive staff. The activity is coordinated by the public relations department. Internal management memoranda indicate that the purpose of the annual report is to report on how management discharged its stewardship responsibilities, including the university's overall performance, goals, financial position, cash flows, and results of operations. Included in the package containing the annual report are requests for contributions and donor reply cards. ##### [720-958-55-105](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-105) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:5f2a5d29237fbc69a8b0f08443a20b42b99cad72ca5ce2a2a1b22c83a72cb76a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-106](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-106) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:666aab4ed881f49f573fe716e4f3dc81da643cbf59120b050ffa404a09e4dbd2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity has elements of management and general functions. Therefore, no call for specific action is required. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-107](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-107) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:57c757842f1a798190bce95e26be273f2e00905de2b2f7c48293c437084cffc3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a The employees performing the activity are not members of the fundraising department and perform other nonfundraising activities. 2. b Internal management memoranda indicate that the purpose of the annual report is to fulfill one of the university's management and general responsibilities. ##### [720-958-55-108](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-108) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:73fd3057e09cdd19d7a9628d81461d3ef1ad04937fb29e5733081e6df1f0b6bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience is selected based on its reasonable potential for use of the management and general component. Although the activity is directed primarily at those who have previously made significant contributions, the audience was selected based on its presumed interest in NFP I's annual report (prior donors who have made significant contributions are likely to have an interest in matters discussed in the annual report). ##### [720-958-55-109](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-109) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:6ffad01ca62e7f443a4964c512afa0abe9b24e5745f4658bd4535aff43208c13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity (distributing annual reports) fulfills one of the NFP's management and general responsibilities (reporting concerning management's fulfillment of its stewardship function). ##### [720-958-55-110](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-110) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:ffe60c22300e59867c6fdba563fd39f91bda2afb08b5ec7d2df2ee93021ac171 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-111](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-111) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:267f36c9fc170488e29b67fbd245359a163f34650186493b247ebabaaa4d0578 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accordance with internal management memoranda documenting its policies requiring it to comply with IRS regulations, Not-for-Profit Entity J (NFP J) mails prior donors the contribution substantiation documentation required by the IRS. The documentation is included on a perforated piece of paper. The information above the perforation line pertains to the documentation required by the IRS. The information below the perforation line includes a request for contributions and may be used as a donor reply card. ##### [720-958-55-112](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-112) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:f7886525a8474d25f8f26a06aba9ee27fc733b38bdcd902b93698e398c0d4037 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. (Note that the costs of the information below the perforation line are identifiable with fundraising and therefore should be charged to fundraising.) ##### [720-958-55-113](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-113) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:7269c5e75fcb99476e4b39b97a96638fa2a9382f7e083b815795f32b75ceb1c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity has elements of management and general functions. Therefore, no call for specific action is required. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-114](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-114) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:126eb6fa61e01e67fcdb5d2953266a023ff0b1af06304c2b7c493cb8343862fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because internal management memoranda indicate that the purpose of the activity is to fulfill one of NFP J's management and general responsibilities. ##### [720-958-55-115](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-115) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:98d23109ec3c441339ba5e41a6dbb6ec3342a3f2a05f5cb571e38dc427652436 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the NFP is required to direct the management and general component of the activity to the particular audience. Although the activity is directed at those who have previously contributed, the audience was selected based on its need for the documentation. ##### [720-958-55-116](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-116) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:ffe01be868f1a49477c44f6609e7d42c1cfe4e4c6dcdfc0a611b3bf73847341d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity (sending documentation required by the IRS) fulfills one of the NFP's management and general responsibilities (complying with IRS regulations). ##### [720-958-55-117](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-117) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e63aba35bffc759ffa2af0e7ae07b577f1f771b36e188a607bd7c94e6f142f27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-118](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-118) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3a8017a81773abfd54af9ed935fc79a68cf998ac8bcc16ea4b92e0da33a4a433 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity K is an animal rights organization. It mails a package of material to individuals included in lists rented from various environmental and other NFPs that support causes that NFP K believes are congruent with its own. In addition to donor response cards and return envelopes, the package includes materials urging recipients to contact their legislators and urge the legislators to support legislation to protect those rights, and postcards addressed to legislators urging support for legislation restricting the use of animal testing for cosmetic products. The mail campaign is part of an overall strategy that includes magazine advertisements and the distribution of similar materials at various community events, some of which are undertaken without fundraising appeals. The advertising and community events reach audiences similar in size and demographics to the audience reached by the mailing. ##### [720-958-55-119](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-119) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:042419a4056d6c15f3b653cab8ba26717e480cf2a3c2c21a17d81a8b9d744681 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-120](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-120) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9097429c478c6d05da9c7e08d346104cb5685373b6d79d4ae46c7d6a8cc067a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (mailing postcards to legislators urging support for legislation restricting the use of animal testing for cosmetic products) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) should be considered. ##### [720-958-55-121](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-121) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9c52c13edc0cbb125025bec0a6e2845fa30753a3d7f3931a982f1b90507da388 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a The program component of this activity calls for specific action by the recipient that will help accomplish the NFP's mission, and it otherwise conducts the program activity in this Example without a request for contributions. 2. b Performing such programs helps accomplish NFP K's mission. ##### [720-958-55-122](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-122) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e11c0f86d0fafbbdfd181bf3344e70838dc29b443647c99b9049643522ef8d17 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (individuals included in lists rented from various environmental and other NFPs that support causes that NFP K believes are congruent with its own) is selected based on its ability to take action to assist the NFP in meeting the goals of the program component of the activity. ##### [720-958-55-123](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-123) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cb79e4092b8ae1b2d43aa7131b94c8015e12c534e13e1abbce61ff897530cefa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (mailing postcards to legislators urging support for legislation restricting the use of animal testing for cosmetic products) that will help accomplish the NFP's mission (to protect animal rights), and the need for and benefits of the action are clearly evident (to protect animal rights). ##### [720-958-55-124](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-124) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:12ba87cc0a265c2521a9dedef341ec01de3548f44d3caab72b78e66d957fac45 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-125](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-125) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:598f11b15aa66d48ce2797d4ee886a7b1ad95419905dd6c335e12eaf1a4d598c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity L is a performing arts organization whose mission is to make the arts available to residents in its area. NFP L charges a fee for attending performances and sends advertisements, including subscription forms, for the performances to residents in its area. These advertisements include a return envelope with a request for contributions. NFP L evaluates the effectiveness of the advertising based on the number of subscriptions sold as well as contributions received. In performing that evaluation, NFP L places more weight on the number of subscriptions sold than on the contributions received. Also, NFP L advertises the performances on local television and radio without a request for contributions but on a smaller scale than the mail advertising. ##### [720-958-55-126](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-126) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cfd7c7cc49d52cdcfe9248960ca8a33947234f5ea8840b90173bce8cb75f0b35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-127](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-127) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cc5892189b4d5a23c69b0c930e202532cb4503c5561122a8918487daf2ef50e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (attending the performances) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. Neither the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-128](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-128) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:2e49b0489cb49b7a9b909600ec443df34cf4d806f2e5ead9ceba0bda5e8447b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a NFP L measures program results and accomplishments of the joint activity and in evaluating the effectiveness of the activity, the NFP places significantly greater weight on the activity's effectiveness in accomplishing program goals than on the activity's effectiveness in raising contributions (NFP L evaluates the effectiveness of the advertising based on the number of subscriptions sold as well as contributions received and places more weight on the number of subscriptions sold than on the contributions received). 2. b It otherwise conducts the program activity without a request for contributions. 3. c Performing such programs helps accomplish NFP L's mission (to make the arts available to residents in its area). ##### [720-958-55-129](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-129) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cab0b493c12b7db1976fe67e9ea6cddcc86286fcf1f2eff984aaaf64c2d3e788 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (a broad segment of the population in NFP L's area) is selected based on its need to use or reasonable potential for use of the action called for by the program component. ##### [720-958-55-130](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-130) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:ec23ec11c7e76426f091f0ab3c594d936a546112825258cb0f6d42a20d670a95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (attending the performances) that will help accomplish the NFP's mission (making the arts available to area residents), and the need for and benefits of the action are clearly evident (attending the performance is a positive cultural experience). (Note that the purchase of subscriptions is an exchange transaction and, therefore, is not a contribution.) ##### [720-958-55-131](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-131) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e84ac5d3719c62b480e0c931095951dfe0442e7e27ff19597deb457e2ef1ac41 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-132](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-132) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:bfc989a75e31946ff61567e3160040fbcaf11937efbf6c7b0d31accfc4ce2645 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity M (NFP M) is a university whose mission is to educate the public (students) in various academic pursuits. NFP M's political science department holds a special lecture series in which prominent world leaders speak about current events. The speakers command relatively high fees and, in order to cover costs and make a modest profit, the university sets a relatively expensive fee to attend. However, the tickets are priced at the fair value of the lecture and no portion of the ticket purchase price is a contribution. NFP M advertises the lectures by sending invitations to prior attendees and to prior donors who have contributed significant amounts, and by placing advertisements in local newspapers read by the general public. At some of the lectures, including the lecture being considered in this Example, deans and other faculty members of NFP M solicit significant contributions from attendees. Other lectures in the series are conducted on a scale similar to the scale of the lecture in this Example without requesting contributions. NFP M's records indicate that historically 75 percent of the attendees have attended prior lectures. Of the 75 percent who have attended prior lectures, 15 percent have made prior contributions to NFP M. Of the 15 percent who have made prior contributions to NFP M, 5 percent have made contributions in response to solicitations made at the events. (Therefore, one-half of 1 percent of attendees make contributions in response to solicitations made at the events. However, those contributions are significant.) Overall, the audience's ability or likelihood to contribute is an insignificant factor in its selection. NFP M evaluates the effectiveness of the activity based on the number of tickets sold, as well as contributions received. In performing that evaluation, NFP M places more weight on the number of tickets sold than on the contributions received. ##### [720-958-55-133](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-133) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:f580887fd4cc27e41f7adbe0720a0da67a550e73dc487b4ea73d8b3b51d550d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. The purchase of the tickets is an exchange transaction and, therefore, is not a contribution. As discussed in paragraph [958-720-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29), costs of goods or services provided in exchange transactions that are part of joint activities, such as costs of direct donor benefits of a special event, should not be reported as fundraising. Paragraph [958-220-45-19](https://asc.understandingaccounting.org/asc/220/958/#220-958-45-19) provides guidance concerning reporting special events. ##### [720-958-55-134](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-134) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3fda79f2edef5fc223d989f54ce7abbe0feddcc1e54bfce4d23afa5db02e0a27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (attending the lecture) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. ##### [720-958-55-135](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-135) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:baf25e5fe1714bd5303777f300477acccc59eb9ab294ece9e3e16d36792f8c0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met because: 1. a The program component of the activity calls for specific action by the recipient that will help accomplish the NFP's mission (educating the public \[students\] in various academic pursuits). 2. b The program is also conducted using the same medium on a scale that is similar to or greater than the scale on which it is conducted with the request for contributions (other lectures in the series are conducted on a scale similar to the scale of the lecture in this Example without requesting contributions). ##### [720-958-55-136](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-136) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:099bf2057c0c8b2fdaa3103833a0d9750a83264dba6077ba8389a9455a8608f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met. The rebuttable presumption that the audience criterion is not met because the audience includes prior donors is overcome in this Example because the audience (those who have shown prior interest in the lecture series, prior donors, a broad segment of the population in NFP M's area, and those attending the lecture) is also selected for its reasonable potential for use of the program component (attending the lecture). Although the audience may make significant contributions, that was an insignificant factor in its selection. ##### [720-958-55-137](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-137) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:f9b91803f76c6f684ef43a069d1294bb0227a35b79f931346c70401e59dba5e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (attending the lecture) that will help accomplish the NFP's mission (educating the public \[students\] in various academic pursuits), and the need for and benefits of the action are clearly evident (attending the lecture is a positive educational experience). ##### [720-958-55-138](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-138) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:73bccde555dadee5f5bed9aa5e32e239d1ba04d438f9fbd76b928e99572446bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-139](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-139) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:6df8e6bb0022df63a50acaddeaacab5cda47c25ade642e97fa8de547e6fd1da3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity N (NFP N) is a university whose mission is to educate the public (students) in various academic pursuits. NFP N's political science department holds a special lecture series in which prominent world leaders speak about current events. Admission is priced at $250, which is above the $50 fair value of the lecture and, therefore, $200 of the admission price is a contribution. Therefore, the audience's likelihood to contribute to the NFP is a significant factor in its selection. NFP N advertises the lectures by sending invitations to prior attendees and to prior donors who have contributed significant amounts, and by placing advertisements in local newspapers read by the general public. NFP N presents similar lectures that are priced at the fair value of those lectures. ##### [720-958-55-140](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-140) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:242dbac8fa08086f21ffc133dc9bf4bf42d5a9a6ee42b501e917d35a6845d7a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose and content criteria are met. The audience criterion is not met. All costs, including those that might otherwise be considered program or management and general costs if they had been incurred in a different activity, except for the costs of the direct donor benefit (the lecture), should be charged to fundraising. The purchase of the tickets is an exchange transaction and, therefore, is not a contribution. As discussed in paragraph [958-720-45-29](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-29), costs of goods or services provided in exchange transactions that are part of joint activities, such as costs of direct donor benefits of a special event, shall not be reported as fundraising. Paragraph [958-720-45-17](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-17) provides guidance concerning reporting special events. ##### [720-958-55-141](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-141) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:40743064044b5bc54bc60d60ae8c993b260f1015a3541c61a969fdbbbf5d888d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (attending the lecture) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. ##### [720-958-55-142](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-142) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:bbc280388858c701f55470321ea184474f6905d3b34ddc49485825d2f17cd462 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met because: 1. a The program component of the activity calls for specific action by the recipient that will help accomplish the NFP's mission (educating the public \[students\] in various academic pursuits). 2. b The program is also conducted using the same medium on a scale that is similar to or greater than the scale on which it is conducted with the request for contributions (other lectures in the series are conducted on a scale similar to the scale of the lecture in this Example without including a contribution in the admission price). ##### [720-958-55-143](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-143) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:cab2856eb485979cc09a38f68096cb09a7e4c68ca7ebe4c45005777704cae707 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is not met. The rebuttable presumption that the audience criterion is not met because the audience is selected based on its likelihood to contribute to the NFP is not overcome in this Example. The fact that the $250 admission price includes a $200 contribution leads to the conclusion that the audience's ability or likelihood to contribute is an overwhelmingly significant factor in its selection, whereas there is no evidence that the extent to which the audience is selected for its need to use or reasonable potential for use of the action called for by the program component (attending the lecture) is overwhelmingly significant. ##### [720-958-55-144](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-144) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e105135365bb20e97e7686b9a93bb4d8018eafb65083dc6f77eb997b920e36c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (attending the lecture) that will help accomplish the NFP's mission (educating the public \[students\] in various academic pursuits), and the need for and benefits of the action are clearly evident (attending the lecture is a positive educational experience). ##### [720-958-55-145](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-145) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:5020b6e8172f338d2945c0c333d60b50b221d1947bd87028433f53903467955f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-146](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-146) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e72322337d5f88ce2857f07720782b5359b46f0ee677bc040a866184fc212d19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity O's (NFP O's) mission is to reduce the incidence of illness from ABC disease, which primarily afflicts people over 65 years of age. One of NFP O's objectives in fulfilling that mission is to have all persons over 65 screened for ABC disease. ##### [720-958-55-147](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-147) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:10e152c91414b245332c37def96618e96951da06c7ac0bf71eb55e9659faf89c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. NFP O rents space at events attended primarily by people over 65 years of age and conducts free screening for ABC disease. NFP O's employees, who are educated about ABC disease and screening procedures and do not otherwise perform fundraising functions, educate interested parties about the effects of ABC disease and the ease and benefits of screening for it. NFP O also solicits contributions at the events. The effectiveness of the activity is evaluated primarily based on how many screening tests are performed, and only minimally based on contributions raised. The employees are not compensated or evaluated based on contributions raised. ##### [720-958-55-148](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-148) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:297fef89b341ad93a27044877979a9a09798c8d699796aade2ac3fb34cdf7b06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. ##### [720-958-55-149](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-149) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:1c18faa34fd16ef284793895afe20e1b47f0139041940d471a31e4318170100d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (being screened for ABC disease) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. Neither of the factors in paragraphs [958-720-45-40 through 45-44](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-40) nor those in paragraphs [958-720-45-45 through 45-46](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-45) are determinative of whether the purpose criterion is met. Therefore, other evidence, such as the indicators in paragraphs [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) , should be considered. ##### [720-958-55-150](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-150) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:102cea7a0b36feeea143bf4c8c1fffcd70b3a5d831119e54204711cf33d2d080 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met based on the other evidence, because: 1. a A process exists to evaluate measured program results and accomplishments and in evaluating the effectiveness of the joint activity, the NFP places significantly greater weight on the activity's effectiveness in accomplishing program goals than on the activity's effectiveness in raising contributions (NFP O evaluates the effectiveness of the activity based on the number of screening tests conducted as well as contributions received and places more weight on the number of tests conducted than on the contributions received). 2. b The qualifications and duties of the personnel performing the activity indicate that it is a program activity (the employees are educated about ABC disease and the testing procedures and do not otherwise perform fundraising functions). 3. c The method of compensation for performing the activity does not indicate that it is a fundraising activity (the employees are not compensated or evaluated based on contributions raised). 4. d Performing such programs helps accomplish NFP O's mission (to prevent ABC disease). ##### [720-958-55-151](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-151) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:1f2b470c31df1d6d671247167c793a9595bb946a75d74ca923cbfa000182bb87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met because the audience (people over 65 years of age) is selected based on its need to use or reasonable potential for use of the action called for by the program component. ##### [720-958-55-152](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-152) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:461ef986036fafb005803c086ceccfacf7a0e25ba50f3cc0f41914f6af84f03b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (being screened for ABC disease) that will help accomplish the NFP's mission (to reduce the incidence of ABC disease), and it explains the need for and benefits of the action (to prevent ABC disease). ##### [720-958-55-153](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-153) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:1caa55b789dbfe67911ffcc08decf143cf0ac78f660ffb5023574d7cff9573c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-720-45-33 through 45-53](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-33) and [958-720-55-6 through 55-9](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-6) . ##### [720-958-55-154](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-154) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d55af1ab3e681a9a2c76c30d128f04d64b13eeaf4eb8a9ddde4ff153325cd532 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity P's (NFP P's) mission is to provide cultural and educational television programming to residents in its area. NFP P owns a public television station and holds a membership drive in which it solicits new members. The drive is conducted by station employees and consists of solicitations that are shown during long breaks between the station's regularly scheduled programs. NFP P's internal management memoranda state that these drives are designed to raise contributions. NFP P evaluates the effectiveness of the activity based on the amount of contributions received. NFP P shows the programs on a similar scale, without the request for contributions. The audience is members of the general public who watch the programs shown during the drive. Station member benefits are given to those who contribute and consist of tokens of appreciation with a nominal value. ##### [720-958-55-155](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-155) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:14f125642d8714a90c5bb659fb10209632965e39ca449f74b3c719e1b2cad235 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose, audience, and content criteria are met, and the joint costs should be allocated. (Note that there would be few, if any, joint costs. Costs associated with the fundraising activities, such as costs of airtime, would be separately identifiable from costs of the program activities, such as licensing costs for a particular television program. Also, note that because no significant benefits or duties are associated with membership, member dues are contributions. Therefore, the substance of the membership-development activities is, in fact, fundraising.) ##### [720-958-55-156](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-156) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:791febfe3ffbe16113f7067dfde1d5966f85829ce371895e8f4905db064bc573 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The activity calls for specific action by the recipient (watching the television program) that will help accomplish the NFP's mission. Therefore, the guidance in paragraph [958-720-45-38](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-38) should be considered. ##### [720-958-55-157](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-157) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:47d3becc12ebb0733f08882540487ebf80da4a1df08794a1d3c775148ddd84dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purpose criterion is met because: 1. a The program component of the activity calls for specific action by the recipient that will help accomplish the NFP's mission. 2. b The program is also conducted using the same medium on a scale that is similar to or greater than the scale on which it is conducted with the request for contributions (NFP P shows the television programs on a similar scale, without the request for contributions). ##### [720-958-55-158](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-158) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:430e3486c5439ba5cb1b2a1b17dfb36f2e63f4aa4d62f588026f045323407ba0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The audience criterion is met. The rebuttable presumption that the audience criterion is not met because the audience is selected based on its likelihood to contribute is overcome in this Example because the audience (members of the general public who watch the television programs shown during the drive) is also selected for its reasonable potential for use of the program component (watching the television programs). Although the audience may make contributions, that was an insignificant factor in its selection. ##### [720-958-55-159](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-159) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:d2965f0859c5429cfa68872902b40bfe74639bd89f61631a4122a91d349301f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The content criterion is met because the activity calls for specific action by the recipient (watching the television programs) that will help accomplish the NFP's mission (providing cultural and educational television programming to residents in its area), and the need for and benefits of the action are clearly evident (watching the programs is a positive cultural and educational experience). ##### [720-958-55-160](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-160) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:c3e852d346d06e29d091f0d3d194e4f226a7e4edc7aeec98996535adfec1300f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration of incidental activities covered in paragraph [958-720-45-55](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-55). ##### [720-958-55-161](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-161) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:39b58bfab52ab1819092b465cac3d78c6eb98084946c87c31e427797f4bca4a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity Q (NFP Q) conducts a fundraising activity by including a generic message, "Contributions to NFP Q may be sent to \[address\]" on a small area of a message that would otherwise be considered a program or management and general activity based on its purpose, audience, and content. That fundraising activity likely would be considered incidental to the program or management and general activity being conducted. ##### [720-958-55-162](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-162) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:75ec6d3bb9177934b2d266a35c144b7da4044698758c33f518156b1880c20168 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration of incidental activities covered in paragraph [958-720-45-55](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-55). ##### [720-958-55-163](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-163) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:5c465e828acad2333e78eeb31a673ac33d1080daebc70751126874b653e3a732 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity R conducts a program activity by including a generic program message such as "Continue to pray for \[a particular cause\]" on a small area of a message that would otherwise be considered fundraising based on its purpose, audience, and content. That program activity would likely be considered incidental to the fundraising activity being conducted. ##### [720-958-55-164](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-164) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:e93ae89529d3b36c972ff657e465d919fba885b48663b2d783839621fc13fac6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example provides an illustration of incidental activities covered in paragraph [958-720-45-55](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-55). ##### [720-958-55-165](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-165) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:7a7a617ca1892a6ef822dd6f07879be3c55259be3de66dd0d50a2b900d3c2418 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity S conducts a management and general activity by including a brief management and general message—"We recently changed our phone number. Our new number is 123-4567"—on a small area of a message that would otherwise be considered a program or fundraising activity based on its purpose, audience, and content. That management and general activity would likely be considered incidental to the program or fundraising activity being conducted. ##### [720-958-55-166](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-166) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:232ff6f8b530e9bd9fe2fb6cb5d05fc9813e5184a5cdc520fc45b9c078b0e17b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosures discussed in paragraph [958-720-50-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-50-2) are illustrated in the following Cases: 1. a Narrative format (Case A) 2. b Tabular format (Case B). ##### [720-958-55-167](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-167) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:7e001ba0832778f005b6deb0b21446ab07014056137a09e4f18f0bdfd3b4fa29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following shows the required and encouraged information in narrative format. - Note X. Allocation of Joint Costs - In 19XX, Not-for-Profit Entity T conducted activities that included requests for contributions, as well as program and management and general components. Those activities included direct mail campaigns, special events, and a telethon. The costs of conducting those activities included a total of $310,000 of joint costs, which are not specifically attributable to particular components of the activities (joint costs). \[Joint costs for each kind of activity were $50,000, $150,000, and $110,000 respectively.\] These joint costs were allocated as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-148FD632-72CF-4352-A3B3-7E982F911AE1-low.gif) Fund raising " $180,000 " Program A " 80,000 " Program B " 40,000 " Management and general " 10,000 " Total " $310,000 " ##### [720-958-55-168](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-168) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:9f7b28be278fe700ad8370377ae0839e964aa0faa1210475cf4415077ac718f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Note that the bracketed sentence is a disclosure that is encouraged but not required. ##### [720-958-55-169](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-169) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:3d0c6f9b2a7e10096e0c945a9042f90a49bda9aa6060394a7553160be767e3ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following reports that information in tabular format, as well as information concerning joint costs incurred for each kind of activity by [functional expense classification](https://asc.understandingaccounting.org/glossary/f/#functional-expense-classification "A method of grouping expenses according to the purpose for which costs are incurred. The primary functional classifications of a not-for-profit entity are program services and supporting activities."), which is neither required nor encouraged, but which is not prohibited. - Note X. Allocation of Joint Costs - In 19XX, Not-for-Profit Entity T conducted activities that included appeals for contributions and incurred joint costs of $310,000. These activities included direct mail campaigns, special events, and a telethon. Joint costs were allocated as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C1FE169F-24FC-4E1B-A341-4C184FF0C84C-low.gif) Direct Mail Special Events Telethon Total Fund raising " $40,000 " " $50,000 " " $90,000 " " $180,000 " Program A " 10,000 " " 65,000 " " 5,000 " " 80,000 " Program B " 25,000 " " 15,000 " " 40,000 " Management and general " 10,000 " " 10,000 " Total " $50,000 " " $150,000 " " $110,000 " " $310,000 " ##### [720-958-55-170](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-170) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:78f2b403a3b4afd2b0948e8ad5527b60024a24a924b99f7382c1cffcc3318fec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Note that shading is used to highlight information that is neither required nor encouraged, but which is not prohibited. However, NFPs may prefer to disclose it. Disclosing the total joint costs for each kind of activity ($50,000, $150,000, and $110,000) is encouraged but not required. ##### [720-958-55-171](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-171) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b52eb6a79f56e8850d87e2796cda2fc048280d73e940cdc7e8c4f6cfeca656f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases represent certain activities to illustrate direct conduct and direct supervision of program or support activities and, therefore, should be allocated to the program or support function or functions that receive a benefit in accordance with paragraph [958-720-45-7(k)](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-7). ##### [720-958-55-172](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-172) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:b76e86bfcb25ef92dd88ad7fc4e6cddd8a40d23bdf3a9b2ffe3346bec42fedb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The broad responsibilities of a chief executive officer generally include administrative and programmatic oversight. At Not-for-Profit Entity A (NFP A), the chief executive officer spends a portion of time directly overseeing the research program. Additionally, a portion of time is spent with current and potential donors on fundraising cultivation activities. A portion of the chief executive officer's compensation and benefits and other expenses would be allocated to the research program and to the fundraising function representing the portion of time spent on those activities because they reflect direct conduct or direct supervision. If the remainder of the chief executive officer's time is spent indirectly supervising the other areas of NFP A, including the administrative areas, those activities would not constitute direct conduct or direct supervision, and the ratable portion of compensation and benefit amounts would remain in management and general activities. ##### [720-958-55-173](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-173) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:33c8f1402584ffef53ea389221148c815b7f4a7fcc23daa0676dff8680ede62a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The chief financial officer at Not-for-Profit Entity B (NFP B) has primary responsibility for (a) accounting and reporting, (b) short-term budgeting and long-term financial planning, (c) cash management, and (d) direct oversight of NFP B's endowment. A portion of the chief financial officer's compensation and benefits and other expenses would be allocated to management and general activities for the accounting and reporting, the short-term budgeting and long-term financial planning, and cash management functions because they benefit the overall organization. A portion also would be allocated to investment expenses for management of the investment strategy of the endowment and would be netted against investment return. However, any portion of time spent supervising the accounting for investments or other fiduciary oversight would not be allocated to investment expenses because that time is related to an accounting and general management activity that benefits the overall organization and should be allocated to management and general activities. ##### [720-958-55-174](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-174) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:91bb69017b977e75344fff2568ce5c416a0191650069fa6237fe74dc168aa56a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The human resources department at Not-for-Profit Entity C (NFP C) generally is involved in the benefits administration for all personnel of NFP C. The human resources department's related costs would not be allocated to any specific program. Rather, those costs would remain a component of management and general activities because benefits administration is a supporting activity for the entire entity. ##### [720-958-55-175](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-175) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:faf97231b824624c9c5b9d9f61b1cc2e05f9343d9f24c424e16c1c19e6c45ebb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity D (NFP D) receives federal grants and employs an accountant who is responsible for grant accounting and reporting. In some cases, under the terms of the grant agreement, a fiscal report is required to be filed that details expenses incurred and charged against the grant. The fiscal report is not part of the direct conduct or direct supervision of the grant but rather is an accounting function. Therefore, the grant accountant's compensation and benefits would not be allocated to the programmatic area. However, a scientific report prepared by a principal investigator who is responsible for the research activity would be indicative of direct conduct and/or direct supervision of the grant activity, and the principal investigator's compensation and benefits would be allocated to the grant. ##### [720-958-55-176](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-176) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:22.378Z to 2026-09-10T01:13:22.378Z Record version: sha256:27584110e0feb3c8771d3a685d9981949d2960e47811516a7a6527a9c68714ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accordance with the Cases presented in paragraphs [958-720-55-172 through 55-175](https://asc.understandingaccounting.org/asc/720/958/#720-958-55-172) , an NFP would be required to assess which activities constitute direct conduct or direct supervision of a program or support function and, therefore, would require allocation of costs. The information required to be disclosed by paragraph [958-720-50-1(d)](https://asc.understandingaccounting.org/asc/720/958/#720-958-50-1) would be the cost allocation method used to allocate costs of activities identifiable with one or more program, fundraising, or membership-development activities, an example of which is illustrated as follows. - Note X. Methods Used for Allocation of Expenses from Management and General Activities - The financial statements report certain categories of expenses that are attributable to one or more program or supporting functions of the Organization. Those expenses include depreciation and amortization, the president's office, communications department, and information technology department. Depreciation is allocated based on square footage, the president's office is allocated based on estimates of time and effort, certain costs of the communications department are allocated based on estimates of time and effort, and the information technology department is allocated based on estimates of time and costs of specific technology utilized. Source downloaded (UTC): 2026-09-10T01:13:24.216Z to 2026-09-10T01:13:24.216Z Record version: sha256:4536841695cb95252f473d36b90761c6f83def6b54fed845a44cb7ddfdc33c10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/720/958/#60-relationships) SEC content: no #### Other Expenses ##### [720-958-60-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:24.216Z to 2026-09-10T01:13:24.216Z Record version: sha256:759e3d6d7bf8a54f541ef2f3d693b55f47a8e956396d81daded6f7485201b856 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For [activities](https://asc.understandingaccounting.org/glossary/a/#activities "Activities are efforts to accomplish specific objectives. Some activities include producing and distributing materials. For example, if a not-for-profit entity (NFP) undertakes a mass mailing that includes a letter and a pamphlet, producing and distributing the letter and pamphlet are part of the activity. Other activities may include no materials, such as an annual dinner or a radio commercial.") that stimulate a desire to purchase a [not-for-profit entity's](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP's) products or use its services, see Subtopic 720-35. #### Income Taxes ##### [720-958-60-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:24.216Z to 2026-09-10T01:13:24.216Z Record version: sha256:a813af4321928cc483bbb08c59b764e03b82f063c7786b6ea04da20caeb216ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For accounting for income taxes that apply to the activities of an NFP, see Topic 740. Source downloaded (UTC): 2026-09-10T01:13:26.933Z to 2026-09-10T01:13:26.933Z Record version: sha256:74c78175491cd44e99442da5be8b5bc1366f353e8090da5825a7ddbd086f205d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-958-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/720/958/#65-transition-and-open-effective-date-information) SEC content: no ##### [720-958-65-1](https://asc.understandingaccounting.org/asc/720/958/#720-958-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:13:26.933Z to 2026-09-10T01:13:26.933Z Record version: sha256:51c817ff6dfd54997efdb82b351149324a872cb054f93cfa10a6bbecb701295d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 01/05/2016 after the end of the transition period stated in Accounting Standards Update No. 2013-06, _Not-for-Profit Entities (Topic 958): Services Received from Personnel of an Affiliate_.