{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/720/","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","number":"720","title":"Other Expenses","area":"Expenses","group":null,"subtopics":[{"number":"720-10","topic":"720","title":"Overall","area":"Expenses","paragraphs":2,"summary":"ASC 720-10 is the Overall subtopic of the Other Expenses Topic, which is essentially an organizing shell. It lists the eight subtopics housed under Topic 720 — Overall, Start-Up Costs, Insurance Costs, Contributions Made, Real and Personal Property Taxes, Advertising Costs, Electronic Equipment Waste Obligations, and Business and Technology Reengineering — and states that each contains standalone guidance with no interrelationship among them.","concepts":["other expenses","start-up costs","insurance costs","contributions made","property taxes","advertising costs","electronic equipment waste obligations","business and technology reengineering"],"categories":["Recognition","Presentation","Financial statement presentation"],"level":"introductory","topic_title":"Other Expenses","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-10-05-1","para":"05-1","html":"
The Other Expenses Topic includes the following Subtopics:
  1. a
    Overall
  2. b
    Start-Up Costs
  3. c
    Insurance Costs
  4. d
    Contributions Made
  5. e
    Real and Personal Property Taxes
  6. f
    Advertising Costs
  7. g
    Electronic Equipment Waste Obligations
  8. h
    Business and Technology Reengineering.
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Each Subtopic in the Other Expenses Topic contains standalone guidance; there is no relationship between the individual Subtopics within this Topic. Each Subtopic provides accounting and reporting guidance for the specific type of costs and expenses as indicated by the Subtopic title.
","snippet":"Each Subtopic in the Other Expenses Topic contains standalone guidance; there is no relationship between the individual Subtopics within this Topic. Each Subtopic provides accounting and reporting guidance for the specif…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:638c0086287abe12915253fc6c545f6bea478f73d96e294df9a553624d69f7ed","downloaded_from":"2026-09-10T01:06:55.927Z","last_downloaded_at":"2026-09-10T01:06:55.927Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483343","source_sha256":"59ebf7563e3d2920748370cfd577e2163927e5c6e319cd11c1c417b4315e7180"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:efbcfc788ab14b4994448f37f7d6175d3698b74117c6fc1fc306d886d5842ae8","downloaded_from":"2026-09-10T01:06:55.927Z","last_downloaded_at":"2026-09-10T01:06:55.927Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483343","source_sha256":"59ebf7563e3d2920748370cfd577e2163927e5c6e319cd11c1c417b4315e7180"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1dd6fc3db5483e0dae40eb0f2cf9277a40b3d10379b8d454a2e2365fd5caade8","downloaded_from":"2026-09-10T01:06:55.927Z","last_downloaded_at":"2026-09-10T01:06:55.927Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483343","source_sha256":"59ebf7563e3d2920748370cfd577e2163927e5c6e319cd11c1c417b4315e7180"}}],"enrichment":{"summary":"ASC 720-10 is the Overall subtopic of the Other Expenses Topic, which is essentially an organizing shell. It lists the eight subtopics housed under Topic 720 — Overall, Start-Up Costs, Insurance Costs, Contributions Made, Real and Personal Property Taxes, Advertising Costs, Electronic Equipment Waste Obligations, and Business and Technology Reengineering — and states that each contains standalone guidance with no interrelationship among them.","key_points":["Topic 720 collects guidance on miscellaneous expenses and costs not addressed in other Topics, organized into eight subtopics listed at 720-10-05-1.","The subtopics are Overall (720-10), Start-Up Costs (720-15), Insurance Costs (720-20), Contributions Made (720-25), Real and Personal Property Taxes (720-30), Advertising Costs (720-35), Electronic Equipment Waste Obligations (720-40), and Business and Technology Reengineering (720-45).","Per 720-10-05-2, each Subtopic contains standalone guidance and there is no relationship between the individual Subtopics within the Topic.","Because the subtopics are independent, guidance or analogies from one 720 subtopic should not be applied to another type of cost covered by a different subtopic.","720-10 Overall itself supplies no recognition or measurement rules; the substantive accounting and reporting requirements reside in the specific cost subtopics."],"categories":["Recognition","Presentation","Financial statement presentation"],"audience_level":"introductory","student_note":"Treat 720-10 as a table of contents, not a source of rules — the testable content is in the individual subtopics (e.g., expensing start-up costs under 720-15, contributions made under 720-25). The common mistake is assuming the 720 subtopics form a coherent framework and reasoning by analogy across them, which 720-10-05-2 expressly forecloses.","related_topics":["720-15","720-20","720-25","720-30","720-35","720-45"],"key_concepts":["other expenses","start-up costs","insurance costs","contributions made","property taxes","advertising costs","electronic equipment waste obligations","business and technology reengineering"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a14b2407a5d785cb1eb7a69e791bdee26cb12a39cdaa9717cd65fa6735c010fe","downloaded_from":"2026-09-10T01:06:55.927Z","last_downloaded_at":"2026-09-10T01:06:55.927Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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Expenses","score":0.6562,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4d0fe4e922169cedf82a40f11d243b2f2ab78e09244f1f407bfc93db84e304ac","downloaded_from":"2026-09-10T01:10:32.559Z","last_downloaded_at":"2026-09-10T01:10:47.285Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"705-10","title":"Overall","topic_title":"Cost of Sales and Services","score":0.654,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:18f302feff9f682e7b8b2191c67c80956df5d33fb326abee61bbfdb4fb08f8b4","downloaded_from":"2026-09-10T00:55:38.735Z","last_downloaded_at":"2026-09-10T00:55:50.312Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-970","title":"Real Estate—General","topic_title":"Other Expenses","score":0.6534,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c9b7a358aa76c9a861ce5e975d4f28e3b7427903fe4eefb07ac0d30844785ce0","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-926","title":"Entertainment—Films","topic_title":"Other Expenses","score":0.6493,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:70bc6d96f5c4c3ba690b2abb875ceb97e41254ee9b06e8fbcf0cb872a744205e","downloaded_from":"2026-09-10T01:10:05.518Z","last_downloaded_at":"2026-09-10T01:10:20.638Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-924","title":"Entertainment—Casinos","topic_title":"Other Expenses","score":0.6402,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aee682c08a94e7b66d9cd5e434b7b8a39d50d1cf5f14411ab6b71c563e054d12","downloaded_from":"2026-09-10T01:09:57.559Z","last_downloaded_at":"2026-09-10T01:10:03.676Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not 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Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e433a580934a1663c97f8f0e2dd9798d86b45648677cf3a699cf6a3bc03829fe","downloaded_from":"2026-09-10T01:06:59.231Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ceacbeb3de48cc674a1460a85fba633eb5a2fa94c0b2251954e4f96dd06016cd","downloaded_from":"2026-09-10T01:06:55.927Z","last_downloaded_at":"2026-09-10T01:06:55.927Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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The single core rule is that costs of start-up activities, including organization costs, must be expensed as incurred (720-15-25-1). The Subtopic defines start-up activities by their nature rather than by the time period in which they occur, and carves out numerous costs governed by other GAAP.","concepts":["start-up costs","organization costs","preopening costs","expense as incurred","nonrecurring operating losses","scope exceptions","not-for-profit entities","allocated depreciation and amortization"],"categories":["Recognition","Initial measurement","Not-for-profit"],"level":"introductory","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-15-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
ContractAddedAccounting Standards Update No. 2014-0905/28/2014
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
RevenueAddedAccounting Standards Update No. 2014-0905/28/2014
720-15-15-1AmendedAccounting Standards Update No. 2014-1006/10/2014
720-15-15-4AmendedAccounting Standards Update No. 2014-0905/28/2014
720-15-55-7AmendedAccounting Standards Update No. 2014-0905/28/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nContract | Added | Accounting Standards Update No. 2014-09 | 05/28/2014 |\nCustomer | Add…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:02c2d61294ded775a9fff10138724500118c24b5bd323888ad15b1ff822762ff","downloaded_from":"2026-09-10T01:06:59.231Z","last_downloaded_at":"2026-09-10T01:06:59.231Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483418","source_sha256":"2ab60bfb374692b12af7fb1767ed45b18f473a96a6a5f1c9655ca294788492b7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f0c3a3832622ffed9107f61a587f4a81dbad38c741533b7ed0bc679b3ce2b834","downloaded_from":"2026-09-10T01:06:59.231Z","last_downloaded_at":"2026-09-10T01:06:59.231Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483418","source_sha256":"2ab60bfb374692b12af7fb1767ed45b18f473a96a6a5f1c9655ca294788492b7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1b4a9d0d854cb3a8fed3a6f0a8b5398cb81ac2078b227e4d3d49f9dd3821dbbf","downloaded_from":"2026-09-10T01:06:59.231Z","last_downloaded_at":"2026-09-10T01:06:59.231Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483418","source_sha256":"2ab60bfb374692b12af7fb1767ed45b18f473a96a6a5f1c9655ca294788492b7"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-15-05-1","para":"05-1","html":"
This Subtopic provides guidance on the financial reporting of start-up and organization costs. This Subtopic defines start-up activities and provides Examples to help entities determine which costs fall within the scope and outside the scope of this Subtopic.
","snippet":"This Subtopic provides guidance on the financial reporting of start-up and organization costs. This Subtopic defines start-up activities and provides Examples to help entities determine which costs fall within the scope …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52265d3c13120a59a6810d6f2360e7b6ecf99df3dca5ec8f34d673872bdf7b76","downloaded_from":"2026-09-10T01:07:02.296Z","last_downloaded_at":"2026-09-10T01:07:02.296Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483391","source_sha256":"4652c54e3e87d3a85d15689423c89f8ed5a4dc2441b5695d14301a60a270d70c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4fb9533c8bdbffc29c28c35bdede65059eb3092f44bc53c4fae434cdd4d1cadd","downloaded_from":"2026-09-10T01:07:02.296Z","last_downloaded_at":"2026-09-10T01:07:02.296Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483391","source_sha256":"4652c54e3e87d3a85d15689423c89f8ed5a4dc2441b5695d14301a60a270d70c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a5e071b4890a2a6aacb80b11c3dd17538dbeb48908aa985097f2a0246789df27","downloaded_from":"2026-09-10T01:07:02.296Z","last_downloaded_at":"2026-09-10T01:07:02.296Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483391","source_sha256":"4652c54e3e87d3a85d15689423c89f8ed5a4dc2441b5695d14301a60a270d70c"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Entities","paragraphs":[{"citation":"720-15-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all nongovernmental entities, including not-for-profit entities (NFPs).
  1. a
    Subparagraph superseded by Accounting Standards Update No. 2014-10.
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2014-10.
  3. c
    Subparagraph superseded by Accounting Standards Update No. 2014-10.
","snippet":"The guidance in this Subtopic applies to all nongovernmental entities, including not-for-profit entities (NFPs).\n(a) Subparagraph superseded by Accounting Standards Update No. 2014-10.\n(b) Subparagraph superseded by Acco…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a46bac5faaaf0dace4a70cb07ff7467a66d1fc50e37021bdcf516abc3b3652d1","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:31dd2742c20a447c625dfdf1d6e2aa8e0bc1b1aada80697805a6c7b457b0431a","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"720-15-15-2","para":"15-2","html":"
The guidance in this Subtopic applies to start-up activities. The definition of start-up activities is based on the nature of the activities and not the time period in which they occur. Start-up activities include activities related to organizing a new entity (commonly referred to as organization costs).
","snippet":"The guidance in this Subtopic applies to start-up activities. The definition of start-up activities is based on the nature of the activities and not the time period in which they occur. Start-up activities include activi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d67fc36f3e923a223cbdbdbe7692869c012ddd004e16262b7bb01b6af78d9be3","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}},{"citation":"720-15-15-3","para":"15-3","html":"
Various terms are used to refer to start-up costs, such as preopening costs, preoperating costs, and organization costs. For purposes of this Subtopic, these costs are referred to as start-up costs.
","snippet":"Various terms are used to refer to start-up costs, such as preopening costs, preoperating costs, and organization costs. For purposes of this Subtopic, these costs are referred to as start-up costs.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7156e9a6387f775f33be3af3a6febae9a8470c7ae5707a3d36fb7d2bdaa90e64","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}},{"citation":"720-15-15-4","para":"15-4","html":"
Certain costs that may be incurred in conjunction with start-up activities are outside the scope of this Subtopic. Such costs should be accounted for in accordance with other existing authoritative accounting literature. The guidance in this Subtopic does not apply to the following transactions and activities:
  1. a
    Ongoing customer acquisition costs, such as policy acquisition costs (see Subtopic 944-30)
  2. b
    Loan origination costs (see Subtopic 310-20)
  3. c
    Activities related to routine, ongoing efforts to refine, enrich, or otherwise improve upon the qualities of an existing product, service, process, or facility
  4. d
    Activities related to mergers or acquisitions
  5. e
    Business process reengineering and information technology transformation costs addressed in Subtopic 720-45
  6. f
    Costs of acquiring or constructing long-lived assets and getting them ready for their intended uses (however, the costs of using long-lived assets that are allocated to start-up activities [for example, depreciation of computers] are within the scope of this Subtopic)
  7. g
    Costs of acquiring or producing inventory
  8. h
    Costs of acquiring intangible assets (however, the costs of using intangible assets that are allocated to start-up activities [for example, amortization of a purchased patent] are within the scope of this Subtopic)
  9. i
    Costs related to internally developed assets (for example, internal-use computer software costs) (however, the costs of using those assets that are allocated to start-up activities are within the scope of this Subtopic)
  10. j
    Research and development costs that are within the scope of Section 730-10-15
  11. k
    Regulatory costs that are within the scope of Section 980-10-15
  12. l
    Costs of fundraising incurred by NFPs
  13. m
    Costs of raising capital
  14. n
    Costs of advertising
  15. o
    Learning or start-up costs incurred in connection with existing contracts with customers and in anticipation of follow-on or future contracts for the same goods or services (see Subtopic 340-40 on other assets and deferred costs).
  16. p
    Costs incurred in connection with acquiring a contract with a customer (see Subtopic 340-40).
","snippet":"Certain costs that may be incurred in conjunction with start-up activities are outside the scope of this Subtopic. Such costs should be accounted for in accordance with other existing authoritative accounting literature.…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fbef4098474620580a3ba426819b445ecfc1ac23674626ee7b5a11cf3f760fec","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}},{"citation":"720-15-15-5","para":"15-5","html":"
Section 720-15-55 provides Examples of costs that are within the scope and outside the scope of this Subtopic.
","snippet":"Section 720-15-55 provides Examples of costs that are within the scope and outside the scope of this Subtopic.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:11e6aedc5da0547102e177a99d45ba10af84e8213d114a2791c9fa356772860c","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:709c7e9d6762f25c61188f3e828e56fa24f407cb6ba60e5634a7e5cce4ad79a2","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:22a928a8cd4003f0580675788bfb68ee50c50e27da6e6b9b8082855c62435ac5","downloaded_from":"2026-09-10T01:07:05.683Z","last_downloaded_at":"2026-09-10T01:07:05.683Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483365","source_sha256":"5f7f60624d2035a52f22e9d683bf8109acb05f81cf865b0e92b00d115c16135e"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-15-25-1","para":"25-1","html":"
Costs of start-up activities, including organization costs, shall be expensed as incurred.
","snippet":"Costs of start-up activities, including organization costs, shall be expensed as incurred.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b55fc14bb28da79ce0110b0cced4f253774988b82816da6412d12e9c19218408","downloaded_from":"2026-09-10T01:07:11.822Z","last_downloaded_at":"2026-09-10T01:07:11.822Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483417","source_sha256":"2a988af1922f240251c69dd4ab3e08b624edbdc1a0137b3123c0c9686660f846"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:61e66a4f234bddd2375a7781ab827c43244dc9222de3350548916a7a54dac6fd","downloaded_from":"2026-09-10T01:07:11.822Z","last_downloaded_at":"2026-09-10T01:07:11.822Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483417","source_sha256":"2a988af1922f240251c69dd4ab3e08b624edbdc1a0137b3123c0c9686660f846"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0277c7c5491741b3a94a70cef3cc9312e0921dda3d08f3acbaf79e618e38abe9","downloaded_from":"2026-09-10T01:07:11.822Z","last_downloaded_at":"2026-09-10T01:07:11.822Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483417","source_sha256":"2a988af1922f240251c69dd4ab3e08b624edbdc1a0137b3123c0c9686660f846"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"720-15-55-1","para":"55-1","html":"
Accounting for certain costs incurred in conjunction with start-up activities are not covered by this Subtopic. An entity should not conclude that costs outside the scope of this Subtopic are to be capitalized. Such costs shall be capitalized if they qualify for capitalization under other generally accepted accounting principles (GAAP).
","snippet":"Accounting for certain costs incurred in conjunction with start-up activities are not covered by this Subtopic. An entity should not conclude that costs outside the scope of this Subtopic are to be capitalized. Such cost…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:398e22b071a1f623d824c27f42d5a85b77da1867c0fc841a3740abb1aa2b1856","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4c94f963af7afbff27284854fb42389485ca1706e878eab793ca61f4f6cb372","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"720-15-55-2","para":"55-2","html":"
This Example illustrates application of the guidance in Section 720-15-15.
","snippet":"This Example illustrates application of the guidance in Section 720-15-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8ae7c846cb517f1e842abb5921c0ecd4fac0ad80b2b6c933caafbca13e4fdd23","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-3","para":"55-3","html":"
A major U.S. beverage entity begins construction of a new plant in China. This represents the entity's initial entry into the Chinese market. As part of the overall strategy, the entity plans to introduce into China, on a locally produced basis, its major U.S. beverage brands. The following costs that might be incurred in conjunction with start-up activities are subject to the provisions of this Subtopic:
  1. a
    Travel costs, employee salary-related costs, and consulting costs related to feasibility studies, accounting, legal, tax, and governmental affairs
  2. b
    Training of local employees related to production, maintenance, computer systems, engineering, finance, and operations
  3. c
    Recruiting, organization, and training related to establishing a distribution network
  4. d
    Nonrecurring operating losses
  5. e
    Depreciation, if any, of new computer data terminals and other communication devices.
","snippet":"A major U.S. beverage entity begins construction of a new plant in China. This represents the entity's initial entry into the Chinese market. As part of the overall strategy, the entity plans to introduce into China, on …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c5857cc900ee665a681bf78309af0edf95c33dabe13a38df857f9604a49b457a","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-4","para":"55-4","html":"
The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic:
  1. a
    Costs of long-lived asset additions, such as the new plant, production equipment, and packaging lines
  2. b
    Internal-use computer software systems development costs
  3. c
    Costs that are capitalizable as inventory
  4. d
    Deferred financing costs.
","snippet":"The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic:\n(a) Costs of long-lived asset additions, such as the new plant, production equipment, and packagi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91d4c3cfb8064484eae225a423c150a078a6a345a5a07449558d3a79cb06efc1","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-5","para":"55-5","html":"
This Example illustrates application of the guidance in Section 720-15-15.
","snippet":"This Example illustrates application of the guidance in Section 720-15-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1ad264068c75516b043bbde9f1c80dbb445232c4bb6f12cfd17801180e36e70a","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-6","para":"55-6","html":"
A retail chain is constructing and opening two new stores. One will open in a territory in which the entity already has three stores operating. The other will open in a territory new to the entity. (Costs related to both openings are treated the same for purposes of this Subtopic.) All of the stores provide the same products and services. The following costs that might be incurred in conjunction with start-up activities are subject to the provisions of this Subtopic:
  1. a
    Salary-related expenses for new employees
  2. b
    Salary-related expenses for the management store opening team
  3. c
    Training costs and meals for newly hired employees
  4. d
    Hotel charges, meals, and transportation for the opening team
  5. e
    Security, property taxes, insurance, and utilities costs incurred after construction is completed
  6. f
    Depreciation, if any, of new computer data terminals and other communication devices
  7. g
    Nonrecurring operating losses.
","snippet":"A retail chain is constructing and opening two new stores. One will open in a territory in which the entity already has three stores operating. The other will open in a territory new to the entity. (Costs related to both…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f924f7976a4137bf95e61217ec099839ed77490761262d410c578c400b221180","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-7","para":"55-7","html":"
The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic:
  1. a
    Store advertising costs
  2. b
    Coupon giveaways within the scope of Topic 606 on revenue from contracts with customers (see paragraphs
    606-10-32-25 through 32-27
    for guidance on consideration payable to a customer)
  3. c
    Costs of uniforms
  4. d
    Costs of furniture and cash registers
  5. e
    Costs to obtain licenses, if any
  6. f
    Security, property taxes, insurance, and utilities costs related to construction activities
  7. g
    Deferred financing costs (see Subtopic 835-30).
","snippet":"The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic:\n(a) Store advertising costs\n(b) Coupon giveaways within the scope of Topic 606 on revenue from co…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:312cefbe4f3b86166915c0b74d5cfa10b791a85ff66d5f5dc8df5cc1c393ab60","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-8","para":"55-8","html":"
This Example illustrates application of the guidance in Section 720-15-15.
","snippet":"This Example illustrates application of the guidance in Section 720-15-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9521e1cf93371bede704a0133adbdea5b73a5d096ff597f4a6287e4f83f6284","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-9","para":"55-9","html":"
A not-for-profit entity (NFP) that provides meals to the homeless is opening a shelter to house the homeless. The entity will rent the facility. This will be its first shelter and it will conduct a fundraising campaign to raise money to start up the shelter. The entity will lease space for the shelter and will incur capital expenditures for leasehold improvements and furniture. The entity expects that it will require three months to set up the space for the shelter. The entity will hire a security firm to secure the premises during the three-month period in which the shelter is built. The following costs that might be incurred in conjunction with start-up activities are subject to the provisions of this Subtopic:
  1. a
    Employee salary-related costs related to needs and feasibility studies
  2. b
    Staff recruiting and training
  3. c
    Rent, security, insurance, and utilities
  4. d
    Consultant fees for developing policies and procedures for operating the shelter
  5. e
    Amortization and depreciation, if any, of leasehold improvements and furniture
  6. f
    Costs of social workers.
","snippet":"A not-for-profit entity (NFP) that provides meals to the homeless is opening a shelter to house the homeless. The entity will rent the facility. This will be its first shelter and it will conduct a fundraising campaign t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ad2dbb9b2c2c9c1ca3d3f7cda971d959a1c1df3933f4cc435f8c052dc8f0c4c4","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-10","para":"55-10","html":"
The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic (see Subtopic 958-720):
  1. a
    Costs of fund-raising
  2. b
    Costs of leasehold improvements and furniture
  3. c
    Architect fees for the leasehold improvements
  4. d
    Advertising costs to publicize the shelter.
","snippet":"The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic (see Subtopic 958-720):\n(a) Costs of fund-raising\n(b) Costs of leasehold improvements and furnitur…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e1e195c894762cce983072b16722b004526301cc1e25bb5b61b6fd96de1e175","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:82d6fa3d80a7e81cc55a914798b145350631d71b2b8cf6b4ed83bfbaeb7df9a7","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:be194512c019dc97525d17e51d88b4fe5d8757123b2b4ff18b373e8531c7e68d","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}}],"enrichment":{"summary":"ASC 720-15 governs the accounting for start-up activities — including one-time activities to open a new facility, introduce a new product or service, conduct business in a new territory or with a new class of customer, initiate a new process in an existing facility, or organize a new entity (organization costs). The single core rule is that costs of start-up activities, including organization costs, must be expensed as incurred (720-15-25-1). The Subtopic defines start-up activities by their nature rather than by the time period in which they occur, and carves out numerous costs governed by other GAAP.","key_points":["Costs of start-up activities, including organization costs, shall be expensed as incurred (720-15-25-1); no capitalization or deferral is permitted.","The Subtopic applies to all nongovernmental entities, including not-for-profit entities (720-15-15-1), and start-up activities are identified by the nature of the activity, not the time period in which it occurs (720-15-15-2).","Terms such as preopening costs, preoperating costs, and organization costs are all treated as start-up costs under this Subtopic (720-15-15-3).","Excluded from scope are, among others, ongoing customer acquisition and loan origination costs, merger/acquisition activities, business process reengineering (720-45), costs of acquiring or constructing long-lived assets, inventory costs, intangible asset acquisition costs, internally developed assets such as internal-use software, R&D under 730-10-15, regulatory costs under 980-10-15, NFP fundraising, capital-raising, advertising, and contract-related learning and acquisition costs under 340-40 (720-15-15-4).","Although the cost of acquiring long-lived, intangible, and internally developed assets is outside the scope, the cost of using those assets that is allocated to start-up activities (for example, depreciation of computers or amortization of a purchased patent) is within the scope and expensed (720-15-15-4(f), (h), (i)).","Excluded costs are not automatically capitalizable; they are capitalized only if they qualify under other GAAP (720-15-55-1).","Illustrative in-scope costs include feasibility study and consulting costs, employee recruiting and training, salary-related costs, post-construction security/property taxes/insurance/utilities, and nonrecurring operating losses (720-15-55-3, 55-6, 55-9)."],"categories":["Recognition","Initial measurement","Not-for-profit"],"audience_level":"introductory","student_note":"The rule itself is one sentence — expense start-up costs as incurred — so exam questions almost always test scope: distinguishing preopening/training/feasibility costs (expensed) from long-lived asset, inventory, software, and advertising costs (governed elsewhere). The common misunderstanding is assuming that anything excluded from 720-15 may be capitalized; 720-15-55-1 says such costs are capitalized only if other GAAP allows it.","related_topics":["340-40","720-45","730-10","958-720","350-40","835-30"],"key_concepts":["start-up costs","organization costs","preopening costs","expense as incurred","nonrecurring operating losses","scope exceptions","not-for-profit entities","allocated depreciation and amortization"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8c469f06060c624e0098d3888b3d29027198d8e2febd688dcc96543d9f20ac15","downloaded_from":"2026-09-10T01:06:59.231Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"730-10","title":"Overall","topic_title":"Research and Development","score":0.6995,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7890655f2034aa4d665ec8c0b81a0013ce7f486c5b8b3af33b0e4e6c48d771eb","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-10","title":"Overall","topic_title":"Other Assets and Deferred Costs","score":0.6985,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3e3958d76226fdfb9914d3c1f4e4016133fcd34ccf5bda5c98b30571ae6f3ee2","downloaded_from":"2026-09-09T23:54:15.524Z","last_downloaded_at":"2026-09-09T23:55:04.724Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-958","title":"Not-for-Profit Entities","topic_title":"Other Expenses","score":0.6922,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b96a0468a587d9659ab1a93e9e247bef703e734975f87d02bfa2991d2059b032","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-40","title":"Contracts with Customers","topic_title":"Other Assets and Deferred Costs","score":0.6903,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:431a935dbc651c9a274c374f3f16c8d79d35892b361e9148e2a929571037c538","downloaded_from":"2026-09-09T23:56:07.379Z","last_downloaded_at":"2026-09-09T23:56:34.589Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-35","title":"Advertising Costs","topic_title":"Other Expenses","score":0.6817,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cda85a51bbc8510bbcda4beef5b6432cfbcc21a21e477090dbb5944828bdf786","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T00:48:53.854Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-970","title":"Real Estate—General","topic_title":"Other Assets and Deferred Costs","score":0.6715,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:422f6ff28a083b2f298d7bf9c9a5f949fb020fdfa1e89ba878c169bd8c75d331","downloaded_from":"2026-09-09T23:58:59.193Z","last_downloaded_at":"2026-09-09T23:59:17.895Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-10","title":"Overall","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3b822c45e971b26c4ca0b38d6124d0c8d7bec59815de44b9c4555b152608a386","downloaded_from":"2026-09-10T01:06:55.927Z","last_downloaded_at":"2026-09-10T01:06:55.927Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483343","source_sha256":"59ebf7563e3d2920748370cfd577e2163927e5c6e319cd11c1c417b4315e7180"}},"next":{"number":"720-20","title":"Insurance Costs","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cf4b8abd52b6f01d269eae1bb85100b91291b3dbead719ec71e3fd60c97e3e2b","downloaded_from":"2026-09-10T01:07:18.243Z","last_downloaded_at":"2026-09-10T01:07:45.379Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1f2414b3f9d6ebbb1204c58a75682e4b9ab184b979bbb79adc0457bc390798a1","downloaded_from":"2026-09-10T01:06:59.231Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-20","topic":"720","title":"Insurance Costs","area":"Expenses","paragraphs":76,"summary":"ASC 720-20 tells a policyholder (a noninsurance entity, or an insurer buying coverage outside its core operations) how to account for insurance it purchases, covering three contract types: retroactive contracts, claims-made contracts, and multiple-year retrospectively rated contracts. If a contract does not actually transfer insurance risk, the premium (less amounts retained by the insurer) is accounted for as a deposit under Subtopic 340-30 (720-20-25-1). For retroactive coverage of already-incurred liabilities, the premium is expensed immediately, a receivable is recorded for expected recoveries, and any excess of receivable over premium is a deferred gain amortized over the recovery period (720-20-25-3 through 25-4; 720-20-35-2).","concepts":["retroactive insurance contract","claims-made policy","deferred gain amortization","deposit accounting","incurred but not reported liability","insurance recoverable","multiple-year retrospectively rated contract","with-and-without method"],"categories":["Recognition","Subsequent measurement","Presentation","Contingencies and guarantees"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-20-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Reinsurance Added Accounting Standards Update No. 2016-19 12/14/2016
720-20-05-3 Amended Accounting Standards Update No. 2016-19 12/14/2016
720-20-05-5 Amended Maintenance Update 2020-18 (PDF) 11/25/2020
720-20-15-6 Amended Accounting Standards Update No. 2016-19 12/14/2016
720-20-15-8 Amended Accounting Standards Update No. 2016-19 12/14/2016
720-20-25-1 Amended Accounting Standards Update No. 2016-19 12/14/2016
720-20-30-2 Amended Maintenance Update 2020-18 (PDF) 11/25/2020
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nReinsurance | Added | Accounting Standards Update No. 2016-19 | 12/14/2016 |\n| | | |\n720…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:04644f1c25cc4d2820357cb1683aa4b6cc61e089c45917f18c58ac3e912efb08","downloaded_from":"2026-09-10T01:07:18.243Z","last_downloaded_at":"2026-09-10T01:07:18.243Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483369","source_sha256":"cd589875d8da0a7126f4dcc6cd16c01e9426bb8e807adb1f2e8fcb24536a8a42"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:18370e357b286981b02dd4e7a88b1939aeff43423246ac0c811c14423a7d7630","downloaded_from":"2026-09-10T01:07:18.243Z","last_downloaded_at":"2026-09-10T01:07:18.243Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483369","source_sha256":"cd589875d8da0a7126f4dcc6cd16c01e9426bb8e807adb1f2e8fcb24536a8a42"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ffda97179e020b5e63aa6aac80d9c1f5cde9f597e315627317d0b1a10382d126","downloaded_from":"2026-09-10T01:07:18.243Z","last_downloaded_at":"2026-09-10T01:07:18.243Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483369","source_sha256":"cd589875d8da0a7126f4dcc6cd16c01e9426bb8e807adb1f2e8fcb24536a8a42"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-20-05-1","para":"05-1","html":"
This Subtopic provides guidance on three types of insurance contracts. The guidance for each is presented in the following Subsections:
  1. a
    Retroactive contracts
  2. b
    Claims-made contracts
  3. c
    Multiple-year retrospectively rated contracts.
","snippet":"This Subtopic provides guidance on three types of insurance contracts. The guidance for each is presented in the following Subsections:\n(a) Retroactive contracts\n(b) Claims-made contracts\n(c) Multiple-year retrospectivel…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c3c39e33ff8cae5a2b83b268dae1f9f60c475d312cbc68001b6401c24937f34a","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"citation":"720-20-05-2","para":"05-2","html":"
In addition, guidance on deposit accounting resulting from contracts that do not transfer insurance risk is contained in the General Subsections of this Subtopic and in Subtopic 340-30. Operations in certain industries may be subject to such high risks that insurance is unavailable or is available only at what is considered to be a prohibitively high cost. Some entities in those industries have pooled their risks by forming mutual insurance entities in which they retain an equity interest and to which they pay insurance premiums. For example, some electric utility entities have formed such a mutual insurance entity to insure risks related to nuclear power plants, and some oil entities have formed an entity to insure against risks associated with petroleum exploration and production. Whether the premium paid represents a payment for the transfer of risk or whether it represents merely a deposit will depend on the circumstances surrounding each entity's interest in and insurance arrangement with the mutual insurance entity. An analysis of the contract is required to determine whether risk has been transferred and to what extent.
","snippet":"In addition, guidance on deposit accounting resulting from contracts that do not transfer insurance risk is contained in the General Subsections of this Subtopic and in Subtopic 340-30. Operations in certain industries m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2ab80a83aef1f197ce3912b92186fa45da7ee2b4cedabee0b620f80d9abfcb78","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c7c3d99b40703266dd493e21c5c4e8313500c6313feaa6f29fe5381cafde9787","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"block":"Retroactive Contracts","heading":null,"paragraphs":[{"citation":"720-20-05-3","para":"05-3","html":"
The Retroactive Contracts Subsections provide guidance on how an insured entity, including an insurance entity purchasing insurance unrelated to its core insurance operations (for example, manufacturers, retailers, service entities, and financial institutions), should account for a purchased retroactive insurance policy and whether the transaction results in gain recognition (excluding reinsurance transactions). For example, an entity records a liability of $100 million incurred as a result of a past event in accordance with Subtopic 450-20. The entity then buys an insurance policy for $60 million to cover that liability.
","snippet":"The Retroactive Contracts Subsections provide guidance on how an insured entity, including an insurance entity purchasing insurance unrelated to its core insurance operations (for example, manufacturers, retailers, servi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3bae801406e6e6ab95294d3bb2b4cda2cd49fe9cdd56d6a02474c6dfb5d383ae","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:06adfcdaa1f32ba0d2da374ef0f1ba79b30c9eb7f79363b421518bb670759d42","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"block":"Claims-Made Contracts","heading":null,"paragraphs":[{"citation":"720-20-05-4","para":"05-4","html":"
Many entities use claims-made policies to satisfy their insurance needs for such coverage as product, directors and officers, and malpractice liabilities. However, entities have been purchasing coverage for a variety of other exposures using a claims-made format. Under a claims-made insurance policy, an entity is insured for any claims reported during the term of the policy, in many cases including those that occurred prior to the policy effective date but after the specified retroactive date.
","snippet":"Many entities use claims-made policies to satisfy their insurance needs for such coverage as product, directors and officers, and malpractice liabilities. However, entities have been purchasing coverage for a variety of …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3365f1ecdb2192b767248358b01fc5b3479a3ebcd9c1fd7cf3a41569a3ffdce8","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"citation":"720-20-05-5","para":"05-5","html":"
Generally, entities purchasing a claims-made policy will renew the policy each year. The amount of coverage purchased may change over time to meet current needs (for example, changing risk within the entity) or to respond to the overall environment (for example, the expected settlement costs of the same claim today may cost more than in prior years). When operations cease, the entity generally purchases tail coverage to insure itself against any previously unasserted claims.
","snippet":"Generally, entities purchasing a claims-made policy will renew the policy each year. The amount of coverage purchased may change over time to meet current needs (for example, changing risk within the entity) or to respon…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a2743596df59f822750b39902b4469bd80b4c2f61e1085f454cd3ff1497b28d2","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"citation":"720-20-05-6","para":"05-6","html":"
Presuming the entity can renew the claims-made policy each year and can obtain tail coverage when desired, such a strategy effectively converts the claims-made policy into an occurrence-based policy covering the entity for any claims made against it.
","snippet":"Presuming the entity can renew the claims-made policy each year and can obtain tail coverage when desired, such a strategy effectively converts the claims-made policy into an occurrence-based policy covering the entity f…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91f83dd4ddecc2c82ccb548d2899b7b2451984936b5fe1be9e8917be42ba9312","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"citation":"720-20-05-7","para":"05-7","html":"
Entities generally use claims-made coverage because it is the only form of insurance available for certain exposures, particularly exposures for which the occurrence dates may be difficult to determine or for which the occurrence may span a long period of time. Therefore, a claims-made policy mitigates potential coverage disputes because the occurrence date generally is not relevant to the determination of coverage.
","snippet":"Entities generally use claims-made coverage because it is the only form of insurance available for certain exposures, particularly exposures for which the occurrence dates may be difficult to determine or for which the o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c910907d5b5143186816f7affbb10d404f27e0043d0709a52fba0bfed88e3422","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"citation":"720-20-05-8","para":"05-8","html":"
Also, there may be reduced insurance costs in the first several years of a claims-made policy as compared to an occurrence-based policy. Many entities that purchase claims-made insurance policies have no knowledge of unasserted outstanding claims or, because their liabilities have not met the recognition criteria contained in paragraph 450-20-25-2 or in other applicable U.S. generally accepted accounting principles (GAAP), have no recognized liability for claims, including incurred but not reported claims. In other situations, however, entities that purchase claims-made insurance policies are aware of potential claims based on a specific incident or incidents or historical experience. In those situations, unasserted claims can be either specifically excluded from or specifically included in the coverage.
","snippet":"Also, there may be reduced insurance costs in the first several years of a claims-made policy as compared to an occurrence-based policy. Many entities that purchase claims-made insurance policies have no knowledge of una…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9f562e7ea0d9fe10e0512449ec9789396441908ebedd0638f5375aa753bd8621","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:86b9acfd459029c74e5faf3bf58cea572238679f0e038a8a4530db7c4d719d8d","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"block":"Multiple-Year Retrospectively Rated Contracts","heading":null,"paragraphs":[{"citation":"720-20-05-9","para":"05-9","html":"
An entity (for example, a manufacturer, a retailer, a service entity, or a financial entity) may enter into a multiple-year retrospectively rated contract with an insurance entity. These contracts may cover various types of exposures such as product and environmental liability risks. A critical feature of these contracts is that part or all of the retrospective rating provision is obligatory such that the retrospective rating provision creates for each party to the contract future rights and obligations as a result of past events.
","snippet":"An entity (for example, a manufacturer, a retailer, a service entity, or a financial entity) may enter into a multiple-year retrospectively rated contract with an insurance entity. These contracts may cover various types…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9a1387fd8b1da809c00f94d4d1eaaf82252428ca4101741a17df3272ebd6b25f","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"citation":"720-20-05-10","para":"05-10","html":"
Such contracts include a retrospective rating provision that provides for any of the following based on contract experience:
  1. a
    Changes in the amount or timing of future contractual cash flows, including premium adjustments, settlement adjustments, or refunds to the noninsurance entity
  2. b
    Changes in the contract's future coverage.
","snippet":"Such contracts include a retrospective rating provision that provides for any of the following based on contract experience:\n(a) Changes in the amount or timing of future contractual cash flows, including premium adjustm…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:be692a0677c725b48ec5c22442ff3100ade6bdeadc779e9281455c0904d4b49d","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52e842d292697ecffb15bda2785e045e5ef2a0c00d46c43487b7f89a7a05ff1b","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ba7f18a3047d63ec71e9fb0dcb664d4604e9b6853d370fbd65fbed76be750a1b","downloaded_from":"2026-09-10T01:07:20.723Z","last_downloaded_at":"2026-09-10T01:07:20.723Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483344","source_sha256":"c58ea2a45b7a12c998ed9a3ff53ac1f4eb5d97a0a9a385294d61b1d95876ea8f"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-20-15-1","para":"15-1","html":"
The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific exceptions noted in the other Subsections of this Section.
","snippet":"The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific exceptions noted in the other Subsections of this Section.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b09d24d4d06f40716d2087b5f785c5d65e449098dc0087daf9656de1b7f56720","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b3f8c843786d422287bf456f998c32fe5db6ac7e47479a52f8cb3786fcc1425e","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":null,"heading":"Entities","paragraphs":[{"citation":"720-20-15-2","para":"15-2","html":"
The guidance in this Subtopic applies to all entities.
","snippet":"The guidance in this Subtopic applies to all entities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f2d09d8c7c9c82f2244abf222b643204d2ffbbe01f75a983ede73aba974ba908","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:04276724dd242b94fe4228b37fd2ae9b7396e7507c40efbb63b9f7ccf1f1acaf","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":"Retroactive Contracts","heading":"Overall Guidance","paragraphs":[{"citation":"720-20-15-3","para":"15-3","html":"
The Retroactive Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph 720-20-15-1, with specific entity and transaction qualifications noted below.
","snippet":"The Retroactive Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph 720-20-15-1, with specific entity and transaction qualifications note…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aa42395ae7f26b9988df19c7594e049a7723e44a6a59d37e198d01e48346faa2","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4ccc4bc60d7357115384e9b7ff8a9eeb8b893b9e817b5c4132d5f01674fa62fd","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":"Retroactive Contracts","heading":"Entities","paragraphs":[{"citation":"720-20-15-4","para":"15-4","html":"
The guidance in the Retroactive Contracts Subsections applies to all entities that enter into retroactive insurance contracts.
","snippet":"The guidance in the Retroactive Contracts Subsections applies to all entities that enter into retroactive insurance contracts.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a4ab70952e208333930bc6079794a8df9c6d608ba526188019ec52541637a26e","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:945ee2be9e2f4b5a275f617636f7bb6e739deca92d4de48a525f5b9236cf49e1","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":"Retroactive Contracts","heading":"Transactions","paragraphs":[{"citation":"720-20-15-5","para":"15-5","html":"
The guidance in the Retroactive Contracts Subsections applies to the following transactions and activities:
  1. a
    Those that meet the indemnification against loss or liability conditions of Section 720-20-25-1
  2. b
    Those that provide indemnification against loss or liability relating to liabilities that have been incurred as a result of a past event, for example, environmental remediation liabilities (see Subtopic 410-30).
","snippet":"The guidance in the Retroactive Contracts Subsections applies to the following transactions and activities:\n(a) Those that meet the indemnification against loss or liability conditions of Section 720-20-25-1\n(b) Those th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:16f0cb07f67b1dd70a069e301a834f93382140e0d4973587ad84ba9c7baf9de6","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"citation":"720-20-15-6","para":"15-6","html":"
The guidance in the Retroactive Contracts Subsections does not apply to the following transactions and activities:
  1. a
    Those that legally extinguish the entity's liability
  2. b
    Reinsurance transactions (see Subtopic 944-20 for guidance on the accounting by insurance entities for reinsurance contracts).
","snippet":"The guidance in the Retroactive Contracts Subsections does not apply to the following transactions and activities:\n(a) Those that legally extinguish the entity's liability\n(b) Reinsurance transactions (see Subtopic 944-2…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:17e71650a96739e5c6922aed4b6423941826b1ca49d35f4c3216ae1dcd8987f7","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8c929a5e67242f48d3bbddd8b42def3bb72b8dda81220b0a71493c1529e0bddf","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":"Claims-Made Contracts","heading":"Overall Guidance","paragraphs":[{"citation":"720-20-15-7","para":"15-7","html":"
The Claims-Made Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph 720-20-15-1, with specific transaction exceptions noted below.
","snippet":"The Claims-Made Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph 720-20-15-1, with specific transaction exceptions noted below.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8789686d28516e1c940f21a4c08fcbf75bfdf4141466c10efd77e24a48e54000","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ac208a30e268f5e721c10b03b913b7d99a1ecd4d6ac4c0c02b97e24d57351b5c","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":"Claims-Made Contracts","heading":"Transactions","paragraphs":[{"citation":"720-20-15-8","para":"15-8","html":"
The guidance in the Claims-Made Contracts Subsections does not apply to reinsurance transactions (see the Reinsurance Subsections of Topic 944 for guidance on the accounting by insurance entities for reinsurance contracts).
","snippet":"The guidance in the Claims-Made Contracts Subsections does not apply to reinsurance transactions (see the Reinsurance Subsections of Topic 944 for guidance on the accounting by insurance entities for reinsurance contract…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:66a9581ac02a381ccba6b484408dc843ed10a8bd5352efaf0f4f66bd2aeaeb3b","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47f048178789c88ee63316b19ecc8e4cb90ccb6af373285a954a9d14b4e4ae44","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":"Multiple-Year Retrospectively Rated Contracts","heading":"Overall Guidance","paragraphs":[{"citation":"720-20-15-9","para":"15-9","html":"
The Multiple-Year Retrospectively Rated Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph 720-20-15-1, with specific transaction exceptions noted below.
","snippet":"The Multiple-Year Retrospectively Rated Contracts Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph 720-20-15-1, with specific transaction except…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ea53a2375880cd06556ec2e139a409ed9c96493d06abaef7f465add03b085b51","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c421cefe5d7fd8cf91972f1a4db5ea2650b291b2f6f39edb5d1b7fbfacfb293f","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"block":"Multiple-Year Retrospectively Rated Contracts","heading":"Transactions","paragraphs":[{"citation":"720-20-15-10","para":"15-10","html":"
The guidance in the Multiple-Year Retrospectively Rated Contracts Subsections does not apply to the following transactions and activities:
  1. a
    A retrospectively rated insurance contract that is not a multiple-year contract or that could be cancelled by either party without further obligation.
","snippet":"The guidance in the Multiple-Year Retrospectively Rated Contracts Subsections does not apply to the following transactions and activities:\n(a) A retrospectively rated insurance contract that is not a multiple-year contra…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07b75bdd1d182a0f2c0422d726205626ff6399b59969904dd14f53e86960bda8","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:12784d6b3f0b7fe70d5c32f0b18d4d3252b2934e014b61c2ca98770a4be3319a","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc61da2cecd989664a5fbaf3d83083ae57d319e6a4fa012cd2f6687f5cb52849","downloaded_from":"2026-09-10T01:07:22.977Z","last_downloaded_at":"2026-09-10T01:07:22.977Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483413","source_sha256":"2cf89b521181ca79e4d4c82de98bf11427661088d1c26e6e7b235e49bbfdd1c7"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-20-25-1","para":"25-1","html":"
To the extent that an insurance contract or reinsurance contract does not, despite its form, provide for indemnification of the insured or the ceding entity by the insurer or reinsurer against loss or liability, the premium paid less the amount of the premium to be retained by the insurer or reinsurer shall be accounted for as a deposit by the insured or the ceding entity. Those contracts may be structured in various ways, but if, regardless of form, their substance is that all or part of the premium paid by the insured or the ceding entity is a deposit, it shall be accounted for as such.
","snippet":"To the extent that an insurance contract or reinsurance contract does not, despite its form, provide for indemnification of the insured or the ceding entity by the insurer or reinsurer against loss or liability, the prem…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0b5d129b06bb71e968bb08b93d7737dd511a38cfeec0ba46e389a8a0298c8e70","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-2","para":"25-2","html":"
See Subtopic 340-30 for guidance on deposit accounting. In addition, the preceding paragraph requires that an entity determine whether insurance risk has been transferred through an insurance contract; entities may find the conditions in Section 944-20-15 useful in assessing whether an insurance contract transfers risk.
","snippet":"See Subtopic 340-30 for guidance on deposit accounting. In addition, the preceding paragraph requires that an entity determine whether insurance risk has been transferred through an insurance contract; entities may find …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eaa32987671a42b18a78e406f0ee110dc5104d8c1a7945039a6488beea61c78b","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dab1c327045d068b800d73a2818073060ca3955acfbd096792f6db841a384264","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"block":"Retroactive Contracts","heading":"Purchase of a Retroactive Insurance Policy","paragraphs":[{"citation":"720-20-25-3","para":"25-3","html":"
Notwithstanding that Topic 944 applies only to insurance entities, purchased retroactive insurance contracts that indemnify the insured shall be accounted for in a manner similar to the manner in which retroactive reinsurance contracts are accounted for under Subtopic 944-605. The guidance in that Subtopic shall be applied, as appropriate, based on the facts and circumstances of the particular transaction. That is, amounts paid for retroactive insurance shall be expensed immediately. Simultaneously, a receivable shall be established for the expected recoveries related to the underlying insured event.
","snippet":"Notwithstanding that Topic 944 applies only to insurance entities, purchased retroactive insurance contracts that indemnify the insured shall be accounted for in a manner similar to the manner in which retroactive reinsu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:28eab03aad6670a77070d7cf4ecb8554b6f3b07cbd35ee686f4c66b58f28c3eb","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-4","para":"25-4","html":"
If the receivable established exceeds the amounts paid for the insurance, the resulting gain is deferred. Immediate gain recognition and liability derecognition are not appropriate because the liability has not been extinguished (the entity is not entirely relieved of its obligation). Additionally, the liability incurred as a result of a past insurable event and amounts receivable under the insurance contract do not meet the criteria for offsetting under paragraph 210-20-45-1.
","snippet":"If the receivable established exceeds the amounts paid for the insurance, the resulting gain is deferred. Immediate gain recognition and liability derecognition are not appropriate because the liability has not been exti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b06484ac90b9207549b6a8d5aac3720039931ea73cc4f5ff821b21d4fc071e8f","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-5","para":"25-5","html":"
If the purchased insurance contract includes coverage for legal and other costs, the accounting for those costs shall be consistent between the asset and the liability. That is, if the entity's accounting policy is to accrue legal and other costs, then the insurance receivable shall reflect those costs if they are covered under the terms of the insurance policy. If an entity's accounting policy is not to accrue for those costs, then the insurance receivable shall not reflect those costs on an accrual basis.
","snippet":"If the purchased insurance contract includes coverage for legal and other costs, the accounting for those costs shall be consistent between the asset and the liability. That is, if the entity's accounting policy is to ac…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:36758b7b79057ffb0cbe7994b3d65806fd034834a1b51c9d46d1121d2ad4e02e","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:437de910fa953e7388d83466bf9b4129db1c8cd92ad6bc84b534c70596eb5de9","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"block":"Claims-Made Contracts","heading":"Claims-Made Insurance Policies That Represent Purchased Retroactive Insurance Contracts","paragraphs":[{"citation":"720-20-25-6","para":"25-6","html":"
A claims-made insurance policy contains a retroactive provision if it provides coverage for specific known claims that were reportable prior to the policy period. Regardless of whether the insured has recognized a loss contingency for those claims, specific known claims that were reportable (by the insured entity to the insurance entity) would encompass:
  1. a
    Asserted claims
  2. b
    Known unasserted claims
  3. c
    Any known previous event or circumstance that might result in a specific claim (whether asserted or unasserted).
Such claims include those that were not reported by the insured to the insurance entity, but would have been reportable to the insurance entity had a claims-made policy been in place in a prior period.
","snippet":"A claims-made insurance policy contains a retroactive provision if it provides coverage for specific known claims that were reportable prior to the policy period. Regardless of whether the insured has recognized a loss c…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dacab776543fe70e560c9e591a25610193b8d589c010626b7eb0d9a473c64287","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-7","para":"25-7","html":"
If a claims-made insurance policy contains a retroactive provision, the retroactive and prospective provisions of the policy shall be accounted for separately, if practicable.
","snippet":"If a claims-made insurance policy contains a retroactive provision, the retroactive and prospective provisions of the policy shall be accounted for separately, if practicable.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f003a5ebed56672e055473fff8d5143b0db0e6516e5483c9e360941c2c25f887","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-8","para":"25-8","html":"
If it is not practicable to separate the retroactive and prospective provisions, the claims-made insurance policy shall be accounted for entirely as a retroactive contract in accordance with Subtopic 944-605. A claims-made insurance policy that contains no retroactive provisions should be accounted for on a prospective basis as described in the Claims-Made Contracts Subsection of Section 720-20-35 and in Examples 4-5 (see paragraphs
720-20-55-13 through 55-20
).
","snippet":"If it is not practicable to separate the retroactive and prospective provisions, the claims-made insurance policy shall be accounted for entirely as a retroactive contract in accordance with Subtopic 944-605. A claims-ma…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8942a1f76dcdbc2d209f34f509f1f0a0d4d98a0fb52b57749a33bff039b39cbc","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-9","para":"25-9","html":"
Paragraph 944-20-15-34B states that in claims-made insurance, the insured event is the reporting to the insurer, within the period specified by the policy, of a claim for a loss covered by the insurance contract. Accordingly, a prospective claims-made insurance policy only covers claims for losses reportable to the insurer during the policy term. A retroactive provision provides coverage for known claims, for which the underlying event had occurred and the incident would have been reportable prior to the effective date of the claims-made policy. A recognized liability for incurred but not reported claims generally would not be determinative in concluding that a claims-made insurance policy either does or does not contain a retroactive provision.
","snippet":"Paragraph 944-20-15-34B states that in claims-made insurance, the insured event is the reporting to the insurer, within the period specified by the policy, of a claim for a loss covered by the insurance contract. Accordi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:db0b7a2e129767e29dade64739407a9037268b35b8f670a3b6313fdb6161af5f","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-10","para":"25-10","html":"
All relevant facts and circumstances should be considered in evaluating whether a claims-made policy contains a retroactive provision. The following are indicators that a claims-made insurance policy does not contain a retroactive provision (that is, it does not provide coverage for previously reportable claims) and, therefore, shall be accounted for on a prospective basis. No one indicator is determinative in this evaluation; the determination must be made upon the specific facts and circumstances:
  1. a
    The insured consistently purchases claims-made insurance policies as part of its risk management program for the specific type of risk being insured, and tail coverage for both prior periods and prior policies is readily available and not excessively priced as compared to tail coverage offered to similar entities that do not contain retroactive provisions.
  2. b
    The claims-made insurance policy is responsive to unknown risks for a finite or limited period of time, as evidenced by the fact that all of the following conditions exist:
    1. 1
      The type of risk being insured is inherently short-tailed (that is, the claims are incurred during the policy period and paid out in their entirety shortly after the end of the policy period).
    2. 2
      The policy term is for a limited period of time (for example, one-year coverage).
    3. 3
      Claims-made coverage is the most readily available coverage for this type of insurance risk.
    4. 4
      The occurrence date of the type of risk covered by the policy is unclear (that is, the causal event that gives rise to an insured claim is difficult to determine). Such a lack of identification creates difficulty in assessing risk for an entity considering whether to self-insure its insurance risk (for example, a manufacturing entity may be completely unaware of the potential health hazards attributable to its core products and may want to protect itself in case a by-product of its production process becomes the next asbestos).
  3. c
    The claims-made insurance policy contains an unambiguous trigger indicating that a claim is covered by the policy. That contract trigger should not be subject to interpretation, negotiation, or manipulation. An example of an unambiguous trigger that indicates that a claim is covered by a claims-made insurance policy would include both of the following provisions:
    1. 1
      The insured notifies the insurance carrier during the policy term that a claim has been asserted or that an incident has occurred.
    2. 2
      The insured must represent that it was not aware of any such incident when the claims-made policy was purchased.
  4. d
    The premium charged for the claims-made insurance policy is not significantly in excess of the premium that would be charged for a claims-made insurance policy that could be purchased by a similar entity with similar insurance risks and no knowledge of any circumstances or events that would result in any claims, excluding any anticipated amounts for a typical number of claims for which the insured is not aware to have specifically occurred but that it expects would be reported (incurred but not reported).
  5. e
    The insurer may base the premium for the claims-made insurance policy on estimates and predictions that are based on the past experience of the insured but the premium is not based on settlement estimates of specific, known events that are expected to be recovered under the policy.
  6. f
    The premium charged for the policy in the current year is not significantly in excess of that charged in previous years, other than for increases in the amount or type of coverage. An anticipated increase in premiums that is expected to occur because the insured entity is advancing toward the mature stage of premiums for claims-made insurance would not be considered in making that determination.
  7. g
    The claims-made insurance policy is primarily intended to cover insurance risk and is not a financing arrangement. Claims-made insurance policies that are intended to cover insurance risk typically include features such as:
    1. 1
      An absence of adjustment features based on experience
    2. 2
      Coverage of the ultimate loss from the claim, once made, regardless of period of settlement.
  8. h
    If the claims-made insurance policy has a specified retroactive date prior to the inception of the claims-made relationship with the insurer, the period from that specified retroactive date to the inception of the claims-made relationship with that insurer is either short or covered by other insurance policies.
","snippet":"All relevant facts and circumstances should be considered in evaluating whether a claims-made policy contains a retroactive provision. The following are indicators that a claims-made insurance policy does not contain a r…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:044ea2dd48135d220404254098a73af654b7e95cd4ed94380eb3a5e8f299a43d","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-11","para":"25-11","html":"
Although the guidance in the Retroactive Contracts Subsection of this Section (see paragraph 720-20-25-3) applies to situations in which the insured entity uses a claims-made insurance policy to finance known losses (that is, when the insurance contract was purchased in order to provide insurance coverage for specific, known events that occurred or were reportable before the inception of the contract), the guidance in that paragraph does not preclude prospective accounting for those claims-made insurance policies or portions of those policies that contain only prospective provisions.
","snippet":"Although the guidance in the Retroactive Contracts Subsection of this Section (see paragraph 720-20-25-3) applies to situations in which the insured entity uses a claims-made insurance policy to finance known losses (tha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d0899bdbf1aa87f0c249c1691e19dc07eefec1cb4ce398029b12fa880a6d42d7","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-12","para":"25-12","html":"
An insured entity may, for various reasons, contemporaneously enter into multiple claims-made insurance policy contracts. In those circumstances, an entity should consider whether those insurance contracts should be combined in order to determine the appropriate accounting treatment. The guidance contained in Section 944-20-15 is helpful in those instances.
","snippet":"An insured entity may, for various reasons, contemporaneously enter into multiple claims-made insurance policy contracts. In those circumstances, an entity should consider whether those insurance contracts should be comb…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cc202d91da5d127e34bc9d65d5bf7964a113f0d97e8bf5121ddc28818992ff5e","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"citation":"720-20-25-13","para":"25-13","html":"
See Examples 1-3 (paragraphs
720-20-55-2 through 55-12
) for illustrations of the application of the recognition guidance for claims-made contracts.
","snippet":"See Examples 1-3 (paragraphs 720-20-55-2 through 55-12) for illustrations of the application of the recognition guidance for claims-made contracts.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6b01a71de8fe813d480211017c31ff23d6d631031767260a51578951f39fe9f1","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3a33051cea018e45d237bf6f800bdba9b204d184ebf58c0260e99624ae580264","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"block":"Claims-Made Contracts","heading":"Recognizing a Liability for Incurred but Not Reported Claims","paragraphs":[{"citation":"720-20-25-14","para":"25-14","html":"
Paragraph 450-20-25-2 requires that insured entities (except as discussed in Section 944-20-15), including those that use a claims-made approach for insuring certain risks, recognize a liability for the probable losses from incurred but not reported claims and incidents if the loss is both probable and reasonably estimable. Paragraphs
450-20-55-10 through 55-17
provide implementation guidance about litigation, claims, and assessments.
","snippet":"Paragraph 450-20-25-2 requires that insured entities (except as discussed in Section 944-20-15), including those that use a claims-made approach for insuring certain risks, recognize a liability for the probable losses f…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:95cd98b28277b5f7a7967b4fde8b9e852d9b50b744aeed7c0dfabddb681d098b","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a1397840f03f37763104114cdadc70c0f728e935bf8cd2538f4fac954b55fc33","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"block":"Multiple-Year Retrospectively Rated Contracts","heading":null,"paragraphs":[{"citation":"720-20-25-15","para":"25-15","html":"
For a multiple-year retrospectively rated insurance contract accounted for as insurance, the insured shall recognize either of the following:
  1. a
    As indicated in paragraph 944-20-25-2, a liability to the extent that the insured has an obligation to pay cash (or other consideration) to the insurer that would not have been required absent experience under the contract
  2. b
    As indicated in paragraph 944-20-25-2, an asset to the extent that any cash (or other consideration) would be payable by the insurer to the insured based on experience to date under the contract.
","snippet":"For a multiple-year retrospectively rated insurance contract accounted for as insurance, the insured shall recognize either of the following:\n(a) As indicated in paragraph 944-20-25-2, a liability to the extent that the …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d912902414b168e07af43c8aee3de65b60b50c23086a66cd1669e4dc93694938","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:17976de5027c4d8895ce9bf4202c125e79a67aa60eecab430d48571aaed8e545","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eb70b47ccbe1892880dd74d8d77caaa92ff7af38d756cd7e21aa4fb188eb5c48","downloaded_from":"2026-09-10T01:07:29.882Z","last_downloaded_at":"2026-09-10T01:07:29.882Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483363","source_sha256":"2cafa258a0ad21182435a436f3f8b7aa826bc1f726deb9137825431852b8efcd"}},{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-20-30-1","para":"30-1","html":"
See Subtopic 340-30 and Section 720-20-25 for measurement guidance on deposit accounting for payments to insurance entities that may not involve transfer of risk.
","snippet":"See Subtopic 340-30 and Section 720-20-25 for measurement guidance on deposit accounting for payments to insurance entities that may not involve transfer of risk.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3a1c3d675830ba39b54bd0ddc13f4f7581ef1a7743e5bc5900db9c5e5942c65","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8a46f6af28a3f128d2981acded2a10d3eed6df0dd18cef25c21518fe40b84307","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}},{"block":"Claims-Made Contracts","heading":"Liability for Incurred but Not Reported Claims Based on the Cost of Tail Coverage","paragraphs":[{"citation":"720-20-30-2","para":"30-2","html":"
The estimated cost of purchasing tail coverage is not relevant in determining the loss to be accrued because paragraph 210-20-45-1 prohibits netting the insurance receivable against the claim liability. However, if the insured entity had the unilateral option to purchase tail coverage at a premium not to exceed a specified fixed maximum, then the insured entity could record a receivable for expected insurance recoveries (after considering deductibles and policy limits) for the portion of the incurred but not reported liability that is insurable under the tail coverage. In that case, the entity would need to record as a cost the expected premium for the tail coverage. The purchase of tail coverage does not eliminate the need to determine if an additional liability should be accrued because of policy limits or other factors.
","snippet":"The estimated cost of purchasing tail coverage is not relevant in determining the loss to be accrued because paragraph 210-20-45-1 prohibits netting the insurance receivable against the claim liability. However, if the i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:17bde3b8a1863500b666d37f46ac9f7a7403767f33ca86d4bdf1108a98b59daa","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f5dee94cec176434535cf35262e290f0f603a3207ccb2f789d344a14abdbcf6c","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}},{"block":"Multiple-Year Retrospectively Rated Contracts","heading":null,"paragraphs":[{"citation":"720-20-30-3","para":"30-3","html":"
For a multiple-year retrospectively rated insurance contract accounted for as insurance, the amount recognized in the current period shall be computed using a with-and-without method, as the difference between the insured's total contract costs before and after the experience under the contract as of the reporting date, including costs such as premium adjustments, settlement adjustments, and impairments of coverage. The amount of premium expense related to impairments of coverage shall be measured in relation to the original contract terms. Future experience under the contract (that is, future losses and future premiums that would be paid regardless of past experience) shall not be considered in measuring the amount to be recognized.
","snippet":"For a multiple-year retrospectively rated insurance contract accounted for as insurance, the amount recognized in the current period shall be computed using a with-and-without method, as the difference between the insure…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f891e9d557c1ddac5ff2a5261e4223a431cca2e80bfdda009e5690b76e61a3dd","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}},{"citation":"720-20-30-4","para":"30-4","html":"
If the insured could terminate the contract before the end of its term and if termination would change the amounts paid (for example, if terminating the contract would cost less than continuing the contract in force), the liability resulting from the contract shall be measured as follows:
  1. a
    If a decision to terminate has been made, the measurement shall be based on an assumption of termination and on experience to date.
  2. b
    Otherwise, the measurement shall be based on the lesser of the following:
    1. 1
      The total incremental amount that would be paid based on the with-and-without calculation assuming experience to date and assuming termination (that is, excluding the effects of future losses and future premiums that would have been paid regardless of experience to date)
    2. 2
      The total incremental amount that would be paid based on the with-and-without calculation assuming experience to date and assuming no termination (that is, excluding the effects of future losses and future premiums that would have been paid regardless of experience to date).
","snippet":"If the insured could terminate the contract before the end of its term and if termination would change the amounts paid (for example, if terminating the contract would cost less than continuing the contract in force), th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aec4f6c66eb8f70643fbedd8cbd03666860ef17257010359f6b4abb9c8b9fe80","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2a6b90df9859ea9cc4f0d3d2192aac8b578818693061ed3b26be609c016d64f","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9863f1c53eca0254cf50d54fa7c2c04344b08d79b7daa2311be837b7261770b3","downloaded_from":"2026-09-10T01:07:31.940Z","last_downloaded_at":"2026-09-10T01:07:31.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483336","source_sha256":"98b6221ea00b679ed72e327eac0a8204fad70fbb45a7b42060da0d938dbc022a"}},{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-20-35-1","para":"35-1","html":"
See Subtopic 340-30 for measurement guidance on deposit accounting for payments to insurance entities that may not involve transfer of risk.
","snippet":"See Subtopic 340-30 for measurement guidance on deposit accounting for payments to insurance entities that may not involve transfer of risk.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ca5a6dcfa671455d14f35ea75f2adb40a2a87845c341d37bc99fc047be538493","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bb8dd74533517bef6a81917d0553ed0e734dbf9b38ab2dfdb08704bcecb82bb5","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"block":"Retroactive Contracts","heading":"Deferred Gain Amortization","paragraphs":[{"citation":"720-20-35-2","para":"35-2","html":"
If the amounts and timing of the insurance recoveries can be reasonably estimated, the deferred gain shall be amortized using the interest method over the estimated period over which the entity expects to recover substantially all amounts due under the terms of the insurance contract. If the amounts and timing of the insurance recoveries cannot be reasonably estimated, then the proportion of actual recoveries to total estimated recoveries shall be used to determine the amount of the amortization.
","snippet":"If the amounts and timing of the insurance recoveries can be reasonably estimated, the deferred gain shall be amortized using the interest method over the estimated period over which the entity expects to recover substan…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:550bdaf17398cb77cdd5d3e93d21ac08185186e6fe40ac89ed11aa3fdd0bb5e8","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c8b0eef079a324f8ec113c20079cac7d29232cabf9f6c4835c6b83ce3c03a1b2","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"block":"Claims-Made Contracts","heading":"Interim Financial Reporting—Entity's Fiscal Year and Policy Year Coincide","paragraphs":[{"citation":"720-20-35-3","para":"35-3","html":"
When the entity's fiscal year and policy year coincide, an appropriate method to recognize expense is through a combination of any of the following:
  1. a
    Accruing the incurred but not reported liability
  2. b
    Accruing any expected increase in insurance recoverables
  3. c
    Amortizing the insurance premium on a pro rata basis over the year.
In addition, the liability for any unusual claims or incidents, as well as any applicable insurance recoverable related thereto, would be recognized in the interim period in which they become known.
","snippet":"When the entity's fiscal year and policy year coincide, an appropriate method to recognize expense is through a combination of any of the following:\n(a) Accruing the incurred but not reported liability\n(b) Accruing any e…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c47907a12ee500beac891371c508a87cb80d7ab49493a25dbcb4a3bb68c7e656","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-4","para":"35-4","html":"
For interim reporting, the approach treats usual recurring losses as integral to annual reporting, and, therefore, any expected changes in the incurred but not reported liability and related insurance recoverables that are not related to specific events can be spread over the entire year. However, material unusual losses shall be accounted for as discrete items and recognized as they occur. The approach discussed in this Subsection assumes the recurring purchase of a claims-made insurance policy with a one-year term and the payment of premiums on the first day of each policy year.
","snippet":"For interim reporting, the approach treats usual recurring losses as integral to annual reporting, and, therefore, any expected changes in the incurred but not reported liability and related insurance recoverables that a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bda655ef0bcb6c8b0917865b57bc6197a3d8d6530c8d564b572458154f0d979b","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-5","para":"35-5","html":"
When the entity's fiscal year and policy term coincide, the year-end incurred but not reported liability relates to the entity's obligation for claims and incidents that have been incurred prior to year-end but will be reportable after year-end. The approach for accounting by policyholders who purchase claims-made insurance policies that consist of prospective provisions is as follows:
  1. a
    The premium paid at the beginning of the fiscal year for the new claims-made insurance policy shall be recognized as a prepaid expense.
  2. b
    At the beginning of the fiscal year, the entity shall estimate its incurred but not reported liability as of the end of the fiscal year. That estimate involves estimating the claims and incidents that will be incurred prior to year-end but will not be reportable until after year-end. Presumably the estimated year-end incurred but not reported liability would approximate the beginning incurred but not reported liability adjusted for relevant historical patterns unless the entity has identified new factors (such as a major change in products, manufacturing processes, or risk management systems) that warrant further adjustment of the ending incurred but not reported liability.
  3. c
    The entity shall compute an estimated annual expense as the sum of all of the following:
    1. 1
      The premium paid for the claims-made policy
    2. 2
      The difference between the beginning incurred but not reported liability and the estimated year-end incurred but not reported liability
    3. 3
      The difference between the beginning insurance recoverable related to the incurred but not reported liability and the estimated ending amount.
    That estimated annual expense shall be recognized in interim periods based on the methodology that best reflects the manner in which the benefits of the insurance coverage are consumed and the incurred but not reported liability is incurred. In addition, liabilities for specific claims incurred during the year that are not included in the incurred but not reported estimate shall be recognized as expense in the interim period in which they are incurred. The method selected shall be appropriate in light of the relevant facts and circumstances and consistently applied.
  4. d
    The estimated year-end incurred but not reported liability shall be reviewed whenever interim financial statements are prepared. Routine adjustments to the estimated liability shall be recognized ratably in each of the remaining interim periods. However, if events and circumstances in that interim period indicate that unusual claims and incidents have been incurred prior to the end of the interim period, the entity shall recognize in that interim period any related significant adjustments of the estimated year-end incurred but not reported liability.
  5. e
    For any insurance recoverable recognized, either related to the incurred but not reported liability or to a specific incurred claim, the entity shall evaluate those assets and adjust them, if necessary, based on changes in circumstances. See paragraphs
    410-30-35-8 through 35-11
    for further guidance on the recognition of a receivable for expected insurance recoveries.
  6. f
    Any unusual claims and incidents that have been incurred prior to the end of an interim period but will probably be reported prior to year-end should not affect net income if they will be covered (insured) under the existing claims-made insurance policy. However, both the asset (under the insurance claim) and the liability (for the incident) shall be reflected on the balance sheet.
","snippet":"When the entity's fiscal year and policy term coincide, the year-end incurred but not reported liability relates to the entity's obligation for claims and incidents that have been incurred prior to year-end but will be r…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ce674e217da573404c381920da17447210ce845ad11be7aaf4758d5e994f590","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-6","para":"35-6","html":"
See the Claims-Made Contracts Subsection of Section 720-20-45 for guidance on offsetting insurance assets and liabilities.
","snippet":"See the Claims-Made Contracts Subsection of Section 720-20-45 for guidance on offsetting insurance assets and liabilities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8102c16815d9e261fb7f582427e99f69149fd133e37d03b15f2fc6713fc370fc","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-7","para":"35-7","html":"
See Example 4 (paragraph 720-20-55-13) for illustrations of the application of the subsequent measurement guidance for interim financial reporting when an entity's fiscal year and policy year coincide.
","snippet":"See Example 4 (paragraph 720-20-55-13) for illustrations of the application of the subsequent measurement guidance for interim financial reporting when an entity's fiscal year and policy year coincide.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ef0ef1abc707eeeb6405db4bde1f8b870cb61837f519d6dd9ded644311a8819d","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:28a6ffb77a16d58f4dceb7b7d368ad954cb7aba73b0a67480a02ef49fe3e8225","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"block":"Claims-Made Contracts","heading":"Interim Financial Reporting—Entity's Fiscal Year and Policy Year Do Not Coincide","paragraphs":[{"citation":"720-20-35-8","para":"35-8","html":"
When the entity's fiscal year and policy year do not coincide, the insurance premium component of expense in interim periods could be based on the estimated premium for claims-made coverage that the entity expects to be able to acquire later in the fiscal year.
","snippet":"When the entity's fiscal year and policy year do not coincide, the insurance premium component of expense in interim periods could be based on the estimated premium for claims-made coverage that the entity expects to be …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4d336440f28007e5a232fc004acba9273413925c3fbc7522ece82c414bb97b6e","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-9","para":"35-9","html":"
When the entity's fiscal year and policy term do not coincide, an entity shall recognize all of the following elements at year-end:
  1. a
    An incurred but not reported liability related to the entity's obligation for claims and incidents that have been incurred prior to year-end but will be reportable after year-end
  2. b
    An insurance recoverable for any outstanding claims that are reimbursable under the existing claims-made policy
  3. c
    An asset for prepaid insurance premiums related to the coverage for claims and incidents that will be incurred after year-end but reported prior to the expiration of the existing claims-made policy.
","snippet":"When the entity's fiscal year and policy term do not coincide, an entity shall recognize all of the following elements at year-end:\n(a) An incurred but not reported liability related to the entity's obligation for claims…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2d5936ca9b964fca2c1d7e88f0528ba9b911be43fa2a52cf8a72d2a6e8e23e57","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-10","para":"35-10","html":"
The approach for accounting by policyholders who purchase claims-made insurance policies that have terms of duration that do not coincide with the entity's fiscal year is as follows:
  1. a
    At the beginning of the fiscal year the entity shall make an estimate of its future premium cost of the new claims-made policy that is expected to be purchased during the fiscal year. The entity shall also estimate the portion of that future premium cost that would relate to coverage for claims and incidents that will be incurred after the end of the fiscal year but reported prior to the expiration of that new claims-made policy; that portion represents the estimated prepaid asset at the end of the fiscal year. The estimate of the future premium cost involves estimating the effect of past claims and incidents that are expected to affect the premium level, as well as the effect of historical patterns and any new factors (such as a major change in products, manufacturing processes, or risk management systems) that are relevant.
  2. b
    At the beginning of the fiscal year the entity shall make an estimate of its incurred but not reported liability as of the end of the fiscal year. That estimate involves estimating the claims and incidents that will be incurred prior to year-end but will not be reportable until after the year-end. Presumably the estimated year-end incurred but not reported liability would closely approximate the beginning incurred but not reported liability adjusted for relevant historical patterns unless the entity has identified new factors (such as a major change in products, manufacturing processes, or risk management systems) that warrant further adjustment of the ending incurred but not reported liability.
  3. c
    The entity shall compute an estimated annual expense as the sum of all of the following:
    1. 1
      The balance of the premium cost for the claims-made policy expiring during the year
    2. 2
      The estimated future premium cost for the new claims-made policy
    3. 3
      The difference between the beginning incurred but not reported liability and the estimated year-end incurred but not reported liability
    4. 4
      The difference between the beginning and estimated ending insurance receivable related to incurred but not reported liability.
    That estimated annual expense should be recognized ratably in interim periods based on the methodology that best reflects the manner in which the benefits of the insurance premiums are consumed and the incurred but not reported liability is incurred. As indicated in paragraph 720-20-35-5(c), the method selected should be appropriate in light of the relevant facts and circumstances and consistently applied. In addition, liabilities for specific claims incurred during the year that are not included in the incurred but not reported estimate shall be recognized as expense in the period in which they are incurred.
  4. d
    The estimated year-end incurred but not reported liability should be reviewed whenever interim financial statements are prepared. Routine adjustments in the estimated liability (such as adjusting the estimated future premium cost to reflect actual) would be recognized ratably in each of the remaining interim periods. However, if events and circumstances in that interim period indicate that unusual claims and incidents have been incurred prior to the end of the interim period, the entity shall recognize in that interim period any related significant adjustments of the estimated year-end incurred but not reported liability.
  5. e
    For any insurance recoverable recognized, either related to the incurred but not reported liability or to a specific incurred claim, the entity should evaluate those assets and adjust them, if necessary, based on changes in circumstances. Paragraphs
    410-30-35-8 through 35-11
    provide further guidance on the recognition of a receivable for expected insurance recoveries.
  6. f
    Any unusual claims and incidents that have been incurred prior to the end of an interim period and that will probably be reported prior to expiration of the new claims-made insurance policy should not affect net income if they will be covered by insurance. However, both the asset (under the insurance claim) and the liability (for the incident) shall be reflected on the balance sheet.
","snippet":"The approach for accounting by policyholders who purchase claims-made insurance policies that have terms of duration that do not coincide with the entity's fiscal year is as follows:\n(a) At the beginning of the fiscal ye…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7bf93744f9c5f6d8165c6fb0d5ae7739d5485b64743453d61565fa88823a0193","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-11","para":"35-11","html":"
See the Claims-Made Contracts Subsection of Section 720-20-45 for guidance on offsetting insurance assets and liabilities.
","snippet":"See the Claims-Made Contracts Subsection of Section 720-20-45 for guidance on offsetting insurance assets and liabilities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0243cf84d006d59ea07bea799b3fd998c9c7f5a67eb230f34b575e99451ed577","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"citation":"720-20-35-12","para":"35-12","html":"
See Example 5 (paragraph 720-20-55-20) for an illustration of the application of the subsequent measurement guidance for interim financial reporting when an entity's fiscal year and policy year do not coincide.
","snippet":"See Example 5 (paragraph 720-20-55-20) for an illustration of the application of the subsequent measurement guidance for interim financial reporting when an entity's fiscal year and policy year do not coincide.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9a31a727bfbb52be68c491dd02b3ca4f6821cf85484bb94ec2bd06313683793","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5810cefeae3d82fdd42956e55b709a21776f5e437d23c4af4856b2342e327665","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"block":"Multiple-Year Retrospectively Rated Contracts","heading":null,"paragraphs":[{"citation":"720-20-35-13","para":"35-13","html":"
The insured shall account for changes in coverage in the same manner as changes in other contract costs, as indicated in paragraph 944-20-35-2. For example, the effects of decreases in coverage without a commensurate reduction in premium shall be recognized as a loss by the insured when the event causing the decrease in coverage takes place.
","snippet":"The insured shall account for changes in coverage in the same manner as changes in other contract costs, as indicated in paragraph 944-20-35-2. For example, the effects of decreases in coverage without a commensurate red…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d845d7048e5862a5a65cee0eedd15c07a845d010f43558c43726c546c8c861c6","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3d11d9180af2c0e0664f8f31801c3bc718efdb80c22c280ea2375590f844c5b0","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3cff17b9ea0c6be7efa17080cc88b689c47054ddc109e8c12b35849a2caab684","downloaded_from":"2026-09-10T01:07:34.188Z","last_downloaded_at":"2026-09-10T01:07:34.188Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483412","source_sha256":"5f30759bc5d285b78a46341b3b9733e2075e2eac3470f19c3c007bf91bcae802"}},{"number":"45","label":"45 Other Presentation Matters","anchor":"45-other-presentation-matters","is_sec":false,"groups":[{"block":"Claims-Made Contracts","heading":null,"paragraphs":[{"citation":"720-20-45-1","para":"45-1","html":"
Unless the conditions of paragraph 210-20-45-1 are met, offsetting prepaid insurance and receivables for expected recoveries from insurers against a recognized incurred but not reported liability or the liability incurred as a result of a past insurable event would not be appropriate.
","snippet":"Unless the conditions of paragraph 210-20-45-1 are met, offsetting prepaid insurance and receivables for expected recoveries from insurers against a recognized incurred but not reported liability or the liability incurre…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b165611d1988a4a1b04b5d6aad6265baff6759319ec92ee0437ccf16b4cf8b06","downloaded_from":"2026-09-10T01:07:37.463Z","last_downloaded_at":"2026-09-10T01:07:37.463Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483387","source_sha256":"90e282d799ea7d877d0bafb1067c421ef4dac00018cf01f7d77e8fc362787c0d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:18b81f30d5b8f6bed22eec65667aaeac59e3d4bf6f04a91ee70678f68fe99dc1","downloaded_from":"2026-09-10T01:07:37.463Z","last_downloaded_at":"2026-09-10T01:07:37.463Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483387","source_sha256":"90e282d799ea7d877d0bafb1067c421ef4dac00018cf01f7d77e8fc362787c0d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c4a2bfe8f21d7a8d458e1073bd46dbd3603933a3b0ba68f340e6dc565115b76f","downloaded_from":"2026-09-10T01:07:37.463Z","last_downloaded_at":"2026-09-10T01:07:37.463Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483387","source_sha256":"90e282d799ea7d877d0bafb1067c421ef4dac00018cf01f7d77e8fc362787c0d"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":"Claims-Made Contracts","heading":null,"paragraphs":[{"citation":"720-20-50-1","para":"50-1","html":"
When an entity changes from occurrence-based insurance to claims-made insurance or elects to significantly reduce or eliminate its insurance coverage paragraphs
450-20-50-3 through 50-6
require disclosure if it is at least reasonably possible that a loss has been incurred. That paragraph also discusses disclosure with respect to unasserted claims.
","snippet":"When an entity changes from occurrence-based insurance to claims-made insurance or elects to significantly reduce or eliminate its insurance coverage paragraphs 450-20-50-3 through 50-6 require disclosure if it is at lea…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0ba643eafe9a8693d4560df344c7305d0431e67e6b8f8500a9ab220f3f7050b1","downloaded_from":"2026-09-10T01:07:40.198Z","last_downloaded_at":"2026-09-10T01:07:40.198Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483359","source_sha256":"331c0dde54f5b111934432867c7a8b8443cf1ff56fad06af7ef0cd1e47d19121"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8ec5d5684d81c622480d20ae3214ba07ffa70b0b951dc655125ef084d0604176","downloaded_from":"2026-09-10T01:07:40.198Z","last_downloaded_at":"2026-09-10T01:07:40.198Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483359","source_sha256":"331c0dde54f5b111934432867c7a8b8443cf1ff56fad06af7ef0cd1e47d19121"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6f9df67821fcd305f2d36078de01d71c008268e40853c327c5ad59d9750120e7","downloaded_from":"2026-09-10T01:07:40.198Z","last_downloaded_at":"2026-09-10T01:07:40.198Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483359","source_sha256":"331c0dde54f5b111934432867c7a8b8443cf1ff56fad06af7ef0cd1e47d19121"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":"Claims-Made Contracts","heading":"Illustrations","paragraphs":[{"citation":"720-20-55-1","para":"55-1","html":"
Examples 1-3 (see paragraphs
720-20-55-2 through 55-12
) provide illustrations for applying the guidance contained in paragraphs
720-20-25-6 through 25-13
.
","snippet":"Examples 1-3 (see paragraphs 720-20-55-2 through 55-12) provide illustrations for applying the guidance contained in paragraphs 720-20-25-6 through 25-13.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c73e5eefe308baed7da72a74e255d342aa4fe0faef82be86a529019cff39a4d6","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-2","para":"55-2","html":"
This Example illustrates how to assess whether an insurance policy for directors and officers liability contains a retroactive provision. The Example contains the following two Cases:
  1. a
    A policy without a retroactive provision (Case A)
  2. b
    A policy with a retroactive provision (Case B).
","snippet":"This Example illustrates how to assess whether an insurance policy for directors and officers liability contains a retroactive provision. The Example contains the following two Cases:\n(a) A policy without a retroactive p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e8d25a778cf9df954ca9f2df3ff7438dff7b8d2db5f8de3461dac6ca7d8a45dd","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-3","para":"55-3","html":"
Entity A is a manufacturer that purchases directors and officers insurance under a claims-made insurance policy each year. Entity A immediately reports any asserted claims or incidents that could result in an asserted claim to its insurance carrier. Entity A currently has no knowledge of any unasserted claims against it and is unaware of any event that would result in any claims. Entity A considers the use of a claims-made insurance policy to be the most efficient and least costly method available to manage its insurance risk related to suits against its directors and officers. Entity A pays BrokerCo to handle its insurance needs. BrokerCo supplies Entity A with binding quotes from several insurance carriers and a comparison to binding quotes for other similar entities. Entity A believes that its premiums are comparable to those of other similar entities that have similar insurance risk profiles and no knowledge of any events or circumstances that might result in a claim. Entity A has an option to purchase tail coverage, which would effectively convert its claims-made policies into occurrence-based policies at any time. On January 1, 20X3, Entity A pays its annual premium of $5 million for its policy. The policy has a retroactive date to January 1, 20X0, which is the year that Entity A first started using the claims-made insurance approach with its insurance carrier. Entity A is unable to bifurcate its policy premium into its retroactive and prospective provisions.
","snippet":"Entity A is a manufacturer that purchases directors and officers insurance under a claims-made insurance policy each year. Entity A immediately reports any asserted claims or incidents that could result in an asserted cl…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bd4a373271b5b13a5dd7f5d1d0801885c934a3e947732af453af81c2a13ffb12","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-4","para":"55-4","html":"
In June 20X3, there is a precipitous drop in the stock price of Entity A, and a lawsuit is brought against the directors. Entity A notifies its insurer about the asserted claim, and the insurer agrees that those claims are covered by its claims-made policy in effect for 20X3.
","snippet":"In June 20X3, there is a precipitous drop in the stock price of Entity A, and a lawsuit is brought against the directors. Entity A notifies its insurer about the asserted claim, and the insurer agrees that those claims a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:20c51ac521eb6e3fe1ba4d231df2212b1675af3a46818b1bd7d9d39db53fe16a","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-5","para":"55-5","html":"
Based on an evaluation of the circumstances, Entity A determined in 20X0 that its claims-made insurance policy is a prospective contract that does not contain any retroactive provisions. Essentially, Entity A was unaware of any known events or circumstances that might result in a claim and viewed the premiums paid for its directors and officers insurance as providing coverage against claims that might occur during the policy period. In making its determination that the claims-made insurance policy did not contain a retroactive provision, Entity A also considered the following:
  1. a
    Entity A typically uses a claims-made policy to manage its insurance risk and plans to continue purchasing a claims-made insurance policy annually.
  2. b
    Tail coverage is readily available.
  3. c
    The premium charged for the claims-made policy is not significantly in excess of premiums charged to other similar entities with similar insurance profiles.
  4. d
    The claims-made policy contains an unambiguous contract trigger to determine when claims are covered.
  5. e
    Because Entity A has no knowledge of any asserted claims or events that would result in a claim, the claims-made policy is primarily expected to cover insurance risk related to future claims.
","snippet":"Based on an evaluation of the circumstances, Entity A determined in 20X0 that its claims-made insurance policy is a prospective contract that does not contain any retroactive provisions. Essentially, Entity A was unaware…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:54229a3abeacd54d517fc7adc41536748fa045c46b946adbcbea39b1044f30ff","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-6","para":"55-6","html":"
This Case makes the same assumptions as Case A, except that the precipitous drop in the stock price of Entity A occurred in 19X9, prior to the inception of its claims-made insurance program with its insurance carrier. During the negotiation of the contract premium, Entity A discussed its concerns with its insurance carrier, and the two agreed that the retroactive date would include any claims related to the drop in the stock price. As a result, the premium was $50 million.
","snippet":"This Case makes the same assumptions as Case A, except that the precipitous drop in the stock price of Entity A occurred in 19X9, prior to the inception of its claims-made insurance program with its insurance carrier. Du…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2e6dabf3118b74cc0709fe042bfe492d02893bd9a62ceabbe6b51acb9330202","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-7","para":"55-7","html":"
Based on an evaluation of the circumstances, Entity A determined in 20X0 that its claims-made insurance policy contains a retroactive provision. Entity A knows that the $50 million premium charged represents the expected costs of settling any claims related to the drop in its stock price, an event that was fully known at the inception of the contract. Entity A disclosed this fact to its insurer, and the two agreed that it might result in a claim and negotiated a premium based on that premise. In making its determination that its directors and officers policy contains a retroactive provision, Entity A also considered the following:
  1. a
    The claims-made policy was taken out in part in response to a known incident that was reported to the insurer.
  2. b
    The premium charged by the insurer includes an estimate of the expected settlement costs for the unasserted claim.
  3. c
    The premium charged primarily represents a financing of the unasserted claim.
","snippet":"Based on an evaluation of the circumstances, Entity A determined in 20X0 that its claims-made insurance policy contains a retroactive provision. Entity A knows that the $50 million premium charged represents the expected…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0810e5b5b636e33d1d4a75baae6a6136684c25f79048b927e4127a8c7f24a1c3","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-8","para":"55-8","html":"
Prior to accounting for the entire contract retroactively, Entity A should, if practicable, bifurcate the contract into its retroactive and prospective provisions and account for each separately.
","snippet":"Prior to accounting for the entire contract retroactively, Entity A should, if practicable, bifurcate the contract into its retroactive and prospective provisions and account for each separately.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9c456d2d207355058b5bda682b7b8e350456977ec97281f53489f5836ae173bf","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-9","para":"55-9","html":"
On February 20, 20X2, Entity A determined that it needed to recognize a $100 million liability for environmental contamination as a result of an accident at one of its manufacturing plants. Entity A initially believed that it would manage the cleanup and any lawsuits arising from the accident through an internal self-insurance program. Subsequently, Entity A decided to purchase a claims-made insurance policy that would include all claims arising from the incident. Entity A decided that it should purchase the policy because it would be more efficient to transfer the risk associated with the development and timing of claims to a third party and representing that the risk associated with all claims had been transferred to a third party would reduce the risk profile of Entity A to its shareholders and other potential investors. On April 1, 20X2, Entity A pays InsurerCo $60 million for a claims-made insurance policy. Entity A and InsurerCo expect the claims related to the incident to be settled over a 10-year period after the purchase of the policy.
","snippet":"On February 20, 20X2, Entity A determined that it needed to recognize a $100 million liability for environmental contamination as a result of an accident at one of its manufacturing plants. Entity A initially believed th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:224e20d0c1212c101e45ff9e95132973e72e29e2be829acfa3ff9903695c85ef","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-10","para":"55-10","html":"
Based on an evaluation of the indicators, Entity A determines that its claims-made insurance policy contains a retroactive provision. In making that determination, Entity A specifically considered the following:
  1. a
    The claims-made policy was purchased specifically to cover known claims for which a liability had been recognized.
  2. b
    The claims-made policy effectively represented a financing of the liability previously recognized by Entity A.
  3. c
    The premium charged was primarily based on expected payouts for an event that had already occurred.
","snippet":"Based on an evaluation of the indicators, Entity A determines that its claims-made insurance policy contains a retroactive provision. In making that determination, Entity A specifically considered the following:\n(a) The …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:74f2bd169c247ffb6fd21fbd44e225c189116da262d8c31183e11dfdb54f0734","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-11","para":"55-11","html":"
HealthCo is a health care provider that purchases medical malpractice insurance in order to manage its insurance risks. HealthCo purchases a claims-made insurance policy each year from its insurance carrier. HealthCo would be able to purchase tail coverage from its insurance carrier if it chose to do so. Although HealthCo has no knowledge of any asserted or unasserted claims against it, HealthCo estimates and recognizes a liability for claims incurred but not reported of $25 million at December 31, 20X2, based on actuarial reviews of its historical claims reporting and payment patterns. HealthCo engages an insurance brokerage entity to ensure that its insurance premiums are consistent with those offered to similar entities with similar insurance risks. During 20X2, HealthCo paid out $95 million of malpractice claims that were fully covered by its insurance program. On January 1, 20X3, HealthCo pays its annual premium of $100 million for its claims-made policy. HealthCo expects that it will require a liability of $29 million on December 31, 20X3. The policy does not cover incidents occurring prior to the inception of the claims-made insurance program with that insurance carrier. In negotiating its policy with InsurerCo, HealthCo asserts to InsurerCo that it is unaware of any specific, current claims (asserted or unasserted) against it.
","snippet":"HealthCo is a health care provider that purchases medical malpractice insurance in order to manage its insurance risks. HealthCo purchases a claims-made insurance policy each year from its insurance carrier. HealthCo wou…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7fb2c475d93dd8dc0be2e694b216c7b47874b856f40372f012abb9a3aeee99a0","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-12","para":"55-12","html":"
Based on an evaluation of the indicators, HealthCo determines that its claims-made insurance policy is a prospective contract that does not contain any retroactive provisions. In making that determination, HealthCo specifically considered the following:
  1. a
    There are no known asserted or unasserted claims that are expected to be covered by the policy. The liability recognized for incurred but not reported claims would not preclude HealthCo from concluding that its claims-made insurance policy is prospective as HealthCo represented that it did not know of any asserted claims.
  2. b
    Tail coverage is readily available.
  3. c
    The premium charged for the claims-made policy is not significantly in excess of premiums charged for similar policies with no retroactive dates.
  4. d
    There is a clear and unambiguous contract coverage trigger.
","snippet":"Based on an evaluation of the indicators, HealthCo determines that its claims-made insurance policy is a prospective contract that does not contain any retroactive provisions. In making that determination, HealthCo speci…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:488b80f12e480dae68b9fd53504eda504699e0ea6aaf53fa64f674bd88a40a2d","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-13","para":"55-13","html":"
This Example provides illustrations for applying the guidance contained in paragraphs
720-20-35-3 through 35-7
. This Example contains the following Cases:
  1. a
    Calculations are made using assumed facts (Case A).
  2. b
    The entity revises its incurred but not reported estimate (Case B).
  3. c
    The entity discovers a defect in the manufacturing process (Case C).
","snippet":"This Example provides illustrations for applying the guidance contained in paragraphs 720-20-35-3 through 35-7. This Example contains the following Cases:\n(a) Calculations are made using assumed facts (Case A).\n(b) The e…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b25e956465b0d8c4955338680fa51ccbfce78ce1914d56d3b2f7c122d1a28d4b","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-14","para":"55-14","html":"
Cases A, B, and C illustrate how to calculate various required amounts (for example, the expected annual insurance expense, the expected quarterly insurance expense, the incurred but not reported liability, the known claims liability and the prepaid insurance) under each Case's different circumstances. Cases A, B, and C share all of the following assumptions.
  1. a
    Entity A purchases claims-made policies every year for its insurable risk. The insurance arrangement meets the criteria for prospective treatment as described in paragraphs
    720-20-25-7 through 25-8
    . The policy has a $500,000 per incident deductible and a $2 million per incident maximum with a policy limit of $15 million. When calculating the insurance recoverable related to incurred but not reported incidents, Entity A assumes that approximately 50 percent of the gross claim value will be recovered because of the deductible. Entity A does not anticipate incurring any losses in excess of the policy's maximums.
  2. b
    Accrued incurred but not reported liability at 12/31/X0: $2 million.
  3. c
    Receivable for insurance recoverable at 12/31/X0: $1 million.
  4. d
    Estimated incurred but not reported liability at 12/31/X1: $2.2 million.
  5. e
    Estimated receivable for insurance recoverable at 12/31/X1: $1.1 million.
  6. f
    Premium for claims-made policy for year ending 12/31/X1, payable 1/1/X1: $1.6 million.
  7. g
    Value of claim for an incident reported during the second quarter (the claim is covered by the insurance policy subject to a $500,000 deductible and was both paid to the claimant and recovered from the carrier during the third quarter): $750,000.
","snippet":"Cases A, B, and C illustrate how to calculate various required amounts (for example, the expected annual insurance expense, the expected quarterly insurance expense, the incurred but not reported liability, the known cla…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:661c10bd41e5e07c4195c0a33e6d9d3eb19e249fbca88aa37a22c3d09fc176cb","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-15","para":"55-15","html":"
The following table illustrates computation of quarterly insurance expense.
","snippet":"The following table illustrates computation of quarterly insurance expense.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d21ec0e7fd3c67241a10a20d9c11ef5132beef83041c0f977ed605d8eaba2eed","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-16","para":"55-16","html":"
In this Case Entity A revises its estimated year-end incurred but not reported liability from $2.2 million to $2.6 million in the second quarter due to overall increases in settling claims, which is considered a routine adjustment by management, and Entity A determines that a reasonable matching of the additional cost to the periods benefited results in recognizing one-half of the adjustment in the second quarter and the remainder of the adjustment over the remaining interim periods on a pro rata basis.
","snippet":"In this Case Entity A revises its estimated year-end incurred but not reported liability from $2.2 million to $2.6 million in the second quarter due to overall increases in settling claims, which is considered a routine …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ca4c0183a877ab440ad5e34c2409a31efe1a044648d236a4c75455bb84a0ae2","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-17","para":"55-17","html":"
The following table illustrates computation of quarterly insurance expense.
","snippet":"The following table illustrates computation of quarterly insurance expense.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9bd2e19cdd131446124dd56b7d2c2140b95aebc81fdabe5bb133ebe5481d6a13","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-18","para":"55-18","html":"
In this Case Entity A discovers a defect in the manufacturing process in the third quarter and corrects it. Entity A evaluates whether its incurred but not reported liability warrants adjustment and concludes that an additional $2.1 million liability is needed for claims that are expected to be reported after year-end. Entity A considers the discovery of the defect to be an unusual event and determines that a reasonable matching of the additional cost to the periods benefited results in the entire adjustment being recognized in the third quarter.
","snippet":"In this Case Entity A discovers a defect in the manufacturing process in the third quarter and corrects it. Entity A evaluates whether its incurred but not reported liability warrants adjustment and concludes that an add…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c7af91617db3ea439c0ca48ba3636cea08b9aefdd0c52eb44b777aea85d99899","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-19","para":"55-19","html":"
The following table illustrates computation of quarterly insurance expense.
","snippet":"The following table illustrates computation of quarterly insurance expense.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:31078c7d02a6cb95a8477fe1e0bc490bd4f8978f5cdce9f95b0d654a2518be2e","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"citation":"720-20-55-20","para":"55-20","html":"
This Example provides an illustration for applying the guidance contained in paragraphs
720-20-35-8 through 35-12
. This Example has the following assumptions:
  1. a
    Entity A purchases claims-made policies every year for its insurable risk. The insurance arrangement meets the criteria for prospective treatment as described in paragraphs
    720-20-25-7 through 25-8
    . The policy has a $500,000 per incident deductible and a $2 million per incident maximum with a policy limit of $15 million. When calculating the insurance recoverable related to incurred but not reported incidents, Entity A assumes that approximately 50 percent of the gross claim value will be recovered because of the deductible. Entity A does not anticipate incurring any losses in excess of the policy's maximums.
  2. b
    The policy period runs from May 1 to April 30, and uses a December 31 year-end for financial reporting purposes.
  3. c
    Accrued incurred but not reported liability at 12/31/X0: $2 million.
  4. d
    Receivable for insurance recoverable at 12/31/X0: $1 million.
  5. e
    Estimated incurred but not reported liability at 12/31/X1: $2.2 million.
  6. f
    Estimated receivable for insurance recoverable at 12/31/X1: $1.1 million.
  7. g
    Premium for one year claims-made policy expiring 4/30/X1: $1.2 million.
  8. h
    Estimated premium for one-year claims-made policy commencing 5/1/X1: $1.8 million.
  9. i
    Value of claim for an incident reported during the second quarter (the claim is covered by the insurance policy subject to a $500,000 deductible and was both paid to the claimant and recovered from the carrier during the third quarter): $750,000.
","snippet":"This Example provides an illustration for applying the guidance contained in paragraphs 720-20-35-8 through 35-12. This Example has the following assumptions:\n(a) Entity A purchases claims-made policies every year for it…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:309f28e4ebc4be3a3a81e4ac21d1ed94226d75eb7f534f9a7260a4a21319453a","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:62967ec26609b8c4c998c41fc56e90dc01d9e57fbe79f031722d52f5db096b8a","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a974c1e17cad033094c7a62de59c80fb620ce00212430334fedbab3296c8e86e","downloaded_from":"2026-09-10T01:07:42.295Z","last_downloaded_at":"2026-09-10T01:07:42.295Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483334","source_sha256":"29e2921d4cc78ca3ba5add2fccd0a0353a23180b0253a65393ca0d2be7cecca7"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":"Claims-Made Contracts","heading":"Health Care Entities","paragraphs":[{"citation":"720-20-60-1","para":"60-1","html":"
For guidance on the recognition of a liability for claims incurred but not reported, see paragraph 954-450-25-2.
","snippet":"For guidance on the recognition of a liability for claims incurred but not reported, see paragraph 954-450-25-2.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b5307743a8786c4343b2402c08911db2ca11e7366dd4b15fdfbc9714674fb33b","downloaded_from":"2026-09-10T01:07:45.379Z","last_downloaded_at":"2026-09-10T01:07:45.379Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483411","source_sha256":"cac8f97470e4730725599dc7f3ea21350e25a6ee81b4abef2c9640283b6ae50b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f04ce4175ea8d3a5b81689be3b16869ca76c94e6fcbfbafc774433ad240f799c","downloaded_from":"2026-09-10T01:07:45.379Z","last_downloaded_at":"2026-09-10T01:07:45.379Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483411","source_sha256":"cac8f97470e4730725599dc7f3ea21350e25a6ee81b4abef2c9640283b6ae50b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:69034ca22bebb11d5ac50bb35c0ef55de33fe545c5ff09e91a4f2fbb1b679ea3","downloaded_from":"2026-09-10T01:07:45.379Z","last_downloaded_at":"2026-09-10T01:07:45.379Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483411","source_sha256":"cac8f97470e4730725599dc7f3ea21350e25a6ee81b4abef2c9640283b6ae50b"}}],"enrichment":{"summary":"ASC 720-20 tells a policyholder (a noninsurance entity, or an insurer buying coverage outside its core operations) how to account for insurance it purchases, covering three contract types: retroactive contracts, claims-made contracts, and multiple-year retrospectively rated contracts. If a contract does not actually transfer insurance risk, the premium (less amounts retained by the insurer) is accounted for as a deposit under Subtopic 340-30 (720-20-25-1). For retroactive coverage of already-incurred liabilities, the premium is expensed immediately, a receivable is recorded for expected recoveries, and any excess of receivable over premium is a deferred gain amortized over the recovery period (720-20-25-3 through 25-4; 720-20-35-2).","key_points":["If, regardless of form, an insurance contract does not indemnify the insured against loss or liability, the premium paid less the amount retained by the insurer is accounted for as a deposit under Subtopic 340-30 (720-20-25-1; 720-20-25-2).","Purchased retroactive insurance is accounted for like retroactive reinsurance under Subtopic 944-605: the premium is expensed immediately and a receivable is established for expected recoveries related to the insured event (720-20-25-3).","Any excess of the receivable over the amount paid is a deferred gain—immediate gain recognition and derecognition of the liability are prohibited because the liability is not extinguished and offsetting is not permitted under 210-20-45-1 (720-20-25-4); the deferred gain is amortized using the interest method, or on a recoveries-to-total-recoveries basis if amounts and timing cannot be reasonably estimated (720-20-35-2).","A claims-made policy that covers specific known claims reportable before the policy period (asserted claims, known unasserted claims, or known events that might result in a claim) contains a retroactive provision; the retroactive and prospective provisions must be accounted for separately if practicable, and if not practicable the entire policy is accounted for as retroactive (720-20-25-6 through 25-8), with indicators of a purely prospective policy listed in 720-20-25-10.","Prospective claims-made policies are accounted for by recognizing the premium as prepaid expense and estimating an annual expense equal to premium plus the change in the incurred-but-not-reported liability and the change in the related insurance recoverable, allocated to interim periods, with unusual claims recognized discretely when incurred (720-20-35-3 through 35-5; 720-20-35-9 through 35-10).","Insured entities must still accrue a liability for probable and reasonably estimable incurred but not reported claims under 450-20-25-2 (720-20-25-14), and prepaid insurance and insurance receivables may not be offset against those liabilities unless 210-20-45-1 is met (720-20-45-1).","For a multiple-year retrospectively rated contract accounted for as insurance, the insured recognizes a liability (or asset) for consideration payable to (or by) the insurer that would not exist absent experience under the contract, measured using a with-and-without method excluding future experience (720-20-25-15; 720-20-30-3; termination alternatives in 720-20-30-4)."],"categories":["Recognition","Subsequent measurement","Presentation","Contingencies and guarantees"],"audience_level":"intermediate","student_note":"This is the policyholder's side of insurance accounting—easy to confuse with Topic 944, which governs insurers. The classic trap is assuming that buying insurance for an already-recognized liability lets you write off the liability and book a gain; instead you expense the premium, record a receivable, defer any gain, and keep the gross liability on the balance sheet.","related_topics":["340-30","944-605","944-20","450-20","410-30","210-20"],"key_concepts":["retroactive insurance contract","claims-made policy","deferred gain amortization","deposit accounting","incurred but not reported liability","insurance recoverable","multiple-year retrospectively rated contract","with-and-without 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retrieval timestamps"}},{"number":"405-30","title":"Insurance-Related Assessments","topic_title":"Liabilities","score":0.7489,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2f88402a57bade0e797133d97be42b7254ed5a0db13ed04a8c3cdcb829242ff5","downloaded_from":"2026-09-10T00:14:14.713Z","last_downloaded_at":"2026-09-10T00:14:44.711Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"605-944","title":"Financial Services—Insurance","topic_title":"Revenue 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Costs","score":0.7392,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b81ccc46db2e4cc38b3616031ed4fa5a7d45debbd6e142c9494871b86f60c2f7","downloaded_from":"2026-09-09T23:55:41.723Z","last_downloaded_at":"2026-09-09T23:56:05.098Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"944-40","title":"Claim Costs and Liabilities for Future Policy Benefits","topic_title":"Financial 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timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7ade7bff5a158a547fc71757c456a7cfeb025beec76a30bebe401ace04e11bcb","downloaded_from":"2026-09-10T01:07:18.243Z","last_downloaded_at":"2026-09-10T01:07:45.379Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-25","topic":"720","title":"Contributions Made","area":"Expenses","paragraphs":12,"summary":"ASC 720-25 governs how a resource provider (any entity) accounts for contributions it makes, including unconditional promises to give. Contributions made are recognized as expenses in the period made, with a corresponding decrease in assets or increase in liabilities, and are measured at the fair value of the assets given (or of the donee liabilities cancelled). Conditional promises are not recognized until the barrier is overcome, using the same conditionality analysis as the contributions received guidance in 958-605.","concepts":["contributions made","unconditional promise to give","conditional contribution","barrier","fair value measurement","net settlement value","donated inventory","resource provider"],"categories":["Recognition","Initial measurement","Not-for-profit","Fair value"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-25-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Conditional Contribution Added Accounting Standards Update No. 2018-08 06/21/2018
Contribution Amended Accounting Standards Update No. 2018-08 06/21/2018
Contribution Amended Accounting Standards Update No. 2010-07 01/28/2010
Donor-Imposed Condition Added Accounting Standards Update No. 2018-08 06/21/2018
Not-for-Profit Entity Added Accounting Standards Update No. 2018-08 06/21/2018
720-25-15-1 through 15-3
 Amended Accounting Standards Update No. 2018-08 06/21/2018
720-25-15-2 Amended Accounting Standards Update No. 2014-09 05/28/2014
720-25-25-1 Amended Accounting Standards Update No. 2018-08 06/21/2018
720-25-50-1 Amended Accounting Standards Update No. 2018-08 06/21/2018
720-25-55-1 Added Accounting Standards Update No. 2018-08 06/21/2018
720-25-55-2 Added Accounting Standards Update No. 2018-08 06/21/2018
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nConditional Contribution | Added | Accounting Standards Update No. 2018-08 | 06/21/2018 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:692d97e8c0999f9d3754eca8a17b76a62d89ddb3733bd53c064af08297398681","downloaded_from":"2026-09-10T01:07:47.863Z","last_downloaded_at":"2026-09-10T01:07:47.863Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483386","source_sha256":"c0f35b9e9d331be1c39eecf18869e4124694fad69f773e51cc91f8e85d73b5e7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2724088788ea857f1f3bbe054ff114b7a6a21ec1f98cc735dcce62213c5be8a1","downloaded_from":"2026-09-10T01:07:47.863Z","last_downloaded_at":"2026-09-10T01:07:47.863Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483386","source_sha256":"c0f35b9e9d331be1c39eecf18869e4124694fad69f773e51cc91f8e85d73b5e7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e34e5ddd312be0adf70940c8b63c67faed308ecfffa1da7a0e70056b4c9356e4","downloaded_from":"2026-09-10T01:07:47.863Z","last_downloaded_at":"2026-09-10T01:07:47.863Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483386","source_sha256":"c0f35b9e9d331be1c39eecf18869e4124694fad69f773e51cc91f8e85d73b5e7"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-25-05-1","para":"05-1","html":"
This Subtopic provides guidance on accounting for contributions made, including unconditional promises to give.
","snippet":"This Subtopic provides guidance on accounting for contributions made, including unconditional promises to give.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5b59162c14fef89083060ee91c060af86af9aeea37dd4b8c7565cac638638e0f","downloaded_from":"2026-09-10T01:07:50.162Z","last_downloaded_at":"2026-09-10T01:07:50.162Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483360","source_sha256":"a59cd8317631adfe29c2f632f7163ec3a1328d448bc0bc00f68afc44670f4edb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8265ba31ad229e164043752ee03d64af9728c40a2d01752a63b52812ee1435d6","downloaded_from":"2026-09-10T01:07:50.162Z","last_downloaded_at":"2026-09-10T01:07:50.162Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483360","source_sha256":"a59cd8317631adfe29c2f632f7163ec3a1328d448bc0bc00f68afc44670f4edb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b8a9dbd798670dce9a3730e7359213e1761e9d870a982257b6a209a494300e93","downloaded_from":"2026-09-10T01:07:50.162Z","last_downloaded_at":"2026-09-10T01:07:50.162Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483360","source_sha256":"a59cd8317631adfe29c2f632f7163ec3a1328d448bc0bc00f68afc44670f4edb"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Entities","paragraphs":[{"citation":"720-25-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all entities. Not-for-profit entities (NFP) should see Subtopic 958-720 on other expenses for additional guidance on contributions made.
","snippet":"The guidance in this Subtopic applies to all entities. Not-for-profit entities (NFP) should see Subtopic 958-720 on other expenses for additional guidance on contributions made.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:332916c3756f86199cce5e1b886bfcda0aabc9eb70adb191ae8602d075714811","downloaded_from":"2026-09-10T01:07:53.263Z","last_downloaded_at":"2026-09-10T01:07:53.263Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483335","source_sha256":"d59531a45e3386d5be7afbcfba0dd70ca7f076f60d6f5c9a5590359fcf7a8e93"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:89cb0811f8f7fe67d99e068f9d5a07e5a04720905943536522edd5272e21087e","downloaded_from":"2026-09-10T01:07:53.263Z","last_downloaded_at":"2026-09-10T01:07:53.263Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483335","source_sha256":"d59531a45e3386d5be7afbcfba0dd70ca7f076f60d6f5c9a5590359fcf7a8e93"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"720-25-15-2","para":"15-2","html":"
The guidance in this Subtopic applies to contributions of cash and other assets, including promises to give made by resource providers. For all entities that receive contributions, see the contributions received guidance in paragraphs 958-605-15-3 through 15-5A.
","snippet":"The guidance in this Subtopic applies to contributions of cash and other assets, including promises to give made by resource providers. For all entities that receive contributions, see the contributions received guidance…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:38ac0d20ba99a59fb3d50147aef2c0242dd64054d7b227aa9768d37823263dea","downloaded_from":"2026-09-10T01:07:53.263Z","last_downloaded_at":"2026-09-10T01:07:53.263Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483335","source_sha256":"d59531a45e3386d5be7afbcfba0dd70ca7f076f60d6f5c9a5590359fcf7a8e93"}},{"citation":"720-25-15-3","para":"15-3","html":"
The guidance in this Subtopic does not apply to the transactions and activities specified in paragraph 958-605-15-6, which is in the Contributions Received Subsection of that Subtopic.
  1. a
    Subparagraph superseded by Accounting Standards Update No. 2018-08.
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2018-08.
  3. c
    Subparagraph superseded by Accounting Standards Update No. 2018-08.
  4. d
    Subparagraph superseded by Accounting Standards Update No. 2018-08.
","snippet":"The guidance in this Subtopic does not apply to the transactions and activities specified in paragraph 958-605-15-6, which is in the Contributions Received Subsection of that Subtopic.\n(a) Subparagraph superseded by Acco…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ddc2a12ca31258e4d38b01becdc69ca377d983e8c4d8d6c52a72af8fc1bc0c3f","downloaded_from":"2026-09-10T01:07:53.263Z","last_downloaded_at":"2026-09-10T01:07:53.263Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483335","source_sha256":"d59531a45e3386d5be7afbcfba0dd70ca7f076f60d6f5c9a5590359fcf7a8e93"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:77c691d421c58d0f29aaa30dda62569b456673f09876b8ec3216b36f6a3da0ea","downloaded_from":"2026-09-10T01:07:53.263Z","last_downloaded_at":"2026-09-10T01:07:53.263Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483335","source_sha256":"d59531a45e3386d5be7afbcfba0dd70ca7f076f60d6f5c9a5590359fcf7a8e93"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9329aff1304a0d3d8ccc77a4fbdcfa7d869498145f214786d6687748190ceced","downloaded_from":"2026-09-10T01:07:53.263Z","last_downloaded_at":"2026-09-10T01:07:53.263Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483335","source_sha256":"d59531a45e3386d5be7afbcfba0dd70ca7f076f60d6f5c9a5590359fcf7a8e93"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-25-25-1","para":"25-1","html":"
Contributions made shall be recognized as expenses in the period made and as decreases of assets or increases of liabilities depending on the form of the benefits given. For example, gifts of items from inventory held for sale are recognized as decreases of inventory and contribution expenses, and unconditional promises to give cash are recognized as payables and contribution expenses. For guidance on determining whether a contribution, including promises to give, is conditional, see the Contributions Received Subsection of Section 958-605-25.
","snippet":"Contributions made shall be recognized as expenses in the period made and as decreases of assets or increases of liabilities depending on the form of the benefits given. For example, gifts of items from inventory held fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c548e664c9928d4f3f7d782f6289a6556764d4b1c4b17ba23376096ba5cb8d51","downloaded_from":"2026-09-10T01:07:58.617Z","last_downloaded_at":"2026-09-10T01:07:58.617Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483382","source_sha256":"b48bb0a5d365607dbd067d52eed488860b6840a33b1813775652a43d326280ca"}},{"citation":"720-25-25-2","para":"25-2","html":"
If the fair value of an asset transferred differs from its carrying amount, a gain or loss shall be recognized on the disposition of the asset (see paragraphs
845-10-30-1 through 30-2
).
","snippet":"If the fair value of an asset transferred differs from its carrying amount, a gain or loss shall be recognized on the disposition of the asset (see paragraphs 845-10-30-1 through 30-2).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ac778811f0f3788018b5218c3d04d7aac8b143486b7e8ceb30732bc3552e2bf0","downloaded_from":"2026-09-10T01:07:58.617Z","last_downloaded_at":"2026-09-10T01:07:58.617Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483382","source_sha256":"b48bb0a5d365607dbd067d52eed488860b6840a33b1813775652a43d326280ca"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ec8f3baba7026d298b154fd0555fc28dd6664e58e36275f0bb6b48afa9c1d8fa","downloaded_from":"2026-09-10T01:07:58.617Z","last_downloaded_at":"2026-09-10T01:07:58.617Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483382","source_sha256":"b48bb0a5d365607dbd067d52eed488860b6840a33b1813775652a43d326280ca"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b347169b73523afc9ecc83a1a108b31dcf2982de90714315480924e6a1807c1","downloaded_from":"2026-09-10T01:07:58.617Z","last_downloaded_at":"2026-09-10T01:07:58.617Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483382","source_sha256":"b48bb0a5d365607dbd067d52eed488860b6840a33b1813775652a43d326280ca"}},{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-25-30-1","para":"30-1","html":"
Contributions made shall be measured at the fair values of the assets given or, if made in the form of a settlement or cancellation of a donee's liabilities, at the fair value of the liabilities cancelled.
","snippet":"Contributions made shall be measured at the fair values of the assets given or, if made in the form of a settlement or cancellation of a donee's liabilities, at the fair value of the liabilities cancelled.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9747b9e92e1f0193b2dce20236e4b5bb749e0d1d0c883328de8ab85210b911f","downloaded_from":"2026-09-10T01:08:01.722Z","last_downloaded_at":"2026-09-10T01:08:01.722Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483362","source_sha256":"3cd7b0c829200a95ae7334a5d515a77bf7ef220d9852fd3838ef062f78bb3445"}},{"citation":"720-25-30-2","para":"30-2","html":"
Unconditional promises to give that are expected to be paid in less than one year may be measured at net settlement value because that amount, although not equivalent to the present value of estimated future cash flows, results in a reasonable estimate of fair value.
","snippet":"Unconditional promises to give that are expected to be paid in less than one year may be measured at net settlement value because that amount, although not equivalent to the present value of estimated future cash flows, …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ce33a1e33686ef78aaf2682ac3d5940756710af00f3849158a69c306fb82f739","downloaded_from":"2026-09-10T01:08:01.722Z","last_downloaded_at":"2026-09-10T01:08:01.722Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483362","source_sha256":"3cd7b0c829200a95ae7334a5d515a77bf7ef220d9852fd3838ef062f78bb3445"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9cbefe6b121c0d353192c8514691cb4e13a899687cfdc2d04d6a1d65d5db9340","downloaded_from":"2026-09-10T01:08:01.722Z","last_downloaded_at":"2026-09-10T01:08:01.722Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483362","source_sha256":"3cd7b0c829200a95ae7334a5d515a77bf7ef220d9852fd3838ef062f78bb3445"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7a1374d4f147709ffa1e9a8e946eecd610eb547c75dc5bdee46019082ffb5112","downloaded_from":"2026-09-10T01:08:01.722Z","last_downloaded_at":"2026-09-10T01:08:01.722Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483362","source_sha256":"3cd7b0c829200a95ae7334a5d515a77bf7ef220d9852fd3838ef062f78bb3445"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-25-50-1","para":"50-1","html":"
This Subtopic does not require disclosures for makers of promises and indications of intentions to give because Topics 450 and 470 provide the relevant disclosure requirements.
","snippet":"This Subtopic does not require disclosures for makers of promises and indications of intentions to give because Topics 450 and 470 provide the relevant disclosure requirements.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:104310354456a1ba51858476a6f37223ad66e157abb178d057d80aa364325e88","downloaded_from":"2026-09-10T01:08:05.531Z","last_downloaded_at":"2026-09-10T01:08:05.531Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483337","source_sha256":"2bf9b2d9a33efcfa249af27fdf8602beedd0e8ca1444fd40d2cbaf6be2a254bf"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:071811553bbaed76e5183d76f1f6cf1a5d2686c39a97987054136c93b8c6be29","downloaded_from":"2026-09-10T01:08:05.531Z","last_downloaded_at":"2026-09-10T01:08:05.531Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483337","source_sha256":"2bf9b2d9a33efcfa249af27fdf8602beedd0e8ca1444fd40d2cbaf6be2a254bf"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5e03751fc6701ebf1ec1d9a5eef366acd95b16591e4e52c0f719e0615912352f","downloaded_from":"2026-09-10T01:08:05.531Z","last_downloaded_at":"2026-09-10T01:08:05.531Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483337","source_sha256":"2bf9b2d9a33efcfa249af27fdf8602beedd0e8ca1444fd40d2cbaf6be2a254bf"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"720-25-55-1","para":"55-1","html":"
See paragraph 958-720-55-1A for a diagram that depicts the process for determining whether a contribution is conditional in addition to distinguishing contributions from exchange transactions. Paragraphs
958-605-55-4 through 55-6
and 958-605-55-13A through 55-14I provide additional guidance and illustrations on what is a conditional contribution.
","snippet":"See paragraph 958-720-55-1A for a diagram that depicts the process for determining whether a contribution is conditional in addition to distinguishing contributions from exchange transactions. Paragraphs 958-605-55-4 thr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fb07cbfb36c24fd2edf6f5b4440b21ac1fc3ec4deb77584de734963ee381b5ef","downloaded_from":"2026-09-10T01:08:09.526Z","last_downloaded_at":"2026-09-10T01:08:09.526Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483410","source_sha256":"66664275deca94742d17c94753505fe543970d470bb4aab49875e412eec5998e"}},{"citation":"720-25-55-2","para":"55-2","html":"
See paragraphs
958-605-55-17A through 55-17F
and
958-605-55-70A through 55-70T
for implementation guidance and illustrations on determining whether a contribution is conditional. That guidance applies to contributions made by a resource provider (for example, a corporate foundation, a corporation, or a not-for-profit entity [NFP]) as well as contributions received by a recipient.
","snippet":"See paragraphs 958-605-55-17A through 55-17F and 958-605-55-70A through 55-70T for implementation guidance and illustrations on determining whether a contribution is conditional. That guidance applies to contributions ma…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9e48e38fa1a8841f73b60f609f988deff602fe0572976863a1d8777cac6fbc2f","downloaded_from":"2026-09-10T01:08:09.526Z","last_downloaded_at":"2026-09-10T01:08:09.526Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483410","source_sha256":"66664275deca94742d17c94753505fe543970d470bb4aab49875e412eec5998e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9a04ab3b54da8d432a76d6c5820b8ee85ba3447bc5685ff06406003f7b48505c","downloaded_from":"2026-09-10T01:08:09.526Z","last_downloaded_at":"2026-09-10T01:08:09.526Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483410","source_sha256":"66664275deca94742d17c94753505fe543970d470bb4aab49875e412eec5998e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:64c10b516a4f473d4f49ec097393157c61da8f144ece73eef049bc22e1527bd9","downloaded_from":"2026-09-10T01:08:09.526Z","last_downloaded_at":"2026-09-10T01:08:09.526Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483410","source_sha256":"66664275deca94742d17c94753505fe543970d470bb4aab49875e412eec5998e"}}],"enrichment":{"summary":"ASC 720-25 governs how a resource provider (any entity) accounts for contributions it makes, including unconditional promises to give. Contributions made are recognized as expenses in the period made, with a corresponding decrease in assets or increase in liabilities, and are measured at the fair value of the assets given (or of the donee liabilities cancelled). Conditional promises are not recognized until the barrier is overcome, using the same conditionality analysis as the contributions received guidance in 958-605.","key_points":["Contributions made are recognized as expenses in the period made and as decreases of assets or increases of liabilities depending on the form of the benefit given; unconditional promises to give cash are recorded as payables and contribution expense (720-25-25-1).","Whether a contribution or promise to give is conditional is determined under the Contributions Received Subsection of Section 958-605-25, and the same guidance applies to resource providers (720-25-25-1; 720-25-55-2).","If the fair value of a transferred asset differs from its carrying amount, a gain or loss is recognized on disposition of the asset (720-25-25-2; see 845-10-30-1 through 30-2).","Contributions made are measured at the fair value of the assets given, or, when made by settling or cancelling a donee's liabilities, at the fair value of the liabilities cancelled (720-25-30-1).","Unconditional promises to give expected to be paid in less than one year may be measured at net settlement value as a reasonable estimate of fair value (720-25-30-2).","The Subtopic applies to all entities; NFPs also look to 958-720, and recipients apply the contributions received guidance in 958-605-15-3 through 15-5A (720-25-15-1; 720-25-15-2).","No disclosures are required by this Subtopic for makers of promises or indications of intention to give because Topics 450 and 470 supply the relevant disclosure requirements (720-25-50-1)."],"categories":["Recognition","Initial measurement","Not-for-profit","Fair value"],"audience_level":"intermediate","student_note":"This is the mirror image of contributions received: the donor expenses the gift when made, but only if the promise is unconditional. The common mistake is accruing an expense for a conditional promise (or a mere intention to give) and forgetting to record a gain or loss when donated property's fair value differs from its carrying amount.","related_topics":["958-720","958-605","845-10","450","470"],"key_concepts":["contributions made","unconditional promise to give","conditional contribution","barrier","fair value measurement","net settlement value","donated inventory","resource provider"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:29021f85eac821d4475ab19dd4ce31fd32b90f31113923670989dc819e2c0baf","downloaded_from":"2026-09-10T01:07:47.863Z","last_downloaded_at":"2026-09-10T01:08:09.526Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"310-958","title":"Not-for-Profit Entities","topic_title":"Receivables","score":0.8275,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ef8ca911e18bd424660cba5b6da5d2e83ca40201a4d8157eb6b1352684b97f4b","downloaded_from":"2026-09-09T23:32:03.631Z","last_downloaded_at":"2026-09-09T23:32:29.176Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"605-958","title":"Not-for-Profit Entities","topic_title":"Revenue Recognition","score":0.8138,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:174baa9a056974d1d0de6a5b17ec88a06e85c2099e5fdf229b6a161f0a776bf0","downloaded_from":"2026-09-10T00:51:19.189Z","last_downloaded_at":"2026-09-10T00:51:49.276Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"405-958","title":"Not-for-Profit Entities","topic_title":"Liabilities","score":0.7508,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:da016bd0c5bb3a1538cc9fe399b6c8ae2039b2efafe69cf534679c311d748dd8","downloaded_from":"2026-09-10T00:19:40.959Z","last_downloaded_at":"2026-09-10T00:20:08.319Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-958","title":"Not-for-Profit Entities","topic_title":"Other Expenses","score":0.7204,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cad09c33f37a69e0976e3bbdbd4b394cad0f7e31b7eef57ad579957136a25433","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"958-20","title":"Financially Interrelated Entities","topic_title":"Not-for-Profit Entities","score":0.6876,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:16cf0279cb487b390915052b1a8a546bf68eb1763cd426ce388c03f54075ac97","downloaded_from":"2026-09-10T02:21:31.090Z","last_downloaded_at":"2026-09-10T02:21:57.175Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"958-10","title":"Overall","topic_title":"Not-for-Profit Entities","score":0.6796,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a07436742473998c2c654f606a5812ac64f4dd9b494d02292f4a7c1372f008a1","downloaded_from":"2026-09-10T02:21:08.558Z","last_downloaded_at":"2026-09-10T02:21:26.859Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-20","title":"Insurance Costs","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cf4b8abd52b6f01d269eae1bb85100b91291b3dbead719ec71e3fd60c97e3e2b","downloaded_from":"2026-09-10T01:07:18.243Z","last_downloaded_at":"2026-09-10T01:07:45.379Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-30","title":"Real and Personal Property Taxes","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:432900273074ebe46e2243d2d32c0eca736a8695d8160f77e6ce2558cbc22fee","downloaded_from":"2026-09-10T01:08:12.940Z","last_downloaded_at":"2026-09-10T01:08:30.360Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2a644c504815f3eff63d1f9843bac8c79bac511433f83388333d260c73ffc90d","downloaded_from":"2026-09-10T01:07:47.863Z","last_downloaded_at":"2026-09-10T01:08:09.526Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-30","topic":"720","title":"Real and Personal Property Taxes","area":"Expenses","paragraphs":13,"summary":"ASC 720-30 governs when an accrual-basis taxpayer records a liability for real and personal property taxes and how much is charged to income in each period. Legal liability for such taxes generally attaches at a specific event date (assessment date, lien date, levy date, etc.) determined by state law, but the preferred accounting is a monthly accrual over the fiscal period of the taxing authority for which the taxes are levied. Accrued property taxes are current liabilities, and later revisions of estimated amounts run through the income statement.","concepts":["real and personal property taxes","assessment date","lien date","monthly accrual","fiscal period of the taxing authority","estimated liability","current liabilities","capitalization of real estate taxes"],"categories":["Recognition","Subsequent measurement","Presentation","Inventory and PP&E"],"level":"introductory","topic_title":"Other Expenses","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-30-05-1","para":"05-1","html":"
This Subtopic addresses the accounting for real and personal property taxes, specifically, when to record the tax liability and the amounts to be charged to income in future periods.
","snippet":"This Subtopic addresses the accounting for real and personal property taxes, specifically, when to record the tax liability and the amounts to be charged to income in future periods.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5c881839d8d3fd7985fd4f3bdea9f4ae99e0dc24d8c967d7d83be5b5442e9556","downloaded_from":"2026-09-10T01:08:12.940Z","last_downloaded_at":"2026-09-10T01:08:12.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483383","source_sha256":"064310a3a83794b039cbbd60cf2df13fbb575ca99c0e555648e0817b2c71c41c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:33891e05cceea0af1d187b8591b8434dd02a9e845491fd5e0002baae1d86fa50","downloaded_from":"2026-09-10T01:08:12.940Z","last_downloaded_at":"2026-09-10T01:08:12.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483383","source_sha256":"064310a3a83794b039cbbd60cf2df13fbb575ca99c0e555648e0817b2c71c41c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e6a99b65d9d0110c0a6b42b97b73a294624f739d8e17d656bdf539be2749800","downloaded_from":"2026-09-10T01:08:12.940Z","last_downloaded_at":"2026-09-10T01:08:12.940Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483383","source_sha256":"064310a3a83794b039cbbd60cf2df13fbb575ca99c0e555648e0817b2c71c41c"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Entities","paragraphs":[{"citation":"720-30-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all entities.
","snippet":"The guidance in this Subtopic applies to all entities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b10a4ead272b5da1d47c36f622dc8fe2fa314f2bd8b507c3e004106347cb6c6","downloaded_from":"2026-09-10T01:08:16.887Z","last_downloaded_at":"2026-09-10T01:08:16.887Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483357","source_sha256":"e3068516de9736c6da65769cf147412fcd0f7060c5beb1f1100fa6b5ea02db16"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fb87c29b115bebb376ca83a925d5692c58b34e219d4c98a74e4d98e80ebf92e8","downloaded_from":"2026-09-10T01:08:16.887Z","last_downloaded_at":"2026-09-10T01:08:16.887Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483357","source_sha256":"e3068516de9736c6da65769cf147412fcd0f7060c5beb1f1100fa6b5ea02db16"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7707e8332c89e318d744098ede5843ff008b3e45b08f11b6e763e76a6944efd4","downloaded_from":"2026-09-10T01:08:16.887Z","last_downloaded_at":"2026-09-10T01:08:16.887Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483357","source_sha256":"e3068516de9736c6da65769cf147412fcd0f7060c5beb1f1100fa6b5ea02db16"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Legal Liability for Property Taxes","paragraphs":[{"citation":"720-30-25-1","para":"25-1","html":"
Unlike excise, income, and social security taxes, which are directly related to particular business events, real and personal property taxes are based on the assessed valuation of property (tangible and intangible) as of a given date, as determined by the laws of a state or other taxing authority. The legal liability for such taxes is generally considered as accruing at the moment of occurrence of some specific event, rather than over a period of time. Depending on jurisdiction, various dates on which certain property taxes may accrue legally include the following:
  1. a
    Assessment date
  2. b
    Beginning of taxing authority's fiscal year
  3. c
    End of taxing authority's fiscal year
  4. d
    Date on which tax becomes a lien on the property
  5. e
    Date tax is levied
  6. f
    Date or dates tax is payable
  7. g
    Date tax becomes delinquent
  8. h
    Tax period appearing on tax bill.
In a given case several of these dates may coincide. The date to be applied in a particular case necessarily requires reference to the law and court decisions of the state concerned.
","snippet":"Unlike excise, income, and social security taxes, which are directly related to particular business events, real and personal property taxes are based on the assessed valuation of property (tangible and intangible) as of…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:35e9cc4be65a8e4f888ddb5b5495cf587247eaf60c639c2785e80523e483e230","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}},{"citation":"720-30-25-2","para":"25-2","html":"
The legal liability for property taxes must be considered when title to property is transferred during the taxable year. Adjustments on account of property taxes paid or accrued are frequently incorporated in agreements covering the sale of real estate, which determine the question for the individual case as between the buyer and seller.
","snippet":"The legal liability for property taxes must be considered when title to property is transferred during the taxable year. Adjustments on account of property taxes paid or accrued are frequently incorporated in agreements …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc6e4b887ad55a7cb654b877f1d7563cd26c5553c33b07f60d3b9f220582ebfd","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1c4f9db6c33fbd9551fe8527d707f40597eef02ce462e7d6cf8e644b661f18eb","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}},{"block":null,"heading":"Accounting for Property Taxes","paragraphs":[{"citation":"720-30-25-3","para":"25-3","html":"
Accounting questions arise as to the following:
  1. a
    When the liability for real and personal property taxes should be recorded on the books of a taxpayer keeping his accounts on the accrual basis
  2. b
    The amounts to be charged against the income of respective periods.
","snippet":"Accounting questions arise as to the following:\n(a) When the liability for real and personal property taxes should be recorded on the books of a taxpayer keeping his accounts on the accrual basis\n(b) The amounts to be ch…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0610286ca047feaf298191c06d4443c62b93e756b6cf03c013132b9dda12204","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}},{"citation":"720-30-25-4","para":"25-4","html":"
The decision is influenced by the particular circumstances of each tax. Such terms as assessment date and levy date vary in meaning in different jurisdictions.
","snippet":"The decision is influenced by the particular circumstances of each tax. Such terms as assessment date and levy date vary in meaning in different jurisdictions.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d7145389638a09683ee03bd3126a0ee9afbba028d2ad011311e51fe8a83025ab","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}},{"citation":"720-30-25-5","para":"25-5","html":"
Determination of the liability for the tax often proceeds by degrees, with several steps being taken at appreciable time intervals. For example, while it is known that the owner of real property is liable, with respect to each tax period, for a tax on property owned on the assessment date, the amount of the tax may not be fixed until much later.
","snippet":"Determination of the liability for the tax often proceeds by degrees, with several steps being taken at appreciable time intervals. For example, while it is known that the owner of real property is liable, with respect t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:741594374ce6c2f4d723865e5473aaa7877afd0e00083f1f75dc447a0d4e2454","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}},{"citation":"720-30-25-6","para":"25-6","html":"
The inability to determine the exact amount of taxes is in itself no justification for failure to recognize an existing tax liability. All of the circumstances relating to a particular tax shall be considered before a satisfactory conclusion is reached.
","snippet":"The inability to determine the exact amount of taxes is in itself no justification for failure to recognize an existing tax liability. All of the circumstances relating to a particular tax shall be considered before a sa…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91e1b9a41fe60fe93853beb7a81200f212a82c9f1a2d7f3bbb29d50934a6e0e0","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}},{"citation":"720-30-25-7","para":"25-7","html":"
Generally, the most acceptable basis of providing for property taxes is monthly accrual on the taxpayer's books during the fiscal period of the taxing authority for which the taxes are levied. The books will then show, at any closing date, the appropriate accrual or prepayment. The monthly accrual basis is practical and satisfactory so long as it is consistently followed.
","snippet":"Generally, the most acceptable basis of providing for property taxes is monthly accrual on the taxpayer's books during the fiscal period of the taxing authority for which the taxes are levied. The books will then show, a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91f5cf3c3d83dec6f4247488d93c0e98f2d33f1bd7e2c6fe328dad3c66f233e6","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3c2cfe0c7211ea70fef6400ceea09fcc66e120995d2c0ba37b21db038aed22c4","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:611ec5c4eca907e487781aad46176b970680226107da3eaa9059f33b43010dcc","downloaded_from":"2026-09-10T01:08:19.562Z","last_downloaded_at":"2026-09-10T01:08:19.562Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483332","source_sha256":"b28bcef9b38ada175ef86c4e594dfc5f59634b80e14806a493e1fc75fadf2123"}},{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-30-35-1","para":"35-1","html":"
Since the liability for property taxes must frequently be estimated at the balance-sheet date, it is often necessary to adjust the provision for taxes of a prior year when their amount has been ascertained. These adjustments should ordinarily be made through the income statement, either in combination with the current year's provision or as a separate item.
","snippet":"Since the liability for property taxes must frequently be estimated at the balance-sheet date, it is often necessary to adjust the provision for taxes of a prior year when their amount has been ascertained. These adjustm…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7c4a594c8b5f20384eae88fcac00a33c8b0518d1cebe5bdae1fb63acd50d0f90","downloaded_from":"2026-09-10T01:08:22.956Z","last_downloaded_at":"2026-09-10T01:08:22.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483408","source_sha256":"8bb77119175efcd12ca4dda7add667433396715e74e73063766780d01ea88bcc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2319fadfde5343777806fb422cd8a7d5fbe7f532910bc3c70a40315d35b61121","downloaded_from":"2026-09-10T01:08:22.956Z","last_downloaded_at":"2026-09-10T01:08:22.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483408","source_sha256":"8bb77119175efcd12ca4dda7add667433396715e74e73063766780d01ea88bcc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:97cb2408cb90b22fb58710e2fb9f3bc7c153d03da8f19c3dc10256c5c0643f94","downloaded_from":"2026-09-10T01:08:22.956Z","last_downloaded_at":"2026-09-10T01:08:22.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483408","source_sha256":"8bb77119175efcd12ca4dda7add667433396715e74e73063766780d01ea88bcc"}},{"number":"45","label":"45 Other Presentation Matters","anchor":"45-other-presentation-matters","is_sec":false,"groups":[{"block":null,"heading":"Balance Sheet","paragraphs":[{"citation":"720-30-45-1","para":"45-1","html":"
An accrued liability for real and personal property taxes, whether estimated or definitely known, shall be included among the current liabilities. Where estimates are subject to a substantial measure of uncertainty, the liability shall be described as estimated.
","snippet":"An accrued liability for real and personal property taxes, whether estimated or definitely known, shall be included among the current liabilities. Where estimates are subject to a substantial measure of uncertainty, the …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e60f6fc9a9bde0553be4c7888546a66462dacbc4a01d60cff88eac4a0081c786","downloaded_from":"2026-09-10T01:08:26.720Z","last_downloaded_at":"2026-09-10T01:08:26.720Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483384","source_sha256":"0bd1fa1a4286d5148ec7ea072a74f20a3383d12b20d234442a5651ab8177b1dc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3530faa447c4b62552e16371942a9d13fb2ed2d047c7da21410e8b4e709de33","downloaded_from":"2026-09-10T01:08:26.720Z","last_downloaded_at":"2026-09-10T01:08:26.720Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483384","source_sha256":"0bd1fa1a4286d5148ec7ea072a74f20a3383d12b20d234442a5651ab8177b1dc"}},{"block":null,"heading":"Income Statement","paragraphs":[{"citation":"720-30-45-2","para":"45-2","html":"
In condensed income statements appearing in published reports, the amounts of real and personal property taxes, however charged in the accounts, are rarely shown separately. They are frequently combined with other taxes but not with taxes on income.
","snippet":"In condensed income statements appearing in published reports, the amounts of real and personal property taxes, however charged in the accounts, are rarely shown separately. They are frequently combined with other taxes …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bed4df33e5e6a64159b22d84544f8212cee5a7e90cb2697e20a43421b4886613","downloaded_from":"2026-09-10T01:08:26.720Z","last_downloaded_at":"2026-09-10T01:08:26.720Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483384","source_sha256":"0bd1fa1a4286d5148ec7ea072a74f20a3383d12b20d234442a5651ab8177b1dc"}},{"citation":"720-30-45-3","para":"45-3","html":"
While it is sometimes appropriate to capitalize in property accounts the amount of real estate taxes applicable to property that is being developed for use or sale, these taxes are generally regarded as an expense of doing business. They may be accounted for in any of the following ways:
  1. a
    Charged to operating expenses
  2. b
    Shown as a separate deduction from income
  3. c
    Distributed among the several accounts to which they are deemed to apply, such as factory overhead, rent income, and selling or general expenses.
","snippet":"While it is sometimes appropriate to capitalize in property accounts the amount of real estate taxes applicable to property that is being developed for use or sale, these taxes are generally regarded as an expense of doi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7c060e935f192b9d5b58fdad66ff403e90d206becc0714f7467a9101bedd8e41","downloaded_from":"2026-09-10T01:08:26.720Z","last_downloaded_at":"2026-09-10T01:08:26.720Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483384","source_sha256":"0bd1fa1a4286d5148ec7ea072a74f20a3383d12b20d234442a5651ab8177b1dc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:207b2fabbe388f7df1dd1a2c91c88be1aef864c028c78f3c3a366b16e6114d6d","downloaded_from":"2026-09-10T01:08:26.720Z","last_downloaded_at":"2026-09-10T01:08:26.720Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483384","source_sha256":"0bd1fa1a4286d5148ec7ea072a74f20a3383d12b20d234442a5651ab8177b1dc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6853a1fabad3cad85aac6659077dae344ca4a82b365a735a19cfe61803a81475","downloaded_from":"2026-09-10T01:08:26.720Z","last_downloaded_at":"2026-09-10T01:08:26.720Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483384","source_sha256":"0bd1fa1a4286d5148ec7ea072a74f20a3383d12b20d234442a5651ab8177b1dc"}}],"enrichment":{"summary":"ASC 720-30 governs when an accrual-basis taxpayer records a liability for real and personal property taxes and how much is charged to income in each period. Legal liability for such taxes generally attaches at a specific event date (assessment date, lien date, levy date, etc.) determined by state law, but the preferred accounting is a monthly accrual over the fiscal period of the taxing authority for which the taxes are levied. Accrued property taxes are current liabilities, and later revisions of estimated amounts run through the income statement.","key_points":["Unlike excise, income, and social security taxes, property taxes are based on assessed valuation of tangible and intangible property as of a given date, and legal liability generally accrues at a specific event rather than over time (720-30-25-1).","Possible legal accrual dates include the assessment date, beginning or end of the taxing authority's fiscal year, lien date, levy date, payment date, delinquency date, or the tax period on the bill; the controlling date depends on the law and court decisions of the state concerned (720-30-25-1).","Inability to determine the exact amount of the tax is no justification for failing to recognize an existing tax liability (720-30-25-6).","The most acceptable basis is monthly accrual on the taxpayer's books during the fiscal period of the taxing authority for which the taxes are levied, so the books show the appropriate accrual or prepayment at any closing date, applied consistently (720-30-25-7).","When a prior year's estimated provision must be adjusted once the actual amount is known, the adjustment is ordinarily made through the income statement, either combined with the current year's provision or as a separate item (720-30-35-1).","Accrued property taxes, estimated or known, are presented among current liabilities, and are described as estimated where subject to substantial uncertainty (720-30-45-1).","Property taxes may be charged to operating expenses, shown as a separate deduction from income, or distributed among accounts such as factory overhead, rent income, and selling or general expenses; capitalization in property accounts is sometimes appropriate for property being developed for use or sale (720-30-45-3)."],"categories":["Recognition","Subsequent measurement","Presentation","Inventory and PP&E"],"audience_level":"introductory","student_note":"Property taxes are not income taxes—do not apply ASC 740 or combine them with income taxes on the face of the statements; the default answer is ratable monthly accrual over the taxing authority's fiscal year, with revised estimates run through current income rather than restated as errors.","related_topics":["740","450","970","835-20","720-10"],"key_concepts":["real and personal property taxes","assessment date","lien date","monthly accrual","fiscal period of the taxing authority","estimated liability","current liabilities","capitalization of real estate taxes"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0a4845e0747cafdb1948b178f0be494cb15323377129158016a401ce6148a5d0","downloaded_from":"2026-09-10T01:08:12.940Z","last_downloaded_at":"2026-09-10T01:08:30.360Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"740-10","title":"Overall","topic_title":"Income Taxes","score":0.7139,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ecbe1694a32cb8556416bc3d27779934e9bc197e19880ce57eaf16f732edd659","downloaded_from":"2026-09-10T01:16:12.781Z","last_downloaded_at":"2026-09-10T01:17:20.090Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"740-980","title":"Regulated Operations","topic_title":"Income Taxes","score":0.6907,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:743b75a2ad19451527f5f93868321ec725c0aa91de835acf8d09ccc4e857a621","downloaded_from":"2026-09-10T01:21:36.471Z","last_downloaded_at":"2026-09-10T01:21:55.089Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"740-946","title":"Financial Services—Investment Companies","topic_title":"Income Taxes","score":0.6788,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a476c0f5383b7d4e6059bb95ef0acfc1a04e9202973de9795f716869acee733b","downloaded_from":"2026-09-10T01:20:56.282Z","last_downloaded_at":"2026-09-10T01:21:12.867Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"740-944","title":"Financial Services—Insurance","topic_title":"Income Taxes","score":0.6721,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a32aba1be47dd32257b229e36ddf0074864cc4516db4fafea066b7e4f42e8315","downloaded_from":"2026-09-10T01:20:36.911Z","last_downloaded_at":"2026-09-10T01:20:53.539Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"740-932","title":"Extractive Activities—Oil and Gas","topic_title":"Income Taxes","score":0.6715,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7880c6e77bfd8b3b1d4088738ec253ef002532c6a54d0993250adc5acffeb3e","downloaded_from":"2026-09-10T01:19:50.149Z","last_downloaded_at":"2026-09-10T01:20:10.076Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"274-10","title":"Overall","topic_title":"Personal Financial Statements","score":0.6681,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f2532b058dff9edfd8c50ab8c040ff845355fd8e8479752658cc10ea721c0897","downloaded_from":"2026-09-09T23:21:27.622Z","last_downloaded_at":"2026-09-09T23:21:52.593Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-25","title":"Contributions Made","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e673a61597c4ccb0c33d0cc55889acffb654d7bee3f5b62af66233d07a2c29be","downloaded_from":"2026-09-10T01:07:47.863Z","last_downloaded_at":"2026-09-10T01:08:09.526Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-35","title":"Advertising Costs","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d88f8a30b8d3f823750f909ce2da0077c9fa55254d6c842b7d743215ae7bd6c6","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T00:48:53.854Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cce43391ea3c15b189bace6cc8ba18f5f280cbd7556edf3ffd22cae152f4a434","downloaded_from":"2026-09-10T01:08:12.940Z","last_downloaded_at":"2026-09-10T01:08:30.360Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-35","topic":"720","title":"Advertising Costs","area":"Expenses","paragraphs":21,"summary":"ASC 720-35 governs how entities account for advertising costs in annual financial statements. The core rule: advertising costs are expensed either as incurred or the first time the advertising takes place, applied consistently as an accounting policy to similar kinds of advertising activities (720-35-25-1); no advertising asset is capitalized, though sales materials may be treated as prepaid supplies and cooperative-advertising obligations must be accrued when the related revenue is recognized. The notes must disclose the policy elected and total advertising expense for each income statement presented (720-35-50-1).","concepts":["advertising costs","expense as incurred","first time advertising takes place","cooperative advertising","production versus communication costs","prepaid supplies","executory contracts","accounting policy disclosure"],"categories":["Recognition","Subsequent measurement","Disclosure","Not-for-profit"],"level":"introductory","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-35-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
720-35-05-1AmendedAccounting Standards Update No. 2016-2012/21/2016
720-35-05-2SupersededAccounting Standards Update No. 2014-0905/28/2014
720-35-15-2AmendedAccounting Standards Update No. 2018-0907/16/2018
720-35-15-2AmendedAccounting Standards Update No. 2014-0905/28/2014
720-35-15-3AmendedAccounting Standards Update No. 2014-0905/28/2014
720-35-15-5SupersededAccounting Standards Update No. 2018-0907/16/2018
720-35-15-5AddedAccounting Standards Update No. 2016-2012/21/2016
720-35-25-1AmendedAccounting Standards Update No. 2018-0907/16/2018
720-35-25-1AAmendedAccounting Standards Update No. 2018-0907/16/2018
720-35-25-1AAddedAccounting Standards Update No. 2016-2012/21/2016
720-35-25-5AmendedAccounting Standards Update No. 2014-0905/28/2014
720-35-35-1AmendedAccounting Standards Update No. 2014-0905/28/2014
720-35-55-1AmendedAccounting Standards Update No. 2012-0410/01/2012
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\n720-35-05-1 | Amended | Accounting Standards Update No. 2016-20 | 12/21/2016 |\n720-35-05…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:459c658324d34e7a05d90857400db101a4c463a981385b80dd7db5f3f9b2c2fb","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T00:48:39.704Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483338","source_sha256":"f185a99cc8cb9245356d947713fcd978eda9caf5089d8bb9322a1155e262ccd8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8ae7765e7e989fe12d10d52cccbf248e9feb8a477aac7fe28ba1dbce16a1f7a5","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T00:48:39.704Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483338","source_sha256":"f185a99cc8cb9245356d947713fcd978eda9caf5089d8bb9322a1155e262ccd8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:03b426a92a6ae0a35e3cc6f37ba91dcc6081eaf81bd9e35909d0ae92f3287350","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T00:48:39.704Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483338","source_sha256":"f185a99cc8cb9245356d947713fcd978eda9caf5089d8bb9322a1155e262ccd8"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-35-05-1","para":"05-1","html":"
This Subtopic provides guidance for annual financial statements on the following:
  1. a
    Reporting the costs of advertising
  2. b
    The financial statement disclosures that shall be made about advertising.
","snippet":"This Subtopic provides guidance for annual financial statements on the following:\n(a) Reporting the costs of advertising\n(b) The financial statement disclosures that shall be made about advertising.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d9bc67a3e3752b1bef09ba1f453d2058aaac3a5b27ca6dd1e76aa81d9b21667f","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}},{"citation":"720-35-05-2","para":"05-2","html":"
Paragraph superseded by Accounting Standards Update No. 2014-09.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2014-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8f4c1ce2c4ccd942bed7270c2bec0b7e5296b9e4ec793636828b7349dd9db9eb","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}},{"citation":"720-35-05-3","para":"05-3","html":"
The following are some of the reasons that costs incurred in anticipation of the probable future economic benefits of advertising generally are expensed:
  1. a
    Financial statement preparers generally presumed that the benefit period is short.
  2. b
    The periods during which the future economic benefits probably would be received and the amounts of such benefits could not be measured and determined easily and objectively.
  3. c
    The advertising costs for some entities were not material.
  4. d
    Advertising is undertaken to provide or increase future economic benefits.
","snippet":"The following are some of the reasons that costs incurred in anticipation of the probable future economic benefits of advertising generally are expensed:\n(a) Financial statement preparers generally presumed that the bene…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2e3b1dffd9a536292f11c24811855b9df87d06c3d029e3de9ff01f96c1fffd3f","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c4fc24506812a7320e9badab8515bb71ae01b43a73ef714f3e92f53afb1ff9fe","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}},{"block":null,"heading":"Description of Advertising","paragraphs":[{"citation":"720-35-05-4","para":"05-4","html":"
Advertising is the promotion of an industry, an entity, a brand, a product name, or specific products or services so as to create or stimulate a positive entity image or to create or stimulate a desire to buy the entity's products or services. Advertising generally uses a form of media—such as mail, television, radio, telephone, facsimile machine, newspaper, magazine, coupon, or billboard—to communicate with potential customers. Examples of advertising include the following:
  1. a
    Directory and buyer's guide advertising
  2. b
    Business and industrial publications
  3. c
    Reprints of advertisements
  4. d
    Television advertising
  5. e
    Direct-mail advertising
  6. f
    Consumer publications
  7. g
    Radio advertisements
  8. h
    Billboard advertisements
  9. i
    Entity and product catalogues
  10. j
    Cooperative advertising
  11. k
    Booklets for sales promotion
  12. l
    Newspaper advertising
  13. m
    Point-of-sale material
  14. n
    Sponsorship of public events.
","snippet":"Advertising is the promotion of an industry, an entity, a brand, a product name, or specific products or services so as to create or stimulate a positive entity image or to create or stimulate a desire to buy the entity'…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e69fb72b8ee670412b70b566550f606766aec527220c72bc7f42cd03432bbad5","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a310c6fd64252f4fb6ef1afdb79f6749c2292c0ae841510b7b9897514fd64607","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}},{"block":null,"heading":"Components of Advertising Activities","paragraphs":[{"citation":"720-35-05-5","para":"05-5","html":"
Advertising activities may have several component costs. Two primary components are the following:
  1. a
    The costs of producing advertisements, such as for idea development, writing advertising copy, artwork, printing, audio and video crews, actors, and other costs
  2. b
    The costs of communicating advertisements that have been produced, such as for magazine space, television airtime, billboard space, and distribution (for example, postage stamps).
","snippet":"Advertising activities may have several component costs. Two primary components are the following:\n(a) The costs of producing advertisements, such as for idea development, writing advertising copy, artwork, printing, aud…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e6d63b06cb6515149a086aa6ea008d4939b7f56b5c924a11cee4dacd5e3a6b2c","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2f4457bc34334b8cc3fe91e0d6dce537adce70aca6f357f600fd8fab3141180b","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f4f47dc1a63b4a111c9727670a85cf90b247de416f4f33091a16a42381be0000","downloaded_from":"2026-09-10T00:48:41.867Z","last_downloaded_at":"2026-09-10T00:48:41.867Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483407","source_sha256":"13173d38001460b7e1b82f8be0c565c6e0ebe69c4556049ea2f2d2a0c71932f1"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Entities","paragraphs":[{"citation":"720-35-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all entities, including not-for-profit entities (NFPs).
","snippet":"The guidance in this Subtopic applies to all entities, including not-for-profit entities (NFPs).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f518bdf479917abe4e8b07b00b05bb20d6eddb34d834e8669c4c906a91a0e3e","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b3886d1c66c08209cf74b8b6ff2b0dc96d71f6f242ca59df57792331909bc59f","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"720-35-15-2","para":"15-2","html":"
The guidance in this Subtopic applies to all advertising transactions and activities, with specific exceptions noted below.
","snippet":"The guidance in this Subtopic applies to all advertising transactions and activities, with specific exceptions noted below.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c901777c0c1ed9957c36b7cf6a1c03f353afb2c1168cf0c7086c3a1ff379aa72","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}},{"citation":"720-35-15-3","para":"15-3","html":"
The guidance in this Subtopic does not apply to the following transactions and activities:
  1. a
    Direct-response advertising costs of an insurance entity (for guidance, see Subtopic 944-30 on insurance).
  2. b
    Advertising costs in interim periods (for guidance, see paragraph 270-10-45-7).
  3. c
    Costs of advertising conducted for others under contractual arrangements.
  4. d
    Indirect costs that are specifically reimbursable under the terms of a contract.
  5. e
    Fundraising by NFPs (however, this Subtopic does apply to advertising activities of NFPs).
  6. f
    Customer acquisition activities, other than advertising.
  7. g
    The costs of premiums, contest prizes, gifts, and similar promotions, as well as discounts or rebates, including those resulting from the redemption of coupons. (Other costs of coupons and similar items, such as costs of newspaper advertising space, are considered advertising costs.)
","snippet":"The guidance in this Subtopic does not apply to the following transactions and activities:\n(a) Direct-response advertising costs of an insurance entity (for guidance, see Subtopic 944-30 on insurance).\n(b) Advertising co…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bdd92bedee2d92a86fa3cb2d6d0f201a4e5a5d15b3692ff5679996b7dcf03cee","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}},{"citation":"720-35-15-4","para":"15-4","html":"
The guidance in this Subtopic may or may not apply to the following transactions and activities:
  1. a
    Some activities, such as product endorsements and sponsorships of events, which may be performed pursuant to executory contracts. Costs incurred under executory contracts generally are recognized as performance under the contract is received. Executory contracts should be evaluated to determine whether the costs recognized under such contracts are advertising costs. To the extent that those costs are advertising costs, such costs should be accounted for in conformity with the guidance in this Subtopic.
","snippet":"The guidance in this Subtopic may or may not apply to the following transactions and activities:\n(a) Some activities, such as product endorsements and sponsorships of events, which may be performed pursuant to executory …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:72b23930df3f83d152f57d3e332d13110ec256719cca25418cdf9865b55e04f0","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}},{"citation":"720-35-15-5","para":"15-5","html":"
Paragraph superseded by Accounting Standards Update No. 2018-09.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2018-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ec738029e4fd7dfa4e63a91046c42124f6031676c02976bf8807a14616b10629","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91dcc302bac1326742702d8062ebd162c771e8b192ebe4d0a42b6cedca21372e","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1fdb629b2ccd8af383e162a15ca136d51b2e602d3a1dafc272ddc2d3a8455b72","downloaded_from":"2026-09-10T00:48:43.595Z","last_downloaded_at":"2026-09-10T00:48:43.595Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483381","source_sha256":"573b18c75edb3407e64658ca178b69b08511cff91da8647c812b850d4a3e2767"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-35-25-1","para":"25-1","html":"
The costs of advertising within the scope of this Subtopic shall be expensed either as incurred or the first time the advertising takes place, except for those costs described in paragraph 720-35-25-1A. The accounting policy selected from these two alternatives shall be applied consistently to similar kinds of advertising activities. Deferring the costs of advertising until the advertising takes place assumes that the costs have been incurred for advertising that will occur. Such costs shall be expensed immediately if such advertising is not expected to occur. Examples of the first time advertising takes place include the first public showing of a television commercial for its intended purpose and the first appearance of a magazine advertisement for its intended purpose.
","snippet":"The costs of advertising within the scope of this Subtopic shall be expensed either as incurred or the first time the advertising takes place, except for those costs described in paragraph 720-35-25-1A. The accounting po…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b8ba6ae370a8211846cae4981268378b455321f92421cdab58aae9f128d271fc","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"citation":"720-35-25-1A","para":"25-1A","html":"
Expenditures for some advertising costs are made after recognizing revenues related to those costs. For example, some entities assume an obligation to reimburse their customers for some or all of the customers' advertising costs (cooperative advertising). When revenues related to the transactions creating those obligations are recognized before the expenditures are made, those obligations shall be accrued and the advertising costs expensed when the related revenues are recognized.
","snippet":"Expenditures for some advertising costs are made after recognizing revenues related to those costs. For example, some entities assume an obligation to reimburse their customers for some or all of the customers' advertisi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f008df7f6ffad0341aed5079f2c4d5eb47f5e37a196208d0f8a5db1a1caeeab","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5772f10db0108017b641db416f635cdaac7987d9303877c9dadaf75e0c3851ba","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Tangible Assets","paragraphs":[{"citation":"720-35-25-2","para":"25-2","html":"
For purposes of applying this Subtopic, costs incurred to produce film or audio and video tape to be used to communicate advertising do not create tangible assets.
","snippet":"For purposes of applying this Subtopic, costs incurred to produce film or audio and video tape to be used to communicate advertising do not create tangible assets.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:87d14afda7fdbe231bd8b451f083ef3ca4b43cd1e3eee8de709125d595b5fb1b","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"citation":"720-35-25-3","para":"25-3","html":"
Sales materials, such as brochures and catalogues, may be accounted for as prepaid supplies until they no longer are owned or expected to be used, in which case their cost would be a cost of advertising and shall be accounted for in conformity with the guidance in this Subtopic.
","snippet":"Sales materials, such as brochures and catalogues, may be accounted for as prepaid supplies until they no longer are owned or expected to be used, in which case their cost would be a cost of advertising and shall be acco…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:680973d5fdecb8921450e38f9b2c36694d1e3e112086c05fb94986d4f01f84a2","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:965650dd918cb919700a321bad6178761dd41c917ea2e618c1c94553d3f7b4a9","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Producing Advertising","paragraphs":[{"citation":"720-35-25-4","para":"25-4","html":"
Costs of producing advertising are incurred during production rather than when the advertising takes place.
","snippet":"Costs of producing advertising are incurred during production rather than when the advertising takes place.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:27fbb10ee50eb5b7f50c45b90df387092034bf220d9b72832f5c0f226db16ecf","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4085f057d35fdb97dcc9cf08bdfc819c41cc77047c955c29c8a6a2162d5234c6","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Communicating Advertising","paragraphs":[{"citation":"720-35-25-5","para":"25-5","html":"
Costs of communicating advertising are not incurred until the item or service has been received and shall not be reported as expenses before the item or service has been received. For example:
  1. a
    The costs of television airtime shall not be reported as advertising expense before the airtime is used. Once it is used, the costs shall be expensed.
  2. b
    The costs of magazine, directory, or other print media advertising space shall not be reported as advertising expense before the space is used. Once it is used, the costs shall be expensed.
","snippet":"Costs of communicating advertising are not incurred until the item or service has been received and shall not be reported as expenses before the item or service has been received. For example:\n(a) The costs of television…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eed8cf01f1e87c93f5b73e9499c9be7a739407a74c3a1c5d0b9368c0fbbb8d0b","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a42ab0cdc375a84ac0bb9557523354bfbb45d6d1b5659bd32346a4e197b4c673","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Executory Contracts","paragraphs":[{"citation":"720-35-25-6","para":"25-6","html":"
As indicated in paragraph 720-35-15-4, some activities, such as product endorsements and sponsorships of events, may be performed pursuant to executory contracts. Costs incurred under executory contracts generally are recognized as performance under the contract is received. Executory contracts should be evaluated to determine whether the costs recognized under such contracts are advertising costs. To the extent that those costs are advertising costs, such costs shall be accounted for in conformity with the guidance in this Subtopic.
","snippet":"As indicated in paragraph 720-35-15-4, some activities, such as product endorsements and sponsorships of events, may be performed pursuant to executory contracts. Costs incurred under executory contracts generally are re…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2091e86f38291212a8c6e88ae4ec0911979196f048398ff2789d6888eb011f40","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5d8901514ee648cf5b115b79731e8c80679b53785665787cf95b9b1b9883218c","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55da5c945da28d490f235b225b1ed4d3dbc47894d7d73eaf2202673367697a77","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-35-35-1","para":"35-1","html":"
Depreciation or amortization of a tangible asset may be a cost of advertising if the tangible asset is used for advertising.
","snippet":"Depreciation or amortization of a tangible asset may be a cost of advertising if the tangible asset is used for advertising.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b09493ed9dee086dcd804a7336d9333b494b621aa95c9b65725ac7004a3f97c9","downloaded_from":"2026-09-10T00:48:47.803Z","last_downloaded_at":"2026-09-10T00:48:47.803Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483330","source_sha256":"59dd114eafe0b6ef77ba7e20dbd5fad8995208200aa5f82f6960171fa1ffde72"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:944e4cb335117afe0c8b452190507c38278f1ea3ec43fb95d90d708329fbc2d5","downloaded_from":"2026-09-10T00:48:47.803Z","last_downloaded_at":"2026-09-10T00:48:47.803Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483330","source_sha256":"59dd114eafe0b6ef77ba7e20dbd5fad8995208200aa5f82f6960171fa1ffde72"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:37cf3806708a0bc5e1429ccd83c9fc8cdc7f327847efa410f0b4a89ac16a4175","downloaded_from":"2026-09-10T00:48:47.803Z","last_downloaded_at":"2026-09-10T00:48:47.803Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483330","source_sha256":"59dd114eafe0b6ef77ba7e20dbd5fad8995208200aa5f82f6960171fa1ffde72"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-35-50-1","para":"50-1","html":"
The notes to financial statements shall disclose both of the following:
  1. a
    The accounting policy selected from the two alternatives in paragraph 720-35-25-1 for reporting advertising, indicating whether such costs are expensed as incurred or the first time the advertising takes place
  2. b
    The total amount charged to advertising expense for each income statement presented.
","snippet":"The notes to financial statements shall disclose both of the following:\n(a) The accounting policy selected from the two alternatives in paragraph 720-35-25-1 for reporting advertising, indicating whether such costs are e…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e2789ea1b12aa411ac73802c0d49fceeb460e6277dd92fa2627c90a8bea4e199","downloaded_from":"2026-09-10T00:48:50.312Z","last_downloaded_at":"2026-09-10T00:48:50.312Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483406","source_sha256":"ec6509b2a46d2ec3fc495988411fd1c7267d559ed8c94e07c1f1ed6deab981f3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c97515bd2ef1916ea30b5f126c448fc30ae23bb5500a13df7db72abc4a3ab1ed","downloaded_from":"2026-09-10T00:48:50.312Z","last_downloaded_at":"2026-09-10T00:48:50.312Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483406","source_sha256":"ec6509b2a46d2ec3fc495988411fd1c7267d559ed8c94e07c1f1ed6deab981f3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e993cd03c3740a1aa255a8048a4bc21c3cb1d3544dc76872d29a3b1ab3141bd7","downloaded_from":"2026-09-10T00:48:50.312Z","last_downloaded_at":"2026-09-10T00:48:50.312Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483406","source_sha256":"ec6509b2a46d2ec3fc495988411fd1c7267d559ed8c94e07c1f1ed6deab981f3"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"720-35-55-1","para":"55-1","html":"
This Example illustrates the guidance provided in paragraph 720-35-50-1.
","snippet":"This Example illustrates the guidance provided in paragraph 720-35-50-1.\nNote X. Advertising\nThe Entity expenses the production costs of advertising the first time the advertising takes place. For the year ended December…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c290c789583bc531456695f531e6324f185aba60fabd713555e0903b0788df3d","downloaded_from":"2026-09-10T00:48:51.939Z","last_downloaded_at":"2026-09-10T00:48:51.939Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483385","source_sha256":"14d2ad0499026962bd118330126decd734d128061246cdebaea29bc5225c5803"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1f26034e8ea2b1af3fff0916368432fd20b1fefd1ea261c7aa95b4995ae9459b","downloaded_from":"2026-09-10T00:48:51.939Z","last_downloaded_at":"2026-09-10T00:48:51.939Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483385","source_sha256":"14d2ad0499026962bd118330126decd734d128061246cdebaea29bc5225c5803"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b387eda6b5685fde4e8a7d6f986d419873b6ef90c7b9c02cacb137014bdcc046","downloaded_from":"2026-09-10T00:48:51.939Z","last_downloaded_at":"2026-09-10T00:48:51.939Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483385","source_sha256":"14d2ad0499026962bd118330126decd734d128061246cdebaea29bc5225c5803"}}],"enrichment":{"summary":"ASC 720-35 governs how entities account for advertising costs in annual financial statements. The core rule: advertising costs are expensed either as incurred or the first time the advertising takes place, applied consistently as an accounting policy to similar kinds of advertising activities (720-35-25-1); no advertising asset is capitalized, though sales materials may be treated as prepaid supplies and cooperative-advertising obligations must be accrued when the related revenue is recognized. The notes must disclose the policy elected and total advertising expense for each income statement presented (720-35-50-1).","key_points":["Advertising costs within scope are expensed either as incurred or the first time the advertising takes place, and the elected policy must be applied consistently to similar kinds of advertising activities (720-35-25-1).","Deferral until the first time advertising takes place is permitted only if the advertising is expected to occur; if it is not expected to occur, the costs are expensed immediately (720-35-25-1).","Cooperative advertising and similar obligations to reimburse customers must be accrued and the advertising cost expensed when the related revenues are recognized, if revenue precedes the expenditure (720-35-25-1A).","Production costs are incurred during production (720-35-25-4), while communication costs (television airtime, print space) are not incurred and cannot be expensed until the item or service has been received (720-35-25-5).","Costs to produce film or audio/video tape used to communicate advertising do not create tangible assets (720-35-25-2), but sales materials such as brochures and catalogues may be carried as prepaid supplies until no longer owned or expected to be used (720-35-25-3).","Notes must disclose the accounting policy selected (expensed as incurred vs. first time advertising takes place) and the total advertising expense for each income statement presented (720-35-50-1).","Scope excludes insurance direct-response advertising (944-30), interim-period advertising (270-10-45-7), advertising conducted for others under contract, specifically reimbursable indirect costs, NFP fundraising, non-advertising customer acquisition, and costs of premiums, prizes, gifts, discounts, and rebates (720-35-15-3)."],"categories":["Recognition","Subsequent measurement","Disclosure","Not-for-profit"],"audience_level":"introductory","student_note":"Exam questions hinge on the two-policy election and the timing traps: you may defer production costs until the first showing, but you can never expense communication costs (airtime, print space) before the service is received. A common misunderstanding is thinking advertising can be capitalized as an asset because of expected future benefits — under 720-35 it cannot (except as prepaid supplies for unused brochures/catalogues).","related_topics":["944-30","270-10","340-10","606-10","958-720"],"key_concepts":["advertising costs","expense as incurred","first time advertising takes place","cooperative advertising","production versus communication costs","prepaid supplies","executory contracts","accounting policy disclosure"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cc2943a974ff8ff7aa1b38c55da7813ce2bef99d77f921ce34c8a0ac1531c607","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T00:48:53.854Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"340-10","title":"Overall","topic_title":"Other Assets and Deferred Costs","score":0.7406,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:08a14a1d58b62ae7fa117f0b72ce59f5d240975c84fa43a22e2cb4d6a63ae42e","downloaded_from":"2026-09-09T23:54:15.524Z","last_downloaded_at":"2026-09-09T23:55:04.724Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-20","title":"Capitalized Advertising Costs","topic_title":"Other Assets and Deferred Costs","score":0.7378,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9486405698857afab5d96b622659c5c6b6977b23f0b63ca2e29f1f5a6f44b619","downloaded_from":"2026-09-09T23:55:08.697Z","last_downloaded_at":"2026-09-09T23:55:37.801Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-958","title":"Not-for-Profit Entities","topic_title":"Other Expenses","score":0.6964,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:70453534da2297a6742de08c39e7a9cb683de7b8e0de8dfd07279375a7116bc9","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established 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timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0984f5ce61712c0be2e77c9cfded479e7295602dc79828c885440868d13b738","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T00:48:53.854Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-40","topic":"720","title":"Electronic Equipment Waste Obligations","area":"Expenses","paragraphs":14,"summary":"ASC 720-40 addresses when a producer must recognize a liability and expense for the cost of disposing of \"historical waste\" electrical and electronic equipment held by private households under EU Directive 2002/96/EC (WEEE). Because the Directive funds historical household waste collectively by producers selling in the market during a country-defined measurement period, the obligating event is participation in that market — so no liability may be recognized before the measurement period begins, regardless of how much qualifying equipment the producer previously sold (720-40-25-1). The liability is accrued over the measurement period based on estimated total program costs and the producer's estimated market share, and is adjusted as actual data arrives (720-40-25-3; 720-40-35-1).","concepts":["historical waste","new waste","weee directive 2002/96/ec","measurement period","market share allocation","obligating event","liability recognition and adjustment","private households vs. commercial users"],"categories":["Recognition","Subsequent measurement","Contingencies and guarantees","Industry-specific"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-40-05-1","para":"05-1","html":"
This Subtopic provides guidance on accounting for historical electronic equipment waste held by private households for obligations associated with Directive 2002/96/EC on Waste Electrical and Electronic Equipment adopted by the European Union.
","snippet":"This Subtopic provides guidance on accounting for historical electronic equipment waste held by private households for obligations associated with Directive 2002/96/EC on Waste Electrical and Electronic Equipment adopted…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d5b792cb127387da6d784f435bfc909fd6116fdff7f37a9f75fed5d1e440fb41","downloaded_from":"2026-09-10T01:08:32.175Z","last_downloaded_at":"2026-09-10T01:08:32.175Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483333","source_sha256":"3a1ac91c1a74c56dc6cdf10072436562f4edd2630dd6ee75c5c3fc190a8fff72"}},{"citation":"720-40-05-2","para":"05-2","html":"
This Subtopic refers to and paraphrases various provisions of the Directive. Nothing in this Subtopic shall be considered a definitive interpretation of any provision of the Directive for any purpose.
","snippet":"This Subtopic refers to and paraphrases various provisions of the Directive. Nothing in this Subtopic shall be considered a definitive interpretation of any provision of the Directive for any purpose.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:00e7d6113f7cc27fc4d65f63ac1d479bc0e8cd6541cc72c3991899d571b8ab5b","downloaded_from":"2026-09-10T01:08:32.175Z","last_downloaded_at":"2026-09-10T01:08:32.175Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483333","source_sha256":"3a1ac91c1a74c56dc6cdf10072436562f4edd2630dd6ee75c5c3fc190a8fff72"}},{"citation":"720-40-05-3","para":"05-3","html":"
The Directive distinguishes between new and historical waste. New waste relates to products put on the market after August 13, 2005. All products put on the market on or before August 13, 2005, are deemed to be historical waste equipment for the purposes of the Directive. This Subtopic does not address the accounting for new waste. As explained in paragraph 410-20-55-23, costs relating to waste of new equipment are to be borne solely by the producers of the new equipment.
","snippet":"The Directive distinguishes between new and historical waste. New waste relates to products put on the market after August 13, 2005. All products put on the market on or before August 13, 2005, are deemed to be historica…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5874b827ce974b07b1035579216ffcedf8b53f8cdb7153f71d656f17794111d6","downloaded_from":"2026-09-10T01:08:32.175Z","last_downloaded_at":"2026-09-10T01:08:32.175Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483333","source_sha256":"3a1ac91c1a74c56dc6cdf10072436562f4edd2630dd6ee75c5c3fc190a8fff72"}},{"citation":"720-40-05-4","para":"05-4","html":"
For the financing of historical waste, the Directive also distinguishes between historical waste from private households and historical waste from users other than private households (commercial users).
This Subtopic provides guidance for historical waste from private households, while Subtopic 410-20 provides guidance for historical waste from commercial users.
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The guidance in this Subtopic applies to all entities affected by Directive 2002/96 on Waste Electrical and Electronic Equipment adopted by the European Union.
","snippet":"The guidance in this Subtopic applies to all entities affected by Directive 2002/96 on Waste Electrical and Electronic Equipment adopted by the European Union.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7031cc2bf922cd18f573bfc9fd6ea240c942ab82334f3115af943775c73872a9","downloaded_from":"2026-09-10T01:08:35.048Z","last_downloaded_at":"2026-09-10T01:08:35.048Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483405","source_sha256":"e6932f576d8e20e5b17ed3706340774646010dfa35df9bc80accad7f0d53d125"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7f6342baf0fe0c7d39d71b9344158bb37603262e55276a1e4efe48a9a232eb4c","downloaded_from":"2026-09-10T01:08:35.048Z","last_downloaded_at":"2026-09-10T01:08:35.048Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483405","source_sha256":"e6932f576d8e20e5b17ed3706340774646010dfa35df9bc80accad7f0d53d125"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"720-40-15-2","para":"15-2","html":"
The guidance in this Subtopic does not apply to the following transactions and activities:
  1. a
    Historical waste from commercial users as addressed in Subtopic 410-20
  2. b
    New waste as defined in the Directive.
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The financing of historical waste held by private households is to be borne collectively by producers that are selling in the market during each measurement period (to be defined by each EU-member country). The obligation is triggered by participation in the market during the measurement period and, therefore, shall not be recognized before the beginning of that period. The volume of equipment that qualifies as historical waste that those producers have sold in the market before the measurement period is not considered.
","snippet":"The financing of historical waste held by private households is to be borne collectively by producers that are selling in the market during each measurement period (to be defined by each EU-member country). The obligatio…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cf04ca77990737a1d89813ec00e65140cf540a0815317062a1d09e7e26234dd9","downloaded_from":"2026-09-10T01:08:37.268Z","last_downloaded_at":"2026-09-10T01:08:37.268Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483379","source_sha256":"6c849fd0a2cda555160e241db06ee3f03a98dfa12f88ddecefc865fe5fe7a8a5"}},{"citation":"720-40-25-2","para":"25-2","html":"
Producers will be required to contribute proportionately based on their participation in the market (for example, in proportion to their respective share of the market by type of equipment). However, the exact method to be used to compute the respective proportions to be contributed by producers will be determined by each EU-member country.
","snippet":"Producers will be required to contribute proportionately based on their participation in the market (for example, in proportion to their respective share of the market by type of equipment). However, the exact method to …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07224d7e3cc376a819c6913776a725f8fc846e9212b02d9172693fcde5e75209","downloaded_from":"2026-09-10T01:08:37.268Z","last_downloaded_at":"2026-09-10T01:08:37.268Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483379","source_sha256":"6c849fd0a2cda555160e241db06ee3f03a98dfa12f88ddecefc865fe5fe7a8a5"}},{"citation":"720-40-25-3","para":"25-3","html":"
If, for example, the method is based on each producer's respective share of the market by type of equipment during the measurement period, a liability for the obligation, with an offsetting amount to expense, shall be recognized over the measurement period for the appropriate portion of the cost based on the estimated total allocable costs of the waste management program and that producer's estimated market share.
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See Section 720-40-25 for a discussion of measurement issues.
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The liability shall be adjusted as actual market share and program cost information is received.
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This Example illustrates the guidance in Sections 720-40-25 and 720-40-35.
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An entity is a producer of electronic equipment that is covered by the Directive. The entity has produced and sold this type of electronic equipment for several years. In the EU-member country in which the entity operates, legislation requires producers to be responsible for costs associated with the disposal of electronic equipment from private households based on each producer's participation in the market, measured by market share, during the measurement period. The EU-member country has defined the measurement period as calendar-year 2005. The entity achieves a 4 percent market share in 2004 and expects to achieve a 5 percent market share in 2005.
","snippet":"An entity is a producer of electronic equipment that is covered by the Directive. The entity has produced and sold this type of electronic equipment for several years. In the EU-member country in which the entity operate…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:520d2461bd1cb8ca7bf512ef2cbd34b0fa88af55360c23636c82fb7016df54a7","downloaded_from":"2026-09-10T01:08:46.648Z","last_downloaded_at":"2026-09-10T01:08:46.648Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483403","source_sha256":"0c5e8e90eb46a83034c2243071640d723615d768c5d527960b54af827eba2eb6"}},{"citation":"720-40-55-3","para":"55-3","html":"
The entity should not recognize a liability in 2004 for the costs associated with the disposal of historical waste held by private households. The obligation is triggered by participation in the market during 2005 (the measurement period). A liability for the obligation, with an offsetting amount to expense, should be recognized over the year for the appropriate portion of the annual cost based on its estimated percent market share. The liability should be adjusted as actual market share information is received. The entity should recognize a liability relating to historical waste costs incurred during 2006 as the entity participates in the market in 2006.
","snippet":"The entity should not recognize a liability in 2004 for the costs associated with the disposal of historical waste held by private households. The obligation is triggered by participation in the market during 2005 (the m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c6355dab6cf323b85fbca99bf1f9031ecfcfcc05f295e3a4ab43a159851d22e7","downloaded_from":"2026-09-10T01:08:46.648Z","last_downloaded_at":"2026-09-10T01:08:46.648Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483403","source_sha256":"0c5e8e90eb46a83034c2243071640d723615d768c5d527960b54af827eba2eb6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c6e7a2c8532bebb69a2529f2e1e750895257e3cdce22192d5b90faac76d21bba","downloaded_from":"2026-09-10T01:08:46.648Z","last_downloaded_at":"2026-09-10T01:08:46.648Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483403","source_sha256":"0c5e8e90eb46a83034c2243071640d723615d768c5d527960b54af827eba2eb6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:db124a8db53fe6862be630f9ca93018566e8fe2af357b685a363e2b8d6969bd6","downloaded_from":"2026-09-10T01:08:46.648Z","last_downloaded_at":"2026-09-10T01:08:46.648Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483403","source_sha256":"0c5e8e90eb46a83034c2243071640d723615d768c5d527960b54af827eba2eb6"}}],"enrichment":{"summary":"ASC 720-40 addresses when a producer must recognize a liability and expense for the cost of disposing of \"historical waste\" electrical and electronic equipment held by private households under EU Directive 2002/96/EC (WEEE). Because the Directive funds historical household waste collectively by producers selling in the market during a country-defined measurement period, the obligating event is participation in that market — so no liability may be recognized before the measurement period begins, regardless of how much qualifying equipment the producer previously sold (720-40-25-1). The liability is accrued over the measurement period based on estimated total program costs and the producer's estimated market share, and is adjusted as actual data arrives (720-40-25-3; 720-40-35-1).","key_points":["The Subtopic applies only to historical waste (products put on the EU market on or before August 13, 2005) held by private households; commercial-user historical waste and new waste are scoped out and addressed elsewhere (720-40-05-3; 720-40-05-4; 720-40-15-2).","The obligation for financing household historical waste is triggered by participation in the market during the measurement period defined by each EU-member country and shall not be recognized before that period begins (720-40-25-1).","Equipment qualifying as historical waste that the producer sold before the measurement period is disregarded in determining the obligation (720-40-25-1).","Each producer contributes proportionately based on market participation (for example, share of market by type of equipment), with the exact allocation method set by each EU-member country (720-40-25-2).","Where allocation is by market share during the period, a liability and offsetting expense are recognized over the measurement period based on estimated total allocable program costs multiplied by estimated market share (720-40-25-3).","The liability shall be adjusted as actual market share and program cost information is received (720-40-35-1).","Costs of new-equipment waste (products marketed after August 13, 2005) are borne solely by the producers of that new equipment and are accounted for under Subtopic 410-20 (720-40-05-3, referencing 410-20-55-23)."],"categories":["Recognition","Subsequent measurement","Contingencies and guarantees","Industry-specific"],"audience_level":"intermediate","student_note":"This is a classic \"what is the obligating event?\" question: students often assume the liability arises when the equipment was originally sold, but under the WEEE scheme for household historical waste it arises only from selling in the market during the measurement period, so a producer that exits the market recognizes nothing. Note the split in guidance — household historical waste here in 720-40, commercial-user historical waste and new waste under 410-20.","related_topics":["410-20","410-30","450-20","720-10"],"key_concepts":["historical waste","new waste","weee directive 2002/96/ec","measurement period","market share allocation","obligating event","liability recognition and adjustment","private households vs. commercial users"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a28ec276c46e1671ad8130ce9f511b20bcbff85d4569bfb23e0d3b08f87457f5","downloaded_from":"2026-09-10T01:08:32.175Z","last_downloaded_at":"2026-09-10T01:08:46.648Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"410-980","title":"Regulated Operations","topic_title":"Asset Retirement and Environmental Obligations","score":0.6208,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5a49b1ce2ebf0f033d17ea7ef76729eed477f439d2c40623a594ab9a0c5e0852","downloaded_from":"2026-09-10T00:22:01.250Z","last_downloaded_at":"2026-09-10T00:22:29.648Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"818-30","title":"Environmental Credit Obligations","topic_title":"Environmental Credits and Environmental Credit Obligations","score":0.6192,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:778686e81ec0494d43aa93de039a12583e1bc64ec7d3efe2a85bcfc3da7192df","downloaded_from":"2026-09-10T01:42:35.777Z","last_downloaded_at":"2026-09-10T01:43:08.971Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"410-30","title":"Environmental Obligations","topic_title":"Asset Retirement and Environmental 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retrieval timestamps"}},"next":{"number":"720-45","title":"Business and Technology Reengineering","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8608f8eb1a0d5a598ac0d7e0f7276ea2b5dd0cd1cc8ba98aea9e3cb14c7757df","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:83106e45c59a9c293753f31eadb34b712e4255b6388e29675684ffe74df2abe8","downloaded_from":"2026-09-10T01:08:32.175Z","last_downloaded_at":"2026-09-10T01:08:46.648Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not 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The core rule is that BPR costs—whether performed internally or by third parties—must be expensed as incurred, even when they are part of a project to acquire, develop, or implement internal-use software. When a bundled third-party consulting contract covers multiple activities, the contract price must be allocated among activities based on objective evidence of relative fair values.","concepts":["business process reengineering","information technology transformation","expense as incurred","current state assessment","request for proposal","relative fair value allocation","internal-use software","consulting contract"],"categories":["Recognition","Initial measurement","Intangibles and goodwill","Inventory and PP&E"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-45-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
720-45-55-1AmendedAccounting Standards Update 2025-0609/18/2025
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\n720-45-55-1 | Amended | Accounting Standards Update 2025-06 | 09/18/2025 |","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c50090be6dcf92b2780af58ab3153135b31f0ff494535fc638ad781447b41a7e","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:08:49.463Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476144","source_sha256":"c0bb7afc947b174516d53b0aa7f73d4f0f319c9dd5143c98ec10c83a9fe54248"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ea8c1ffaf3a5ee0aa673a0d772c3788732bd433bd846ace0b037735cba1041fa","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:08:49.463Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476144","source_sha256":"c0bb7afc947b174516d53b0aa7f73d4f0f319c9dd5143c98ec10c83a9fe54248"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9cdf71e3ae2f615797c906f82faadfba137a347595821052c57918d462beb00a","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:08:49.463Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476144","source_sha256":"c0bb7afc947b174516d53b0aa7f73d4f0f319c9dd5143c98ec10c83a9fe54248"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-45-05-1","para":"05-1","html":"
This Subtopic provides guidance on costs associated with business process reengineering and information technology transformation projects. The following describes such projects.
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To take advantage of new advances in electronic commerce and in computer technologies, many entities are entering into consulting contracts that combine business process reengineering and information technology transformation. Consulting services may encompass software development, software acquisition, software implementation, training, and ongoing support. Business process reengineering may be a component of some of those activities.
","snippet":"To take advantage of new advances in electronic commerce and in computer technologies, many entities are entering into consulting contracts that combine business process reengineering and information technology transform…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:49b0701f419de4407bd30ccd97cb715a7fc8e028111c589a7acb6a91881336c1","downloaded_from":"2026-09-10T01:08:52.286Z","last_downloaded_at":"2026-09-10T01:08:52.286Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483380","source_sha256":"d4962d0d2d582ff65a14c55159ee8f9e25503de076fb48ceb989952c966e3de8"}},{"citation":"720-45-05-3","para":"05-3","html":"
Information technology transformation projects that involve software packages (sometimes called enterprise software) recently have been undertaken by entities that must reengineer their business processes to connect into that software rather than modify that software to connect into their existing business processes. The transformation project may include the installation of new computer hardware, the purchase of office equipment, furniture, or work stations, and the physical reconfiguration of the work area.
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The guidance in this Subtopic applies to all entities.
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This Subtopic does not address or change current accounting practices for internal-use software development costs, which are addressed in Subtopic 350-40, or the acquisition of property and equipment.
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The cost of business process reengineering activities, whether done internally or by third parties, is to be expensed as incurred. This expense treatment also applies when the business process reengineering activities are part of a project to acquire, develop, or implement internal-use software.
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The following third-party or internally generated costs typically associated with business process reengineering shall be expensed as incurred:
  1. a
    Preparation of request for proposal—the process of preparing a proposal.
  2. b
    Current state assessment—the process of documenting the entity's current business process, except as it relates to current software structure. This activity is sometimes called mapping, developing an as-is baseline, flow charting, and determining current business process structure.
  3. c
    Process reengineering—the effort to reengineer the entity's business process to increase efficiency and effectiveness. This activity is sometimes called analysis, determining best-in-class, profit and performance improvement development, and developing should-be processes.
  4. d
    Restructuring the work force—the effort to determine what employee makeup is necessary to operate the reengineered business processes.
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Internal and third-party personnel involved with current state assessment, process reengineering, and restructuring the work force usually have backgrounds in business function, business control, internal audit, internal control, and so forth. Although some may have information technology and software application expertise, the focus of this effort is on process rather than software systems.
","snippet":"Internal and third-party personnel involved with current state assessment, process reengineering, and restructuring the work force usually have backgrounds in business function, business control, internal audit, internal…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9c3448f44518eb077ade7909a68aea2fa8da15a8b113f1fa5316f44f11ae94a1","downloaded_from":"2026-09-10T01:08:57.730Z","last_downloaded_at":"2026-09-10T01:08:57.730Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483331","source_sha256":"240e02a2402a21e60508bee68c6c8e96d8979367c9783610d4733c987c9315ee"}},{"citation":"720-45-25-4","para":"25-4","html":"
Costs typically associated with the acquisition or the construction of property and equipment phase of a business process reengineering project shall be accounted for in accordance with the entity's existing policies for productive assets.
","snippet":"Costs typically associated with the acquisition or the construction of property and equipment phase of a business process reengineering project shall be accounted for in accordance with the entity's existing policies for…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fe299c7b581cee716be2fd7f78c2bc3ee9d9044a7b0ad3cb5d980444fe6d439e","downloaded_from":"2026-09-10T01:08:57.730Z","last_downloaded_at":"2026-09-10T01:08:57.730Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483331","source_sha256":"240e02a2402a21e60508bee68c6c8e96d8979367c9783610d4733c987c9315ee"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:253de16813d876b37ce17e4bca932513fb06435390e6349adfec2b96d2262ce8","downloaded_from":"2026-09-10T01:08:57.730Z","last_downloaded_at":"2026-09-10T01:08:57.730Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483331","source_sha256":"240e02a2402a21e60508bee68c6c8e96d8979367c9783610d4733c987c9315ee"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3e25ebed91410e422e03a69a1a054d7c1bf4e1b891dd56b4393137d9de2d414c","downloaded_from":"2026-09-10T01:08:57.730Z","last_downloaded_at":"2026-09-10T01:08:57.730Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483331","source_sha256":"240e02a2402a21e60508bee68c6c8e96d8979367c9783610d4733c987c9315ee"}},{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-45-30-1","para":"30-1","html":"
When a third party is used for a business process reengineering project, the total consulting contract price (or the sum of the linked contracts with the same vendor) shall be allocated to each activity based on the relative fair values of those separate activities. The allocation shall be based on the objective evidence of the fair value of the elements in the contract, not necessarily the separate prices stated within the contract for each element.
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The following table sets forth the accounting for typical components of a business process reengineering/information technology transformation project based on whether the item should be:
  1. a
    Expensed as incurred in accordance with the guidance contained in this Subtopic
  2. b
    Expensed as incurred in accordance with internal-use software guidance contained in Subtopic 350-40
  3. c
    Capitalized in accordance with internal-use software guidance contained in Subtopic 350-40
  4. d
    Capitalized as part of the cost of acquiring a fixed asset in accordance with a company's existing policy.
(Note that letters in the grid refer to the corresponding guidance listed above.)
Transition date:(P) December 16, 2027; (N) December 16, 2027Transition guidance:
350-40-65-4The following table sets forth the accounting for typical components of a business process reengineering/information technology transformation project based on whether the item should be:
  1. a
    Expensed as incurred in accordance with the guidance contained in this Subtopic
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2025-06.
  3. c
    Subparagraph superseded by Accounting Standards Update No. 2025-06.
  4. d
    Capitalized as part of the cost of acquiring a fixed asset in accordance with a company's existing policy
  5. e
    Capitalized or expensed in accordance with the internal-use software guidance contained in Subtopic 350-40.
(Note that letters in the grid refer to the corresponding guidance listed above.)
","snippet":"The following table sets forth the accounting for typical components of a business process reengineering/information technology transformation project based on whether the item should be:\n(a) Expensed as incurred in acco…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1dd6429d03253b169f88ef6375afe76ab32585ce756ca3c4c50017b30d1753c4","downloaded_from":"2026-09-10T01:09:03.528Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483378","source_sha256":"627ccd1268072330d3c0d468a581f51a5faf6b55efad6d76b22794cd559e288d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aafc44bae1a1833a7cc3a2268dcc92417cdb6c06aec611b7489262ecccf3285a","downloaded_from":"2026-09-10T01:09:03.528Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483378","source_sha256":"627ccd1268072330d3c0d468a581f51a5faf6b55efad6d76b22794cd559e288d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f6c691331db216896c71e8adf3610834af5ddb5dc4be47824dbaff60182726a5","downloaded_from":"2026-09-10T01:09:03.528Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483378","source_sha256":"627ccd1268072330d3c0d468a581f51a5faf6b55efad6d76b22794cd559e288d"}}],"enrichment":{"summary":"ASC 720-45 governs the accounting for costs of business process reengineering (BPR) activities, including those bundled into information technology transformation projects (e.g., enterprise software installations). The core rule is that BPR costs—whether performed internally or by third parties—must be expensed as incurred, even when they are part of a project to acquire, develop, or implement internal-use software. When a bundled third-party consulting contract covers multiple activities, the contract price must be allocated among activities based on objective evidence of relative fair values.","key_points":["Business process reengineering costs, whether incurred internally or paid to third parties, are expensed as incurred, including when the reengineering is part of a project to acquire, develop, or implement internal-use software (720-45-25-1).","Specific costs that must be expensed as incurred include preparation of a request for proposal, current state assessment (except as it relates to current software structure), process reengineering, and restructuring the work force (720-45-25-2).","Costs in the property and equipment acquisition or construction phase of a BPR project follow the entity's existing policies for productive assets (720-45-25-4).","For third-party projects, the total consulting contract price (or the sum of linked contracts with the same vendor) is allocated to each activity based on the relative fair values of those separate activities, using objective evidence of fair value rather than the prices stated in the contract (720-45-30-1).","The Subtopic applies to all entities but does not address or change accounting for internal-use software development costs (Subtopic 350-40) or the acquisition of property and equipment (720-45-15-1 through 15-2).","The illustrative table in 720-45-55-1 sorts typical project components among expensing under this Subtopic, treatment under the internal-use software guidance in 350-40, and capitalization as part of a fixed asset; ASU 2025-06 amends the table (transition date December 16, 2027; transition guidance in 350-40-65-4)."],"categories":["Recognition","Initial measurement","Intangibles and goodwill","Inventory and PP&E"],"audience_level":"intermediate","student_note":"The exam trap is assuming that because reengineering work is bundled into a capitalizable enterprise software or ERP implementation, the whole contract can be capitalized—720-45-25-1 requires the reengineering portion to be expensed, and 720-45-30-1 forces a relative-fair-value split of the bundled fee based on objective evidence, not the vendor's stated line-item prices.","related_topics":["350-40","360","720-15","420"],"key_concepts":["business process reengineering","information technology transformation","expense as incurred","current state assessment","request for proposal","relative fair value allocation","internal-use software","consulting contract"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:48b3204d7b8629e2fb5f7f3d59ae95509feb5b3aea205f5ef0cd120f4f533c32","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"730-10","title":"Overall","topic_title":"Research and Development","score":0.7674,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a738aa33ca976874b30c5df46531fef358aee1a5c392a3df2822ad3d6c3ca45c","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"350-40","title":"Internal-Use Software","topic_title":"Intangibles—Goodwill and Other","score":0.7288,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:31afb39efb978d056069ec55dde4516a7fedfd12e6acc136a388a3f3b1289296","downloaded_from":"2026-09-10T00:02:14.508Z","last_downloaded_at":"2026-09-10T00:02:45.249Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"985-20","title":"Costs of Software to Be Sold, Leased, or Marketed","topic_title":"Software","score":0.6948,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:21e252a70264da5a606d1aab468a1cde4979bd54d9cbdda1f9dc41480b8e4d49","downloaded_from":"2026-09-10T02:28:26.033Z","last_downloaded_at":"2026-09-10T02:28:54.478Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-970","title":"Real Estate—General","topic_title":"Other Expenses","score":0.6812,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:42dc1bf1f79aac07f9453baa6b288078e9228c04cd4b8cd0fd286be5c488d834","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-10","title":"Overall","topic_title":"Other Assets and Deferred Costs","score":0.6765,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:99cd5ce4098a10be79d140a737bd1fc0f5c9b2b36f1cfb684a04af8ce1e5a01f","downloaded_from":"2026-09-09T23:54:15.524Z","last_downloaded_at":"2026-09-09T23:55:04.724Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-40","title":"Contracts with Customers","topic_title":"Other Assets and Deferred Costs","score":0.6752,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:01c4e1217ef6df178e5e0adab8b8d60f5a03f9c811220f23aa19f7500a3432ca","downloaded_from":"2026-09-09T23:56:07.379Z","last_downloaded_at":"2026-09-09T23:56:34.589Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-40","title":"Electronic Equipment Waste Obligations","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:974d7175262cd512ea1abf8fde84d937a751ea13c96f64c8ef04884c04f0727f","downloaded_from":"2026-09-10T01:08:32.175Z","last_downloaded_at":"2026-09-10T01:08:46.648Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-50","title":"Fees Paid to the Federal Government by Pharmaceutical Manufacturers and Health Insurers","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e01dff0e9cd93cbf98587c696f4365e9997c5f90dafbaaa9a112ccba4bb26527","downloaded_from":"2026-09-10T01:09:07.373Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2f5f1052e65c6a9c2e641ba0427995b24d8c2e623fccef518e89a4c56e749798","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-50","topic":"720","title":"Fees Paid to the Federal Government by Pharmaceutical Manufacturers and Health Insurers","area":"Expenses","paragraphs":10,"summary":"ASC 720-50 governs how pharmaceutical manufacturers and health insurers account for the annual, non-tax-deductible fees payable to the U.S. Treasury under the Affordable Care Act (as amended by the Health Care and Education Reconciliation Act). The entire estimated annual fee liability is recognized in full upon the first qualifying event in the calendar year (first branded prescription drug sale, or first provision of U.S. health risk insurance), with an offsetting deferred cost amortized to expense — normally straight-line — over that calendar year. The fee is presented as an operating expense.","concepts":["annual health care reform fee","branded prescription drug sales","net premiums written","deferred cost amortization","liability recognition trigger","operating expense presentation","non-deductible fee","market-share allocation"],"categories":["Recognition","Presentation","Industry-specific","Initial measurement"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-50-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
720-50-05-1AmendedAccounting Standards Update No. 2011-0607/21/2011
720-50-05-1AddedAccounting Standards Update No. 2010-2712/16/2010
720-50-05-2AmendedAccounting Standards Update No. 2011-0607/21/2011
720-50-05-2AddedAccounting Standards Update No. 2010-2712/16/2010
720-50-05-3AddedAccounting Standards Update No. 2011-0607/21/2011
720-50-05-4AddedAccounting Standards Update No. 2011-0607/21/2011
720-50-15-1AmendedAccounting Standards Update No. 2011-0607/21/2011
720-50-15-1AddedAccounting Standards Update No. 2010-2712/16/2010
720-50-25-1AmendedAccounting Standards Update No. 2011-0607/21/2011
720-50-25-1AddedAccounting Standards Update No. 2010-2712/16/2010
720-50-45-1AmendedAccounting Standards Update No. 2011-0607/21/2011
720-50-45-1AddedAccounting Standards Update No. 2010-2712/16/2010
720-50-65-1AddedAccounting Standards Update No. 2010-2712/16/2010
720-50-65-2AddedAccounting Standards Update No. 2011-0607/21/2011
","snippet":"The following table identifies the changes made to this Subtopic.\nNote: Subtopic title changed by Accounting Standards Update No. 2011-06 on 07/21/11 from Other Expenses—Fees Paid to the Federal Government by Pharmaceuti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0f1c4809ae0004359a369298ae410efe1d6ba71507c90ecec5d41d57468f0dce","downloaded_from":"2026-09-10T01:09:07.373Z","last_downloaded_at":"2026-09-10T01:09:07.373Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479961","source_sha256":"ab7a717c18c9116a26e072de5173f8e3f6fab5780317a93844e84a4fe08129d2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2339662df5a200ca2bf4490b8e93a6467ee1cc31af7549f3f0d8db0dfa1cc8ed","downloaded_from":"2026-09-10T01:09:07.373Z","last_downloaded_at":"2026-09-10T01:09:07.373Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479961","source_sha256":"ab7a717c18c9116a26e072de5173f8e3f6fab5780317a93844e84a4fe08129d2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7076fc139f2e5b4a6e499b48f9919a36a42ed5f2c9836373d13157a86eb60bd7","downloaded_from":"2026-09-10T01:09:07.373Z","last_downloaded_at":"2026-09-10T01:09:07.373Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479961","source_sha256":"ab7a717c18c9116a26e072de5173f8e3f6fab5780317a93844e84a4fe08129d2"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-50-05-1","para":"05-1","html":"
This Subtopic provides guidance on the annual fees paid by pharmaceutical manufacturers and health insurers to the U.S. Treasury in accordance with the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act (the Acts).
","snippet":"This Subtopic provides guidance on the annual fees paid by pharmaceutical manufacturers and health insurers to the U.S. Treasury in accordance with the Patient Protection and Affordable Care Act as amended by the Health …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eb865b57377fbd657af12294e2093ceb09c975d2fed14854c87b51d9f778b3a6","downloaded_from":"2026-09-10T01:09:10.286Z","last_downloaded_at":"2026-09-10T01:09:10.286Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479929","source_sha256":"0b1056a121e0ec407ad6f84a98c2b6cdc46eb720f2a2361208b20ed1afa51bd8"}},{"citation":"720-50-05-2","para":"05-2","html":"
The Acts impose annual fees on the pharmaceutical manufacturing industry for each calendar year beginning on or after January 1, 2011, and on the health insurance industry for each calendar year beginning on or after January 1, 2014. An entity's portion of the annual fee is payable no later than September 30 of the applicable calendar year and is not tax deductible.
","snippet":"The Acts impose annual fees on the pharmaceutical manufacturing industry for each calendar year beginning on or after January 1, 2011, and on the health insurance industry for each calendar year beginning on or after Jan…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d764e4c5d7f3c3787f9bae838e045e9dbc9e2abc2bf691d48beaa7ff22524407","downloaded_from":"2026-09-10T01:09:10.286Z","last_downloaded_at":"2026-09-10T01:09:10.286Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479929","source_sha256":"0b1056a121e0ec407ad6f84a98c2b6cdc46eb720f2a2361208b20ed1afa51bd8"}},{"citation":"720-50-05-3","para":"05-3","html":"
For the pharmaceutical manufacturing industry, the annual fee will be allocated to individual pharmaceutical manufacturers on the basis of the amount of their branded prescription drug sales for the preceding year as a percentage of the industry's branded prescription drug sales for the same period. A pharmaceutical manufacturing entity's portion of the annual fee becomes payable to the U.S. Treasury once the entity has a gross receipt from branded prescription drug sales to any specified government program or in accordance with coverage under any government program for each calendar year beginning on or after January 1, 2011.
","snippet":"For the pharmaceutical manufacturing industry, the annual fee will be allocated to individual pharmaceutical manufacturers on the basis of the amount of their branded prescription drug sales for the preceding year as a p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:06cc8d080db22fad572ae5c9e9b3e9fb36432172d4a1cacac0bc25dc25568204","downloaded_from":"2026-09-10T01:09:10.286Z","last_downloaded_at":"2026-09-10T01:09:10.286Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479929","source_sha256":"0b1056a121e0ec407ad6f84a98c2b6cdc46eb720f2a2361208b20ed1afa51bd8"}},{"citation":"720-50-05-4","para":"05-4","html":"
For the health insurance industry, the annual fee will be allocated to individual health insurers based on the ratio of the amount of an entity's net premiums written during the preceding calendar year to the amount of health insurance for any U.S. health risk that is written during the preceding calendar year. A health insurance entity's portion of the annual fee becomes payable to the U.S. Treasury once the entity provides health insurance for any U.S. health risk for each calendar year beginning on or after January 1, 2014.
","snippet":"For the health insurance industry, the annual fee will be allocated to individual health insurers based on the ratio of the amount of an entity's net premiums written during the preceding calendar year to the amount of h…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3b291f0c3b8fbb90a4babd61b1d48dfb5ef4d5169ccb10f46c425599106108c","downloaded_from":"2026-09-10T01:09:10.286Z","last_downloaded_at":"2026-09-10T01:09:10.286Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479929","source_sha256":"0b1056a121e0ec407ad6f84a98c2b6cdc46eb720f2a2361208b20ed1afa51bd8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5386f3b7c842c36580ecbab50b614ae7ca287fe98d33d4638748ed54e18a887d","downloaded_from":"2026-09-10T01:09:10.286Z","last_downloaded_at":"2026-09-10T01:09:10.286Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479929","source_sha256":"0b1056a121e0ec407ad6f84a98c2b6cdc46eb720f2a2361208b20ed1afa51bd8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cacf0fcd4a4b0831b2215bcdcf015cd2ea300c746f0c845ea13b6104792a7bd3","downloaded_from":"2026-09-10T01:09:10.286Z","last_downloaded_at":"2026-09-10T01:09:10.286Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479929","source_sha256":"0b1056a121e0ec407ad6f84a98c2b6cdc46eb720f2a2361208b20ed1afa51bd8"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-50-15-1","para":"15-1","html":"
The guidance in this Subtopic applies to all pharmaceutical manufacturers and health insurers that are subject to the annual fee imposed by the Acts described in paragraphs
720-50-05-1 through 05-4
. The guidance in this Subtopic is based on the unique facts and circumstances of the fee to be paid by pharmaceutical manufacturers and health insurers in accordance with the Acts; accordingly, an entity should apply judgment when evaluating the facts and circumstances of other fee arrangements before analogizing to the guidance in this Subtopic.
","snippet":"The guidance in this Subtopic applies to all pharmaceutical manufacturers and health insurers that are subject to the annual fee imposed by the Acts described in paragraphs 720-50-05-1 through 05-4. The guidance in this …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39fe07f474e8e7c459ead2164d5d1672cd4b5f90c5a7453b7f56eded34a72e08","downloaded_from":"2026-09-10T01:09:13.443Z","last_downloaded_at":"2026-09-10T01:09:13.443Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479898","source_sha256":"d9c936c08cfd96b26e324ce67386c6286f425ad05769b4d32f230bd0d7841681"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f0bc7cd4186a9a78c68720e171bc80be02b5889eaebac43f701a6b398c45ef96","downloaded_from":"2026-09-10T01:09:13.443Z","last_downloaded_at":"2026-09-10T01:09:13.443Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479898","source_sha256":"d9c936c08cfd96b26e324ce67386c6286f425ad05769b4d32f230bd0d7841681"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c0504e497946999ceeb5df15c7d18ee33784c7f0fdb352168e8a0f27b19501d0","downloaded_from":"2026-09-10T01:09:13.443Z","last_downloaded_at":"2026-09-10T01:09:13.443Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479898","source_sha256":"d9c936c08cfd96b26e324ce67386c6286f425ad05769b4d32f230bd0d7841681"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-50-25-1","para":"25-1","html":"
The liability related to the annual fee described in paragraphs
720-50-05-1 through 05-4
shall be estimated and recorded in full upon the first qualifying sale for pharmaceutical manufacturers or once the entity provides qualifying health insurance for health insurers in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized to expense using a straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. The annual fee imposed on health insurers does not represent a cost related to the acquisition of policies that is consistent with the definition of an acquisition cost in Subtopic 944-30.
","snippet":"The liability related to the annual fee described in paragraphs 720-50-05-1 through 05-4 shall be estimated and recorded in full upon the first qualifying sale for pharmaceutical manufacturers or once the entity provides…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7f9ba2ad6da544f34c6f3e96cd2bb6bd44096b9dabd3b45ee34aea30838892ce","downloaded_from":"2026-09-10T01:09:17.233Z","last_downloaded_at":"2026-09-10T01:09:17.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479878","source_sha256":"33f269a8dbef058a48139f0ae014ca3cc81a1b87ecf8680664a5ae722d71a19e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:deb20c00dd1a33e78f135076327fc48703bf9eb3dec7d21af16574b43fb4e7e6","downloaded_from":"2026-09-10T01:09:17.233Z","last_downloaded_at":"2026-09-10T01:09:17.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479878","source_sha256":"33f269a8dbef058a48139f0ae014ca3cc81a1b87ecf8680664a5ae722d71a19e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0180cd8bc23bf4fc1bfdde6c299a922b6d065f85aadbf2dfb828e6701894d7ec","downloaded_from":"2026-09-10T01:09:17.233Z","last_downloaded_at":"2026-09-10T01:09:17.233Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479878","source_sha256":"33f269a8dbef058a48139f0ae014ca3cc81a1b87ecf8680664a5ae722d71a19e"}},{"number":"45","label":"45 Other Presentation Matters","anchor":"45-other-presentation-matters","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-50-45-1","para":"45-1","html":"
The annual fee described in paragraphs
720-50-05-1 through 05-4
shall be presented as an operating expense.
","snippet":"The annual fee described in paragraphs 720-50-05-1 through 05-4 shall be presented as an operating expense.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:718e2d7a09c28b1fc7cc7b65c409c13d52a4bdc42d7c64de2a0618dde5b60eaf","downloaded_from":"2026-09-10T01:09:19.889Z","last_downloaded_at":"2026-09-10T01:09:19.889Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479847","source_sha256":"9304ac69abdf6a5a9ec22b764a49fc6471edac66a89a25d4646d4b4aa04429d3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:284a1de243fbe08a532c1bb7c8defc3cef002e9db3026e509d684ef9bfcbc704","downloaded_from":"2026-09-10T01:09:19.889Z","last_downloaded_at":"2026-09-10T01:09:19.889Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479847","source_sha256":"9304ac69abdf6a5a9ec22b764a49fc6471edac66a89a25d4646d4b4aa04429d3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fe423645254316e477f2083883990fc8741d6322b3d6066d27702241c68f0689","downloaded_from":"2026-09-10T01:09:19.889Z","last_downloaded_at":"2026-09-10T01:09:19.889Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479847","source_sha256":"9304ac69abdf6a5a9ec22b764a49fc6471edac66a89a25d4646d4b4aa04429d3"}},{"number":"65","label":"65 Transition and Open Effective Date Information","anchor":"65-transition-and-open-effective-date-information","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-50-65-1","para":"65-1","html":"
Paragraph superseded on 07/14/2011 after the end of the transition period stated in Accounting Standards Update No. 2010-27, Other Expenses (Topic 720): Fees Paid to the Federal Government by Pharmaceutical Manufacturers.
","snippet":"Paragraph superseded on 07/14/2011 after the end of the transition period stated in Accounting Standards Update No. 2010-27, Other Expenses (Topic 720): Fees Paid to the Federal Government by Pharmaceutical Manufacturers…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6c880610d30236a8a9c91be31317633829b5d354877706957eb18fba0a79c0b3","downloaded_from":"2026-09-10T01:09:23.678Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479813","source_sha256":"1fa4413e3d8d1c2d9c8a2cd82257955c4147d888c9e8361d136d43cb49c3996f"}},{"citation":"720-50-65-2","para":"65-2","html":"
Paragraph superseded on 07/02/2014 after the end of the transition period stated in Accounting Standards Update No. 2011-06, Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers.
","snippet":"Paragraph superseded on 07/02/2014 after the end of the transition period stated in Accounting Standards Update No. 2011-06, Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:84dce3cd470bde75d573b9f93b77979e62a3eca976fc3c205febb82cb5bd19a0","downloaded_from":"2026-09-10T01:09:23.678Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479813","source_sha256":"1fa4413e3d8d1c2d9c8a2cd82257955c4147d888c9e8361d136d43cb49c3996f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:63b5679632ce95c62ef8b3aae42dff9688057d1b37ab8672c1dd83608b4a4f9c","downloaded_from":"2026-09-10T01:09:23.678Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479813","source_sha256":"1fa4413e3d8d1c2d9c8a2cd82257955c4147d888c9e8361d136d43cb49c3996f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7fe3a95e2e153cc4bff33702c038e86adf36270083133317bb444519e50aadc5","downloaded_from":"2026-09-10T01:09:23.678Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479813","source_sha256":"1fa4413e3d8d1c2d9c8a2cd82257955c4147d888c9e8361d136d43cb49c3996f"}}],"enrichment":{"summary":"ASC 720-50 governs how pharmaceutical manufacturers and health insurers account for the annual, non-tax-deductible fees payable to the U.S. Treasury under the Affordable Care Act (as amended by the Health Care and Education Reconciliation Act). The entire estimated annual fee liability is recognized in full upon the first qualifying event in the calendar year (first branded prescription drug sale, or first provision of U.S. health risk insurance), with an offsetting deferred cost amortized to expense — normally straight-line — over that calendar year. The fee is presented as an operating expense.","key_points":["The Acts impose annual fees on pharmaceutical manufacturers for calendar years beginning on or after January 1, 2011, and on health insurers for calendar years beginning on or after January 1, 2014; the fee is payable no later than September 30 of the applicable year and is not tax deductible (720-50-05-2).","Each entity's share is allocated by market share: branded prescription drug sales of the preceding year for manufacturers (720-50-05-3), and net premiums written in the preceding calendar year for U.S. health risk for insurers (720-50-05-4).","The full estimated liability is recorded upon the first qualifying sale (manufacturers) or once qualifying health insurance is provided (insurers) in the applicable calendar year, with a corresponding deferred cost (720-50-25-1).","The deferred cost is amortized to expense straight-line over the calendar year the fee is payable, unless another method better allocates the fee (720-50-25-1).","The health insurer fee is not an acquisition cost as defined in Subtopic 944-30 (720-50-25-1).","The annual fee shall be presented as an operating expense (720-50-45-1).","The guidance rests on the unique facts and circumstances of these fees; judgment is required before analogizing to other fee arrangements (720-50-15-1)."],"categories":["Recognition","Presentation","Industry-specific","Initial measurement"],"audience_level":"intermediate","student_note":"The classic trap is thinking the fee accrues ratably as sales or premiums occur — instead the entire annual liability is booked at the first qualifying sale/coverage, and it is the deferred asset (not the liability) that is amortized straight-line over the year. Also remember the fee is not tax deductible and is not an insurance acquisition cost under 944-30.","related_topics":["944-30","740","450","405","720-30"],"key_concepts":["annual health care reform fee","branded prescription drug sales","net premiums written","deferred cost amortization","liability recognition trigger","operating expense presentation","non-deductible fee","market-share allocation"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4e7521f1a0a94a74f963098a2a7b8ebc6877df3d7da80ef3e025b8aaeaa5a0e5","downloaded_from":"2026-09-10T01:09:07.373Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"405-954","title":"Health Care Entities","topic_title":"Liabilities","score":0.6278,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2d60986c2f08c32dbfbfad1aa06f52a534097fc8ead865c133ecf36e36ff9b7e","downloaded_from":"2026-09-10T00:19:21.041Z","last_downloaded_at":"2026-09-10T00:19:37.991Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-954","title":"Health Care Entities","topic_title":"Other Expenses","score":0.6233,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:722603b769e45876ac34b11c182f66415f6666b0c62af647fff588b37686837d","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:54.691Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"430-954","title":"Health Care Entities","topic_title":"Deferred Revenue","score":0.5898,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7ffffa94560ee39a68d4f088784319f1fb5b880eb7666d4af85908d87618567d","downloaded_from":"2026-09-10T00:24:26.950Z","last_downloaded_at":"2026-09-10T00:25:00.362Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"605-954","title":"Health Care Entities","topic_title":"Revenue Recognition","score":0.5886,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a2f44b0e1a960a9dfa55847d8a4ef9e2bd09a294e992a852b6c1ce731dec451d","downloaded_from":"2026-09-10T00:50:41.818Z","last_downloaded_at":"2026-09-10T00:51:15.106Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"808-10","title":"Overall","topic_title":"Collaborative Arrangements","score":0.5803,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8d56ba52f4248f51965101be4c8558d131051cf2d6b17b873703eab18ac3e2cb","downloaded_from":"2026-09-10T01:28:13.879Z","last_downloaded_at":"2026-09-10T01:28:40.651Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"405-30","title":"Insurance-Related Assessments","topic_title":"Liabilities","score":0.5787,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:75a8161057348e58993b0e9d13d1257f683f4949d015e1e2e76132d0b4fe59d3","downloaded_from":"2026-09-10T00:14:14.713Z","last_downloaded_at":"2026-09-10T00:14:44.711Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-45","title":"Business and Technology Reengineering","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8608f8eb1a0d5a598ac0d7e0f7276ea2b5dd0cd1cc8ba98aea9e3cb14c7757df","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-908","title":"Airlines","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7d41a512da2a6d785cb63b381b5ab5612fd3ebc87acb9515320ce0fe74f6f667","downloaded_from":"2026-09-10T01:09:26.801Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:695338e34fdbd05a6f1e98b8a83c5210a84d04628f4267ec4a14ed73c6a05f38","downloaded_from":"2026-09-10T01:09:07.373Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-908","topic":"720","title":"Airlines","area":"Expenses","paragraphs":7,"summary":"ASC 720-908 governs how airlines account for route developmental costs, preoperating costs, and certain maintenance/overhaul costs. The core rule is expense-as-incurred: because route expansion is a normal, recurring activity in a deregulated environment with uncertain recoverability, these costs may not be capitalized. It also addresses the direct expensing method for overhauls and the cost of repairing rotables.","concepts":["route developmental costs","preoperating costs","expense as incurred","overhaul costs","direct expensing method","rotables","airline industry","capitalization prohibition"],"categories":["Recognition","Industry-specific","Inventory and PP&E"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-908-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
908-720-25-1AmendedAccounting Standards Update No. 2014-0905/28/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\n908-720-25-1 | Amended | Accounting Standards Update No. 2014-09 | 05/28/2014 |","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ebb2ca258736e3c728290cc8b9ac9914f6611ab6a6f0f042c98bb1d9c5d0a198","downloaded_from":"2026-09-10T01:09:26.801Z","last_downloaded_at":"2026-09-10T01:09:26.801Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478754","source_sha256":"26eeeef31e172a407594b1bd2d633399b07668fb10e9303ae33b0ac8a9a333e2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a96938d1669d1034f41ba629e1d022e7dc7a69e8961e8fb2ddabb1ef7ee4f2df","downloaded_from":"2026-09-10T01:09:26.801Z","last_downloaded_at":"2026-09-10T01:09:26.801Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478754","source_sha256":"26eeeef31e172a407594b1bd2d633399b07668fb10e9303ae33b0ac8a9a333e2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a13509b8a15594796313ddb948a022cf632121d90460879071a66041f0ca1542","downloaded_from":"2026-09-10T01:09:26.801Z","last_downloaded_at":"2026-09-10T01:09:26.801Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478754","source_sha256":"26eeeef31e172a407594b1bd2d633399b07668fb10e9303ae33b0ac8a9a333e2"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-908-05-1","para":"05-1","html":"
This Subtopic provides accounting guidance for the following costs for entities in the airline industry:
  1. a
    Developmental costs, including those directly related to the development of new routes
  2. b
    Preoperating costs, including initial preparation costs for a new route or new type of aircraft
  3. c
    Overhaul costs using the direct expensing method.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 908-10-15.
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Because of the current deregulated environment and the uncertainty regarding the recoverability of route developmental costs, such costs related to the preparation of operations of new routes shall not be capitalized. Route expansion or alteration has become a recurring activity among the airlines, and any related cost shall be considered a normal and recurring cost of conducting business.
","snippet":"Because of the current deregulated environment and the uncertainty regarding the recoverability of route developmental costs, such costs related to the preparation of operations of new routes shall not be capitalized. Ro…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bdd049abbda9315c07905a1dfb644dd6d5e47e04cc3eacf29d81455df1d6954c","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:785aba6e2a4d528a0b26790aea437d636eb97e6a9f7484b40653a28ca9420031","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}},{"block":null,"heading":"Preoperating Costs","paragraphs":[{"citation":"720-908-25-2","para":"25-2","html":"
Preoperating costs shall be expensed as incurred rather than capitalized.
","snippet":"Preoperating costs shall be expensed as incurred rather than capitalized.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60df1707a0d33c4fe513858c2d37f197ef858abfecb15bed54739c5a63fa7500","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2303760398b31cea3bcb9eddf2260189eb6435aab7d1c5664ce00b2df247b3e","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}},{"block":null,"heading":"Overhaul Costs—Direct Expensing Method","paragraphs":[{"citation":"720-908-25-3","para":"25-3","html":"
Paragraph 908-360-25-2 provides guidance on accounting methods for overhaul expenses. Most carriers recognize the cost of overhauls as expenses as they are incurred because, in the case of carriers with large fleets, such costs are relatively constant from period to period.
","snippet":"Paragraph 908-360-25-2 provides guidance on accounting methods for overhaul expenses. Most carriers recognize the cost of overhauls as expenses as they are incurred because, in the case of carriers with large fleets, suc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:854e46f020397fe272e49e45eb804d0f203910ef1d9b31bde54b2fc22acc80e3","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c993c41b718bb00e4730b3151be0128656af6295170b42af64f2bab9c9e8e1cb","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}},{"block":null,"heading":"Rotables","paragraphs":[{"citation":"720-908-25-4","para":"25-4","html":"
The cost of repairing rotables shall be charged to expense as it is incurred. See also guidance in paragraphs 908-360-35-2 and 908-360-45-1 concerning rotables.
","snippet":"The cost of repairing rotables shall be charged to expense as it is incurred. See also guidance in paragraphs 908-360-35-2 and 908-360-45-1 concerning rotables.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6a7b9675e764696af7a3953c56131d5965c4ce585552545bbcff16bd94e5be50","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:814806d489448f290cc9767b1d41fdd6a267754545c5909ebf8a782be2c9d72b","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a2ce8405724f491e03fb418f6d14e53f205c65dd44303f843ceb07b4bca8c909","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"enrichment":{"summary":"ASC 720-908 governs how airlines account for route developmental costs, preoperating costs, and certain maintenance/overhaul costs. The core rule is expense-as-incurred: because route expansion is a normal, recurring activity in a deregulated environment with uncertain recoverability, these costs may not be capitalized. It also addresses the direct expensing method for overhauls and the cost of repairing rotables.","key_points":["The Subtopic covers developmental costs (including those directly related to developing new routes), preoperating costs (including initial preparation for a new route or new aircraft type), and overhaul costs under the direct expensing method (720-908-05-1).","Route developmental costs related to preparing operations of new routes shall not be capitalized because deregulation makes recoverability uncertain and route expansion or alteration is a normal, recurring cost of doing business (720-908-25-1).","Preoperating costs shall be expensed as incurred rather than capitalized (720-908-25-2).","Under the direct expensing method most carriers expense overhaul costs as incurred, since for large fleets such costs are relatively constant period to period; accounting method alternatives are in 908-360-25-2 (720-908-25-3).","The cost of repairing rotables shall be charged to expense as incurred, with related guidance at 908-360-35-2 and 908-360-45-1 (720-908-25-4).","Scope follows the airline Overall Subtopic scope in Section 908-10-15 (720-908-15-1)."],"categories":["Recognition","Industry-specific","Inventory and PP&E"],"audience_level":"intermediate","student_note":"This is a bright-line \"no capitalization\" rule: airlines cannot defer start-up-type route and preoperating costs even though they expect future benefits. Students often confuse the direct expensing method for overhauls (720-908) with the built-in overhaul and deferral methods addressed in 908-360.","related_topics":["908-10","908-360","720-15","360-10"],"key_concepts":["route developmental costs","preoperating costs","expense as incurred","overhaul costs","direct expensing method","rotables","airline industry","capitalization prohibition"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:28d8f929a6053fdb1e1df384768e57d6b16b1365918c67bceb0a5fe35e7bd228","downloaded_from":"2026-09-10T01:09:26.801Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"360-908","title":"Airlines","topic_title":"Property, Plant, and Equipment","score":0.755,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1a942aa3dc282916694c3e560c13c0319c0b6115cf4734f5d58a5ac0f1e3fee2","downloaded_from":"2026-09-10T00:07:28.720Z","last_downloaded_at":"2026-09-10T00:07:56.986Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"330-908","title":"Airlines","topic_title":"Inventory","score":0.6895,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:517a205c0e7732beeb16378f8b789bcd042cf5193ee2bbfe1b9d9eed3a1ff921","downloaded_from":"2026-09-09T23:51:55.917Z","last_downloaded_at":"2026-09-09T23:52:13.368Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"908-10","title":"Overall","topic_title":"Airlines","score":0.6812,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:664553bdf11ed72dbeddf6a5517be1b246389c3606c3549c84b78aed8886be52","downloaded_from":"2026-09-10T02:08:49.576Z","last_downloaded_at":"2026-09-10T02:08:57.617Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-932","title":"Extractive Activities—Oil and Gas","topic_title":"Other Expenses","score":0.6293,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6c0ece6dfe7252a5e33190ebc9babd31e3677c69a2b3eb072a04b1c3df3aedaa","downloaded_from":"2026-09-10T01:10:32.559Z","last_downloaded_at":"2026-09-10T01:10:47.285Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"350-908","title":"Airlines","topic_title":"Intangibles—Goodwill and Other","score":0.6275,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ae9a8dfb975d3565af109b6bc9b5c7f30164cbbafc9538e23a498ad1435b0d91","downloaded_from":"2026-09-10T00:03:35.089Z","last_downloaded_at":"2026-09-10T00:03:43.707Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-944","title":"Financial Services—Insurance","topic_title":"Other Expenses","score":0.6166,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3729bb7eaa340f81da3c5c21860ffc87058478394ddbfb674807e1f9a2ebd0b7","downloaded_from":"2026-09-10T01:11:16.270Z","last_downloaded_at":"2026-09-10T01:11:38.484Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-50","title":"Fees Paid to the Federal Government by Pharmaceutical Manufacturers and Health Insurers","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e01dff0e9cd93cbf98587c696f4365e9997c5f90dafbaaa9a112ccba4bb26527","downloaded_from":"2026-09-10T01:09:07.373Z","last_downloaded_at":"2026-09-10T01:09:23.678Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-922","title":"Entertainment—Cable Television","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5dd9c7847870609956afe38c4a44d37b7067ecac2cccd582f39892238e4bbcb7","downloaded_from":"2026-09-10T01:09:40.397Z","last_downloaded_at":"2026-09-10T01:09:54.134Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1134d8238d555e48347632a80227654ff689519d53619163340f15063e90acb2","downloaded_from":"2026-09-10T01:09:26.801Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-922","topic":"720","title":"Entertainment—Cable Television","area":"Expenses","paragraphs":7,"summary":"This Subtopic tells cable television entities which industry-specific costs must be expensed rather than capitalized. During the prematurity period (while a cable system is being built out and partially marketed), subscriber-related costs and general and administrative expenses are period costs. Costs of disconnecting/reconnecting subscribers after initial installation, and costs of unsuccessful franchise applications or abandoned franchises, are also charged to expense.","concepts":["prematurity period","subscriber-related costs","general and administrative expenses","hookup costs","disconnect and reconnect costs","unsuccessful franchise application costs","abandoned franchises","period costs"],"categories":["Recognition","Industry-specific","Intangibles and goodwill"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-922-00-1","para":"00-1","html":"
No updates have been made to this subtopic.
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This Subtopic provides guidance for certain costs incurred by entities in the cable television industry, such as subscriber-related costs, hookup costs, and unsuccessful franchise applications costs.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 922-10-15.
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During the prematurity period, any subscriber-related costs and general and administrative expenses shall be expensed as period costs.
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For guidance on accounting during the prematurity period for certain programming costs and other system costs, see paragraph 922-350-25-1.
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After the initial installation as described in paragraph 922-360-25-7, costs incurred for disconnecting and reconnecting shall be charged to expense.
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Costs of unsuccessful franchise applications and abandoned franchises shall be charged to expense.
Refer to paragraph 922-350-25-3 for guidance on the accounting for the costs of successful franchise applications.
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Refer to paragraph 922-350-25-3 for guidance on the accounting for the costs of successful franchise applications.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bbf69fe283893200c4826be5d30913239f34e15d6bf1d77c60fdd797c7cb9e17","downloaded_from":"2026-09-10T01:09:54.134Z","last_downloaded_at":"2026-09-10T01:09:54.134Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478623","source_sha256":"399e7cc450710f0163878589f9e8e6255c8c270d722af1f038602d041b1333be"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4413c9eef19bebcb1da71f8f283ac41a82571272988a503a716d0ebd9ff488d3","downloaded_from":"2026-09-10T01:09:54.134Z","last_downloaded_at":"2026-09-10T01:09:54.134Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478623","source_sha256":"399e7cc450710f0163878589f9e8e6255c8c270d722af1f038602d041b1333be"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d8757602723482cbfb61c604fa030ad2aed317fd32ddada74179219dab2f9fae","downloaded_from":"2026-09-10T01:09:54.134Z","last_downloaded_at":"2026-09-10T01:09:54.134Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478623","source_sha256":"399e7cc450710f0163878589f9e8e6255c8c270d722af1f038602d041b1333be"}}],"enrichment":{"summary":"This Subtopic tells cable television entities which industry-specific costs must be expensed rather than capitalized. During the prematurity period (while a cable system is being built out and partially marketed), subscriber-related costs and general and administrative expenses are period costs. Costs of disconnecting/reconnecting subscribers after initial installation, and costs of unsuccessful franchise applications or abandoned franchises, are also charged to expense.","key_points":["During the prematurity period, subscriber-related costs and general and administrative expenses shall be expensed as period costs (720-922-25-1).","Accounting during the prematurity period for certain programming costs and other system costs is addressed instead in 922-350-25-1 (720-922-25-2).","After the initial installation described in 922-360-25-7, costs incurred for disconnecting and reconnecting subscribers shall be charged to expense (720-922-25-3).","Costs of unsuccessful franchise applications and abandoned franchises shall be charged to expense; successful franchise application costs are accounted for under 922-350-25-3 (720-922-25-4).","The Subtopic's scope follows the cable television Overall Subtopic scope in Section 922-10-15 (720-922-15-1)."],"categories":["Recognition","Industry-specific","Intangibles and goodwill"],"audience_level":"intermediate","student_note":"The exam trap is the capitalize-versus-expense line: initial hookup/installation costs and successful franchise costs may be capitalized under 922-350 and 922-360, but subscriber-related and G&A costs during the prematurity period, later disconnect/reconnect costs, and unsuccessful or abandoned franchise costs are always expensed. Students often assume all prematurity-period costs are capitalized because the system is not yet fully operating.","related_topics":["922-10","922-350","922-360","720-10","350-30"],"key_concepts":["prematurity period","subscriber-related costs","general and administrative expenses","hookup costs","disconnect and reconnect costs","unsuccessful franchise application costs","abandoned franchises","period costs"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8b81f62e2ec0a73a1dec4bcbe212c85ea78e0edd175689915a522148a385f7e7","downloaded_from":"2026-09-10T01:09:40.397Z","last_downloaded_at":"2026-09-10T01:09:54.134Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"350-922","title":"Entertainment—Cable Television","topic_title":"Intangibles—Goodwill and 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Equipment","score":0.8257,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fbfa63a34986d5c0aa4b395725467392879d34a8a5c7347c696a8c3df107bca7","downloaded_from":"2026-09-10T00:08:15.419Z","last_downloaded_at":"2026-09-10T00:08:28.839Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"835-922","title":"Entertainment—Cable Television","topic_title":"Interest","score":0.7803,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ebebf595260ed09be320b8db9c63c1cc5436bbcd193c8c462e292fcc3768e8de","downloaded_from":"2026-09-10T01:50:34.120Z","last_downloaded_at":"2026-09-10T01:50:42.248Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"922-10","title":"Overall","topic_title":"Entertainment—Cable Television","score":0.7779,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f2de96e12de5c58725c6c5cbd84358187e5e66501c86913cec217f5fd47d15f","downloaded_from":"2026-09-10T02:10:54.487Z","last_downloaded_at":"2026-09-10T02:11:00.249Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-926","title":"Entertainment—Films","topic_title":"Other 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Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ae8d63ec8bcf89e70167862edb3e919cdb944929ca9ff92791250bb9ed652c09","downloaded_from":"2026-09-10T01:09:57.559Z","last_downloaded_at":"2026-09-10T01:10:03.676Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f16f62c6b1f2fd3d29ed0b224d51d3d5547e7710223a97ef553f7576cd75425b","downloaded_from":"2026-09-10T01:09:40.397Z","last_downloaded_at":"2026-09-10T01:09:54.134Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-924","topic":"720","title":"Entertainment—Casinos","area":"Expenses","paragraphs":3,"summary":"This Subtopic governs how a casino entity accounts for the cost of promotional allowances — complimentary goods and services (comps) such as rooms, food, beverages, and entertainment given to customers. Its single substantive rule is that the cost of providing those promotional allowances is included in costs and expenses (720-924-25-1). Scope follows the casino Overall Subtopic, Section 924-10-15.","concepts":["promotional allowances","complimentaries","casino entity","costs and expenses","gaming operations","customer incentives"],"categories":["Industry-specific","Recognition","Presentation"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-924-05-1","para":"05-1","html":"
This Subtopic addresses the accounting and reporting for the cost of promotional allowances provided by a casino entity to a customer.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 924-10-15.
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The cost of providing promotional allowances shall be included in costs and expenses.
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Its single substantive rule is that the cost of providing those promotional allowances is included in costs and expenses (720-924-25-1). Scope follows the casino Overall Subtopic, Section 924-10-15.","key_points":["The Subtopic addresses accounting and reporting for the cost of promotional allowances provided by a casino entity to a customer (720-924-05-1).","Scope is the same as the casino Overall Subtopic, Section 924-10-15 (720-924-15-1).","The cost of providing promotional allowances shall be included in costs and expenses (720-924-25-1).","The guidance addresses the cost side of comps; it does not itself prescribe the revenue presentation of promotional allowances."],"categories":["Industry-specific","Recognition","Presentation"],"audience_level":"intermediate","student_note":"Casinos give away large volumes of \"comps,\" and this rule keeps their cost in operating costs and expenses rather than netting it against gaming revenue. A common misunderstanding is confusing this cost-recognition rule with the separate revenue-side question of how (or whether) complimentaries are reported as revenue, which is addressed under the casino revenue guidance (now driven by ASC 606).","related_topics":["924-10","924-605","606-10","720-10"],"key_concepts":["promotional allowances","complimentaries","casino entity","costs and expenses","gaming operations","customer incentives"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5415105ee145b9286aa7fd511cbe39c025de3934067ed997d6d0883e419ae8c2","downloaded_from":"2026-09-10T01:09:57.559Z","last_downloaded_at":"2026-09-10T01:10:03.676Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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timestamps"}},{"number":"720-926","topic":"720","title":"Entertainment—Films","area":"Expenses","paragraphs":6,"summary":"This Subtopic governs how film production and distribution entities account for certain costs incurred to develop and market a film, including overall deal costs and exploitation costs. Costs of overall deals that cannot be identified with specific projects are charged to expense as incurred over the related time period (720-926-25-1), advertising costs follow Subtopic 720-35 (720-926-25-2), and all other exploitation costs, including marketing costs, are expensed as incurred (720-926-25-3).","concepts":["exploitation costs","overall deal arrangements","participation costs","advertising costs","marketing costs","expense as incurred","film production and distribution"],"categories":["Recognition","Disclosure","Industry-specific"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-926-05-1","para":"05-1","html":"
This Subtopic addresses the accounting by entities in the film production and distribution industry for certain compensation and other costs incurred to develop and market a film. Those costs include participation and exploitation costs.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 926-10-15.
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An entity may enter into an overall deal arrangement. An entity shall charge the costs of overall deals that cannot be identified with specific projects to expense as they are incurred over the related time period.
","snippet":"An entity may enter into an overall deal arrangement. An entity shall charge the costs of overall deals that cannot be identified with specific projects to expense as they are incurred over the related time period.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c0594e1111310660d531277951711a67ad21d097eb980a4e0d404e54fe094644","downloaded_from":"2026-09-10T01:10:15.540Z","last_downloaded_at":"2026-09-10T01:10:15.540Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478210","source_sha256":"188fac3c2f5e06dc475639c85cbb486a441b45c4735f44b23117b8e253855022"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d61a1b09c6fe53dea369a74a9de81106e4a012a43df63d972c6c2d7f2bb7c58a","downloaded_from":"2026-09-10T01:10:15.540Z","last_downloaded_at":"2026-09-10T01:10:15.540Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478210","source_sha256":"188fac3c2f5e06dc475639c85cbb486a441b45c4735f44b23117b8e253855022"}},{"block":null,"heading":"Exploitation Costs","paragraphs":[{"citation":"720-926-25-2","para":"25-2","html":"
An entity shall account for advertising costs in accordance with the provisions of Subtopic 720-35.
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All other exploitation costs, including marketing costs, shall be expensed as incurred.
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An entity shall disclose its methods of accounting for exploitation costs.
","snippet":"An entity shall disclose its methods of accounting for exploitation costs.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e1efcba2f4c21633726d5b6bfb81f3d84cb55391a7dc8c289b7627e34456d955","downloaded_from":"2026-09-10T01:10:17.987Z","last_downloaded_at":"2026-09-10T01:10:17.987Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478441","source_sha256":"2974670551bacd1a50641d1c39c39d5f362a2f9ab334491784f051df0a0dbf73"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:927b5ee5d178cad28b48a63b98e26304b099df6f0f8de57020e00494a4071c10","downloaded_from":"2026-09-10T01:10:17.987Z","last_downloaded_at":"2026-09-10T01:10:17.987Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478441","source_sha256":"2974670551bacd1a50641d1c39c39d5f362a2f9ab334491784f051df0a0dbf73"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e8582e2860b7e0132cf0bb18d8f852910e5984839c224489b956b2a0562650d7","downloaded_from":"2026-09-10T01:10:17.987Z","last_downloaded_at":"2026-09-10T01:10:17.987Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478441","source_sha256":"2974670551bacd1a50641d1c39c39d5f362a2f9ab334491784f051df0a0dbf73"}}],"enrichment":{"summary":"This Subtopic governs how film production and distribution entities account for certain costs incurred to develop and market a film, including overall deal costs and exploitation costs. Costs of overall deals that cannot be identified with specific projects are charged to expense as incurred over the related time period (720-926-25-1), advertising costs follow Subtopic 720-35 (720-926-25-2), and all other exploitation costs, including marketing costs, are expensed as incurred (720-926-25-3).","key_points":["The Subtopic covers compensation and other costs incurred to develop and market a film, including participation costs and exploitation costs (720-926-05-1).","Scope follows the Entertainment—Films Overall Subtopic scope in Section 926-10-15 (720-926-15-1).","Costs of overall deal arrangements that cannot be identified with specific projects are expensed as incurred over the related time period (720-926-25-1).","Advertising costs are accounted for under Subtopic 720-35 (720-926-25-2).","All other exploitation costs, including marketing costs, are expensed as incurred (720-926-25-3).","An entity must disclose its methods of accounting for exploitation costs (720-926-50-1)."],"categories":["Recognition","Disclosure","Industry-specific"],"audience_level":"intermediate","student_note":"The key takeaway is that film marketing and other exploitation costs are period expenses, not capitalized film costs — a common error is assuming launch advertising can be deferred and matched against future film revenue. Note advertising is carved out to Subtopic 720-35's rules rather than governed here.","related_topics":["926-10","926-20","720-35","926-330"],"key_concepts":["exploitation costs","overall deal arrangements","participation costs","advertising costs","marketing costs","expense as incurred","film production and distribution"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:971ba8cd810e93494b1332662bdbe14307a68c1955e9db208e9b1d6ae9c94d79","downloaded_from":"2026-09-10T01:10:05.518Z","last_downloaded_at":"2026-09-10T01:10:20.638Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"705-926","title":"Entertainment—Films","topic_title":"Cost of Sales and Services","score":0.8729,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a67521257f69ec48ff19b2273bf29d5deb9002879b74840c952485d04dd1464","downloaded_from":"2026-09-10T00:56:26.941Z","last_downloaded_at":"2026-09-10T00:56:38.121Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"835-926","title":"Entertainment—Films","topic_title":"Interest","score":0.8494,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7426fce1172f3ad7db1aaec73a8cdfa141127f179af034d5a0e553919280ad35","downloaded_from":"2026-09-10T01:50:45.748Z","last_downloaded_at":"2026-09-10T01:50:51.672Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"926-10","title":"Overall","topic_title":"Entertainment—Films","score":0.8316,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:576e71ca637f58adea549a5ccbec67e3185415e74cad42b64bd4a5961d4ff7ec","downloaded_from":"2026-09-10T02:11:25.730Z","last_downloaded_at":"2026-09-10T02:11:34.569Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"230-926","title":"Entertainment—Films","topic_title":"Statement of Cash Flows","score":0.8072,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b901b29819aae0456d846f5031618c340a4b3f576b024c8593976f780438fc90","downloaded_from":"2026-09-09T23:12:42.609Z","last_downloaded_at":"2026-09-09T23:12:53.235Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"705-985","title":"Software","topic_title":"Cost of Sales and Services","score":0.7349,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d4887daf5683f40b04e01d0e80e13ef75a52e931341ddb6af5c4da013749fab4","downloaded_from":"2026-09-10T00:56:55.035Z","last_downloaded_at":"2026-09-10T00:57:08.857Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"330-926","title":"Entertainment—Films","topic_title":"Inventory","score":0.7335,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6cbfa29ccc922e1feda7e95febf0a6bb1399b2442302a5604079180c5cb2f4ea","downloaded_from":"2026-09-09T23:52:47.274Z","last_downloaded_at":"2026-09-09T23:52:53.935Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-924","title":"Entertainment—Casinos","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ae8d63ec8bcf89e70167862edb3e919cdb944929ca9ff92791250bb9ed652c09","downloaded_from":"2026-09-10T01:09:57.559Z","last_downloaded_at":"2026-09-10T01:10:03.676Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-928","title":"Entertainment—Music","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:33fd5880087248cd6e82472fd4b065161a83bf6f64b701849339e2bbdab7dba0","downloaded_from":"2026-09-10T01:10:22.861Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8b622851183258730d682fc6b17ac97b9f4fbb45efb71d8a80d734ba5c2bf494","downloaded_from":"2026-09-10T01:10:05.518Z","last_downloaded_at":"2026-09-10T01:10:20.638Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-928","topic":"720","title":"Entertainment—Music","area":"Expenses","paragraphs":5,"summary":"This Subtopic tells music-industry entities when to expense artist royalties, record master production costs, advance minimum guarantees paid by licensees, and other license fees. The core rule is that artist royalties (adjusted for anticipated returns) are charged to expense in the period the record sale occurs, advances are expensed as royalties are subsequently earned, and any advance or minimum guarantee that appears unrecoverable is expensed when the loss becomes evident (720-928-25-1, 720-928-25-3).","concepts":["artist royalties","advance royalties","record master costs","minimum guarantee","license agreements","recoverability","anticipated returns","expense recognition"],"categories":["Recognition","Industry-specific","Impairment"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-928-05-1","para":"05-1","html":"
This Subtopic provides guidance for accounting when an entity in the music industry expenses any of the following:
  1. a
    Royalties earned by artists
  2. b
    Costs to produce record masters
  3. c
    Minimum guarantees paid in advance by a licensee to a licensor
  4. d
    Other fees paid under license agreements.
","snippet":"This Subtopic provides guidance for accounting when an entity in the music industry expenses any of the following:\n(a) Royalties earned by artists\n(b) Costs to produce record masters\n(c) Minimum guarantees paid in advanc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:80dc4657c0e3bf05e4e0020fffaa9cc2fede16f558642a0531507a67ac680938","downloaded_from":"2026-09-10T01:10:22.861Z","last_downloaded_at":"2026-09-10T01:10:22.861Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478358","source_sha256":"715d3022bdc018d521287cda524c8de60b60b28ebfd81159029de18f2136259a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f61f59cbb33ebf2edea42685e007c814bca27c08ca621a9cd50c2d95a358c00","downloaded_from":"2026-09-10T01:10:22.861Z","last_downloaded_at":"2026-09-10T01:10:22.861Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478358","source_sha256":"715d3022bdc018d521287cda524c8de60b60b28ebfd81159029de18f2136259a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f9524fceb14467b80929178f5a6ec891e7f22c7c21ba54c6075cbf679db9309b","downloaded_from":"2026-09-10T01:10:22.861Z","last_downloaded_at":"2026-09-10T01:10:22.861Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478358","source_sha256":"715d3022bdc018d521287cda524c8de60b60b28ebfd81159029de18f2136259a"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-928-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 928-10-15.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 928-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d295bf0f09a4bc4b587af14b74d21ef7dc37215c45a7056a910e31f9130763e0","downloaded_from":"2026-09-10T01:10:25.607Z","last_downloaded_at":"2026-09-10T01:10:25.607Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477304","source_sha256":"52e16e3c70b87776cfc8155f7eee4985b985d152a7c08e03b70940bfb6d039a8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ccd97bf71f1da0fe8c3586635417bcd20fadeb4718df3cfa1accc3ea1c44fedb","downloaded_from":"2026-09-10T01:10:25.607Z","last_downloaded_at":"2026-09-10T01:10:25.607Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477304","source_sha256":"52e16e3c70b87776cfc8155f7eee4985b985d152a7c08e03b70940bfb6d039a8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a282a74872ab38dbbf8b6ade8503bcaf19a2ca24aafbd07e3a903a5120d9737c","downloaded_from":"2026-09-10T01:10:25.607Z","last_downloaded_at":"2026-09-10T01:10:25.607Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477304","source_sha256":"52e16e3c70b87776cfc8155f7eee4985b985d152a7c08e03b70940bfb6d039a8"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Licensor Accounting","paragraphs":[{"citation":"720-928-25-1","para":"25-1","html":"
The amount of royalties earned by artists, as adjusted for anticipated returns, shall be charged to expense of the period in which the sale of the record takes place. Advance royalties shall be charged to expense as subsequent royalties are earned by the artist. Any portion of such advances that subsequently appear not to be fully recoverable from future royalties to be earned by the artist shall be charged to expense during the period in which the loss becomes evident.
","snippet":"The amount of royalties earned by artists, as adjusted for anticipated returns, shall be charged to expense of the period in which the sale of the record takes place. Advance royalties shall be charged to expense as subs…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5455f871932134a622386a312d0fe10194e6ff4834d38231127d154e377ac04e","downloaded_from":"2026-09-10T01:10:30.076Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478484","source_sha256":"3eaec82d9abb2994b1492885b527826d29c4f6d52d91c80af790793925ae6da7"}},{"citation":"720-928-25-2","para":"25-2","html":"
The portion of the record master cost borne by the record company not reported as an asset in accordance with paragraph 928-340-25-2 shall be charged to expense.
","snippet":"The portion of the record master cost borne by the record company not reported as an asset in accordance with paragraph 928-340-25-2 shall be charged to expense.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7dbbd695e8fe0baf1d4e5af7f0d7963efa561b2ccd20a6b84b5a86c62a8addd6","downloaded_from":"2026-09-10T01:10:30.076Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478484","source_sha256":"3eaec82d9abb2994b1492885b527826d29c4f6d52d91c80af790793925ae6da7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7cacf87fa4df115879a657e93e83c83136edd0598e8924a509b3237390835438","downloaded_from":"2026-09-10T01:10:30.076Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478484","source_sha256":"3eaec82d9abb2994b1492885b527826d29c4f6d52d91c80af790793925ae6da7"}},{"block":null,"heading":"Licensee Accounting","paragraphs":[{"citation":"720-928-25-3","para":"25-3","html":"
As described in paragraph 928-340-35-3, if all or a portion of a minimum guarantee paid in advance by a licensee subsequently appears not to be recoverable through future use of the rights obtained under the license, the nonrecoverable portion shall be charged to expense.
","snippet":"As described in paragraph 928-340-35-3, if all or a portion of a minimum guarantee paid in advance by a licensee subsequently appears not to be recoverable through future use of the rights obtained under the license, the…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a0202aac5dbadfa103ddf79cb294add8a3f1f398874c012813c14357e27f58cb","downloaded_from":"2026-09-10T01:10:30.076Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478484","source_sha256":"3eaec82d9abb2994b1492885b527826d29c4f6d52d91c80af790793925ae6da7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6a77f197c24d87b83ba108c548ee6795a7de4d3085f15c3129def195cb01975a","downloaded_from":"2026-09-10T01:10:30.076Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478484","source_sha256":"3eaec82d9abb2994b1492885b527826d29c4f6d52d91c80af790793925ae6da7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f964e82b5185a96451c5253654d58b00d9e6ac828580b96fc27c82a20e55d52b","downloaded_from":"2026-09-10T01:10:30.076Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478484","source_sha256":"3eaec82d9abb2994b1492885b527826d29c4f6d52d91c80af790793925ae6da7"}}],"enrichment":{"summary":"This Subtopic tells music-industry entities when to expense artist royalties, record master production costs, advance minimum guarantees paid by licensees, and other license fees. The core rule is that artist royalties (adjusted for anticipated returns) are charged to expense in the period the record sale occurs, advances are expensed as royalties are subsequently earned, and any advance or minimum guarantee that appears unrecoverable is expensed when the loss becomes evident (720-928-25-1, 720-928-25-3).","key_points":["Royalties earned by artists, as adjusted for anticipated returns, are charged to expense in the period in which the sale of the record takes place (720-928-25-1).","Advance royalties are charged to expense as subsequent royalties are earned by the artist (720-928-25-1).","Any portion of an artist advance that subsequently appears not to be fully recoverable from future royalties is charged to expense in the period the loss becomes evident (720-928-25-1).","The portion of record master cost borne by the record company that is not reported as an asset under 928-340-25-2 is charged to expense (720-928-25-2).","A minimum guarantee paid in advance by a licensee that no longer appears recoverable through future use of the licensed rights is expensed to the extent nonrecoverable (720-928-25-3, referencing 928-340-35-3).","The Subtopic follows the scope of the Overall Subtopic in Section 928-10-15 (720-928-15-1)."],"categories":["Recognition","Industry-specific","Impairment"],"audience_level":"intermediate","student_note":"The trap is treating advances as permanent assets: an advance royalty or minimum guarantee is capitalized only while recoverable, and must be expensed as royalties are earned or as soon as nonrecoverability becomes evident. Pair this expense guidance with the asset-side rules in 928-340.","related_topics":["928-10","928-340","928-405","926","606"],"key_concepts":["artist royalties","advance royalties","record master costs","minimum guarantee","license agreements","recoverability","anticipated returns","expense recognition"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fa4568ebdb3e9f7ecc1bd50084a0aae40d9ef47d636710c6e924a519c3a42617","downloaded_from":"2026-09-10T01:10:22.861Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"340-928","title":"Entertainment—Music","topic_title":"Other Assets and Deferred Costs","score":0.8742,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:67cbed1718b9059d6dca0ccc489a00248c8c13c8ba8e3c4b3161632084656d9f","downloaded_from":"2026-09-09T23:57:11.675Z","last_downloaded_at":"2026-09-09T23:57:36.379Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"405-928","title":"Entertainment—Music","topic_title":"Liabilities","score":0.8064,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d4df9188be0b1ddbb9bfe9885ddfc2b1391ad9cf77291f760beb9a4d59d3d049","downloaded_from":"2026-09-10T00:17:48.299Z","last_downloaded_at":"2026-09-10T00:17:59.597Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"928-10","title":"Overall","topic_title":"Entertainment—Music","score":0.7731,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:83dbb6188b25e217e4a491ea1f4cc0794a5103ff4dd03d1c286529596cc839f4","downloaded_from":"2026-09-10T02:12:12.808Z","last_downloaded_at":"2026-09-10T02:12:18.919Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"440-928","title":"Entertainment—Music","topic_title":"Commitments","score":0.7486,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07b3aff76d5006312f433515c52a2d7533f45a9376639b5e3a8f4b69ff104137","downloaded_from":"2026-09-10T00:25:52.692Z","last_downloaded_at":"2026-09-10T00:26:04.387Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-926","title":"Entertainment—Films","topic_title":"Other Expenses","score":0.7077,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c25819b6fb537b58528a29d9080d6874b5e9548b09d3d1bb53df784f546f0baf","downloaded_from":"2026-09-10T01:10:05.518Z","last_downloaded_at":"2026-09-10T01:10:20.638Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"430-928","title":"Entertainment—Music","topic_title":"Deferred Revenue","score":0.6627,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4b1693d28ec1fa4b00890dadfad2a86c88cab4ebcd86b923e7ff0c8d4f627730","downloaded_from":"2026-09-10T00:24:14.561Z","last_downloaded_at":"2026-09-10T00:24:22.885Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not 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Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9bd34952b78b69896a6cd89ac6c0c978b8891a65376a93c1e21936b080f4bfd1","downloaded_from":"2026-09-10T01:10:32.559Z","last_downloaded_at":"2026-09-10T01:10:47.285Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f7f264c9a91476e598c5d174c400cbee4915090153ddb9ea80dfb452f76c2c5f","downloaded_from":"2026-09-10T01:10:22.861Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-932","topic":"720","title":"Extractive Activities—Oil and Gas","area":"Expenses","paragraphs":5,"summary":"This Subtopic identifies costs unique to oil- and gas-producing activities that do not result in acquisition of an asset and therefore must be charged to expense as incurred. Under the successful efforts framework, geological and geophysical (G&G) costs, costs of carrying and retaining undeveloped properties, dry hole and bottom hole contributions, and the costs of exploratory wells (and exploratory-type stratigraphic test wells) that do not find proved reserves are expensed immediately. It also notes the customary practice of accumulating an in-house exploration department's costs and allocating them to exploration activities using standardized charges.","concepts":["geological and geophysical costs","carrying and retaining undeveloped properties","exploratory wells","stratigraphic test wells","dry hole and bottom hole contributions","successful efforts method","expense as incurred","exploration department cost allocation"],"categories":["Recognition","Industry-specific","Initial measurement"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-932-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Exploratory WellAmendedAccounting Standards Update No. 2010-0301/06/2010
ProductionAmendedAccounting Standards Update No. 2010-0301/06/2010
PropertiesAmendedAccounting Standards Update No. 2010-0301/06/2010
Stratigraphic Test WellAmendedAccounting Standards Update No. 2010-0301/06/2010
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nExploratory Well | Amended | Accounting Standards Update No. 2010-03 | 01/06/2010 |\nProd…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4d05d67df3b57ec14b0cab0a5e880460e85f82a1e706353899486273675a8ada","downloaded_from":"2026-09-10T01:10:32.559Z","last_downloaded_at":"2026-09-10T01:10:32.559Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478302","source_sha256":"799c6d23c0c670f1c9ea2ddddfeac0b86472c7bff430b600fdb4c6c9f6cd2f44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4ab1a25f972397fd9c6179979e80757a52cc712d253168241ffbcc6b67e35408","downloaded_from":"2026-09-10T01:10:32.559Z","last_downloaded_at":"2026-09-10T01:10:32.559Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478302","source_sha256":"799c6d23c0c670f1c9ea2ddddfeac0b86472c7bff430b600fdb4c6c9f6cd2f44"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9446fbc12ef8fab9d442d5ebfb1911db36b4751a4a4d76058d57992c84bf3599","downloaded_from":"2026-09-10T01:10:32.559Z","last_downloaded_at":"2026-09-10T01:10:32.559Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478302","source_sha256":"799c6d23c0c670f1c9ea2ddddfeac0b86472c7bff430b600fdb4c6c9f6cd2f44"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-932-05-1","para":"05-1","html":"
This Subtopic addresses costs unique to the oil and gas industry that are to be expensed immediately.
","snippet":"This Subtopic addresses costs unique to the oil and gas industry that are to be expensed immediately.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:64092eb63692f53a5d800964e63244d5d24f58194e2a89e52bc65ae873ca40d5","downloaded_from":"2026-09-10T01:10:36.576Z","last_downloaded_at":"2026-09-10T01:10:36.576Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478020","source_sha256":"899b584a066b36f60d6b3172ce4e6b12c28e3d63e0ca49213e4a144d724ca4d6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3cedc76bad39cb9442e2e53aa59bb615c3ac71a60d90250c7bbd22c49529760d","downloaded_from":"2026-09-10T01:10:36.576Z","last_downloaded_at":"2026-09-10T01:10:36.576Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478020","source_sha256":"899b584a066b36f60d6b3172ce4e6b12c28e3d63e0ca49213e4a144d724ca4d6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2fecd39c49fd882ba08f2572f3e0ccb6f9c0cf5a14cf28a69e16cde9cd10697e","downloaded_from":"2026-09-10T01:10:36.576Z","last_downloaded_at":"2026-09-10T01:10:36.576Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478020","source_sha256":"899b584a066b36f60d6b3172ce4e6b12c28e3d63e0ca49213e4a144d724ca4d6"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-932-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 932-10-15.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 932-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6681e946692c242b5abef4118463934912afb764f5347eb08f116128c0d45c3b","downloaded_from":"2026-09-10T01:10:40.202Z","last_downloaded_at":"2026-09-10T01:10:40.202Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478637","source_sha256":"ba771b61b9032ef5d174a9bb22695d8d08a46ce37f19b190a91a9eb3c6600f35"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6d825e484eb5ec22b4bf03b8fa78ee92bda096fb3d4241f4b736876cfe3448ab","downloaded_from":"2026-09-10T01:10:40.202Z","last_downloaded_at":"2026-09-10T01:10:40.202Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478637","source_sha256":"ba771b61b9032ef5d174a9bb22695d8d08a46ce37f19b190a91a9eb3c6600f35"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26a9e3a02071307d0e5ed2a591f245bd739c5a1d4d0314d271fbe752b9d62a44","downloaded_from":"2026-09-10T01:10:40.202Z","last_downloaded_at":"2026-09-10T01:10:40.202Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478637","source_sha256":"ba771b61b9032ef5d174a9bb22695d8d08a46ce37f19b190a91a9eb3c6600f35"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-932-25-1","para":"25-1","html":"
Some costs incurred in an entity's oil- and gas-producing activities do not result in acquisition of an asset and, therefore, shall be charged to expense. Examples include:
  1. a
    Geological and geophysical costs
  2. b
    The costs of carrying and retaining undeveloped properties
  3. c
    The costs of drilling those exploratory wells and exploratory-type stratigraphic test wells that do not find proved reserves.
Geological and geophysical costs, costs of carrying and retaining undeveloped properties, and dry hole and bottom hole contributions shall be charged to expense when incurred. Costs of carrying and retaining undeveloped properties do not increase the potential of those properties to contain oil and gas reserves. Carrying costs are incurred to maintain an entity's rights, not to acquire those rights. In a sense, they are penalties for having delayed drilling and development activities and, thereby, having delayed potential production of oil and gas. Because carrying costs do not enhance the future benefits from the entity's properties and other assets, they are charged to expense when incurred.
","snippet":"Some costs incurred in an entity's oil- and gas-producing activities do not result in acquisition of an asset and, therefore, shall be charged to expense. Examples include:\n(a) Geological and geophysical costs\n(b) The co…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cae56b6aea73bdc019a0c6989c1622d6b8ec8ed59ae86b519ab5bc05fa562c92","downloaded_from":"2026-09-10T01:10:45.467Z","last_downloaded_at":"2026-09-10T01:10:45.467Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479078","source_sha256":"8a799f5771c28ba377dc78d856ad00fe3a39d9c5b1d43fd679187320b7a09d8f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:baf1cb0262feaeaa74438f1c41eae7d8d1c6d6bb7ae70a35706aefb6c0d16c7d","downloaded_from":"2026-09-10T01:10:45.467Z","last_downloaded_at":"2026-09-10T01:10:45.467Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479078","source_sha256":"8a799f5771c28ba377dc78d856ad00fe3a39d9c5b1d43fd679187320b7a09d8f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0eee9222af5824a6db684e7e56e4ec2d6bcd03fed77a201a74a1203b1437f70c","downloaded_from":"2026-09-10T01:10:45.467Z","last_downloaded_at":"2026-09-10T01:10:45.467Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479078","source_sha256":"8a799f5771c28ba377dc78d856ad00fe3a39d9c5b1d43fd679187320b7a09d8f"}},{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-932-30-1","para":"30-1","html":"
When the operating entity maintains its own exploration department, it is customary for costs of that department to be accumulated and allocated to exploration activities and projects. The allocation is based on standardized charges, such as cost per day for a crew, costs per shot-point for seismic work, hourly basis for engineers, and the like. Frequently, employment contracts with geologists or geophysicists call for the employee to receive ownership interests in leases acquired as the result of exploration.
","snippet":"When the operating entity maintains its own exploration department, it is customary for costs of that department to be accumulated and allocated to exploration activities and projects. The allocation is based on standard…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:af2ce9243bce4db7d2828b29857a6cbb1c36de6ecc6142e8d11b3e0bd40414cd","downloaded_from":"2026-09-10T01:10:47.285Z","last_downloaded_at":"2026-09-10T01:10:47.285Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479155","source_sha256":"fd95ea1e16ee55164614e1b939db2c27f578496ba80184bc30d43823f973920a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6467178dd831913eb9c333385c79d006e045c2c06a8c0124203346e46cd617d3","downloaded_from":"2026-09-10T01:10:47.285Z","last_downloaded_at":"2026-09-10T01:10:47.285Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479155","source_sha256":"fd95ea1e16ee55164614e1b939db2c27f578496ba80184bc30d43823f973920a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a756ec30cb74733974eb2a4131569bb6f6fb8a1f597e64f93606cb9a57f6b572","downloaded_from":"2026-09-10T01:10:47.285Z","last_downloaded_at":"2026-09-10T01:10:47.285Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479155","source_sha256":"fd95ea1e16ee55164614e1b939db2c27f578496ba80184bc30d43823f973920a"}}],"enrichment":{"summary":"This Subtopic identifies costs unique to oil- and gas-producing activities that do not result in acquisition of an asset and therefore must be charged to expense as incurred. Under the successful efforts framework, geological and geophysical (G&G) costs, costs of carrying and retaining undeveloped properties, dry hole and bottom hole contributions, and the costs of exploratory wells (and exploratory-type stratigraphic test wells) that do not find proved reserves are expensed immediately. It also notes the customary practice of accumulating an in-house exploration department's costs and allocating them to exploration activities using standardized charges.","key_points":["Costs incurred in oil- and gas-producing activities that do not result in acquisition of an asset shall be charged to expense (720-932-25-1).","Examples of immediately expensed costs are geological and geophysical costs, costs of carrying and retaining undeveloped properties, and costs of drilling exploratory wells and exploratory-type stratigraphic test wells that do not find proved reserves (720-932-25-1).","Geological and geophysical costs, carrying and retaining costs of undeveloped properties, and dry hole and bottom hole contributions are charged to expense when incurred (720-932-25-1).","Carrying costs are expensed because they are incurred to maintain, not acquire, the entity's rights and do not enhance the properties' potential to contain reserves or the future benefits from the entity's assets (720-932-25-1).","Where an entity maintains its own exploration department, its costs are customarily accumulated and allocated to exploration activities and projects using standardized charges (e.g., cost per day for a crew, cost per shot-point for seismic work, hourly rates for engineers) (720-932-30-1).","Employment contracts with geologists or geophysicists frequently provide the employee ownership interests in leases acquired as a result of exploration (720-932-30-1).","The scope follows that of the Overall Subtopic in Section 932-10-15 (720-932-15-1)."],"categories":["Recognition","Industry-specific","Initial measurement"],"audience_level":"intermediate","student_note":"This is the expense side of the successful efforts method: the key test is whether the cost acquired an asset (proved reserves or property rights) or merely maintained/searched. Students often wrongly assume all exploration outlays can be capitalized pending outcome — G&G and carrying costs are expensed immediately regardless of later drilling success.","related_topics":["932-10","932-360","932-235","930-720"],"key_concepts":["geological and geophysical costs","carrying and retaining undeveloped properties","exploratory wells","stratigraphic test wells","dry hole and bottom hole contributions","successful efforts method","expense as incurred","exploration department cost allocation"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2d2e574918a2911c1df6b9e3a7053aa6cbab06e39ea4abf87f423852ad40e6b0","downloaded_from":"2026-09-10T01:10:32.559Z","last_downloaded_at":"2026-09-10T01:10:47.285Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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Gas","topic_title":"Interest","score":0.7597,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0febbb638866be838d95df8290d0808805d58d8f063209c3ff788f24ab6a626d","downloaded_from":"2026-09-10T01:50:54.044Z","last_downloaded_at":"2026-09-10T01:51:06.744Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"350-932","title":"Extractive Activities—Oil and Gas","topic_title":"Intangibles—Goodwill and Other","score":0.7475,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b3e8b6cbca6cf02877cbb7ee70fdeb07bf441633dace99b1e29d13d64bb3d286","downloaded_from":"2026-09-10T00:04:39.480Z","last_downloaded_at":"2026-09-10T00:04:44.333Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"470-932","title":"Extractive Activities—Oil and Gas","topic_title":"Debt","score":0.7467,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:952890184ca322a50d7832fa74ed16b61d2b29aeb5e6be1a5be3f72b9ec506c5","downloaded_from":"2026-09-10T00:33:36.319Z","last_downloaded_at":"2026-09-10T00:33:48.351Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established 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Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:33fd5880087248cd6e82472fd4b065161a83bf6f64b701849339e2bbdab7dba0","downloaded_from":"2026-09-10T01:10:22.861Z","last_downloaded_at":"2026-09-10T01:10:30.076Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-940","title":"Financial Services—Brokers and Dealers","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:48024cf78fb093005a1e2f49dd59f1f9f825ae769638da9af2243d7ae15b4e86","downloaded_from":"2026-09-10T01:10:51.348Z","last_downloaded_at":"2026-09-10T01:11:02.039Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by 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Its only substantive instruction is a cross-reference: for 12b-1 fees and contingent deferred sales charges, apply the cost guidance in Subtopic 946-720 (Investment Companies—Other Expenses). Its scope follows the broker-dealer Overall Subtopic scope in Section 940-10-15.","concepts":["mutual fund distribution costs","12b-1 fees","deferred sales charges","broker-dealers","other expenses","cross-reference guidance"],"categories":["Industry-specific","Recognition","Financial statement presentation"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-940-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
12b-1AddedAccounting Standards Update No. 2014-0905/28/2014
940-720-05-1AddedAccounting Standards Update No. 2014-0905/28/2014
940-720-15-1AddedAccounting Standards Update No. 2014-0905/28/2014
940-720-25-1AddedAccounting Standards Update No. 2014-0905/28/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\n12b-1 | Added | Accounting Standards Update No. 2014-09 | 05/28/2014 |\n| | | |\n940-720-0…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:924d164c6e94aea0e7509ec9f4778ac812a4da75186927617ebf7a197cf2b623","downloaded_from":"2026-09-10T01:10:51.348Z","last_downloaded_at":"2026-09-10T01:10:51.348Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477320","source_sha256":"cc4e3718b05d2dc56f65964b5e83222f2cd80677b99ebd80a7cc03e337a42f3a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b6db3abaf84d75e0c30cd67f3e82eb7ee4e242fff3344f866e059ea865564a24","downloaded_from":"2026-09-10T01:10:51.348Z","last_downloaded_at":"2026-09-10T01:10:51.348Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477320","source_sha256":"cc4e3718b05d2dc56f65964b5e83222f2cd80677b99ebd80a7cc03e337a42f3a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f140ab8b7540976d5324c9d7747a9fd9d32f3866b429e253aed041796dd8671d","downloaded_from":"2026-09-10T01:10:51.348Z","last_downloaded_at":"2026-09-10T01:10:51.348Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477320","source_sha256":"cc4e3718b05d2dc56f65964b5e83222f2cd80677b99ebd80a7cc03e337a42f3a"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-940-05-1","para":"05-1","html":"
This Subtopic addresses the accounting for mutual fund distribution costs for brokers and dealers in securities (broker-dealers).
","snippet":"This Subtopic addresses the accounting for mutual fund distribution costs for brokers and dealers in securities (broker-dealers).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6c24b499aee8f42fc98eb6747ea6e5b751c22c689a05dc81462361e90ae2a624","downloaded_from":"2026-09-10T01:10:53.777Z","last_downloaded_at":"2026-09-10T01:10:53.777Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478013","source_sha256":"ff153a3355f6173ba34149d32902bca0038e197b80fe28fb15b9485f5a4ccca1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c3b9d983417a9a1fd8462cce8fcfc6af90bbfa8f6a6557160921844ab5072b81","downloaded_from":"2026-09-10T01:10:53.777Z","last_downloaded_at":"2026-09-10T01:10:53.777Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478013","source_sha256":"ff153a3355f6173ba34149d32902bca0038e197b80fe28fb15b9485f5a4ccca1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fe080d239142f4bd38457f32c0e8c274d700bce2978ddc227984a0e660b75af9","downloaded_from":"2026-09-10T01:10:53.777Z","last_downloaded_at":"2026-09-10T01:10:53.777Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478013","source_sha256":"ff153a3355f6173ba34149d32902bca0038e197b80fe28fb15b9485f5a4ccca1"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-940-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dd4eb827a85d3b52d612c62e182fa8a2b7859c9aa9bbfaa5e565b2b504a50d49","downloaded_from":"2026-09-10T01:10:57.257Z","last_downloaded_at":"2026-09-10T01:10:57.257Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477801","source_sha256":"8999e31babd2b33c87c9991d8f124552fce5fddd716f967682fe7cc28640fd85"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:05a8c3f69768735563c6a490f21baae0900ed9987e32b05fe1351e7bf58a9600","downloaded_from":"2026-09-10T01:10:57.257Z","last_downloaded_at":"2026-09-10T01:10:57.257Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477801","source_sha256":"8999e31babd2b33c87c9991d8f124552fce5fddd716f967682fe7cc28640fd85"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6b810d74dc8579c5b10a4c95a5f06d4f0dcca55deffb12e30cf4e4c640de758f","downloaded_from":"2026-09-10T01:10:57.257Z","last_downloaded_at":"2026-09-10T01:10:57.257Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477801","source_sha256":"8999e31babd2b33c87c9991d8f124552fce5fddd716f967682fe7cc28640fd85"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-940-25-1","para":"25-1","html":"
With respect to 12b-1 fees and deferred sales charges, see the cost guidance in Subtopic 946-720.
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Its only substantive instruction is a cross-reference: for 12b-1 fees and contingent deferred sales charges, apply the cost guidance in Subtopic 946-720 (Investment Companies—Other Expenses). Its scope follows the broker-dealer Overall Subtopic scope in Section 940-10-15.","key_points":["The subtopic covers accounting for mutual fund distribution costs incurred by broker-dealers (720-940-05-1).","Scope is the same as the broker-dealer Overall Subtopic, Section 940-10-15 (720-940-15-1).","For 12b-1 fees and deferred sales charges, the applicable cost guidance is in Subtopic 946-720 (720-940-25-1).","The subtopic itself contains no independent recognition, measurement, or disclosure requirements beyond the cross-reference."],"categories":["Industry-specific","Recognition","Financial statement presentation"],"audience_level":"intermediate","student_note":"Recognize this as a pointer subtopic, not a source of rules: if asked how a broker-dealer accounts for 12b-1 fees or deferred sales charges, the answer is found in 946-720. A common mistake is assuming 720-940 permits capitalizing distribution costs; it prescribes nothing on its own.","related_topics":["946-720","940-10","940-20","720-10"],"key_concepts":["mutual fund distribution costs","12b-1 fees","deferred sales charges","broker-dealers","other expenses","cross-reference guidance"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3d13aa8be311c587a71c31db373917997eb8cfb57166e4b175595707c80b6abc","downloaded_from":"2026-09-10T01:10:51.348Z","last_downloaded_at":"2026-09-10T01:11:02.039Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"720-946","title":"Financial Services—Investment Companies","topic_title":"Other 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Dealers","topic_title":"Liabilities","score":0.7132,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b72c22594281577c188b91d15d51e5019d7ebeb5bb822250f9d7c8ad20d4639b","downloaded_from":"2026-09-10T00:18:03.082Z","last_downloaded_at":"2026-09-10T00:18:22.655Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"940-20","title":"Broker-Dealer Activities","topic_title":"Financial Services—Brokers and Dealers","score":0.7045,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d455e17a55c43cf19a9ebcad8c7420dbb7784f23137201504a92621f0199523f","downloaded_from":"2026-09-10T02:13:27.861Z","last_downloaded_at":"2026-09-10T02:13:58.835Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-940","title":"Financial Services—Brokers and Dealers","topic_title":"Other Assets and Deferred 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Lending","area":"Expenses","paragraphs":5,"summary":"This Subtopic governs how depository institutions account for assessments imposed by the Financing Corporation (FICO) under the Deposit Insurance Funds Act of 1996, which requires institutions with deposits assessable by the Deposit Insurance Fund to help finance outstanding FICO bonds. The single rule is that the FICO assessment is reported as a period cost as incurred (720-942-25-1) rather than capitalized or accrued for future periods.","concepts":["financing corporation assessment","deposit insurance fund","depository institution","period cost","expense as incurred","deposit insurance funds act of 1996"],"categories":["Recognition","Industry-specific"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-942-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
942-720-05-2 Amended Maintenance Update 2014-07 (PDF) 03/17/2014
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This Subtopic addresses the recognition of assessments by the Financing Corporation.
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On September 30, 1996, the Deposit Insurance Funds Act of 1996 was enacted. The Act authorizes the Financing Corporation (FICO) to impose an assessment on institutions with deposits assessable by the Deposit Insurance Fund to share in the cost of financing outstanding FICO bonds.
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The guidance in this Subtopic applies to all depository institutions that are subject to Financing Corporation assessment.
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A depository institution shall report the Financing Corporation (FICO) assessment as a period cost as incurred.
","snippet":"A depository institution shall report the Financing Corporation (FICO) assessment as a period cost as incurred.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3529043caa3aeef6c0c7570449ef74e763381e1b29f5a45471213bae14434297","downloaded_from":"2026-09-10T01:11:13.136Z","last_downloaded_at":"2026-09-10T01:11:13.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478051","source_sha256":"2a79e731d363ea71cc345ddde5cfced6a2dd119b890001a5d7ab49d4eda9a293"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ebfd300a6a1288d9c24e5060b5f0b6f8f7d7e8efde09c0d98a1a809b7f63dff3","downloaded_from":"2026-09-10T01:11:13.136Z","last_downloaded_at":"2026-09-10T01:11:13.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478051","source_sha256":"2a79e731d363ea71cc345ddde5cfced6a2dd119b890001a5d7ab49d4eda9a293"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d6edc1aaedc63e59c91dde4b464ee53d34deae93cdf67c036ef268e20ffc1b67","downloaded_from":"2026-09-10T01:11:13.136Z","last_downloaded_at":"2026-09-10T01:11:13.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478051","source_sha256":"2a79e731d363ea71cc345ddde5cfced6a2dd119b890001a5d7ab49d4eda9a293"}}],"enrichment":{"summary":"This Subtopic governs how depository institutions account for assessments imposed by the Financing Corporation (FICO) under the Deposit Insurance Funds Act of 1996, which requires institutions with deposits assessable by the Deposit Insurance Fund to help finance outstanding FICO bonds. The single rule is that the FICO assessment is reported as a period cost as incurred (720-942-25-1) rather than capitalized or accrued for future periods.","key_points":["The Subtopic applies to all depository institutions that are subject to Financing Corporation assessment (720-942-15-1).","The Deposit Insurance Funds Act of 1996 authorizes FICO to impose an assessment on institutions with deposits assessable by the Deposit Insurance Fund to share the cost of financing outstanding FICO bonds (720-942-05-2).","A depository institution shall report the FICO assessment as a period cost as incurred (720-942-25-1).","Because the assessment is expensed as incurred, no asset or liability is recognized for the institution's share of future FICO bond financing costs."],"categories":["Recognition","Industry-specific"],"audience_level":"intermediate","student_note":"A very short, single-rule industry Subtopic: the FICO assessment is simply an expense of the period incurred. The common mistake is treating the assessment as a prepaid asset or accruing the institution's share of the entire remaining FICO bond obligation instead of recognizing it period by period.","related_topics":["720","942","942-405","450"],"key_concepts":["financing corporation assessment","deposit insurance fund","depository institution","period cost","expense as incurred","deposit insurance funds act of 1996"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:38b9f7a675a7fbc4d29456da2e4795af3b2c4cca8ecd819c1730506a6c09503b","downloaded_from":"2026-09-10T01:11:04.995Z","last_downloaded_at":"2026-09-10T01:11:13.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"720-948","title":"Financial Services—Mortgage Banking","topic_title":"Other 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Lending","topic_title":"Investments—Other","score":0.5904,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a5374be67dca28bdee00595f832e8f05d226790428778cc9849fd36145d25522","downloaded_from":"2026-09-09T23:45:52.117Z","last_downloaded_at":"2026-09-09T23:46:08.804Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"942-10","title":"Overall","topic_title":"Financial Services—Depository and 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Because 944-30-25-1A permits capitalization only of incremental direct acquisition costs relating to successful contract acquisitions or renewals, everything else — non-qualifying acquisition-related costs and all indirect costs — is charged to expense as incurred (944-720-25-2).","concepts":["deferred acquisition costs","successful efforts capitalization","indirect costs","expense as incurred","direct-response advertising","agent commissions","general overhead","insurance entity"],"categories":["Recognition","Industry-specific","Initial measurement"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-944-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Acquisition CostsAmendedAccounting Standards Update No. 2010-2610/13/2010
944-720-25-1AmendedAccounting Standards Update No. 2010-2610/13/2010
944-720-25-2AmendedAccounting Standards Update No. 2010-2610/13/2010
944-720-55-1AmendedAccounting Standards Update No. 2014-0905/28/2014
944-720-55-1AddedAccounting Standards Update No. 2010-2610/13/2010
944-720-55-2AddedAccounting Standards Update No. 2010-2610/13/2010
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nAcquisition Costs | Amended | Accounting Standards Update No. 2010-26 | 10/13/2010 |\n| |…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1fcdf00e992100efc194e29b1ad8da0ea91f14e8a7b9b7e8379d3e8f4bdebbf5","downloaded_from":"2026-09-10T01:11:16.270Z","last_downloaded_at":"2026-09-10T01:11:16.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478241","source_sha256":"b6d3f081bd4a8cbedde675f177204bed9895eb9f39cd8790a840e7e558129d9e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9fe77131f922f6094c3e054670f24f246cb5d32c04fb90d50f8397560f3963ec","downloaded_from":"2026-09-10T01:11:16.270Z","last_downloaded_at":"2026-09-10T01:11:16.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478241","source_sha256":"b6d3f081bd4a8cbedde675f177204bed9895eb9f39cd8790a840e7e558129d9e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ee1650f4828fbfa1525ccd891d7e98e0087630f6031caac1e5f5aebe7aa5e603","downloaded_from":"2026-09-10T01:11:16.270Z","last_downloaded_at":"2026-09-10T01:11:16.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478241","source_sha256":"b6d3f081bd4a8cbedde675f177204bed9895eb9f39cd8790a840e7e558129d9e"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-944-05-1","para":"05-1","html":"
This Subtopic provides guidance to insurance entities on accounting for and financial reporting of other expenses.
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In a number of life insurance entities, virtually all sales expense is composed of compensation paid to agents. Such compensation relates directly to the amount of business produced by an agent.
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In other entities, considerably less compensation will be paid to agents; however, additional sums will be paid to salaried employees, such as branch managers and employees, or to field representatives, who call on and assist the agents.
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There are also entities that do not sell through agents. Some entities use mail, the internet, and other mass-marketing methods to sell their products.
","snippet":"There are also entities that do not sell through agents. Some entities use mail, the internet, and other mass-marketing methods to sell their products.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9e478c1e2fd0711b7d0dbad3bf718368f60cc44da3f20521bab514461258b808","downloaded_from":"2026-09-10T01:11:19.488Z","last_downloaded_at":"2026-09-10T01:11:19.488Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478744","source_sha256":"1dea937d9cba864918f2ac5e87e2813c882ad65801318a74d35a156e400a7cad"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbd7224940053413921178f8794b8b1ea75058f8e27d0d0008abae6f8f9949b2","downloaded_from":"2026-09-10T01:11:19.488Z","last_downloaded_at":"2026-09-10T01:11:19.488Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478744","source_sha256":"1dea937d9cba864918f2ac5e87e2813c882ad65801318a74d35a156e400a7cad"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f385b1e8af7d920ebb639ffcc4b2f0b330284026dd1dacfbb15a16fbb1ef4991","downloaded_from":"2026-09-10T01:11:19.488Z","last_downloaded_at":"2026-09-10T01:11:19.488Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478744","source_sha256":"1dea937d9cba864918f2ac5e87e2813c882ad65801318a74d35a156e400a7cad"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-944-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 944-10-15.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 944-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d16de187436588f8112a8e8a6ffab370bf562adbb9bd14b81f494fc866e88025","downloaded_from":"2026-09-10T01:11:23.343Z","last_downloaded_at":"2026-09-10T01:11:23.343Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479316","source_sha256":"05ff7e01d75e9646ed1972271a24e1eb52f9fb3aa5bee062f567f995fecc32f7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1ff3c692ee627d468c5fe5a0732c64f21d76d16f57364d8ccd4d37a2a55ecbdc","downloaded_from":"2026-09-10T01:11:23.343Z","last_downloaded_at":"2026-09-10T01:11:23.343Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479316","source_sha256":"05ff7e01d75e9646ed1972271a24e1eb52f9fb3aa5bee062f567f995fecc32f7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5b86f288b5e5c9a4007081a35e9bbfc7bb04b188e330c00c8b60c67d61110339","downloaded_from":"2026-09-10T01:11:23.343Z","last_downloaded_at":"2026-09-10T01:11:23.343Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479316","source_sha256":"05ff7e01d75e9646ed1972271a24e1eb52f9fb3aa5bee062f567f995fecc32f7"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-944-25-1","para":"25-1","html":"
Paragraph 944-30-25-1A requires that an insurance entity capitalize certain acquisition costs directly related to successful contracts.
","snippet":"Paragraph 944-30-25-1A requires that an insurance entity capitalize certain acquisition costs directly related to successful contracts.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:87463ae9e9550a741cb5d75968952c580a1b7b587e03206d8ded88166f070c90","downloaded_from":"2026-09-10T01:11:30.049Z","last_downloaded_at":"2026-09-10T01:11:30.049Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477550","source_sha256":"b564a1be453ba54303d768c7220036c3a941535da72ab6b664b4c05db67cdd6d"}},{"citation":"720-944-25-2","para":"25-2","html":"
An insurance entity shall charge to expense as incurred any of the following costs:
  1. a
    An acquisition-related cost that cannot be capitalized in accordance with paragraph 944-30-25-1A (for implementation guidance, see paragraph 944-720-55-1)
  2. b
    An indirect cost (for implementation guidance, see paragraph 944-720-55-2).
","snippet":"An insurance entity shall charge to expense as incurred any of the following costs:\n(a) An acquisition-related cost that cannot be capitalized in accordance with paragraph 944-30-25-1A (for implementation guidance, see p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dfee5756953e8c7c9710eb6fe9ea801e4ea43131102d5a19a77cb661d9980fec","downloaded_from":"2026-09-10T01:11:30.049Z","last_downloaded_at":"2026-09-10T01:11:30.049Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477550","source_sha256":"b564a1be453ba54303d768c7220036c3a941535da72ab6b664b4c05db67cdd6d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2c9f05e313a2c1b177305ed4c05aba80949cde7b65231dbe90e8e50f085cb54","downloaded_from":"2026-09-10T01:11:30.049Z","last_downloaded_at":"2026-09-10T01:11:30.049Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477550","source_sha256":"b564a1be453ba54303d768c7220036c3a941535da72ab6b664b4c05db67cdd6d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:efc2fbe806960afe7bfeda24a1d8a7ee565ba3f27303d06dc6a3c03b6877a163","downloaded_from":"2026-09-10T01:11:30.049Z","last_downloaded_at":"2026-09-10T01:11:30.049Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477550","source_sha256":"b564a1be453ba54303d768c7220036c3a941535da72ab6b664b4c05db67cdd6d"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"720-944-55-1","para":"55-1","html":"
This implementation guidance addresses paragraph 944-720-25-2(a), which requires that an insurance entity charge to expense as incurred any acquisition-related cost that cannot be capitalized in accordance with paragraphs 944-30-25-1A through 25-1AA. Such costs include costs of all of the following:
  1. a
    Soliciting potential customers (except direct-response advertising capitalized in accordance with paragraph 944-30-25-1AA)
  2. b
    Market research
  3. c
    Training
  4. d
    Administration
  5. e
    Unsuccessful acquisition or renewal efforts (except direct-response advertising capitalized in accordance with paragraph 944-30-25-1AA)
  6. f
    Product development.
","snippet":"This implementation guidance addresses paragraph 944-720-25-2(a), which requires that an insurance entity charge to expense as incurred any acquisition-related cost that cannot be capitalized in accordance with paragraph…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7de44a8fe7a14340c6387d05f5eb495d1880bcca41cd6fd04d049361406dc9ca","downloaded_from":"2026-09-10T01:11:34.185Z","last_downloaded_at":"2026-09-10T01:11:34.185Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478516","source_sha256":"4aadb7d7b55b374569ec633ba24a3df0931e6f209a8c595fa9084236ee640c51"}},{"citation":"720-944-55-2","para":"55-2","html":"
This implementation guidance addresses paragraph 944-720-25-2(b), which requires that an insurance entity charge to expense as incurred any indirect cost. Such costs include all of the following:
  1. a
    Administrative costs
  2. b
    Rent
  3. c
    Depreciation
  4. d
    Occupancy costs
  5. e
    Equipment costs (including data processing equipment dedicated to acquiring insurance contracts)
  6. f
    Other general overhead.
","snippet":"This implementation guidance addresses paragraph 944-720-25-2(b), which requires that an insurance entity charge to expense as incurred any indirect cost. Such costs include all of the following:\n(a) Administrative costs…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:83ca83e558d456498cecde9dbbd1c7643db958f0569f695a388ce830d99e2710","downloaded_from":"2026-09-10T01:11:34.185Z","last_downloaded_at":"2026-09-10T01:11:34.185Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478516","source_sha256":"4aadb7d7b55b374569ec633ba24a3df0931e6f209a8c595fa9084236ee640c51"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d3782c4c9bf206ff4668fc4f12585cc60e7c34e0769fad98cdc356c777ef2e33","downloaded_from":"2026-09-10T01:11:34.185Z","last_downloaded_at":"2026-09-10T01:11:34.185Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478516","source_sha256":"4aadb7d7b55b374569ec633ba24a3df0931e6f209a8c595fa9084236ee640c51"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d5fab1e7324d30c4d23a5e396ffb8f33560c460005b1001ed1cf0ea2cd5e334e","downloaded_from":"2026-09-10T01:11:34.185Z","last_downloaded_at":"2026-09-10T01:11:34.185Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478516","source_sha256":"4aadb7d7b55b374569ec633ba24a3df0931e6f209a8c595fa9084236ee640c51"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Other Expenses","paragraphs":[{"citation":"720-944-60-1","para":"60-1","html":"
For guidance on accounting for insurance costs by any insured entity, see Subtopic 720-20.
","snippet":"For guidance on accounting for insurance costs by any insured entity, see Subtopic 720-20.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b7a320c2e75a8d56e68cba80de670882099d6938d3f58d9c78215cd4fe5872ab","downloaded_from":"2026-09-10T01:11:36.351Z","last_downloaded_at":"2026-09-10T01:11:36.351Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479085","source_sha256":"5aa2f8d6b3e17b7de77d8dd6f2c6a9ffdaa900d502eafece5b97dc3f54bf5b97"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09229cee37f30fdfdf60e7b5756ffad8223760b45b8dfaab8767eb94b344357b","downloaded_from":"2026-09-10T01:11:36.351Z","last_downloaded_at":"2026-09-10T01:11:36.351Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479085","source_sha256":"5aa2f8d6b3e17b7de77d8dd6f2c6a9ffdaa900d502eafece5b97dc3f54bf5b97"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:79beb7843fef31fbf2e1ecbd276ca63a8840e96b17cad18d5760b91a0953f549","downloaded_from":"2026-09-10T01:11:36.351Z","last_downloaded_at":"2026-09-10T01:11:36.351Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479085","source_sha256":"5aa2f8d6b3e17b7de77d8dd6f2c6a9ffdaa900d502eafece5b97dc3f54bf5b97"}}],"enrichment":{"summary":"ASC 944-720 tells insurance entities which costs must be expensed as incurred rather than capitalized as deferred acquisition costs. Because 944-30-25-1A permits capitalization only of incremental direct acquisition costs relating to successful contract acquisitions or renewals, everything else — non-qualifying acquisition-related costs and all indirect costs — is charged to expense as incurred (944-720-25-2).","key_points":["944-720-25-2(a) requires an insurance entity to expense as incurred any acquisition-related cost that fails the capitalization criteria of 944-30-25-1A.","944-720-25-2(b) requires an insurance entity to expense as incurred all indirect costs.","Per 944-720-55-1, non-capitalizable acquisition-related costs include soliciting potential customers, market research, training, administration, unsuccessful acquisition or renewal efforts, and product development — except direct-response advertising capitalized under 944-30-25-1AA.","Per 944-720-55-2, indirect costs that must be expensed include administrative costs, rent, depreciation, occupancy costs, equipment costs (including data processing equipment dedicated to acquiring insurance contracts), and other general overhead.","The Subtopic follows the scope of 944-10-15 (944-720-15-1) and observes that sales expense structures vary — agent commissions tied to business produced, salaried branch/field personnel, or mass-marketing channels (944-720-05-2 through 05-4).","For accounting for insurance costs by an insured (non-insurer) entity, look to Subtopic 720-20 rather than this Subtopic (944-720-60-1)."],"categories":["Recognition","Industry-specific","Initial measurement"],"audience_level":"intermediate","student_note":"This is the mirror image of the DAC rules: after ASU 2010-26 only incremental direct costs of *successful* contract acquisitions may be deferred, so know the expense-as-incurred lists cold. The most common mistake is deferring costs of unsuccessful selling efforts, training, or overhead allocated to acquisition activity — only direct-response advertising meeting 944-30-25-1AA escapes immediate expensing.","related_topics":["944-30","944-10","720-20","944-40","340-20"],"key_concepts":["deferred acquisition costs","successful efforts capitalization","indirect costs","expense as incurred","direct-response advertising","agent commissions","general overhead","insurance entity"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0f10e90aee0cae139a876a0abf09f7bd8d29b47e5094ed65fc313e521c4a5103","downloaded_from":"2026-09-10T01:11:16.270Z","last_downloaded_at":"2026-09-10T01:11:38.484Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"340-944","title":"Financial Services—Insurance","topic_title":"Other Assets and Deferred Costs","score":0.7498,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:613ed6123e5a82c31c56288e6f5a8f827aa325eea7817de03f05cd0c117e3cc5","downloaded_from":"2026-09-09T23:57:59.765Z","last_downloaded_at":"2026-09-09T23:58:11.192Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"944-30","title":"Acquisition Costs","topic_title":"Financial Services—Insurance","score":0.7127,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:46fbbc5b9c2806056dfb0243a3354e79f7710b2167c74655dd703d8abf522bec","downloaded_from":"2026-09-10T02:15:49.991Z","last_downloaded_at":"2026-09-10T02:16:24.166Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"815-944","title":"Financial Services—Insurance","topic_title":"Derivatives and Hedging","score":0.7045,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:417ffce5827e3e4940258111ca421f294909455f6fad8178749d2ed0abd04d35","downloaded_from":"2026-09-10T01:40:24.221Z","last_downloaded_at":"2026-09-10T01:40:44.205Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"405-944","title":"Financial Services—Insurance","topic_title":"Liabilities","score":0.6978,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:81d911e932c288bafe322b017bf80b34157c537883876a061cb0400d27669061","downloaded_from":"2026-09-10T00:18:57.648Z","last_downloaded_at":"2026-09-10T00:19:09.841Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-954","title":"Health Care Entities","topic_title":"Other Expenses","score":0.6937,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7d4e7e1abd852f7b4efc712ecf6f557881fd0065479e49ef700a266273cdb00","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:54.691Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"944-20","title":"Insurance Activities","topic_title":"Financial Services—Insurance","score":0.6793,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8e822aee3b6d8a4452e9879f28462b3325eacd5dadd990ecc1984cb01daf748d","downloaded_from":"2026-09-10T02:14:58.695Z","last_downloaded_at":"2026-09-10T02:15:47.018Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-942","title":"Financial Services—Depository and Lending","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:89b153403e268bee1a49c42a1f6dec26fe51e4009a5829cc5be7df311049f004","downloaded_from":"2026-09-10T01:11:04.995Z","last_downloaded_at":"2026-09-10T01:11:13.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-946","title":"Financial Services—Investment Companies","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:31a58dc0b1d30670d9b1f0906f3cde916a4b5a8edf3548f6bed88afeea7ee12d","downloaded_from":"2026-09-10T01:11:42.404Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1454fb9e46ed68384a7d796f4dece3051a9f030cd2bafc44f5980cc672c9d2d1","downloaded_from":"2026-09-10T01:11:16.270Z","last_downloaded_at":"2026-09-10T01:11:38.484Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-946","topic":"720","title":"Financial Services—Investment Companies","area":"Expenses","paragraphs":8,"summary":"This Subtopic tells investment advisers and mutual fund distributors how to account for costs incurred to distribute fund shares. The general rule: if the adviser does not receive both 12b-1 fees and contingent-deferred sales fees, the distribution/offering costs fail the definition of an asset and must be expensed as incurred (with initial offering costs treated as start-up costs under Subtopic 720-15). Distributors of no-front-end-load mutual funds instead defer and amortize incremental direct costs and expense indirect costs as incurred.","concepts":["12b-1 fees","contingent-deferred sales fees","offering costs","distribution costs","incremental direct costs","start-up costs","front-end load","definition of an asset"],"categories":["Recognition","Industry-specific","Subsequent measurement"],"level":"advanced","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-946-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
12b-1 Added Accounting Standards Update No. 2014-09 05/28/2014
Contingent-Deferred Sales Load Added Accounting Standards Update No. 2014-09 05/28/2014
Front-End Load Added Accounting Standards Update No. 2014-09 05/28/2014
Offering Costs Added Accounting Standards Update No. 2014-09 05/28/2014
946-720-05-1 Added Accounting Standards Update No. 2014-09 05/28/2014
946-720-15-1 Added Accounting Standards Update No. 2014-09 05/28/2014
946-720-15-2 Added Accounting Standards Update No. 2014-09 05/28/2014
946-720-25-1 through 25-4
 Added Accounting Standards Update No. 2014-09 05/28/2014
946-720-25-2 Amended Accounting Standards Update No. 2024-02 03/29/2024
946-720-25-3 Amended Accounting Standards Update No. 2016-20 12/21/2016
946-720-25-4 Amended Accounting Standards Update No. 2016-20 12/21/2016
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\n12b-1 | Added | Accounting Standards Update No. 2014-09 | 05/28/2014 |\nContingent-Deferr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c6d068d0ab7e6f6cd63e48f6c97d79d2c0fb0b7cf20631163bac2cafd13ee475","downloaded_from":"2026-09-10T01:11:42.404Z","last_downloaded_at":"2026-09-10T01:11:42.404Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477254","source_sha256":"05401901d907b757cc4021ad812e717a989d86c8a366debd113d0295d96a1f29"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6c016d464394bd68b5033aff4e7b7782d6965283c47601a5dfa4f0a6ce1a7e0e","downloaded_from":"2026-09-10T01:11:42.404Z","last_downloaded_at":"2026-09-10T01:11:42.404Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477254","source_sha256":"05401901d907b757cc4021ad812e717a989d86c8a366debd113d0295d96a1f29"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c301ed192b78d8030d4e29c132bce08f389b6f44a230e5209d2650141ae99a47","downloaded_from":"2026-09-10T01:11:42.404Z","last_downloaded_at":"2026-09-10T01:11:42.404Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477254","source_sha256":"05401901d907b757cc4021ad812e717a989d86c8a366debd113d0295d96a1f29"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-946-05-1","para":"05-1","html":"
This Subtopic addresses:
  1. a
    Investment adviser's offering costs when both 12b-1 fees and contingent-deferred sales fees are not received
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2014-09.
  3. c
    Distribution costs for mutual funds with no front-end sales fee.
","snippet":"This Subtopic addresses:\n(a) Investment adviser's offering costs when both 12b-1 fees and contingent-deferred sales fees are not received\n(b) Subparagraph superseded by Accounting Standards Update No. 2014-09.\n(c) Distri…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d5770312eb59c2a1ad9843ce96927761c0e2c4eda4c80b313dc6f5a3874920fa","downloaded_from":"2026-09-10T01:11:45.518Z","last_downloaded_at":"2026-09-10T01:11:45.518Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478877","source_sha256":"dd73f83f9456a1b541c088b40fa12bab74d28788f5817f95d65ec20268bc6c7e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:44f9b327bc0482998b4ba28a870774c0f2b9b32b08355e5913ed77757db889ae","downloaded_from":"2026-09-10T01:11:45.518Z","last_downloaded_at":"2026-09-10T01:11:45.518Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478877","source_sha256":"dd73f83f9456a1b541c088b40fa12bab74d28788f5817f95d65ec20268bc6c7e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d78b91a55289673f9cc04a16c6b28efc54ecebffbc962e857c514e63674375e5","downloaded_from":"2026-09-10T01:11:45.518Z","last_downloaded_at":"2026-09-10T01:11:45.518Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478877","source_sha256":"dd73f83f9456a1b541c088b40fa12bab74d28788f5817f95d65ec20268bc6c7e"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-946-15-1","para":"15-1","html":"
This Subtopic has its own discrete scope, which is separate and distinct from the pervasive scope for this Topic as outlined in Section 946-10-15.
","snippet":"This Subtopic has its own discrete scope, which is separate and distinct from the pervasive scope for this Topic as outlined in Section 946-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:634f6dacb6407523aa9a3cfab60b6fd66d6265717c7aaf8ae6de47ca2002f581","downloaded_from":"2026-09-10T01:11:47.766Z","last_downloaded_at":"2026-09-10T01:11:47.766Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478539","source_sha256":"6bd401c194517608b66cc94a6a38ca3008b6085f0ce77d2431d98dad2805dfa7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d290c08e24e7cd3d5af71207cf474a092b4f60ac939d3d3e539af0e238267187","downloaded_from":"2026-09-10T01:11:47.766Z","last_downloaded_at":"2026-09-10T01:11:47.766Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478539","source_sha256":"6bd401c194517608b66cc94a6a38ca3008b6085f0ce77d2431d98dad2805dfa7"}},{"block":null,"heading":"Entities","paragraphs":[{"citation":"720-946-15-2","para":"15-2","html":"
The guidance in this Subtopic applies to all investment advisers and distributors within the scope of either the Overall Subtopic (see Section 946-10-15) or Subtopic 940-10 (see Section 940-10-15).
","snippet":"The guidance in this Subtopic applies to all investment advisers and distributors within the scope of either the Overall Subtopic (see Section 946-10-15) or Subtopic 940-10 (see Section 940-10-15).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fe244b0082dfdc63c878687873592079f917236146ae57bfc2e583bc5ca23a17","downloaded_from":"2026-09-10T01:11:47.766Z","last_downloaded_at":"2026-09-10T01:11:47.766Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478539","source_sha256":"6bd401c194517608b66cc94a6a38ca3008b6085f0ce77d2431d98dad2805dfa7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e97f0df906f24bd8869ef91eec19b58c7e24d02001326eaf44be8f09e1f83a6f","downloaded_from":"2026-09-10T01:11:47.766Z","last_downloaded_at":"2026-09-10T01:11:47.766Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478539","source_sha256":"6bd401c194517608b66cc94a6a38ca3008b6085f0ce77d2431d98dad2805dfa7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c6d8016d53c93eed3fd3a60472d48e911cc1a59a15f1c418a76893269907ad60","downloaded_from":"2026-09-10T01:11:47.766Z","last_downloaded_at":"2026-09-10T01:11:47.766Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478539","source_sha256":"6bd401c194517608b66cc94a6a38ca3008b6085f0ce77d2431d98dad2805dfa7"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Investment Adviser's Offering Costs When both 12b-1 Fees and Contingent-Deferred Sales Fees Are Not Received","paragraphs":[{"citation":"720-946-25-1","para":"25-1","html":"
Paragraph 946-720-25-4 provides guidance on accounting by investment advisers who are reimbursed, for offering costs paid, through both 12b-1 fees and contingent-deferred sales fees. Accordingly, the accounting by those investment advisers for offering costs are outside the scope of the guidance in paragraphs
946-720-25-2 through 25-3
.
","snippet":"Paragraph 946-720-25-4 provides guidance on accounting by investment advisers who are reimbursed, for offering costs paid, through both 12b-1 fees and contingent-deferred sales fees. Accordingly, the accounting by those …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f3d6ff4dd949c3a52a30633d9aa0bd4068a4f8dfabfc52a9a2a1313c7c90e3f","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}},{"citation":"720-946-25-2","para":"25-2","html":"
Benefits expected from the expenditures paid by an investment adviser in connection with the distribution of shares of a fund in circumstances in which the investment adviser does not receive both 12b-1 fees and contingent-deferred sales fees do not meet the definition of an asset of the investment adviser as provided in FASB Concepts Statement No. 6, Elements of Financial Statements. Accordingly, such offering costs paid by the investment adviser shall be expensed as incurred. Initial offering costs paid by an investment adviser that does not receive both 12b-1 fees and contingent-deferred sales fees are start-up costs of the investment adviser, which should be accounted for in accordance with Subtopic 720-15.
Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance:
105-10-65-9 Costs incurred by an investment adviser in connection with the distribution of shares of a fund in circumstances in which the investment adviser does not receive both 12b-1 fees and contingent-deferred sales fees shall be expensed as incurred. Initial offering costs paid by an investment adviser that does not receive both 12b-1 fees and contingent-deferred sales fees are start-up costs of the investment adviser, which should be accounted for in accordance with Subtopic 720-15.
","snippet":"Benefits expected from the expenditures paid by an investment adviser in connection with the distribution of shares of a fund in circumstances in which the investment adviser does not receive both 12b-1 fees and continge…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7fcc2cf4f47c65b27a15de714239b6cc7aef464e098d6443ea4427a0c93067f8","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:557fd23eab799f6bc40be2c59fe3ea56c9b9f6e9ed71179f49f7120340d90c39","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}},{"block":null,"heading":"Distribution Costs for Funds","paragraphs":[{"citation":"720-946-25-3","para":"25-3","html":"
The guidance in paragraph 946-720-25-2 applies also to distribution plans of open-end investment companies permitted under Rule 12b-1. Some closed-end interval funds incur distribution-related fees (similar to 12b-1 fees) and impose early withdrawal charges (similar to contingent-deferred sales fees) pursuant to exemptive orders issued under the Investment Company Act of 1940. In addition, certain funds not subject to regulation under the Investment Company Act of 1940 also may incur fees and impose charges that are substantially the same as 12b-1 fees and contingent-deferred sales fees, respectively. In those instances, an entity shall defer and amortize the incremental direct costs and shall account for offering costs incurred for distribution of those funds in a manner similar to the accounting specified in paragraph 946-720-25-4.
","snippet":"The guidance in paragraph 946-720-25-2 applies also to distribution plans of open-end investment companies permitted under Rule 12b-1. Some closed-end interval funds incur distribution-related fees (similar to 12b-1 fees…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:daf16ecc55eb9881b114b2acfd21dc0127ff658fb4ad5e207f3967ae81c031b6","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}},{"citation":"720-946-25-4","para":"25-4","html":"
Distributors of mutual funds that do not have a front-end load shall defer and amortize the incremental direct costs and shall expense the indirect costs when incurred.
","snippet":"Distributors of mutual funds that do not have a front-end load shall defer and amortize the incremental direct costs and shall expense the indirect costs when incurred.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eef592665f6aab22db7c82cace7dbb36ea992bb579d36535773f636dba3df62f","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3361c2f1777e4a13a6807484b5e7e72439774b3acd2690c8b608bc40945ee478","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3bdc9e880e586e91e2ff924f7eb52ec16f426635fde3651d04304d681ba3f32b","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}}],"enrichment":{"summary":"This Subtopic tells investment advisers and mutual fund distributors how to account for costs incurred to distribute fund shares. The general rule: if the adviser does not receive both 12b-1 fees and contingent-deferred sales fees, the distribution/offering costs fail the definition of an asset and must be expensed as incurred (with initial offering costs treated as start-up costs under Subtopic 720-15). Distributors of no-front-end-load mutual funds instead defer and amortize incremental direct costs and expense indirect costs as incurred.","key_points":["The Subtopic has its own discrete scope, separate from the pervasive scope of Section 946-10-15, and applies to all investment advisers and distributors within the scope of either Subtopic 946-10 or Subtopic 940-10 (720-946-15-1 through 15-2).","Advisers reimbursed through both 12b-1 fees and contingent-deferred sales fees follow paragraph 946-720-25-4 and are outside the scope of 720-946-25-2 through 25-3 (720-946-25-1).","When an investment adviser does not receive both 12b-1 fees and contingent-deferred sales fees, expected benefits from distribution expenditures do not meet the FASB Concepts Statement No. 6 definition of an asset, so those offering costs are expensed as incurred (720-946-25-2).","Initial offering costs paid by an adviser that does not receive both fee types are start-up costs accounted for under Subtopic 720-15 (720-946-25-2).","The expense-as-incurred guidance also applies to Rule 12b-1 distribution plans of open-end investment companies; however, closed-end interval funds and unregistered funds with fees/charges substantially the same as 12b-1 fees and contingent-deferred sales fees must defer and amortize incremental direct costs in a manner similar to 946-720-25-4 (720-946-25-3).","Distributors of mutual funds without a front-end load defer and amortize incremental direct costs and expense indirect costs when incurred (720-946-25-4).","Amended guidance effective for periods beginning after December 16, 2024 (public) / December 16, 2025 (nonpublic), with transition guidance in 105-10-65-9, restates the rule as costs incurred in connection with distribution of fund shares being expensed as incurred (720-946-25-2)."],"categories":["Recognition","Industry-specific","Subsequent measurement"],"audience_level":"advanced","student_note":"The pivot point is whether the adviser receives BOTH 12b-1 fees and contingent-deferred sales fees — only then is deferral and amortization of incremental direct costs appropriate; otherwise everything is expensed as incurred. Students often wrongly assume any fund distribution cost can be capitalized because future fee revenue is expected, but expected benefits alone do not create an asset under Concepts Statement No. 6.","related_topics":["946-720","720-15","940-10","946-10","105-10"],"key_concepts":["12b-1 fees","contingent-deferred sales fees","offering costs","distribution costs","incremental direct costs","start-up costs","front-end load","definition of an asset"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:691e2023b4d5eca4d152d97ca75616d922278acb83e5932af0888e962bc136b1","downloaded_from":"2026-09-10T01:11:42.404Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"720-940","title":"Financial Services—Brokers and 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Banking","area":"Expenses","paragraphs":4,"summary":"This Subtopic governs how a mortgage banking enterprise accounts for fees it pays to permanent investors to assure the ultimate sale of residential or commercial loans. Such commitment fees are expensed when the loans are actually sold to the permanent investor, or earlier if it becomes evident the commitment will not be used. Because residential commitments typically cover blocks of loans, the fee is allocated to individual loan transactions on the ratio of the individual loan amount to the total commitment amount.","concepts":["loan commitment fees","permanent investor","mortgage banking","expense recognition","block of loans allocation","sale of loans"],"categories":["Recognition","Industry-specific","Financial instruments"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-948-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Permanent Investor Added Maintenance Update 2017-06 (PDF) 04/07/2017
948-720-25-1 Amended Maintenance Update 2017-06 (PDF) 04/07/2017
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This Subtopic addresses the accounting for residential or commercial loan commitment fees.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 948-10-15.
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Fees paid to permanent investors to ensure the ultimate sale of the loans (residential or commercial loan commitment fees) shall be recognized as expense when the loans are sold to permanent investors or when it becomes evident the commitment will not be used. Because residential loan commitment fees ordinarily relate to blocks of loans, fees recognized as revenue or expense as the result of individual loan transactions shall be based on the ratio of the individual loan amount to the total commitment amount.
","snippet":"Fees paid to permanent investors to ensure the ultimate sale of the loans (residential or commercial loan commitment fees) shall be recognized as expense when the loans are sold to permanent investors or when it becomes …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3bbc93db509f76d443768a8c4175bbac72d049a9cdb4ed2704453c02cedc9284","downloaded_from":"2026-09-10T01:12:06.328Z","last_downloaded_at":"2026-09-10T01:12:06.328Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478074","source_sha256":"afda7b81d245e15c529b4c914b897a94d73e1ba7351e22a491dcb2b9d3a3c8b9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bdc88c47d032404dd5a9e05af9685861536c8fe353b3077f6123915f62fc018e","downloaded_from":"2026-09-10T01:12:06.328Z","last_downloaded_at":"2026-09-10T01:12:06.328Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478074","source_sha256":"afda7b81d245e15c529b4c914b897a94d73e1ba7351e22a491dcb2b9d3a3c8b9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:799ff54cb396c37a87459be3cb6fa665ffb16836a68ed8e96cd0ce3342f09a36","downloaded_from":"2026-09-10T01:12:06.328Z","last_downloaded_at":"2026-09-10T01:12:06.328Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478074","source_sha256":"afda7b81d245e15c529b4c914b897a94d73e1ba7351e22a491dcb2b9d3a3c8b9"}}],"enrichment":{"summary":"This Subtopic governs how a mortgage banking enterprise accounts for fees it pays to permanent investors to assure the ultimate sale of residential or commercial loans. Such commitment fees are expensed when the loans are actually sold to the permanent investor, or earlier if it becomes evident the commitment will not be used. Because residential commitments typically cover blocks of loans, the fee is allocated to individual loan transactions on the ratio of the individual loan amount to the total commitment amount.","key_points":["The Subtopic addresses accounting for residential or commercial loan commitment fees (720-948-05-1).","Fees paid to permanent investors to ensure the ultimate sale of loans are recognized as expense when the loans are sold to the permanent investors, or when it becomes evident the commitment will not be used (720-948-25-1).","Because residential loan commitment fees ordinarily relate to blocks of loans, amounts recognized as revenue or expense from individual loan transactions are based on the ratio of the individual loan amount to the total commitment amount (720-948-25-1).","Scope follows the Overall Subtopic scope for mortgage banking activities in Section 948-10-15 (720-948-15-1)."],"categories":["Recognition","Industry-specific","Financial instruments"],"audience_level":"intermediate","student_note":"Remember the direction of the payment: here the mortgage banker pays a fee to a permanent investor, so it is an expense deferred until the loans are sold (or the commitment lapses), not an immediate period cost. The common mistake is expensing the fee when paid rather than matching it to the loan sale, and forgetting the pro-rata allocation across the block of loans.","related_topics":["948-10","948-310","310-20","860"],"key_concepts":["loan commitment fees","permanent investor","mortgage banking","expense recognition","block of loans allocation","sale of loans"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:159b0965df136bb7b53b141acae64d014afbd96e4751823fd0051e46e9aaa397","downloaded_from":"2026-09-10T01:11:56.550Z","last_downloaded_at":"2026-09-10T01:12:06.328Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"310-948","title":"Financial Services—Mortgage 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Paragraph Action Accounting Standards Update Date
Continuing Franchise Fees Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
Contract Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
Contract Added Accounting Standards Update No. 2014-09 05/28/2014
Customer Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
Customer Added Accounting Standards Update No. 2014-09 05/28/2014
Franchisor Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
952-720-05-1 Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
952-720-15-1 Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
952-720-25-1 Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
952-720-25-2 Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
952-720-25-2 Amended Accounting Standards Update No. 2014-09 05/28/2014
952-720-45-1 Superseded Maintenance Update 2017-09 (PDF) 05/30/2017
952-720-45-1 Added Accounting Standards Update No. 2014-09 05/28/2014
952-720-50-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014
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As a result, the subtopic contains no operative guidance today; franchisor cost accounting is addressed under ASC 606 and ASC 340-40.","key_points":["All of the scope, recognition, presentation and other-presentation-matters paragraphs (720-952-05-1, 15-1, 25-1, 25-2, 45-1) were superseded by Maintenance Update 2017-09, leaving no substantive expense guidance for franchisors in this subtopic.","The single disclosure paragraph, 720-952-50-1, was superseded by Accounting Standards Update No. 2014-09, the revenue recognition standard.","Because ASU 2014-09 replaced the legacy franchisor revenue and related cost model, costs of obtaining and fulfilling franchise contracts are now evaluated under ASC 340-40 and revenue under ASC 606.","A superseded paragraph number is retained in the Codification as a placeholder; students should not cite it as current GAAP but may need it when analyzing pre-adoption financial statements."],"categories":["Industry-specific","Revenue","Transition and effective dates","Disclosure"],"audience_level":"intermediate","student_note":"This subtopic is a shell: knowing that it is fully superseded is the point, and the common mistake is citing old franchisor cost-deferral rules that ASU 2014-09 eliminated. For current franchisor accounting, go to ASC 606 for revenue and ASC 340-40 for contract costs.","related_topics":["606","340-40","952","952-606","720"],"key_concepts":["superseded guidance","franchisor costs","franchise fee revenue","costs to obtain a contract","costs to fulfill a contract","industry-specific expense guidance"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5a4645d474503b25db6ae80178a16d4f370bc612afd7288515e6fdd6bc7348d2","downloaded_from":"2026-09-10T01:12:09.288Z","last_downloaded_at":"2026-09-10T01:12:26.241Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"340-952","title":"Franchisors","topic_title":"Other Assets and Deferred Costs","score":0.8572,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e5361af653f17d3df5a2d63d318da523101f670e0e98bd380e96bb70a85adb43","downloaded_from":"2026-09-09T23:58:29.537Z","last_downloaded_at":"2026-09-09T23:58:41.693Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"440-952","title":"Franchisors","topic_title":"Commitments","score":0.7938,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5182d7963d2a11c8d6a178ee85461d9419ac6770526e4125bb47599c75d0673b","downloaded_from":"2026-09-10T00:26:07.459Z","last_downloaded_at":"2026-09-10T00:26:21.596Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"605-952","title":"Franchisors","topic_title":"Revenue Recognition","score":0.7887,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b4943aaacba97784af644fcfebadc743a512227ea51294bbe3ebf8bc6ce8be32","downloaded_from":"2026-09-10T00:50:14.020Z","last_downloaded_at":"2026-09-10T00:50:38.705Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"810-952","title":"Franchisors","topic_title":"Consolidation","score":0.7669,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:137377ce3a1fb2a0779bc365e8fc1d2701cd0af0b1b4498a4903be03ee2fd93f","downloaded_from":"2026-09-10T01:32:30.134Z","last_downloaded_at":"2026-09-10T01:32:39.647Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"705-912","title":"Contractors—Federal Government","topic_title":"Cost of Sales and Services","score":0.7419,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:df82eda0e1880de0b3aadae6a6c2086c99f3d9c59edfbf8dd73f943ea6ea93ea","downloaded_from":"2026-09-10T00:56:15.317Z","last_downloaded_at":"2026-09-10T00:56:24.655Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"952-10","title":"Overall","topic_title":"Franchisors","score":0.7309,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:80be5ee9f347717eca1d1c2fef6d09e9645945c47f3300b0ac9f9cde99e2b6a3","downloaded_from":"2026-09-10T02:20:27.287Z","last_downloaded_at":"2026-09-10T02:20:55.063Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-948","title":"Financial Services—Mortgage Banking","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:228321ae75950229bc67a06d8bc6fba4f1008bf8a859cb4773931740c8e79f16","downloaded_from":"2026-09-10T01:11:56.550Z","last_downloaded_at":"2026-09-10T01:12:06.328Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-954","title":"Health Care Entities","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2da86a85d49c314383ec5daab119185e384ab7badc1c3ea2d5be1af4a5798312","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:54.691Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:448f161df526035cde95288a01139c2a350586605bee8f68663aefc741b8a5fc","downloaded_from":"2026-09-10T01:12:09.288Z","last_downloaded_at":"2026-09-10T01:12:26.241Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-954","topic":"720","title":"Health Care Entities","area":"Expenses","paragraphs":22,"summary":"ASC 720-954 governs how health care entities account for insurance-related and other operating expenses, principally retrospectively rated insurance policies, claims-made policies, malpractice loss accruals, multiprovider captive insurance arrangements, and stop-loss insurance. The core rules turn on whose loss experience drives the premium: if the entity's own experience, the minimum premium is expensed over the coverage period and recoveries are deferred until estimated losses exceed the stipulated maximum premium; if a group's experience, additional premiums or refunds are accrued based on group experience to date, including asserted and unasserted, reported and unreported claims.","concepts":["retrospectively rated insurance policy","stop-loss insurance","multiprovider captive insurance entity","claims-made policy","incurred but not reported claims","malpractice loss accrual","acquisition costs","common trust fund"],"categories":["Recognition","Subsequent measurement","Disclosure","Industry-specific"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-954-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Prepaid Health Care Services Superseded Accounting Standards Update No. 2014-09 05/28/2014
Stop-Loss Insurance Added Accounting Standards Update No. 2014-06 03/14/2014
954-720-05-3 Amended Accounting Standards Update No. 2014-06 03/14/2014
954-720-25-1 Amended Accounting Standards Update No. 2010-24 08/27/2010
954-720-25-5 Amended Accounting Standards Update No. 2010-24 08/27/2010
954-720-25-6 Superseded Accounting Standards Update No. 2014-09 05/28/2014
954-720-25-7 Superseded Accounting Standards Update No. 2014-09 05/28/2014
954-720-30-1 through 30-3 Superseded Accounting Standards Update No. 2010-24 08/27/2010
954-720-35-3 Superseded Accounting Standards Update No. 2010-24 08/27/2010
954-720-45-1 Amended Accounting Standards Update No. 2014-06 03/14/2014
954-720-50-1 Amended Accounting Standards Update No. 2012-04 10/01/2012
954-720-50-4 Amended Accounting Standards Update No. 2014-06 03/14/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nPrepaid Health Care Services | Superseded | Accounting Standards Update No. 2014-09 | 05…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5293eb9364908a4823c10027bd381cf62f0f66c5c527af652732c86ae7c10fd9","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:28.117Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479164","source_sha256":"ae45351cbbb8c21526d3fa009982c22d8b384d2435536530fb08f6dae3862cb8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:50e85760915e012d78fa397856d09335567d6f2aca249bc757f2ad59e560d821","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:28.117Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479164","source_sha256":"ae45351cbbb8c21526d3fa009982c22d8b384d2435536530fb08f6dae3862cb8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:05f963ebba0df59060b2c55066f361dbda0bad0fde28ea136210a1adda064df8","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:28.117Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479164","source_sha256":"ae45351cbbb8c21526d3fa009982c22d8b384d2435536530fb08f6dae3862cb8"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-954-05-1","para":"05-1","html":"
This Subtopic provides guidance on accounting for other expenses for health care entities within the scope of this Topic.
","snippet":"This Subtopic provides guidance on accounting for other expenses for health care entities within the scope of this Topic.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d03f1c5b9d05332e6ecb2cb47d9953cec2994b80bd0b0816fc947e7989b69547","downloaded_from":"2026-09-10T01:12:29.956Z","last_downloaded_at":"2026-09-10T01:12:29.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478153","source_sha256":"b50dedff38bbdb53055e7078fa0c7579172e2c29639426d69491c0bbf8a2fbbc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0146f9687aea4d9da2dcaff397fff502808110ab6237d778550e6587c9c2039e","downloaded_from":"2026-09-10T01:12:29.956Z","last_downloaded_at":"2026-09-10T01:12:29.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478153","source_sha256":"b50dedff38bbdb53055e7078fa0c7579172e2c29639426d69491c0bbf8a2fbbc"}},{"block":null,"heading":"Prepaid Health Care Services","paragraphs":[{"citation":"720-954-05-2","para":"05-2","html":"
Many prepaid health care providers incur costs that vary with, and are primarily related to, the marketing of subscriber contracts and member enrollment. These costs, sometimes referred to as acquisition costs, consist mainly of commissions paid to agents or brokers and incentive compensation based on new enrollments. Commissions and incentive compensation may be paid when the contracts are written, at later dates, or over the terms of the contracts as premiums are received. Some providers incur additional costs directly related to the acquisition of specific contracts, such as the costs of specialized brochures, marketing, and advertising. Providers also incur costs that are related to the acquisition of new members but that do not relate to specific contracts and are not considered acquisition costs. These costs include salaries of the marketing director and staff, general marketing brochures, and general advertising and promotion expenses.
","snippet":"Many prepaid health care providers incur costs that vary with, and are primarily related to, the marketing of subscriber contracts and member enrollment. These costs, sometimes referred to as acquisition costs, consist m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ad10a029f4ca6e7d0df9c5e7173327eaa2a45aed49c8f884cf08eb8c1ba34e0d","downloaded_from":"2026-09-10T01:12:29.956Z","last_downloaded_at":"2026-09-10T01:12:29.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478153","source_sha256":"b50dedff38bbdb53055e7078fa0c7579172e2c29639426d69491c0bbf8a2fbbc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:538e42dec960a3c8933a533bf640d3c2231339e9c397ceded0498459429b3339","downloaded_from":"2026-09-10T01:12:29.956Z","last_downloaded_at":"2026-09-10T01:12:29.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478153","source_sha256":"b50dedff38bbdb53055e7078fa0c7579172e2c29639426d69491c0bbf8a2fbbc"}},{"block":null,"heading":"Stop-Loss Insurance","paragraphs":[{"citation":"720-954-05-3","para":"05-3","html":"
In stop-loss insurance, prepaid health care providers or associated entities transfer portions of their financial risks to other entities. A provider typically contracts to recover health care costs in excess of stated amounts during the contract periods.
","snippet":"In stop-loss insurance, prepaid health care providers or associated entities transfer portions of their financial risks to other entities. A provider typically contracts to recover health care costs in excess of stated a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8708365a79c98a39edf2ef3860968d7ee4d7ad3edc7bf435a8bdf51eb865a6a2","downloaded_from":"2026-09-10T01:12:29.956Z","last_downloaded_at":"2026-09-10T01:12:29.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478153","source_sha256":"b50dedff38bbdb53055e7078fa0c7579172e2c29639426d69491c0bbf8a2fbbc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:19a68f98cc90caf913366b54880ee5209b54694724bc86c9d746a0cd704c932c","downloaded_from":"2026-09-10T01:12:29.956Z","last_downloaded_at":"2026-09-10T01:12:29.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478153","source_sha256":"b50dedff38bbdb53055e7078fa0c7579172e2c29639426d69491c0bbf8a2fbbc"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:02fa26921c4f49516119fe79e61cc07835c45c2460658fe0928da20264da84e3","downloaded_from":"2026-09-10T01:12:29.956Z","last_downloaded_at":"2026-09-10T01:12:29.956Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478153","source_sha256":"b50dedff38bbdb53055e7078fa0c7579172e2c29639426d69491c0bbf8a2fbbc"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-954-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 954-10-15.
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A health care entity with a retrospectively rated insurance policy whose ultimate premium is based primarily on the health care entity's loss experience shall account for the minimum premium as an expense over the period of coverage under the policy. Insurance recoveries from a retrospectively rated insurance policy whose ultimate premium is based primarily on the health care entity's loss experience shall not be recognized until the estimated losses exceed the stipulated maximum premium.
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A health care entity insured under a retrospectively rated policy whose ultimate premium is based primarily on the experience of a group of health care entities shall accrue additional premiums or refunds on the basis of the group's experience to date, which includes a provision for the ultimate cost of asserted and unasserted claims before the financial statement date, whether reported or unreported.
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An accrual for malpractice losses shall be based on estimated ultimate losses and costs associated with settling claims. See paragraphs 954-450-25-2 through 2A for factors to consider when determining the amount of the accrual.
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The Claims Made Contract Subsections of Subtopic 720-20 apply if a health care entity purchases a claims-made insurance policy. As discussed in paragraph 720-20-25-14, insured entities (except as discussed in Section 944-20-15), including those that use a claims-made approach for insuring certain risks, recognize a liability for the probable losses from incurred but not reported claims and incidents if the loss is both probable and reasonably estimable. Consequently, a health care entity that is insured under a claims-made insurance policy recognizes the estimated cost of claims and incidents not reported to the insurance carrier, in accordance with Subtopic 954-450.
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An entity that participates in a common trust fund and forfeits its rights to any excess funding shall expense its contributions and account for its participation in the trust fund based on the type of coverage obtained (for example, occurrence basis, claims-made, or retrospectively rated).
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A health care entity insured under a retrospectively rated policy whose ultimate premium is based primarily on the experience of a group of health care entities amortizes the initial premium to expense on a pro rata basis over the policy term.
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A health care entity insured by an unconsolidated multiprovider captive insurance entity for medical malpractice claims under a retrospectively rated policy based primarily on the experience of a group of health care entities shall account for such insurance as indicated in paragraph 954-720-25-2. However, the health care entity shall consider whether the economic substance of the multiprovider captive insurance entity is sufficient to relieve the health care entity from further liability.
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Stop-loss insurance premiums shall be included in reported health care costs. Stop-loss insurance recoveries shall be reported as reductions of related health care costs.
","snippet":"Stop-loss insurance premiums shall be included in reported health care costs. Stop-loss insurance recoveries shall be reported as reductions of related health care costs.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4222f971e2b123fcb2c9271cd24b25db98ffea15ee0ee6178a02c7d0c15606cc","downloaded_from":"2026-09-10T01:12:50.085Z","last_downloaded_at":"2026-09-10T01:12:50.085Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478461","source_sha256":"1c3317d1ce9f6b0d1b7df9cadafc91a3e99ff84f41c0fb78e5fcc380606b3b80"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:df30d5418359e710369989f694ec3987117414c45ba0219d78ddc44d4a16d63b","downloaded_from":"2026-09-10T01:12:50.085Z","last_downloaded_at":"2026-09-10T01:12:50.085Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478461","source_sha256":"1c3317d1ce9f6b0d1b7df9cadafc91a3e99ff84f41c0fb78e5fcc380606b3b80"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6c214e19a7958d2de55c7c0a65f4d3a0bebfd3100ca663d92436dcd30b9d415a","downloaded_from":"2026-09-10T01:12:50.085Z","last_downloaded_at":"2026-09-10T01:12:50.085Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478461","source_sha256":"1c3317d1ce9f6b0d1b7df9cadafc91a3e99ff84f41c0fb78e5fcc380606b3b80"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":"Retrospectively Rated Premiums","paragraphs":[{"citation":"720-954-50-1","para":"50-1","html":"
A health care entity insured under a retrospectively rated policy whose ultimate premium is based primarily on the experience of a group of health care entities shall disclose both of the following:
  1. a
    It is insured under a retrospectively rated policy.
  2. b
    Premiums are accrued based on the ultimate cost of the experience to date of a group of entities.
","snippet":"A health care entity insured under a retrospectively rated policy whose ultimate premium is based primarily on the experience of a group of health care entities shall disclose both of the following:\n(a) It is insured und…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7e07eca128363916a18025e499f149a522fc787da4fae6fbd749e66ae3a4cc3","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc9537dd6c6b3fa690f488d72d6cc8cd63f57e6ccf8e363599e3bc87d85a0e5c","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}},{"block":null,"heading":"Medical Malpractice Claims Insured by Captive Insurance Entities","paragraphs":[{"citation":"720-954-50-2","para":"50-2","html":"
The health care entity shall disclose both of the following:
  1. a
    It is insured under a retrospectively rated policy of a multiprovider captive insurance entity.
  2. b
    The premiums are accrued based on the captive insurance entity's experience to date.
","snippet":"The health care entity shall disclose both of the following:\n(a) It is insured under a retrospectively rated policy of a multiprovider captive insurance entity.\n(b) The premiums are accrued based on the captive insurance…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0a95de6ff80c7891427208b6b6877342c227beed702aea5000fd68e623785928","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}},{"citation":"720-954-50-3","para":"50-3","html":"
A health care entity that is insured by a multiprovider captive insurance entity shall disclose in its financial statements:
  1. a
    That it is insured by such an entity
  2. b
    Its ownership percentage in the captive entity
  3. c
    The method of accounting for its investment in, and the operations of, the captive entity.
","snippet":"A health care entity that is insured by a multiprovider captive insurance entity shall disclose in its financial statements:\n(a) That it is insured by such an entity\n(b) Its ownership percentage in the captive entity\n(c)…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a25615ccc1db63b349d863ff11bd4b6ff390f109a0a0f7ffd9d1de1505846dff","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:74a24183de8d376c9733b4a7f24bcf54959cb178aa72b243d08e27232ba387ff","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}},{"block":null,"heading":"Prepaid Health Care Services—Stop-Loss Insurance","paragraphs":[{"citation":"720-954-50-4","para":"50-4","html":"
The nature, amounts, and effects of significant stop-loss insurance contracts shall be disclosed.
","snippet":"The nature, amounts, and effects of significant stop-loss insurance contracts shall be disclosed.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3cb620b2315c4d6595a1a14394ae5b0ba252fe2985b129558d0b390129d5c3da","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d10f1c2aae2c3f8dfa22b8eceadc4280a2f2c5be989041803e6371b64df1ab8d","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f5aa319207987c895f335c738a5dfa904393d5c5e7a155e7553dc2e55de28e75","downloaded_from":"2026-09-10T01:12:51.764Z","last_downloaded_at":"2026-09-10T01:12:51.764Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478258","source_sha256":"ca061d2983fa348387d32ea4eaa7acb6df2376765b1baa2f5a0caf49d6802b13"}}],"enrichment":{"summary":"ASC 720-954 governs how health care entities account for insurance-related and other operating expenses, principally retrospectively rated insurance policies, claims-made policies, malpractice loss accruals, multiprovider captive insurance arrangements, and stop-loss insurance. The core rules turn on whose loss experience drives the premium: if the entity's own experience, the minimum premium is expensed over the coverage period and recoveries are deferred until estimated losses exceed the stipulated maximum premium; if a group's experience, additional premiums or refunds are accrued based on group experience to date, including asserted and unasserted, reported and unreported claims.","key_points":["Under a retrospectively rated policy whose ultimate premium depends primarily on the entity's own loss experience, the minimum premium is expensed over the coverage period and insurance recoveries are not recognized until estimated losses exceed the stipulated maximum premium (720-954-25-1).","Under a retrospectively rated policy based primarily on a group of health care entities' experience, additional premiums or refunds are accrued on the group's experience to date, including the ultimate cost of asserted and unasserted claims, reported or unreported (720-954-25-2), and the initial premium is amortized pro rata over the policy term (720-954-35-1).","Malpractice loss accruals are based on estimated ultimate losses and the costs of settling claims, using the factors in 954-450-25-2 through 25-2A (720-954-25-3).","A health care entity insured under a claims-made policy applies the Claims Made Contract Subsections of Subtopic 720-20 and still recognizes the estimated cost of incurred but not reported claims and incidents when probable and reasonably estimable (720-954-25-4A).","An entity insured by an unconsolidated multiprovider captive under a group-experience retrospectively rated policy follows 954-720-25-2 but must assess whether the captive has sufficient economic substance to relieve it of further liability (720-954-35-2).","Stop-loss insurance premiums are included in reported health care costs and stop-loss recoveries are reported as reductions of related health care costs (720-954-45-1).","Required disclosures include the existence and accrual basis of retrospectively rated policies, insurance through a multiprovider captive with the ownership percentage and accounting method for the investment, and the nature, amounts, and effects of significant stop-loss contracts (720-954-50-1 through 50-4)."],"categories":["Recognition","Subsequent measurement","Disclosure","Industry-specific"],"audience_level":"intermediate","student_note":"The exam trap is symmetry: recoveries under an own-experience retrospectively rated policy are deferred until estimated losses exceed the stipulated maximum premium, whereas group-experience policies require accruing premiums or refunds currently based on group experience. Students also forget that buying a claims-made policy does not eliminate the need to accrue IBNR losses.","related_topics":["954-450","720-20","954-10","944-20","954-720"],"key_concepts":["retrospectively rated insurance policy","stop-loss insurance","multiprovider captive insurance entity","claims-made policy","incurred but not reported claims","malpractice loss accrual","acquisition costs","common trust fund"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d8fc3a23d50b9522b6855fb73d0f97241c78c69a1ad73d511c68f4a014e2813b","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:54.691Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"450-954","title":"Health Care Entities","topic_title":"Contingencies","score":0.8654,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3e804afeab30349dc29e512fc31fa7e410c00613e55d8a2eb159f3cc834f71c7","downloaded_from":"2026-09-10T00:28:27.303Z","last_downloaded_at":"2026-09-10T00:28:57.040Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"405-954","title":"Health Care Entities","topic_title":"Liabilities","score":0.7652,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:63e45415fbe0f564df6f9303c6f192c92b1909356680d2eb564fe10e252b9d47","downloaded_from":"2026-09-10T00:19:21.041Z","last_downloaded_at":"2026-09-10T00:19:37.991Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"310-954","title":"Health Care Entities","topic_title":"Receivables","score":0.759,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:31a5529b0aff124914b26e97504a31f6d609cbf2bf209b731c1fff8eeeeed88b","downloaded_from":"2026-09-09T23:31:29.416Z","last_downloaded_at":"2026-09-09T23:32:00.586Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-20","title":"Insurance Costs","topic_title":"Other Expenses","score":0.7556,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e84ab2ce4d18709bcecd2a77784242e7a23348838e7e513fc899c3c31cad700e","downloaded_from":"2026-09-10T01:07:18.243Z","last_downloaded_at":"2026-09-10T01:07:45.379Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"810-954","title":"Health Care Entities","topic_title":"Consolidation","score":0.7494,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a02c52c04d446ee4753b2fb0fe74b87671b9581931f744e997bd8c649f206c67","downloaded_from":"2026-09-10T01:32:41.551Z","last_downloaded_at":"2026-09-10T01:33:00.907Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"605-944","title":"Financial Services—Insurance","topic_title":"Revenue Recognition","score":0.7364,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26472b7e08b793d1b35d03f24d2f494a99aa148c9dcb10457990b81d1800e50c","downloaded_from":"2026-09-10T00:49:17.918Z","last_downloaded_at":"2026-09-10T00:49:46.481Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-952","title":"Franchisors","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:519ee88932bcefeba64ec61fb44489f925c7f8d9850a822a77c3c17701b7679a","downloaded_from":"2026-09-10T01:12:09.288Z","last_downloaded_at":"2026-09-10T01:12:26.241Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-958","title":"Not-for-Profit Entities","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f32bff899d6ef072a33901d7cfa098c97c646e5b4abdc9529810489ced1b5679","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:40a5dc518066bebdc691ba09e75bf971428eb623ab7de6fa47b7f56d40727256","downloaded_from":"2026-09-10T01:12:28.117Z","last_downloaded_at":"2026-09-10T01:12:54.691Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-958","topic":"720","title":"Not-for-Profit Entities","area":"Expenses","paragraphs":269,"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.","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"],"categories":["Not-for-profit","Presentation","Disclosure","Financial statement presentation"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-958-00-1","para":"00-1","html":"
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
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nAffiliate | Amended | Maintenance Update 2018-12 | 09/10/2018 |\nAffiliate | Added | Acco…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0578c087a3c363c82613ac3a086220e5b96f7b22188912f39f8f6a1ed31022b","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:12:58.744Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477247","source_sha256":"b083eed94551f83a70a94f8e6a6017365e8363359fbb5603e1b5abbefb6b738b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fb0bee46764668beb66c4a2a833f13a006c5f95c413e0976a792a15408c15c94","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:12:58.744Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477247","source_sha256":"b083eed94551f83a70a94f8e6a6017365e8363359fbb5603e1b5abbefb6b738b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ca1d7d41493709e546ea0c13be621d959fee513dbc8d27f7a4db8494f75ed351","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:12:58.744Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477247","source_sha256":"b083eed94551f83a70a94f8e6a6017365e8363359fbb5603e1b5abbefb6b738b"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-958-05-1","para":"05-1","html":"
This Subtopic provides guidance on reporting expenses for not-for-profit entities (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.
","snippet":"This Subtopic provides guidance on reporting expenses for not-for-profit entities (NFPs). The guidance in this Subtopic is presented in the following three Subsections:\n(a) General\n(b) Accounting for Costs of Activities …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d7018b36b358c6ed983aac1642c4329895255ae6cb731611533560a50a8c208e","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}},{"citation":"720-958-05-2","para":"05-2","html":"
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 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.
","snippet":"The General Subsections provide incremental guidance on the following subjects:\n(a) The functional classification of expenses\n(b) The natural classification of expenses\n(c) Contributions made\n(d) Fundraising costs\n(e) Pr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3fe8a25bb98f8a9669e5cca899980d06dd6668e94ea7326cb85005918124ba67","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}},{"citation":"720-958-05-3","para":"05-3","html":"
For additional information about the presentation of expenses in a statement of activities, see Section 958-220-45.
","snippet":"For additional information about the presentation of expenses in a statement of activities, see Section 958-220-45.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:807f7652ae7b4989cf61ecd0ab7ae05b78577cd61f4127b227b8f2d5a841cd73","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}},{"citation":"720-958-05-4","para":"05-4","html":"
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. 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 and supporting activities.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5b95f63fb1ab10a455df65ff15c5e42b6bdd43e16717007e8f10105f2c37cc3e","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6451c8f64daa54edd522761164e7d6dcb386e9cf0654f7ca83f3a808f65fbf15","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":null,"paragraphs":[{"citation":"720-958-05-5","para":"05-5","html":"
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 are combined with fundraising activities. Some not-for-profit entities (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. 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 have been allocated and the amounts of joint costs.
","snippet":"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 are combined with fundraisi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5aaeadf93abe677c2954c22119b41cec58c9d98dd03b327fed3b7f3d1aaeeab6","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}},{"citation":"720-958-05-6","para":"05-6","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fc24c20acfb576b0ea909aab9eeb6add5e4176bd2a2d20bd8dc0360c9abfc4ef","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:30e111fe50950bda26dfdb2211b20a5c96c2959cd422c9b1503985bfa6a53f5f","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}},{"block":"Services Received from Personnel of an Affiliate","heading":null,"paragraphs":[{"citation":"720-958-05-7","para":"05-7","html":"
The Services Received from Personnel of an Affiliate Subsections provide guidance for reporting services received by a not-for-profit entity (NFP) 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.
","snippet":"The Services Received from Personnel of an Affiliate Subsections provide guidance for reporting services received by a not-for-profit entity (NFP) from personnel of an affiliate that directly benefit the recipient NFP an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:997858e94ba702b7127c7b9eaf4278fbd1a84ab3b1304b12365b9a55daa1af98","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3d91362b71f13658e5dda3c0240b596e4ff0803cdec485bcc58ed8e734f3c3b5","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7a88cb4352b4a16f4ed6f1fd8bfba1ba43b633a6e8f5a5692cde1d961eeae973","downloaded_from":"2026-09-10T01:13:01.081Z","last_downloaded_at":"2026-09-10T01:13:01.081Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477736","source_sha256":"12d361c6a42f18d72ec989388817b750def034daca96553a66d2ff29bb459ffd"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-958-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:101b7eeadcfc2f6ea2fd2c3b6b30b9f5afa082cb9d01cac4a1b16c4cb5c68df2","downloaded_from":"2026-09-10T01:13:02.797Z","last_downloaded_at":"2026-09-10T01:13:02.797Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478112","source_sha256":"8107a15be5fbf5041579b7119b51f215dfbe7c03cedfcc3ae0e630b4b5012ac2"}},{"citation":"720-958-15-2","para":"15-2","html":"
The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific exceptions noted in the other Subsections of this Section.
","snippet":"The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific exceptions noted in the other Subsections of this Section.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d6ecf34d6b65a9f29e8d88e872cc3fd483f50ba1d13f2c1f262616e63c0575f0","downloaded_from":"2026-09-10T01:13:02.797Z","last_downloaded_at":"2026-09-10T01:13:02.797Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478112","source_sha256":"8107a15be5fbf5041579b7119b51f215dfbe7c03cedfcc3ae0e630b4b5012ac2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:05c8c1236326af879376b0019549d80365a0cff2a4ffe034c294196185e20733","downloaded_from":"2026-09-10T01:13:02.797Z","last_downloaded_at":"2026-09-10T01:13:02.797Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478112","source_sha256":"8107a15be5fbf5041579b7119b51f215dfbe7c03cedfcc3ae0e630b4b5012ac2"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":"Overall Guidance","paragraphs":[{"citation":"720-958-15-3","para":"15-3","html":"
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, with specific exceptions noted below.
","snippet":"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, with specific exc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6267ae528ce701645248a9fe29fafe84b042060df4cb4e94436efe3491fd84ae","downloaded_from":"2026-09-10T01:13:02.797Z","last_downloaded_at":"2026-09-10T01:13:02.797Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478112","source_sha256":"8107a15be5fbf5041579b7119b51f215dfbe7c03cedfcc3ae0e630b4b5012ac2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:581785ab7fd7af73ab1b369ef3c2590fdb22bed2ff7dec794b449e74fd0a9cd0","downloaded_from":"2026-09-10T01:13:02.797Z","last_downloaded_at":"2026-09-10T01:13:02.797Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478112","source_sha256":"8107a15be5fbf5041579b7119b51f215dfbe7c03cedfcc3ae0e630b4b5012ac2"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":"Entities","paragraphs":[{"citation":"720-958-15-4","para":"15-4","html":"
The guidance in the Accounting for Costs of Activities that Include Fundraising Subsections applies to all not-for-profit entities (NFPs) that solicit contributions.
","snippet":"The guidance in the Accounting for Costs of Activities that Include Fundraising Subsections applies to all not-for-profit entities (NFPs) that solicit contributions.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c0aa01323acc93a06d034e80604cb53cebf74c25b282dca85e9c3d07b7ec79fc","downloaded_from":"2026-09-10T01:13:02.797Z","last_downloaded_at":"2026-09-10T01:13:02.797Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478112","source_sha256":"8107a15be5fbf5041579b7119b51f215dfbe7c03cedfcc3ae0e630b4b5012ac2"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ff7355de9ae6ea1d31707256afb29a5799055c4e406e816c476ea19d5a42212d","downloaded_from":"2026-09-10T01:13:02.797Z","last_downloaded_at":"2026-09-10T01:13:02.797Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478112","source_sha256":"8107a15be5fbf5041579b7119b51f215dfbe7c03cedfcc3ae0e630b4b5012ac2"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":"Transactions","paragraphs":[{"citation":"720-958-15-5","para":"15-5","html":"
The guidance in the Accounting for Costs of Activities that Include Fundraising Subsections applies only to costs of joint activities. The guidance does not address allocations of costs in other circumstances.
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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, with specific exceptions noted below.
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The guidance in the Services Received from Personnel of an Affiliate Subsections applies to all not-for-profit entities (NFPs) that receive services from personnel of an affiliate that directly benefit the recipient NFP and for which the affiliate does not charge the recipient NFP.
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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.
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A not-for-profit entity (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.
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Paragraph superseded by Accounting Standards Update No. 2018-08.
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If an NFP makes contributions or awards grants to other NFPs upon specific requests of others, the NFP may be acting as an agent, trustee, or intermediary in a transfer between the donor and the beneficiary specified by the donor (agency transaction) (see paragraph 958-605-25-24).
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Costs of fundraising activities, 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.
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An NFP shall comply with the guidance in Subtopic 720-35 applicable to its advertising activities. Fundraising by NFPs is not considered advertising and is not within the scope of that Subtopic.
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Paragraph superseded by Accounting Standards Update No. 2014-09.
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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 package.
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Paragraph superseded by Accounting Standards Update No. 2014-09.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2014-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b1b6b4ffd3c32619d157b7cc1369f7d7a1c42e36dab910a3f5481be167bb1a38","downloaded_from":"2026-09-10T01:13:10.551Z","last_downloaded_at":"2026-09-10T01:13:10.551Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478518","source_sha256":"945cf1287168c56022eb8ab10bacd237aa44b7237be1b7d60c1b55ece09f0981"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:08d8aec4042bb3320aa815cd05026b82fe4ea5ee885a4c60d612253c28982101","downloaded_from":"2026-09-10T01:13:10.551Z","last_downloaded_at":"2026-09-10T01:13:10.551Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478518","source_sha256":"945cf1287168c56022eb8ab10bacd237aa44b7237be1b7d60c1b55ece09f0981"}},{"block":"Services Received from Personnel of an Affiliate","heading":null,"paragraphs":[{"citation":"720-958-25-9","para":"25-9","html":"
A not-for-profit entity (NFP) shall recognize all services received from personnel of an affiliate 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.
","snippet":"A not-for-profit entity (NFP) shall recognize all services received from personnel of an affiliate that directly benefit the recipient NFP (that is, are similar to personnel directly engaged by the recipient NFP). For ex…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6fbc1e6ddaa36c2480f692ae7aef5e776331fb211ad89263ca9e331605a18513","downloaded_from":"2026-09-10T01:13:10.551Z","last_downloaded_at":"2026-09-10T01:13:10.551Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478518","source_sha256":"945cf1287168c56022eb8ab10bacd237aa44b7237be1b7d60c1b55ece09f0981"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:076116c1d57c0901f6c8f0c47a6c06c5915d0e53a6b948cc87165a13d01496a1","downloaded_from":"2026-09-10T01:13:10.551Z","last_downloaded_at":"2026-09-10T01:13:10.551Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478518","source_sha256":"945cf1287168c56022eb8ab10bacd237aa44b7237be1b7d60c1b55ece09f0981"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8457f605a1c36127d084a8fc79924adf44946cb2d80afe5aa7c4b99a636a5bb1","downloaded_from":"2026-09-10T01:13:10.551Z","last_downloaded_at":"2026-09-10T01:13:10.551Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478518","source_sha256":"945cf1287168c56022eb8ab10bacd237aa44b7237be1b7d60c1b55ece09f0981"}},{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":"Contributions Made","paragraphs":[{"citation":"720-958-30-1","para":"30-1","html":"
A liability and an expense recognized under paragraph 958-720-25-1 shall be measured initially at fair value.
","snippet":"A liability and an expense recognized under paragraph 958-720-25-1 shall be measured initially at fair value.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2a098b5c19d44ab74eceb874c658d306b0fb0721ca36daa2126822eca3491cba","downloaded_from":"2026-09-10T01:13:13.365Z","last_downloaded_at":"2026-09-10T01:13:13.365Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478100","source_sha256":"5c50d8a9acb866a78ef2c08f056b2b0d3bf9c1aa8f55a48ada12b0682185f8be"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0ec034cbb2358aad28eb8b700ea6017eef0f2b2fe09673965a96bd74494f9df2","downloaded_from":"2026-09-10T01:13:13.365Z","last_downloaded_at":"2026-09-10T01:13:13.365Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478100","source_sha256":"5c50d8a9acb866a78ef2c08f056b2b0d3bf9c1aa8f55a48ada12b0682185f8be"}},{"block":"Services Received from Personnel of an Affiliate","heading":null,"paragraphs":[{"citation":"720-958-30-2","para":"30-2","html":"
Services received from personnel of an affiliate that directly benefit the recipient not-for-profit entity (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.
","snippet":"Services received from personnel of an affiliate that directly benefit the recipient not-for-profit entity (NFP) and for which the affiliate does not charge the recipient NFP shall be measured by the recipient NFP at the…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:306780ce90efb35ac0df5cf82274da36ac1e5669f1401a7cfe8fc1fbe2cdc39b","downloaded_from":"2026-09-10T01:13:13.365Z","last_downloaded_at":"2026-09-10T01:13:13.365Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478100","source_sha256":"5c50d8a9acb866a78ef2c08f056b2b0d3bf9c1aa8f55a48ada12b0682185f8be"}},{"citation":"720-958-30-3","para":"30-3","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9cd2858501a7b17c96a750b978656e5227ed1dc28e1f09b9127962109c35aa66","downloaded_from":"2026-09-10T01:13:13.365Z","last_downloaded_at":"2026-09-10T01:13:13.365Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478100","source_sha256":"5c50d8a9acb866a78ef2c08f056b2b0d3bf9c1aa8f55a48ada12b0682185f8be"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f02d8188a46c663037293bd89367da23769b9a03950a375aef4e0a5fe5453cf","downloaded_from":"2026-09-10T01:13:13.365Z","last_downloaded_at":"2026-09-10T01:13:13.365Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478100","source_sha256":"5c50d8a9acb866a78ef2c08f056b2b0d3bf9c1aa8f55a48ada12b0682185f8be"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:53ae16cdf720d344c300664f21ba78013722c2045b288f3383533a1213910d61","downloaded_from":"2026-09-10T01:13:13.365Z","last_downloaded_at":"2026-09-10T01:13:13.365Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478100","source_sha256":"5c50d8a9acb866a78ef2c08f056b2b0d3bf9c1aa8f55a48ada12b0682185f8be"}},{"number":"45","label":"45 Other Presentation Matters","anchor":"45-other-presentation-matters","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-958-45-1","para":"45-1","html":"
This Subsection provides guidance on the reporting of expenses incurred by not-for-profit entities (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.
","snippet":"This Subsection provides guidance on the reporting of expenses incurred by not-for-profit entities (NFPs) as follows:\n(a) Functional classification of expenses\n(b) Analysis of expenses by their nature and function\n(c) Cl…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:88f05c931a81c8543a300e302614e388c1c336dcefd722168354e2e6e6a72bdb","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2bfa1c2fd9341c44e444914f6d43e43ff3fa0af26ce1283ccd314af800b51a29","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":null,"heading":"Functional Classification of Expenses","paragraphs":[{"citation":"720-958-45-2","para":"45-2","html":"
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, such as major classes of program services and supporting 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
    2. 2
      Fundraising activities
    3. 3
      Membership development activities.
","snippet":"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 informa…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c3a07993981e99f6bed8cdc7d539a64e0bf66b5efd37700ac18ed56acf2dc81f","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-2A","para":"45-2A","html":"
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.
","snippet":"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 functi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3e8fd289299ba50060d506c1b02f7100468807924e15de51c775eb7f07e9392f","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-3","para":"45-3","html":"
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 to NFPs supported by the federated fundraising entity. Paragraphs
280-10-50-1 through 50-19
, although not required of NFPs, may be helpful in determining what constitutes major classes of programs and supporting activities.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:04181ca172ebcecd3f8b4a99d743c279ca73e6d9b237cfedb660fb1bfb3e7a31","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-4","para":"45-4","html":"
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. 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.
","snippet":"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 an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:27fdce3163cc86a74ebf2a0ae890e5e2bb7e48f94ddbeab41fdba94836c781b1","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-5","para":"45-5","html":"
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).
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:085223b37243086b32d51c6b77bf7e9b29bbb0b9979468141344896561428ba5","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-6","para":"45-6","html":"
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
  2. b
    Fundraising activities
  3. c
    Membership development activities.
","snippet":"Supporting activities are all activities of an NFP other than program services. Generally, supporting activities include the following activities:\n(a) Management and general activities\n(b) Fundraising activities\n(c) Memb…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0b56fc50b0c81226685acfc3121746a6f3e89e970f8b5ab9b5322e16b040f5bd","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-7","para":"45-7","html":"
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
  6. f
    Soliciting funds other than contributions 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.
  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
    ), fundraising activities (see paragraphs
    958-720-45-9 through 45-10
    ), or membership development activities (see paragraphs
    958-720-45-11 through 45-14
    ).     See paragraphs
    958-720-55-171 through 55-176
    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.
","snippet":"Management and general activities include the following:\n(a) Oversight\n(b) Business management\n(c) General recordkeeping and payroll\n(d) Budgeting\n(e) Financing, including unallocated interest costs pursuant to paragraph…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0454309a876c5c792f1a3c9ee6b2dc699a2b10ab0151abfeccfb2451e0919bdf","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-8","para":"45-8","html":"
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). See paragraphs
958-720-55-171 through 55-176
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.
","snippet":"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 direct…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:63bddf0e393ec35699bb383466b1fa3790dfa3ea7cd45f8256336d91ba21f6ef","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-9","para":"45-9","html":"
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.
","snippet":"Fundraising activities include the following:\n(a) Publicizing and conducting fundraising campaigns\n(b) Maintaining donor mailing lists\n(c) Conducting special fundraising events\n(d) Preparing and distributing fundraising …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc1a59b6730403eee5ca9c2824079a23f9a656265805ef6800f540fe32e5a425","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-10","para":"45-10","html":"
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 of Section 958-605-25.
","snippet":"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 of Secti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:942fdd4e3df3ac868d04ac7e2c57ec389611a0a17e9c30cf8ff5e8c869422957","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-11","para":"45-11","html":"
Membership development activities include the following:
  1. a
    Soliciting for prospective members and membership dues
  2. b
    Membership relations
  3. c
    Similar activities.
","snippet":"Membership development activities include the following:\n(a) Soliciting for prospective members and membership dues\n(b) Membership relations\n(c) Similar activities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c7cef90009bdce2e18979ee01e08916f94f346e87c6a90d8eab6aec3941fa436","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-12","para":"45-12","html":"
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
for indicators useful in determining the contribution and exchange portions of membership dues.)
","snippet":"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 c…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b1c16cef57065c5d3164577aa5d2ad6eb463061b78ebc0a3fdf690af5f9e5100","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-13","para":"45-13","html":"
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, as discussed in the Accounting for Costs of Activities that Include Fundraising Subsections of this Subtopic beginning with paragraph 958-720-45-28.
","snippet":"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 ac…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23668e663aaaffa5609cdc5eba5ac04473e4136e578dcdc06c7231519a568fb3","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-14","para":"45-14","html":"
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, an appropriate part of the costs of soliciting members shall be allocated to the membership development function and a part to program services.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aa8e349fb859f8630da3373f022ec3f26f9fe8438236586a397200f21398e44a","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:201efe921d86ee5e81cfceba8d54c59611f5bd723cd149d0e68f753e4b58c095","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":null,"heading":"Analysis of Expenses by Their Nature and Function","paragraphs":[{"citation":"720-958-45-15","para":"45-15","html":"
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. The relationship between functional classification and natural classification for all expenses shall be presented in an analysis that disaggregates functional expense classifications, such as major classes of program services and supporting activities, by their natural expense classifications, 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, 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 for an example of how to report expenses by nature and function.
","snippet":"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 p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5b8ae3b66483da687bed1d0db2125c2e0830a8912d0cba4c4924bf8bad108098","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-16","para":"45-16","html":"
Paragraph superseded by Accounting Standards Update No. 2016-14.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2016-14.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bf2f8592e516ba6cfd98adc2ae4aabb779540989656beebb27641608560190ac","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3231ea15a74469f54c71ae7261ce061c14f7c5b3b3b56823844d65f0e0a14c10","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":null,"heading":"Classification of Particular Costs","paragraphs":[{"citation":"720-958-45-17","para":"45-17","html":"
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.
","snippet":"This Subsection provides classification guidance for the following specific costs:\n(a) Cost of premiums\n(b) Cost of sales\n(c) Reductions in amounts charged for goods and services\n(d) Interest costs\n(e) Cost of occupancy …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:762819eac2dd07b292f13d47f89b70ffbdd107937c6cc8efb14af043a2718cd8","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-18","para":"45-18","html":"
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.
","snippet":"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 contributi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9edad955600fe8ae8fda43c2772209f9736a842fac7fcce4be74b86ab8e47724","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-19","para":"45-19","html":"
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.
","snippet":"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 th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7db54f45504df3cf18af238896cf68cd6e51435673c27fb8521f10ac8a39654","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-20","para":"45-20","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b4cc37c8b6a22c6b17e0861136dd2acc143d7cf985ba9f20ee7fca8056922682","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-21","para":"45-21","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d88cba69cb23de8826f457d91b1b46bd38a40c1d64e3f557920913e7ea5d61d1","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-22","para":"45-22","html":"
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.
","snippet":"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 p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e42c14b2727b232b7975d47b62a5d6429f9a87275e7c65c7857dcf9301ab17e7","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-23","para":"45-23","html":"
If a reduction in the amount charged for goods and services is reported as an expense in accordance with paragraph 958-720-25-7, 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.
","snippet":"If a reduction in the amount charged for goods and services is reported as an expense in accordance with paragraph 958-720-25-7, the expense shall be reported in the same functional classification in which the cost of th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:acf397bedac1f0d845d132fc4e78bd238169ddda2456b80c18c5e5176c2c0ee2","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-24","para":"45-24","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b4ac625158fea6749e113dc502c7838e5914b9d616d36c79caa69ae334c5aec3","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-25","para":"45-25","html":"
Occupying and maintaining a building is not a separate supporting service.
","snippet":"Occupying and maintaining a building is not a separate supporting service.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7b22b7f2521ff7cccc52ae50e530d6771ef47101a5afeb9214f5f1f31748de3d","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-26","para":"45-26","html":"
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.
","snippet":"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 impo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e8f397c87358356504b01b73857834ae34b18807d4575ba645808fcfc1ec2357","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-27","para":"45-27","html":"
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.
","snippet":"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 re…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a989fd0f099f9282504225cc2899d2854dd866ac8d089486e01d91bc6aec58b8","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1eea3a6f40be6a640c1393ea730f47bbde41617e439ac88fead29f0e4f74ac0a","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":null,"paragraphs":[{"citation":"720-958-45-28","para":"45-28","html":"
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.
","snippet":"This Subsection provides guidance on the following:\n(a) Classification of the costs of a joint activity\n(b) Allocation methods\n(c) Incidental activities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9c9c7fb9e47af3ce75b5ab26dbc6e5c8619a5b11e8304b569d19f6a92f48d4d","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e81624e785ca853c5528f7bfbbe385a51ca81a26090fb3022938112fe6fc8866","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":"Classification of the Costs of a Joint Activity","paragraphs":[{"citation":"720-958-45-29","para":"45-29","html":"
If the criteria of purpose, audience, and content are met, the costs of a joint activity 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 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, 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.
","snippet":"If the criteria of purpose, audience, and content are met, the costs of a joint activity shall be classified as follows:\n(a) The costs that are identifiable with a particular function shall be charged to that function.\n(…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:57c70e448cd9c49a7a04f2b460f46313601441c7b8d8a7f5983f5028b2040f2f","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-30","para":"45-30","html":"
In circumstances in which a not-for-profit entity (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), 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.
","snippet":"In circumstances in which a not-for-profit entity (NFP) that conducts joint activities has a functional structure that includes functional classifications other than fundraising, program, and management and general (see …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6841ce1f6dd601861fdc8f0979c6cb2493b34dfb9b21b4ff9df7f8e198ea214c","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-31","para":"45-31","html":"
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.
","snippet":"Classification of costs incurred by an NFP for joint activities is based on the following criteria:\n(a) The purpose criterion\n(b) The audience criterion\n(c) The content criterion.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:46f99cd1e7976da114d9b485649102d7b74ef1d2774facdcf416cbc0bcd9c0da","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-32","para":"45-32","html":"
Examples 1 through 16 (see paragraphs
958-720-55-36 through 55-159
) provide illustrations of the tests and analysis that are used to determine whether the criteria listed in the preceding paragraph are met.
","snippet":"Examples 1 through 16 (see paragraphs 958-720-55-36 through 55-159) provide illustrations of the tests and analysis that are used to determine whether the criteria listed in the preceding paragraph are met.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4eb0291f9c542c67e3d2b73038339992a3ccc908102635f22fa67c3dcc0513a","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-33","para":"45-33","html":"
The purpose criterion is met if the purpose of the joint activity includes accomplishing program or management and general functions.
","snippet":"The purpose criterion is met if the purpose of the joint activity includes accomplishing program or management and general functions.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:19799ead7be508aed97d2467b47a2a1ad67a1e94aac081043412e84982fdec7a","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-34","para":"45-34","html":"
Paragraphs
958-720-45-35 through 45-39
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, paragraphs
    958-720-45-35 through 45-39
    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 provides guidance pertaining to both program and management and general functions.
","snippet":"Paragraphs 958-720-45-35 through 45-39provide guidance that shall be considered in determining whether the purpose criterion is met, specifically:\n(a) If program functions are combined with fundraising activities, paragr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a2ff396f27b6a263f118c8b1eb6631cfcefa5e9071bb0737f56b83bd8e100d80","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-35","para":"45-35","html":"
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).
","snippet":"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 f…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0d6fcd2de54712449f44988ea1c9d3594405d34a0ce6ac31f2002ebbf01a1321","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-36","para":"45-36","html":"
See paragraphs
958-720-55-4 through 55-5
, 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 shall also be considered in determining whether the purpose criterion is met.
","snippet":"See paragraphs 958-720-55-4 through 55-5, 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 wi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52f2ca4ef1aa48122ee393ec0931e1b486f067d43c94b2a67dfffc2f6161db2f","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-37","para":"45-37","html":"
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.
  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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9585e58066f1c87a3f3d90dcf7bf18f675ad256609beba0edc9cdd80488722f0","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-38","para":"45-38","html":"
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.
","snippet":"The following factors shall be considered, in the order in which they are listed, to determine whether the purpose criterion is met:\n(a) The compensation or fees test\n(b) The separate and similar activities test\n(c) The …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b96531997329c3e995f435215aaff97c3add2d3ce8be20ed886b38e37bb5efb6","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-39","para":"45-39","html":"
See Examples 1 through 16 (paragraphs
958-720-55-36 through 55-159
), which provide implementation guidance for these three tests.
","snippet":"See Examples 1 through 16 (paragraphs 958-720-55-36 through 55-159), which provide implementation guidance for these three tests.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:77949bb24a6c227c59336d87bc0b145920e3b6fa622bbbc2cba686a0e9b28262","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-40","para":"45-40","html":"
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 raised for that discrete joint activity.
","snippet":"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 raised for that discrete joint activity.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4e0aaf3916b1d199c24d0e92b6f299a9c6b24e3c3ea4485adf74b39be8345060","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-41","para":"45-41","html":"
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.
","snippet":"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 contra…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e3e71f5108d7e6ed2d463ab92c8e16551fc791d076daa1a2a00b4088b86fbdd3","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-42","para":"45-42","html":"
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.
","snippet":"The compensation or fees test is a negative test in that it either:\n(a) Results in failing the purpose criterion\n(b) Is not determinative of whether the purpose criterion is met.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:174c2f47bc4f92ae6fb7bad2453a16c511211e7689c0a3856417e5ede35108e7","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-43","para":"45-43","html":"
In considering the guidance in paragraph 958-720-45-38, 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.
","snippet":"In considering the guidance in paragraph 958-720-45-38, 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 t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:80b065558988a2593c73f0bdc1e7cbe28bd8067749411d44f858d9c46f144ef7","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-44","para":"45-44","html":"
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 (the separate and similar activities test) shall be considered.
","snippet":"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-…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23eabe431df3c2227fee53d5a7c6347c82590e4b14ab7a3f80eac8de7c068e84","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-45","para":"45-45","html":"
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
      ).
    2. 2
      A similar program component 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. 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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aa6130e32b87c1a62a1ff6e9ccba13deee12353e19959c904a165e820e28c2cd","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-46","para":"45-46","html":"
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.
","snippet":"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 tes…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39c1ab08f15b2358abed37f784faabbd8a04f460fdb45d871fc2fc8a10221c06","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-47","para":"45-47","html":"
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
or
958-720-45-45 through 45-46
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
, which provide implementation guidance for applying the other evidence test.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a6046f6954d7c9429bdd9f8ba21c25a806e91e041f60a549dd6ff299abab725","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-48","para":"45-48","html":"
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.
","snippet":"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 o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:08f2fb48e7dcef804d05aeca88b47bd87032f72fc82f0d53b33da8f2d759b508","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-49","para":"45-49","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a72a0411621678d79600a5740151c010595babdb9dc2d4ba0704d3473f693dd1","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-50","para":"45-50","html":"
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). 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.
","snippet":"The content criterion is met if the joint activity supports program or management and general functions, as follows:\n(a) Program. The joint activity calls for specific action by the recipient that will help accomplish th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:672d4f9519aa73c5b0fcc282d1e73514078923aaac5bad18377bc6d572ff1e91","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-51","para":"45-51","html":"
Information identifying and describing the NFP, its causes, or how the contributions provided will be used is considered in support of fundraising.
","snippet":"Information identifying and describing the NFP, its causes, or how the contributions provided will be used is considered in support of fundraising.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7485d97e835e3a6571ce30d520e9a78bd549e52c5d248af591655188c581c00","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-52","para":"45-52","html":"
Activities that are undertaken as a result of receiving contributions are management and general activities. For example, activities conducted to comply with requirements of regulatory bodies concerning contributions that have been received are management and general activities.
","snippet":"Activities that are undertaken as a result of receiving contributions are management and general activities. For example, activities conducted to comply with requirements of regulatory bodies concerning contributions tha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:157e0420f5cc7217cc9a1742d33cfea8ebb9c6d7fb5e1517249249fd1bab972c","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"citation":"720-958-45-53","para":"45-53","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3b04dbb3889627e8e384e691bc8011db014eb79551c3ed3e575e7d744dfc98ed","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:134ef4800c48101496775124a637b283aafad458e00b16f67c763320706e4d36","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":"Allocation Methods","paragraphs":[{"citation":"720-958-45-54","para":"45-54","html":"
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
, 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.
","snippet":"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 p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a485af0bece5cfdcc326f33dcf3d968031453e79875bacfd07078c4687211f7","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8026d21edefdb34ca602ed405f17d4b0df07d0d5b0f32d49d89b7ec87fe0581a","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":"Incidental Activities","paragraphs":[{"citation":"720-958-45-55","para":"45-55","html":"
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 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, 958-720-55-163, and 958-720-55-165 for implementation guidance for incidental activities.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6f8a9767ab5ee99de3634c575774eb1783ac28f5d1bd50c5935386ed73a087a5","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a766165c396f409a2fb40320b3e036054f18c196b06bd64a28841a3ed0ad6601","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"block":"Services Received from Personnel of an Affiliate","heading":null,"paragraphs":[{"citation":"720-958-45-56","para":"45-56","html":"
The increase in net assets associated with services received from personnel of an affiliate that directly benefit the recipient not-for-profit entity (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 for presentation guidance on services received from personnel of an affiliate.
","snippet":"The increase in net assets associated with services received from personnel of an affiliate that directly benefit the recipient not-for-profit entity (NFP) and for which the affiliate does not charge the recipient NFP sh…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f67eab80499f796d84c8976484e9c7c93877c572dd951f663b146a7a5a0d8c03","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c59b9d3f2d7d74be1a6b460d91709995a1fd350d67a812a3d77d070e942a94f5","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ee89d5b7482540fa97ccb58b9e2261aeee64628b1f29bda306a112a2ba29c28f","downloaded_from":"2026-09-10T01:13:16.668Z","last_downloaded_at":"2026-09-10T01:13:16.668Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477876","source_sha256":"04b4588af75dee7371ff8aef690096e0fe249987827ad3154362203b90d4bfbb"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-958-50-1","para":"50-1","html":"
The financial statements of a not-for-profit entity (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, 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.
  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 or Note F in paragraph 958-205-55-21 for examples of note disclosures on the cost allocation methods used.
","snippet":"The financial statements of a not-for-profit entity (NFP) shall disclose the following information:\n(a) Total fundraising expenses.\n(b) Total program expenses and information about why total program expenses disclosed in…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:413062df704c95a233d9f4234d20df1945d78f6648556851290b5f92c0bb7435","downloaded_from":"2026-09-10T01:13:20.026Z","last_downloaded_at":"2026-09-10T01:13:20.026Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478184","source_sha256":"331beec1ffa2d6e30487f559875ae2fe392c14a1fe282dd1b29dc756aa32122c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b40a869efd1d7428def5f0e4724a25b09117b6f7cf65b31b38108e0713ceef0","downloaded_from":"2026-09-10T01:13:20.026Z","last_downloaded_at":"2026-09-10T01:13:20.026Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478184","source_sha256":"331beec1ffa2d6e30487f559875ae2fe392c14a1fe282dd1b29dc756aa32122c"}},{"block":"Accounting for Costs of Activities that Include Fundraising","heading":null,"paragraphs":[{"citation":"720-958-50-2","para":"50-2","html":"
A not-for-profit entity (NFP) that allocates joint costs shall disclose all of the following in the notes to its financial statements:
  1. a
    The types of activities 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, if practical. See Example 20 (paragraph 958-720-55-166) for illustrative disclosures.
","snippet":"A not-for-profit entity (NFP) that allocates joint costs shall disclose all of the following in the notes to its financial statements:\n(a) The types of activities for which joint costs have been incurred\n(b) A statement …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ce55e2d0a8f5df1377473bf67f83fd63dbddb2213856466206f860085647ec97","downloaded_from":"2026-09-10T01:13:20.026Z","last_downloaded_at":"2026-09-10T01:13:20.026Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478184","source_sha256":"331beec1ffa2d6e30487f559875ae2fe392c14a1fe282dd1b29dc756aa32122c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d713b5a09dc11374fbed9219edd462e4f862bb21ae9d2785ae6a06d06224aaac","downloaded_from":"2026-09-10T01:13:20.026Z","last_downloaded_at":"2026-09-10T01:13:20.026Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478184","source_sha256":"331beec1ffa2d6e30487f559875ae2fe392c14a1fe282dd1b29dc756aa32122c"}},{"block":"Services Received from Personnel of an Affiliate","heading":null,"paragraphs":[{"citation":"720-958-50-3","para":"50-3","html":"
The disclosures in Subtopic 850-10 shall be provided for services received by a not-for-profit entity (NFP) from personnel of an affiliate.
","snippet":"The disclosures in Subtopic 850-10 shall be provided for services received by a not-for-profit entity (NFP) from personnel of an affiliate.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0c9a06bd2daddf9cc5fffffacd9999b99ce295013bc8c1741bc682ebf50a1967","downloaded_from":"2026-09-10T01:13:20.026Z","last_downloaded_at":"2026-09-10T01:13:20.026Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478184","source_sha256":"331beec1ffa2d6e30487f559875ae2fe392c14a1fe282dd1b29dc756aa32122c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3bf53628a078e603b040361382d31c454e0f0daf88e3e74dd202894da7d34b17","downloaded_from":"2026-09-10T01:13:20.026Z","last_downloaded_at":"2026-09-10T01:13:20.026Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478184","source_sha256":"331beec1ffa2d6e30487f559875ae2fe392c14a1fe282dd1b29dc756aa32122c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5a6d8ddb8247d2b3239b94e2ec3016217fc7835b29769f7496253fae384444fa","downloaded_from":"2026-09-10T01:13:20.026Z","last_downloaded_at":"2026-09-10T01:13:20.026Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478184","source_sha256":"331beec1ffa2d6e30487f559875ae2fe392c14a1fe282dd1b29dc756aa32122c"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"720-958-55-1A","para":"55-1A","html":"
The following diagram illustrates the process for determining whether a transfer of assets to a recipient is a 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 can be found in Subtopic 958-605 on not-for-profit entities—revenue recognition.
","snippet":"The following diagram illustrates the process for determining whether a transfer of assets to a recipient is a contribution or an exchange transaction and how to determine whether a contribution is conditional. Further g…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:192903867e24a9c85b12d475c7e8ced89b37699a1073b8f5a2d9b7a9ec8af083","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:531863439c86d853effe4ca8aa21ae680f0c7aeefa308e297b252edc63f09394","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"block":"Accounting for Costs of Activities That Include Fundraising","heading":null,"paragraphs":[{"citation":"720-958-55-1","para":"55-1","html":"
Paragraph superseded by Accounting Standards Update No. 2018-08.
","snippet":"Paragraph superseded by Accounting Standards Update No. 2018-08.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc7e2685fa4032979de1bb6045709af614ae275a99d8431582bd845732dbc294","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26eecd3763d0023eb4bc4064687f97d343c50315fbf712738487bfef7768baa6","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"block":"Accounting for Costs of Activities That Include Fundraising","heading":"Implementation Guidance","paragraphs":[{"citation":"720-958-55-1B","para":"55-1B","html":"
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 that include fundraising.
","snippet":"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 a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60c380467c22b8d3336255aa9fdb91953686831ec95bbf56dd54b10f2f6631c0","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-2","para":"55-2","html":"
The following flowchart summarizes the guidance in paragraphs
958-720-45-29 through 45-53
and is not intended as a substitute for the guidance therein.
","snippet":"The following flowchart summarizes the guidance in paragraphs 958-720-45-29 through 45-53 and is not intended as a substitute for the guidance therein.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f062ca2110d58610829ce331684eb188fb37bf275e138872670219d5e8ce6620","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-3","para":"55-3","html":"
The following provides implementation guidance related to paragraph 958-720-45-35.
","snippet":"The following provides implementation guidance related to paragraph 958-720-45-35.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:591a0c388e760009adf5e14f286dec101768d6b734f054c638643725d3864f2b","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-4","para":"55-4","html":"
The following are examples of activities that call for specific action by the audience that will help accomplish the not-for-profit entity's (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, 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.
","snippet":"The following are examples of activities that call for specific action by the audience that will help accomplish the not-for-profit entity's (NFP's) mission:\n(a) An NFP's mission includes improving individuals' physical …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:76952f51a92a5c66da8308b8e7a443409267d3d16081c262d619ec29d18fec3d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-5","para":"55-5","html":"
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 is not a call for specific action by the audience that will help accomplish the NFP's mission.
","snippet":"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:\n(a) Educating the audience about causes or motivating the audience to otherwis…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7df17ab75102508dd62c94471f946c59530d765f1b67146dd08f87c4663f15c8","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-6","para":"55-6","html":"
The following provides implementation guidance related to paragraph 958-720-45-47.
","snippet":"The following provides implementation guidance related to paragraph 958-720-45-47.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d051d9a803a1c147ac93f7ea26f50666b8d3e0455a717f170bf9b5cd7ad827c7","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-7","para":"55-7","html":"
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. The facts may indicate that the purpose criterion is met if the program component of the joint activity 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.
","snippet":"The following are examples of indicators that provide evidence that the purpose criterion may be met:\n(a) Measuring program results and accomplishments of the activity. The facts may indicate that the purpose criterion i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9700849bfa6d5c5ea41c84f0d7dbad4b5de7ea02b6aafbbc41b51e472068c883","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-8","para":"55-8","html":"
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. The facts may indicate that the purpose criterion is not met if some, but less than a majority, of compensation or fees for any party's performance of any component of the discrete joint activity varies based on contributions raised for that discrete joint activity.
","snippet":"The following are examples of indicators that provide evidence that the purpose criterion may not be met:\n(a) Evaluation. The facts may indicate that the purpose criterion is not met if the evaluation of any party's perf…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eaf3f15163027bb2e2847115b8616232822f76e8277eaeb808dc934f16cd9be7","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-9","para":"55-9","html":"
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 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 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.
","snippet":"The following are examples of indicators that provide evidence that the purpose criterion may be either met or not met:\n(a) Evaluation of measured results of the activity. The NFP may have a process to evaluate measured …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b2c291503c48fb7f04384a8284cfc00f34e3e16d9c828ed80d5e3e9e49b4b426","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-10","para":"55-10","html":"
The following provides implementation guidance related to paragraphs
958-720-45-48 through 45-49
.
","snippet":"The following provides implementation guidance related to paragraphs 958-720-45-48 through 45-49.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc3a361f5beb545e0f3d510d0c506d9636adde9382dffd98af8916a7d3ed0e78","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-11","para":"55-11","html":"
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 of $50. In that case, the audience is required to make a $450 contribution in order to attend.
","snippet":"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 th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e41e925a1c78981d25e86db7c47d27cb96b70cfbd0f901059e1de5d413efbb3","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-12","para":"55-12","html":"
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 must be overwhelmingly significant in order to rebut the presumption that the audience criterion is not met.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cf81a083d6551e489bf77bf329c1651dfcd45a80f579daedf48d0d8bb8d45cbd","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-13","para":"55-13","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3396f61a6fb0fe56c76aaa80a06a32ade271b4a7b21cac4b08635e3a739c0f35","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-14","para":"55-14","html":"
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.
","snippet":"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. Neverth…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09f3dfa72ee0cceae28d96611d8bba064b696f6c3ec9599c4cc05e2a26f713e0","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-15","para":"55-15","html":"
Paragraph 958-720-45-49(c) 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.
","snippet":"Paragraph 958-720-45-49(c) 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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b4b6ad686edf04238c2ed527603be8db5d35f2633422370883f51ccec4067cf2","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-16","para":"55-16","html":"
The following provides implementation guidance related to paragraphs
958-720-45-50 through 45-53
.
","snippet":"The following provides implementation guidance related to paragraphs 958-720-45-50 through 45-53.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:897bbc27b3d1c7703a1a25d3b44f11300a5802a26cf3037d5444cd7f6d5055a2","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-17","para":"55-17","html":"
Paragraph 958-720-45-50(a) 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, 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.
","snippet":"Paragraph 958-720-45-50(a) 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-…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:96103b234ec2adaa35cb3652ca43c55a850ec8632a68e82e1e29313f3aed92eb","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-18","para":"55-18","html":"
Paragraph 958-720-45-50(b) 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 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:
","snippet":"Paragraph 958-720-45-50(b) 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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a1d899b29cf65d602e931e3b84619749a23ddcd7a26282e4dcb4eb3c64e22d1","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-19","para":"55-19","html":"
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.
","snippet":"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 Subt…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ebcc9b0f5816b5de6b185a930457274e887761ca7165385b85cd875bd976a04c","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-20","para":"55-20","html":"
Some NFPs may conduct membership development activities. 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.
","snippet":"Some NFPs may conduct membership development activities. If there are no significant benefits or duties connected with membership, the substance of the membership development activities may, in fact, be fundraising. In s…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c5b2fcb895660d0180e24c5b431937b4771461f073db20f828c12c2a8a694e83","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-21","para":"55-21","html":"
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 should be allocated between fundraising and the exchange transaction.
","snippet":"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 a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d8fa60c458d8937a0ee39e12f1d90c4fd911113b69e1466c22142dd3dd39ee92","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-22","para":"55-22","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d7844e2bfc71baa12e0a0684fa06f41f588b97186d51bf21166025b768322c25","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-23","para":"55-23","html":"
Some NFPs have missions that include educating the public (students) in areas other than causes. Paragraph 958-720-55-4 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.
","snippet":"Some NFPs have missions that include educating the public (students) in areas other than causes. Paragraph 958-720-55-4 provides that, for those entities, educating the audience in areas other than causes or motivating t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e6f5120086260c89f6794769ce2580e6de25d03229559d22d230b48988c3ed07","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-24","para":"55-24","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:64877019061afa80d2b8d4175367beb240c85e1b9bf53ddc636e99253c50caa7","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-25","para":"55-25","html":"
Paragraphs
958-720-55-26 through 55-31
provide some commonly used cost allocation methods.
","snippet":"Paragraphs 958-720-55-26 through 55-31 provide some commonly used cost allocation methods.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2ba483ac6f3ea9ed822521123164a8e8655faf958c5b41fa6c381b3a93d62b7a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-26","para":"55-26","html":"
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.
","snippet":"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, a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9d2bb9d5fc9af778a89ebaafd7ef0d8f5a4f8da8ee38b92f9dd456fa4ab59123","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-27","para":"55-27","html":"
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.
","snippet":"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 joi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ea4c7918eb13727b628c12825ecc535b0cedf0cec4c8b9e9d14a85143061c82","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-28","para":"55-28","html":"
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.
","snippet":"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 spe…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:051cfaeba9abcbf13c78a4ec82fd8c55d9a6d281bc87f2696cbe4023e45d5fb9","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-29","para":"55-29","html":"
For example, the costs of a direct mail campaign that can be specifically identified with program services 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.
","snippet":"For example, the costs of a direct mail campaign that can be specifically identified with program services are the costs of separate program materials and a postcard that calls for specific action by the recipient that w…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c0cb92ebc611c04b4d60add767ed3874bdf65973d8ce931ddb4dc5b3166af114","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-30","para":"55-30","html":"
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.
","snippet":"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. Th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9a64344b7c468f95d95d7ff1e49617a90e7680996b0179dec67dd547850e4b95","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-31","para":"55-31","html":"
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.
","snippet":"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 s…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:577a43a519c33a1cb27bdab7a30777a9da6b25d9327a866080e6e64b2dfcf8d0","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-32","para":"55-32","html":"
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.
","snippet":"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 b…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e0dac23b604b7c6fa62a6f2b5514a4a983242a57d0a800eeb12105f143d2c3d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-33","para":"55-33","html":"
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.
","snippet":"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 mat…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:376d87a4f23bbfb83af1ec3c111fcf1bdbea81c7514d98581b4efb22ecc11d39","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-34","para":"55-34","html":"
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, 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 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 are not met, the costs of the pamphlets used in the fundraising packets, as well as the joint costs, should be charged to fundraising.
","snippet":"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-r…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:30cbbaf3f28426713f4dd63dbe891353d4c3ba86476609aa2d333d2d9a62a2d5","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dd0369c86eca99d7b8b8894257d0ed54fda887cec0265bf91c84735cfddb3a22","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"block":"Accounting for Costs of Activities That Include Fundraising","heading":"Illustrations","paragraphs":[{"citation":"720-958-55-35","para":"55-35","html":"
Paragraph 958-720-45-29 provides that all costs of 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.
","snippet":"Paragraph 958-720-45-29 provides that all costs of 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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:535c153419c5bd2e5515423fdd27eafd387e2837fe391ef4754fdfee94960e3c","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-36","para":"55-36","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:85bb3cc76a1da278c12017c90b4f454f5adb0826796b00d9fab59b2fa8a181b7","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-37","para":"55-37","html":"
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.
","snippet":"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 drug…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d7a2cb1415a96b8589fb619752a3d669c25653cd791975cfe58a5170c84c9540","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-38","para":"55-38","html":"
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.
","snippet":"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 abu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:101f28ed8e86d65bfd828f8b85d9a33ddfbcdeaf522c643e7b2b25e617b8053f","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-39","para":"55-39","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:251624a32e6bcd10648462e5e5d2e0bced8de9b1a56eb0ffaa3b05cdd2b57140","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-40","para":"55-40","html":"
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 should be considered. Neither the factors in paragraphs
958-720-45-40 through 45-44
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 miss…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9f5b744e991b8aecad93ea72004a9d2f3c85a58eb503377fa24b1a24f0bf6df","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-41","para":"55-41","html":"
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
    .)
","snippet":"The purpose criterion is met based on the other evidence, because:\n(a) The program component of this activity calls for specific action by the recipient (encouraging parents to counsel children about the dangers of drug …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e261ea13de580fe8b5da60a5d225b16d74d05e6945f0ac119ef69864b956b9fa","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-42","para":"55-42","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7454ac72a1263804767537e978f5466eec61ac3d48bc652860b46979a924654","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-43","para":"55-43","html":"
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).
","snippet":"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) tha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc8a90e1b332242defebb40ee8e3039ac563ea347a113a81104105db1b06ab65","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-44","para":"55-44","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f1d745f5ba178a1611ebcc732b5c0c7c19e92f45f3745c78b1504a73ca4634cf","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-45","para":"55-45","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9371ca0ce093491d8f591843b28284e12be5b344d380e15f2100e81c679614d9","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-46","para":"55-46","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d06a649531d9d5fb3b1ea364bcd3170206c17fe41aeff0d8a83cf6172fa91565","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-47","para":"55-47","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07e9de59ae2c33407e87482205ef70813e019ef01dfdca4945f78c8550e5733c","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-48","para":"55-48","html":"
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 should be considered.
","snippet":"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 should be consi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:13b167cce346061f90e953ae151ce9a0708646d8856d290fcdb5dc4fb6d1b411","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-49","para":"55-49","html":"
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).
","snippet":"The purpose criterion is met because:\n(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)…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5acb8481d104923996965c2b924f9ee67d0789816f2993898010179ed9b4ceee","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-50","para":"55-50","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b8ea25ec0e1c1ce086ea9e58dc8a4df30b77f7c4c7180daf13d83a9bd5086ee7","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-51","para":"55-51","html":"
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).
","snippet":"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 e…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0f9a5e34d46da05d8466435630e50d2eed2c9322a98615581000b35168f9d1e4","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-52","para":"55-52","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b86be82ba10c39c3049d429d006e3e975679cb1c12a404d4e9d92e9d3ed6b322","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-53","para":"55-53","html":"
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.
","snippet":"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 go…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6d93a4db9aa95eb1ea7f2d7679c1ce841a1d323616725a498b87f6730d3918aa","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-54","para":"55-54","html":"
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.
","snippet":"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 u…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2f0155a13d98d9f9ae093f2e71c01e3b2da14e5a2d46197af9d143610c5d4832","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-55","para":"55-55","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f4d4be3078ea900c78db9edfd9a8fc1a85c8c38fbc8387d90efdb85770df215d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-56","para":"55-56","html":"
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 should be considered. Neither the factors in paragraphs
958-720-45-40 through 45-44
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 9…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1cb8cc7744f5f0abc93d391d60d9c2df80bb2b03f33defaf320965c357c64cca","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-57","para":"55-57","html":"
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.
","snippet":"The purpose criterion is met based on the other evidence, because:\n(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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0dd40907a8a61aa770aaea701d9b87b458c4b22c42bbee294f26a15f833c0b42","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-58","para":"55-58","html":"
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).
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8c1646b4e907b8ba873619128e8e0562830677034ab65217e3d83f13dac2ab80","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-59","para":"55-59","html":"
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).
","snippet":"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 (t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:82c2f6311ff93a78299da2a14891c952388037b2d2f755e6cf249683df3ba604","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-60","para":"55-60","html":"
The following Cases illustrate the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
:
  1. a
    The purpose criterion is met (Case A).
  2. b
    The purpose criterion is not met (Case B).
","snippet":"The following Cases illustrate the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9:\n(a) The purpose criterion is met (Case A).\n(b) The purpose criterion is not met (Case B).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:78cf8341c7e045fbc5fbc5dd0de21ed01bda622021e27989f3d0d5eebbf32fbf","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-61","para":"55-61","html":"
Cases A and B have the following assumptions.
","snippet":"Cases A and B have the following assumptions.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fb712ce77271c33f99e575b75956ec8be36694d7be50ffd10db3bb3ec4abef36","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-62","para":"55-62","html":"
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.
","snippet":"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'…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b22da9ee27f7a8479381946af5fc81ec01fe46584530f350e813d71c59502a5d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-63","para":"55-63","html":"
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.
","snippet":"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 contribu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:341c0def5bf051545fd633d77c0909539b5138a3f2e09392c44c5ccdeaa53220","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-64","para":"55-64","html":"
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.
","snippet":"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 t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8214495749c267317a04aaf3ab6f0bbdddcf1f0cf0d9f2fe62a2362e2b141d10","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-65","para":"55-65","html":"
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.)
","snippet":"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 identifiabl…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b941bd6aa21b4fbf44536f6dfa44298fbfcc1a7c99a38c770d82b4575988181f","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-66","para":"55-66","html":"
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 should be considered. Neither the factors in paragraphs
958-720-45-40 through 45-44
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 should be considered. Neither the factors in paragraphs…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d433a35be0ffd05b95f16def691188cc3513c85ca1edb21184309d96c69eaf81","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-67","para":"55-67","html":"
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.
","snippet":"The purpose criterion is met based on the other evidence, because:\n(a) Performing such programs helps accomplish Entity D's mission.\n(b) The objectives of the program are documented in a letter to the public relations fi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:588815cb27fab83525b4c80e94841f8d6fdd54279dfe6afe61ee36e1b45e1144","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-68","para":"55-68","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f8e50c8aa3cbe2d49773d554d9d0630448c6d678769b4807620de0b61c316a0a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-69","para":"55-69","html":"
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).
","snippet":"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 fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:02ed446693130a8f3b6572356cd0fe8567d8f5b54a4b253d7dbdc95702646674","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-70","para":"55-70","html":"
In this Case, NFP D employs a fundraising consultant to develop the first brochure and pays that consultant 30 percent of contributions raised.
","snippet":"In this Case, NFP D employs a fundraising consultant to develop the first brochure and pays that consultant 30 percent of contributions raised.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:28aee124d94dd2d2a335503e0ceff8fa28ed73c3abdad670728df81e58552f0e","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-71","para":"55-71","html":"
The content and audience criteria are met.
","snippet":"The content and audience criteria are met.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbcdfd61ad14740385c4dff63779cf46e9231e81fd2b582ba6d04cb5b4ed11dc","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-72","para":"55-72","html":"
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.
","snippet":"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 pa…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:977cbe79d9f1b856ca5609652f218868d59526b7379c3c40ccec1a942b213683","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-73","para":"55-73","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d5ff973d7f7590f412a34d63d4fb4349c6bca77eeedd64a3a540a084fe343292","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-74","para":"55-74","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9343bce8d9eccf7d2312a60b05213eaf6501a4207ed102768aee840068ed8c22","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-75","para":"55-75","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:032f1c2271a53766859f28d080a2a1ff298db60bf4a9a5202777fe39e030c7b6","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-76","para":"55-76","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3220820dfec1bd17c6a2a9ce20842e890b5221f7eeed8a4d6155eb9fefa4e290","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-77","para":"55-77","html":"
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 should be considered. Neither the factors in paragraphs
958-720-45-40 through 45-44
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 should be considered. Nei…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:533d611b71752f90825b50a8832bd18b778a0897d5ead611241ccdd646b12795","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-78","para":"55-78","html":"
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).
","snippet":"The purpose criterion is met based on the other evidence, because:\n(a) The qualifications and duties of the personnel performing the activity indicate that it is a program activity (the canvassers are selected from indiv…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bbfe6cc6fa14f35b801904ce56ba5376eb58d9b9db76791cb337998177080941","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-79","para":"55-79","html":"
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.
","snippet":"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 pro…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3cc12bd26a0b139ad0b2eb65e7a080e6d67d4f996df58a80215fd1bee4d38a66","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-80","para":"55-80","html":"
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).
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:958cfa2c65a388a7f22b728739bd894f1e2cb2ad05ce9c31bc691de83eb524d2","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-81","para":"55-81","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7632ea83ddde83ddc842000986720da8e98ed9af8d3f3146a958fedfef5c93ab","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-82","para":"55-82","html":"
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.
","snippet":"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 t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bac882583e59439c052de9eb5370aac4cb9113c7c011d7ea90b0ec4e03ca3c38","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-83","para":"55-83","html":"
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.
","snippet":"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 thos…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d551b30c96db0d7fe2695cf25a4fe43d1b6a6fc3b074d9e02247bd5b0532b084","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-84","para":"55-84","html":"
The purpose, audience, and content criteria are not met. All costs should be charged to fundraising.
","snippet":"The purpose, audience, and content criteria are not met. All costs should be charged to fundraising.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:37522b87564e86210d22416a6f00524f7b2981735194f73584f85ae6270c09da","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-85","para":"55-85","html":"
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.
","snippet":"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 cri…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:85a18ad2718e7ab1314bf7cef76e78f032aba5ac2422e4d969846cd03ebfe1fc","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-86","para":"55-86","html":"
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.)
","snippet":"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 p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0ed29fc77080cc267d3480543f64d46196e659c3eaaee8ed3a46f1f309572940","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-87","para":"55-87","html":"
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.)
","snippet":"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 specif…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:17afb4818fd0ebeb2f880ce118f1997c76ee295cef6e2c1769be76ee43936b0a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-88","para":"55-88","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:03a9009ff722f38ac64a49c0058c9662ec56602d2b5b0abfe4cf2accee4b3b34","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-89","para":"55-89","html":"
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.
","snippet":"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 minu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7ebe5edce815d28dc01059a0e6b4d6ca5ea37c779fd0a4e57516fd7f28bc0f0a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-90","para":"55-90","html":"
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.
","snippet":"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 situa…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c65ab471cac21e8cf59ee454296dc4c062914b1564631fb0e24219b9c306bbcf","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-91","para":"55-91","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ae6f67d5ec1b9222578d685cc5690f0f004ad3c7465b53b4fbb4f7ea150c9303","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-92","para":"55-92","html":"
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 should be considered.
","snippet":"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 should be considered.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3429e168090aadc8d182f84dd739224df40825ee67cc93abdba3a4af6ab4bf7c","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-93","para":"55-93","html":"
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).
","snippet":"The purpose criterion is met because:\n(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).\n(b) A similar …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3acc2d36cdd4094aea0a2a4d31bfb4b9ef0c24ceadf9c68c3cf465e66f5eee9e","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-94","para":"55-94","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:daed504a2eac557b1b3ea8af4b2f4bdfae29c04a33b859fe036e7f892b6f2820","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-95","para":"55-95","html":"
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).
","snippet":"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 fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0ab10a14f0121b99f772960db487e463bf702bfaec6a807bbbb64f8a309acf9a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-96","para":"55-96","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3b4e75fb4d694d731c7593e54ae85d323110a0cc824780236ad8b2571181f10b","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-97","para":"55-97","html":"
Not-for-Profit Entity H's (NFP H's) mission is to provide food, clothing, and medical care to children in developing countries.
","snippet":"Not-for-Profit Entity H's (NFP H's) mission is to provide food, clothing, and medical care to children in developing countries.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0f45e49d9c5a4ebb1c0fc553d92dcd0b8e7988bd4c575a9b91e7e936999be316","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-98","para":"55-98","html":"
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.
","snippet":"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 th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4ebce416724f7ea344e6b4e0ee87964212dfc1bafb93d0089cd8b9d22bbed7e6","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-99","para":"55-99","html":"
The purpose, audience, and content criteria are not met. All costs should be charged to fundraising.
","snippet":"The purpose, audience, and content criteria are not met. All costs should be charged to fundraising.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:56a2da40d72e9e91e2148f00d2cb8d43095b280b5443fd84f87058c533ce5fc6","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-100","para":"55-100","html":"
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
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
, 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.
","snippet":"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, not…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d5b1883cf6d2340e81da88f51969e2e29a42fd13f57d3901563886fb9771458a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-101","para":"55-101","html":"
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.)
","snippet":"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 pr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2691e1e9fd1b9fe4feaaab96b0f71beaa2a8fcfbd64710959bf21f50d9c5f1dc","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-102","para":"55-102","html":"
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.)
","snippet":"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 fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:723143a360dd924f5781a4eed1d9a9f4e63e455e065ac84dedcdf7fa44113706","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-103","para":"55-103","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1b091fc1e5e7a25033dee9e0076bb70df4b2094795d9c5ece15ef70c2e35a8c4","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-104","para":"55-104","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c68254f77a8d64ff73112bc8330bbf4304899e81f68836f04322caf491541e6e","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-105","para":"55-105","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f2a5d29237fbc69a8b0f08443a20b42b99cad72ca5ce2a2a1b22c83a72cb76a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-106","para":"55-106","html":"
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
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 nor those in paragraphs 958-720-45-45 throu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:666aab4ed881f49f573fe716e4f3dc81da643cbf59120b050ffa404a09e4dbd2","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-107","para":"55-107","html":"
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.
","snippet":"The purpose criterion is met based on the other evidence, because:\n(a) The employees performing the activity are not members of the fundraising department and perform other nonfundraising activities.\n(b) Internal managem…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:57c757842f1a798190bce95e26be273f2e00905de2b2f7c48293c437084cffc3","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-108","para":"55-108","html":"
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).
","snippet":"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 m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:73fd3057e09cdd19d7a9628d81461d3ef1ad04937fb29e5733081e6df1f0b6bf","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-109","para":"55-109","html":"
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).
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ffad01ca62e7f443a4964c512afa0abe9b24e5745f4658bd4535aff43208c13","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-110","para":"55-110","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ffe60c22300e59867c6fdba563fd39f91bda2afb08b5ec7d2df2ee93021ac171","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-111","para":"55-111","html":"
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.
","snippet":"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 requ…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:267f36c9fc170488e29b67fbd245359a163f34650186493b247ebabaaa4d0578","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-112","para":"55-112","html":"
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.)
","snippet":"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 c…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f7886525a8474d25f8f26a06aba9ee27fc733b38bdcd902b93698e398c0d4037","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-113","para":"55-113","html":"
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
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 nor those in paragraphs 958-720-45-45 throu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7269c5e75fcb99476e4b39b97a96638fa2a9382f7e083b815795f32b75ceb1c4","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-114","para":"55-114","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:126eb6fa61e01e67fcdb5d2953266a023ff0b1af06304c2b7c493cb8343862fc","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-115","para":"55-115","html":"
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.
","snippet":"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 contribu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:98d23109ec3c441339ba5e41a6dbb6ec3342a3f2a05f5cb571e38dc427652436","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-116","para":"55-116","html":"
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).
","snippet":"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).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ffe01be868f1a49477c44f6609e7d42c1cfe4e4c6dcdfc0a611b3bf73847341d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-117","para":"55-117","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e63aba35bffc759ffa2af0e7ae07b577f1f771b36e188a607bd7c94e6f142f27","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-118","para":"55-118","html":"
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.
","snippet":"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 congr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3a8017a81773abfd54af9ed935fc79a68cf998ac8bcc16ea4b92e0da33a4a433","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-119","para":"55-119","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:042419a4056d6c15f3b653cab8ba26717e480cf2a3c2c21a17d81a8b9d744681","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-120","para":"55-120","html":"
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 should be considered. Neither the factors in paragraphs
958-720-45-40 through 45-44
nor those in paragraphs
958-720-45-45 through 45-46
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
should be considered.
","snippet":"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 mi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9097429c478c6d05da9c7e08d346104cb5685373b6d79d4ae46c7d6a8cc067a4","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-121","para":"55-121","html":"
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.
","snippet":"The purpose criterion is met based on the other evidence, because:\n(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 condu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9c52c13edc0cbb125025bec0a6e2845fa30753a3d7f3931a982f1b90507da388","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-122","para":"55-122","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e11c0f86d0fafbbdfd181bf3344e70838dc29b443647c99b9049643522ef8d17","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-123","para":"55-123","html":"
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).
","snippet":"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) t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cb79e4092b8ae1b2d43aa7131b94c8015e12c534e13e1abbce61ff897530cefa","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-124","para":"55-124","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:12ba87cc0a265c2521a9dedef341ec01de3548f44d3caab72b78e66d957fac45","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-125","para":"55-125","html":"
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.
","snippet":"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 subscript…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:598f11b15aa66d48ce2797d4ee886a7b1ad95419905dd6c335e12eaf1a4d598c","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-126","para":"55-126","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cfd7c7cc49d52cdcfe9248960ca8a33947234f5ea8840b90173bce8cb75f0b35","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-127","para":"55-127","html":"
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 should be considered. Neither the factors in paragraphs
958-720-45-40 through 45-44
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 should be considered. Neither the facto…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cc5892189b4d5a23c69b0c930e202532cb4503c5561122a8918487daf2ef50e3","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-128","para":"55-128","html":"
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).
","snippet":"The purpose criterion is met based on the other evidence, because:\n(a) NFP L measures program results and accomplishments of the joint activity and in evaluating the effectiveness of the activity, the NFP places signific…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2e49b0489cb49b7a9b909600ec443df34cf4d806f2e5ead9ceba0bda5e8447b3","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-129","para":"55-129","html":"
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.
","snippet":"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 componen…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cab0b493c12b7db1976fe67e9ea6cddcc86286fcf1f2eff984aaaf64c2d3e788","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-130","para":"55-130","html":"
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.)
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ec23ec11c7e76426f091f0ab3c594d936a546112825258cb0f6d42a20d670a95","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-131","para":"55-131","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e84ac5d3719c62b480e0c931095951dfe0442e7e27ff19597deb457e2ef1ac41","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-132","para":"55-132","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bfc989a75e31946ff61567e3160040fbcaf11937efbf6c7b0d31accfc4ce2645","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-133","para":"55-133","html":"
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, 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 provides guidance concerning reporting special events.
","snippet":"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 958-72…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f580887fd4cc27e41f7adbe0720a0da67a550e73dc487b4ea73d8b3b51d550d1","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-134","para":"55-134","html":"
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 should be considered.
","snippet":"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 should be considered.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3fda79f2edef5fc223d989f54ce7abbe0feddcc1e54bfce4d23afa5db02e0a27","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-135","para":"55-135","html":"
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).
","snippet":"The purpose criterion is met because:\n(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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:baf25e5fe1714bd5303777f300477acccc59eb9ab294ece9e3e16d36792f8c0f","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-136","para":"55-136","html":"
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.
","snippet":"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 int…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:099bf2057c0c8b2fdaa3103833a0d9750a83264dba6077ba8389a9455a8608f5","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-137","para":"55-137","html":"
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).
","snippet":"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 pursui…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f9b91803f76c6f684ef43a069d1294bb0227a35b79f931346c70401e59dba5e2","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-138","para":"55-138","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:73bccde555dadee5f5bed9aa5e32e239d1ba04d438f9fbd76b928e99572446bb","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-139","para":"55-139","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6df8e6bb0022df63a50acaddeaacab5cda47c25ade642e97fa8de547e6fd1da3","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-140","para":"55-140","html":"
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, 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 provides guidance concerning reporting special events.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:242dbac8fa08086f21ffc133dc9bf4bf42d5a9a6ee42b501e917d35a6845d7a4","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-141","para":"55-141","html":"
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 should be considered.
","snippet":"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 should be considered.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:40743064044b5bc54bc60d60ae8c993b260f1015a3541c61a969fdbbbf5d888d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-142","para":"55-142","html":"
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).
","snippet":"The purpose criterion is met because:\n(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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bbc280388858c701f55470321ea184474f6905d3b34ddc49485825d2f17cd462","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-143","para":"55-143","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cab2856eb485979cc09a38f68096cb09a7e4c68ca7ebe4c45005777704cae707","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-144","para":"55-144","html":"
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).
","snippet":"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 pursui…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e105135365bb20e97e7686b9a93bb4d8018eafb65083dc6f77eb997b920e36c0","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-145","para":"55-145","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5020b6e8172f338d2945c0c333d60b50b221d1947bd87028433f53903467955f","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-146","para":"55-146","html":"
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.
","snippet":"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 al…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e72322337d5f88ce2857f07720782b5359b46f0ee677bc040a866184fc212d19","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-147","para":"55-147","html":"
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.
","snippet":"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 otherwi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:10e152c91414b245332c37def96618e96951da06c7ac0bf71eb55e9659faf89c","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-148","para":"55-148","html":"
The purpose, audience, and content criteria are met, and the joint costs should be allocated.
","snippet":"The purpose, audience, and content criteria are met, and the joint costs should be allocated.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:297fef89b341ad93a27044877979a9a09798c8d699796aade2ac3fb34cdf7b06","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-149","para":"55-149","html":"
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 should be considered. Neither of the factors in paragraphs
958-720-45-40 through 45-44
nor those in paragraphs
958-720-45-45 through 45-46
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
, should be considered.
","snippet":"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 should be considered. Neither of th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1c18faa34fd16ef284793895afe20e1b47f0139041940d471a31e4318170100d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-150","para":"55-150","html":"
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).
","snippet":"The purpose criterion is met based on the other evidence, because:\n(a) A process exists to evaluate measured program results and accomplishments and in evaluating the effectiveness of the joint activity, the NFP places s…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:102cea7a0b36feeea143bf4c8c1fffcd70b3a5d831119e54204711cf33d2d080","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-151","para":"55-151","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1f2b470c31df1d6d671247167c793a9595bb946a75d74ca923cbfa000182bb87","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-152","para":"55-152","html":"
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).
","snippet":"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 e…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:461ef986036fafb005803c086ceccfacf7a0e25ba50f3cc0f41914f6af84f03b","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-153","para":"55-153","html":"
This Example illustrates the guidance in paragraphs
958-720-45-33 through 45-53
and
958-720-55-6 through 55-9
.
","snippet":"This Example illustrates the guidance in paragraphs 958-720-45-33 through 45-53 and 958-720-55-6 through 55-9.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1caa55b789dbfe67911ffcc08decf143cf0ac78f660ffb5023574d7cff9573c1","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-154","para":"55-154","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d55af1ab3e681a9a2c76c30d128f04d64b13eeaf4eb8a9ddde4ff153325cd532","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-155","para":"55-155","html":"
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.)
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:14f125642d8714a90c5bb659fb10209632965e39ca449f74b3c719e1b2cad235","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-156","para":"55-156","html":"
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 should be considered.
","snippet":"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 should be considered.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:791febfe3ffbe16113f7067dfde1d5966f85829ce371895e8f4905db064bc573","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-157","para":"55-157","html":"
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).
","snippet":"The purpose criterion is met because:\n(a) The program component of the activity calls for specific action by the recipient that will help accomplish the NFP's mission.\n(b) The program is also conducted using the same med…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47d3becc12ebb0733f08882540487ebf80da4a1df08794a1d3c775148ddd84dd","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-158","para":"55-158","html":"
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.
","snippet":"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 (me…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:430e3486c5439ba5cb1b2a1b17dfb36f2e63f4aa4d62f588026f045323407ba0","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-159","para":"55-159","html":"
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).
","snippet":"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 p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d2965f0859c5429cfa68872902b40bfe74639bd89f61631a4122a91d349301f6","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-160","para":"55-160","html":"
This Example provides an illustration of incidental activities covered in paragraph 958-720-45-55.
","snippet":"This Example provides an illustration of incidental activities covered in paragraph 958-720-45-55.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c3e852d346d06e29d091f0d3d194e4f226a7e4edc7aeec98996535adfec1300f","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-161","para":"55-161","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39b58bfab52ab1819092b465cac3d78c6eb98084946c87c31e427797f4bca4a9","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-162","para":"55-162","html":"
This Example provides an illustration of incidental activities covered in paragraph 958-720-45-55.
","snippet":"This Example provides an illustration of incidental activities covered in paragraph 958-720-45-55.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:75ec6d3bb9177934b2d266a35c144b7da4044698758c33f518156b1880c20168","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-163","para":"55-163","html":"
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.
","snippet":"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 b…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5c465e828acad2333e78eeb31a673ac33d1080daebc70751126874b653e3a732","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-164","para":"55-164","html":"
This Example provides an illustration of incidental activities covered in paragraph 958-720-45-55.
","snippet":"This Example provides an illustration of incidental activities covered in paragraph 958-720-45-55.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e93ae89529d3b36c972ff657e465d919fba885b48663b2d783839621fc13fac6","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-165","para":"55-165","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7a7a617ca1892a6ef822dd6f07879be3c55259be3de66dd0d50a2b900d3c2418","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-166","para":"55-166","html":"
The disclosures discussed in paragraph 958-720-50-2 are illustrated in the following Cases:
  1. a
    Narrative format (Case A)
  2. b
    Tabular format (Case B).
","snippet":"The disclosures discussed in paragraph 958-720-50-2 are illustrated in the following Cases:\n(a) Narrative format (Case A)\n(b) Tabular format (Case B).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:232ff6f8b530e9bd9fe2fb6cb5d05fc9813e5184a5cdc520fc45b9c078b0e17b","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-167","para":"55-167","html":"
The following shows the required and encouraged information in narrative format.
","snippet":"The following shows the required and encouraged information in narrative format.\nNote X. Allocation of Joint Costs\nIn 19XX, Not-for-Profit Entity T conducted activities that included requests for contributions, as well a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7e001ba0832778f005b6deb0b21446ab07014056137a09e4f18f0bdfd3b4fa29","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-168","para":"55-168","html":"
Note that the bracketed sentence is a disclosure that is encouraged but not required.
","snippet":"Note that the bracketed sentence is a disclosure that is encouraged but not required.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9f7b28be278fe700ad8370377ae0839e964aa0faa1210475cf4415077ac718f5","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-169","para":"55-169","html":"
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, which is neither required nor encouraged, but which is not prohibited.
","snippet":"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, which is neither required nor encouraged, b…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3d0c6f9b2a7e10096e0c945a9042f90a49bda9aa6060394a7553160be767e3ce","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-170","para":"55-170","html":"
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.
","snippet":"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…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:78f2b403a3b4afd2b0948e8ad5527b60024a24a924b99f7382c1cffcc3318fec","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-171","para":"55-171","html":"
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).
","snippet":"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 th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b52eb6a79f56e8850d87e2796cda2fc048280d73e940cdc7e8c4f6cfeca656f7","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-172","para":"55-172","html":"
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.
","snippet":"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 overs…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b76e86bfcb25ef92dd88ad7fc4e6cddd8a40d23bdf3a9b2ffe3346bec42fedb3","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-173","para":"55-173","html":"
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.
","snippet":"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 o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:33c8f1402584ffef53ea389221148c815b7f4a7fcc23daa0676dff8680ede62a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-174","para":"55-174","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:91bb69017b977e75344fff2568ce5c416a0191650069fa6237fe74dc168aa56a","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-175","para":"55-175","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:faf97231b824624c9c5b9d9f61b1cc2e05f9343d9f24c424e16c1c19e6c45ebb","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"citation":"720-958-55-176","para":"55-176","html":"
In accordance with the Cases presented in paragraphs
958-720-55-172 through 55-175
, 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) 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.
","snippet":"In accordance with the Cases presented in paragraphs 958-720-55-172 through 55-175, an NFP would be required to assess which activities constitute direct conduct or direct supervision of a program or support function and…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:27584110e0feb3c8771d3a685d9981949d2960e47811516a7a6527a9c68714ac","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:647b8ae492d25efd4bc910d57c8c34939b67cc07fbbd92d33bf8afa38b82efd6","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbaf34fc9399d64f461d46ca724dd5b4227d0f71baf15cb0305c36e677fe037d","downloaded_from":"2026-09-10T01:13:22.378Z","last_downloaded_at":"2026-09-10T01:13:22.378Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479075","source_sha256":"0f76ff0f9b9bade788efc42da1e20beb55b079888e7af6cb313decf055719fbd"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Other Expenses","paragraphs":[{"citation":"720-958-60-1","para":"60-1","html":"
For activities that stimulate a desire to purchase a not-for-profit entity's (NFP's) products or use its services, see Subtopic 720-35.
","snippet":"For activities that stimulate a desire to purchase a not-for-profit entity's (NFP's) products or use its services, see Subtopic 720-35.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:759e3d6d7bf8a54f541ef2f3d693b55f47a8e956396d81daded6f7485201b856","downloaded_from":"2026-09-10T01:13:24.216Z","last_downloaded_at":"2026-09-10T01:13:24.216Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477677","source_sha256":"f531f07947d76f574bb8d547854ae679a51f6692547fb37759607e552bf1c114"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3c0ce7078d82bea1f6a22deb8aefa2c7d8dabf0bb2bc54f3021371da597266dd","downloaded_from":"2026-09-10T01:13:24.216Z","last_downloaded_at":"2026-09-10T01:13:24.216Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477677","source_sha256":"f531f07947d76f574bb8d547854ae679a51f6692547fb37759607e552bf1c114"}},{"block":null,"heading":"Income Taxes","paragraphs":[{"citation":"720-958-60-2","para":"60-2","html":"
For accounting for income taxes that apply to the activities of an NFP, see Topic 740.
","snippet":"For accounting for income taxes that apply to the activities of an NFP, see Topic 740.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a813af4321928cc483bbb08c59b764e03b82f063c7786b6ea04da20caeb216ee","downloaded_from":"2026-09-10T01:13:24.216Z","last_downloaded_at":"2026-09-10T01:13:24.216Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477677","source_sha256":"f531f07947d76f574bb8d547854ae679a51f6692547fb37759607e552bf1c114"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f1e58acbeab62cfcc308ab288debbcf94fb53603096906e590458dba78654f94","downloaded_from":"2026-09-10T01:13:24.216Z","last_downloaded_at":"2026-09-10T01:13:24.216Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477677","source_sha256":"f531f07947d76f574bb8d547854ae679a51f6692547fb37759607e552bf1c114"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4536841695cb95252f473d36b90761c6f83def6b54fed845a44cb7ddfdc33c10","downloaded_from":"2026-09-10T01:13:24.216Z","last_downloaded_at":"2026-09-10T01:13:24.216Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477677","source_sha256":"f531f07947d76f574bb8d547854ae679a51f6692547fb37759607e552bf1c114"}},{"number":"65","label":"65 Transition and Open Effective Date Information","anchor":"65-transition-and-open-effective-date-information","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-958-65-1","para":"65-1","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:51c817ff6dfd54997efdb82b351149324a872cb054f93cfa10a6bbecb701295d","downloaded_from":"2026-09-10T01:13:26.933Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477563","source_sha256":"bf7a7873e3bcca1d295bcf5d5805df3fb11d2de674a36e5e93bb437413f388b9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b21a13186d365947c8bc2ee391171152b3ff4d36408ef0de5c42e72bb6ffef9f","downloaded_from":"2026-09-10T01:13:26.933Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477563","source_sha256":"bf7a7873e3bcca1d295bcf5d5805df3fb11d2de674a36e5e93bb437413f388b9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:74c78175491cd44e99442da5be8b5bc1366f353e8090da5825a7ddbd086f205d","downloaded_from":"2026-09-10T01:13:26.933Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477563","source_sha256":"bf7a7873e3bcca1d295bcf5d5805df3fb11d2de674a36e5e93bb437413f388b9"}}],"enrichment":{"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 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Income","score":0.8239,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7060b5d7f93822cc01a7f1f874f86f91f41384d7fd3781663aaa87a5b5e46aaa","downloaded_from":"2026-09-09T23:07:15.767Z","last_downloaded_at":"2026-09-09T23:07:32.842Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"205-958","title":"Not-for-Profit Entities","topic_title":"Presentation of Financial Statements","score":0.7904,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc6d8857e92c214bb143d76d47c4f17309ac3ea514f525cf074214b923c8f639","downloaded_from":"2026-09-09T22:55:47.235Z","last_downloaded_at":"2026-09-09T22:56:13.307Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"958-20","title":"Financially Interrelated Entities","topic_title":"Not-for-Profit Entities","score":0.7699,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cb13f2d6008f3db8bd227ce4c5bac2b052d509338ac2c826044312dfb03155f2","downloaded_from":"2026-09-10T02:21:31.090Z","last_downloaded_at":"2026-09-10T02:21:57.175Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"605-958","title":"Not-for-Profit Entities","topic_title":"Revenue Recognition","score":0.7621,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:310ee09520c1fb713d8d7d6bddca5542a29432e12ea5aeb157f8a594224f2988","downloaded_from":"2026-09-10T00:51:19.189Z","last_downloaded_at":"2026-09-10T00:51:49.276Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not 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retrieval timestamps"}},"next":{"number":"720-970","title":"Real Estate—General","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:31939aec3979b3fa5704927dcf76facb29d5f2a1419a2935e5df04df58bc691d","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:40a7cc616233b1442f0332c9302595ce1441d284f2a5089af20741dd5fde63df","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-970","topic":"720","title":"Real Estate—General","area":"Expenses","paragraphs":9,"summary":"ASC 720-970 addresses when real estate project costs must be expensed rather than capitalized. Its core rules: internal costs of preacquisition activities for a property that will be an operating property at acquisition date are expensed as incurred (720-970-25-1), and indirect costs not clearly related to projects under development or construction — including general and administrative expenses — are charged to expense as incurred (720-970-25-3). The Subtopic defines \"operating\" property as one where major construction is substantially complete and the property is either available for occupancy upon tenant improvements or already income-producing (720-970-25-2).","concepts":["real estate project costs","preacquisition costs","internal costs","operating property","indirect costs","general and administrative expenses","capitalization versus expensing","project under development or construction"],"categories":["Recognition","Inventory and PP&E","Industry-specific","Initial measurement"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-970-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
970-720-05-3AmendedAccounting Standards Update No. 2012-0410/01/2012
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\n970-720-05-3 | Amended | Accounting Standards Update No. 2012-04 | 10/01/2012 |","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:44e223be7eaf9cfc23adfa9fcb47d8184792c310551566159d3ec9c0515777a5","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:30.229Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479180","source_sha256":"b1912007a0cd82d06ac7a7584101a269318258dc0ee20c668b9eea79ccb2b38c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ce80cc6b6f8548b5f9e3db922f475ead3a51f97f09ba53f8c7d35d34f93ba14","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:30.229Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479180","source_sha256":"b1912007a0cd82d06ac7a7584101a269318258dc0ee20c668b9eea79ccb2b38c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a613452f40dbbdec39d1b1e471a09413e569912b1ee8d0955a5eecbe6641ff8f","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:30.229Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479180","source_sha256":"b1912007a0cd82d06ac7a7584101a269318258dc0ee20c668b9eea79ccb2b38c"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-970-05-1","para":"05-1","html":"
The content in this Subtopic is contained in the Real Estate Project Costs Subsections.
","snippet":"The content in this Subtopic is contained in the Real Estate Project Costs Subsections.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:17aee5c8ec10a07d779b7ea53a6407339736aeeb77dd54bcefef2777de67da5c","downloaded_from":"2026-09-10T01:13:33.685Z","last_downloaded_at":"2026-09-10T01:13:33.685Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477262","source_sha256":"e8a2feb8d1ff8488b43845750a956f3873418eaf2986c955063202ae61db2843"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d137f52545696779398116485a1670af3f983633c3348cbbd1afa58c4db190ff","downloaded_from":"2026-09-10T01:13:33.685Z","last_downloaded_at":"2026-09-10T01:13:33.685Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477262","source_sha256":"e8a2feb8d1ff8488b43845750a956f3873418eaf2986c955063202ae61db2843"}},{"block":"Real Estate Project Costs","heading":null,"paragraphs":[{"citation":"720-970-05-2","para":"05-2","html":"
The Real Estate Project Costs Subsections of this Subtopic provide guidance on the capitalization and expensing of real estate project costs.
","snippet":"The Real Estate Project Costs Subsections of this Subtopic provide guidance on the capitalization and expensing of real estate project costs.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:590c6f27427e45f8abe22a8bafdbb3a24a9e2c7a1d19e16e800a4b7fc3285cf8","downloaded_from":"2026-09-10T01:13:33.685Z","last_downloaded_at":"2026-09-10T01:13:33.685Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477262","source_sha256":"e8a2feb8d1ff8488b43845750a956f3873418eaf2986c955063202ae61db2843"}},{"citation":"720-970-05-3","para":"05-3","html":"
See the Real Estate Project Costs Subsection of Section 970-340-25 for guidance on the accounting for internal costs relating to real estate property acquisitions.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 970-10-15.
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The Real Estate Project Costs Subsections follow the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see the Real Estate Project Costs Subsection of Section 970-10-15.
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Internal costs of preacquisition activities incurred in connection with the acquisition of a property that will be classified as operating at the date of acquisition shall be expensed as incurred.
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A property would be considered operating if, at the date of acquisition, major construction activity (as distinguished from activities such as routine maintenance and cleanup) is substantially completed on the property and either of the following conditions exists:
  1. a
    It is held available for occupancy upon completion of tenant improvements by the acquirer.
  2. b
    It is already income-producing.
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Indirect costs that do not clearly relate to projects under development or construction, including general and administrative expenses, shall be charged to expense as incurred.
","snippet":"Indirect costs that do not clearly relate to projects under development or construction, including general and administrative expenses, shall be charged to expense as incurred.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6d2ab342716028bf0afa3040db0910c4b71f34e432c5a9b2f5569a4c8c22033a","downloaded_from":"2026-09-10T01:13:42.190Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477205","source_sha256":"13cfa112cb56d9ea5615b9089928bd7bcc546f7bf78d0c7c822aed42ea8233c5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f16f3cc1fabb6d04712e06e6a09e35ed3ca07fc8a0086d57f1eb840019b51fb9","downloaded_from":"2026-09-10T01:13:42.190Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477205","source_sha256":"13cfa112cb56d9ea5615b9089928bd7bcc546f7bf78d0c7c822aed42ea8233c5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ed734747b85c721ca50fbb986aa7755a7aca44cebd4fd2c3d675d2a355230c93","downloaded_from":"2026-09-10T01:13:42.190Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477205","source_sha256":"13cfa112cb56d9ea5615b9089928bd7bcc546f7bf78d0c7c822aed42ea8233c5"}}],"enrichment":{"summary":"ASC 720-970 addresses when real estate project costs must be expensed rather than capitalized. Its core rules: internal costs of preacquisition activities for a property that will be an operating property at acquisition date are expensed as incurred (720-970-25-1), and indirect costs not clearly related to projects under development or construction — including general and administrative expenses — are charged to expense as incurred (720-970-25-3). The Subtopic defines \"operating\" property as one where major construction is substantially complete and the property is either available for occupancy upon tenant improvements or already income-producing (720-970-25-2).","key_points":["All content in this Subtopic resides in the Real Estate Project Costs Subsections, which govern capitalization versus expensing of real estate project costs (720-970-05-1 and 720-970-05-2).","Internal costs of preacquisition activities incurred to acquire a property that will be classified as operating at the acquisition date must be expensed as incurred (720-970-25-1).","A property is 'operating' at acquisition if major construction activity (not routine maintenance or cleanup) is substantially completed and it is either held available for occupancy upon completion of tenant improvements by the acquirer or already income-producing (720-970-25-2).","Indirect costs that do not clearly relate to projects under development or construction, including general and administrative expenses, are charged to expense as incurred (720-970-25-3).","Guidance on accounting for internal costs relating to real estate property acquisitions (i.e., the capitalization side) is located in the Real Estate Project Costs Subsection of Section 970-340-25 (720-970-05-3).","Scope follows the Overall Subtopic scope in Section 970-10-15, including the Real Estate Project Costs Subsection of that section (720-970-15-1 and 720-970-15-2)."],"categories":["Recognition","Inventory and PP&E","Industry-specific","Initial measurement"],"audience_level":"intermediate","student_note":"This is the \"expense it\" mirror of ASC 970-340's capitalization rules: the key fork is whether the target property is already operating (expense internal preacquisition costs) versus under development or construction (potential capitalization). Students commonly assume all preacquisition costs can be capitalized — internal costs tied to an operating property, and any indirect/G&A costs not clearly tied to a development project, never can.","related_topics":["970-340","970-10","970-360","805","835-20"],"key_concepts":["real estate project costs","preacquisition costs","internal costs","operating property","indirect costs","general and administrative expenses","capitalization versus expensing","project under development or construction"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47990d0e92d6a44be2bc8a54b775a4221abe216a188f09aefc93f5e9a73b7d85","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"340-970","title":"Real Estate—General","topic_title":"Other Assets and Deferred Costs","score":0.8477,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ce049d2e55825b000c3fc19e76de3a7488c7d1e711aa1cd15af52c8a953d2b97","downloaded_from":"2026-09-09T23:58:59.193Z","last_downloaded_at":"2026-09-09T23:59:17.895Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"230-970","title":"Real Estate—General","topic_title":"Statement of Cash Flows","score":0.755,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b7de21244008860f104e6a7c628b228eca90161f93a8512a77d0c4a770d9716f","downloaded_from":"2026-09-09T23:13:47.405Z","last_downloaded_at":"2026-09-09T23:13:52.062Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"360-970","title":"Real Estate—General","topic_title":"Property, Plant, and Equipment","score":0.7526,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0d31b9356181d846936b32dca01f3841ec369fd000f8314a8211918a366d8359","downloaded_from":"2026-09-10T00:11:50.248Z","last_downloaded_at":"2026-09-10T00:12:34.852Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"705-976","title":"Real Estate—Retail Land","topic_title":"Cost of Sales and Services","score":0.7375,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f1f0722dc72e677d3a7ca5148dceb96af9d1063b4fd319925a9a53380f0e882","downloaded_from":"2026-09-10T00:56:41.306Z","last_downloaded_at":"2026-09-10T00:56:51.715Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"970-10","title":"Overall","topic_title":"Real Estate—General","score":0.7347,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:54b9f18c24b570de1bbf859e102d5aaff0459f567221942c63b925a682db1300","downloaded_from":"2026-09-10T02:25:52.021Z","last_downloaded_at":"2026-09-10T02:26:12.373Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-972","title":"Real Estate—Common Interest Realty Associations","topic_title":"Other Expenses","score":0.7333,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7d07f74863ada3917c6c7d8bb93a41a076f5335132b955bd7380ef3ffe7a3318","downloaded_from":"2026-09-10T01:13:44.169Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-958","title":"Not-for-Profit Entities","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f32bff899d6ef072a33901d7cfa098c97c646e5b4abdc9529810489ced1b5679","downloaded_from":"2026-09-10T01:12:58.744Z","last_downloaded_at":"2026-09-10T01:13:26.933Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-972","title":"Real Estate—Common Interest Realty Associations","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:400dc7111e3025654c0ab36c889070e2a1531ec7c41f820f393a4527322d7f71","downloaded_from":"2026-09-10T01:13:44.169Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fa283f2b1bcc632b7a74b521380330f190ff591d02a15a89c72650f246fec78d","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-972","topic":"720","title":"Real Estate—Common Interest Realty Associations","area":"Expenses","paragraphs":3,"summary":"This Subtopic tells common interest realty associations (CIRAs) — such as condominium and homeowners' associations — how to account for expenditures on major repairs or replacements of common property. Under 720-972-25-1, a CIRA that uses fund accounting charges such expenditures to the fund(s) established for major repairs and replacements; if the expenditure relates to common property that has been recognized as an asset, the amount is instead reported as a transfer to the operating fund (or property fund, if one exists).","concepts":["common interest realty association","fund accounting","major repairs and replacements fund","common property","interfund transfer","operating fund","property fund"],"categories":["Recognition","Industry-specific","Financial statement presentation"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-972-05-1","para":"05-1","html":"
This Subtopic addresses the accounting for major repair or replacement expenditures by common interest realty associations.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 972-10-15.
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Common interest realty associations that use fund accounting shall charge expenditures for major repairs or replacements to the fund or funds established for major repairs or replacements. If an expenditure from the major repairs and replacement fund relates to common property recognized as an asset, the amount expended shall be reported as a transfer to the operating fund (or property fund, if such a fund is established).
","snippet":"Common interest realty associations that use fund accounting shall charge expenditures for major repairs or replacements to the fund or funds established for major repairs or replacements. If an expenditure from the majo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ba9bc7408ff15d6ba7bcdb5758a5df3ad39c364b8a7cc512d451745b2958484","downloaded_from":"2026-09-10T01:13:52.448Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478566","source_sha256":"0ed8691cfbffdc28b66a63fd625ea83e66cfdec0b09ad4bba798930a11629539"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:414da371a8dee76a502f62310b284ad03c533917f815b7e08a768b6f83380af0","downloaded_from":"2026-09-10T01:13:52.448Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478566","source_sha256":"0ed8691cfbffdc28b66a63fd625ea83e66cfdec0b09ad4bba798930a11629539"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8a8a04bf342e00b4ebdadb6fd1aa536825f79c4d2e4a5f602c7517a118db40b9","downloaded_from":"2026-09-10T01:13:52.448Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478566","source_sha256":"0ed8691cfbffdc28b66a63fd625ea83e66cfdec0b09ad4bba798930a11629539"}}],"enrichment":{"summary":"This Subtopic tells common interest realty associations (CIRAs) — such as condominium and homeowners' associations — how to account for expenditures on major repairs or replacements of common property. Under 720-972-25-1, a CIRA that uses fund accounting charges such expenditures to the fund(s) established for major repairs and replacements; if the expenditure relates to common property that has been recognized as an asset, the amount is instead reported as a transfer to the operating fund (or property fund, if one exists).","key_points":["The Subtopic addresses accounting for major repair or replacement expenditures by common interest realty associations (720-972-05-1).","Its scope is the same as that of the Overall Subtopic, ASC 972-10-15 (720-972-15-1).","A CIRA using fund accounting charges expenditures for major repairs or replacements to the fund or funds established for major repairs and replacements (720-972-25-1).","If the expenditure from the major repairs and replacement fund relates to common property that is recognized as an asset, the amount expended is reported as a transfer to the operating fund — or to the property fund if such a fund has been established (720-972-25-1)."],"categories":["Recognition","Industry-specific","Financial statement presentation"],"audience_level":"intermediate","student_note":"The trap is treating every replacement outlay as an expense of the replacement fund: if the underlying common property is capitalized as an asset, the outlay is a transfer between funds rather than a charge against the replacement fund. Knowing whether the CIRA recognizes common property as an asset drives the answer.","related_topics":["972-10","972-360","972-605","958-205"],"key_concepts":["common interest realty association","fund accounting","major repairs and replacements fund","common property","interfund transfer","operating fund","property fund"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b673b0984d78157f324201d2926f190d30b772ef19dd7a38fdb8073ecda2be31","downloaded_from":"2026-09-10T01:13:44.169Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"740-972","title":"Real Estate—Common Interest Realty Associations","topic_title":"Income Taxes","score":0.7599,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7696ba839af2ca54cb5c71c35d21367a59bd6d00e66fe1c07c15b251de31e620","downloaded_from":"2026-09-10T01:21:24.280Z","last_downloaded_at":"2026-09-10T01:21:33.804Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"205-972","title":"Real Estate—Common Interest Realty Associations","topic_title":"Presentation of Financial Statements","score":0.7554,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f7dbd90d5aa758b2314717de8b1f090c9942f763b2646445db30861f3352530c","downloaded_from":"2026-09-09T22:58:02.817Z","last_downloaded_at":"2026-09-09T22:58:14.869Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"235-972","title":"Real Estate—Common Interest Realty Associations","topic_title":"Notes to Financial Statements","score":0.7424,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dddd33e82d0fba9e43dc470a0c2751c5ccbee4b7a2f48668be9a0ac2082fd83f","downloaded_from":"2026-09-09T23:16:43.120Z","last_downloaded_at":"2026-09-09T23:16:53.919Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"972-10","title":"Overall","topic_title":"Real Estate—Common Interest Realty Associations","score":0.7385,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b785538332d67a13e06f6ce492ee8963611fb237d7a69c135fab875f8124d70a","downloaded_from":"2026-09-10T02:26:14.164Z","last_downloaded_at":"2026-09-10T02:26:21.543Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"850-972","title":"Real Estate—Common Interest Realty Associations","topic_title":"Related Party Disclosures","score":0.7353,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3c9e882ed590ff00d36a70967392fcaa1a9b929c10d117cf9ac57d426370741c","downloaded_from":"2026-09-10T02:02:42.771Z","last_downloaded_at":"2026-09-10T02:02:50.151Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-970","title":"Real Estate—General","topic_title":"Other Expenses","score":0.7333,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7deca7bc338ac6d9d45f6d1efa98ba2aea189abef4f1ad767f02dad69a60058c","downloaded_from":"2026-09-10T01:13:30.229Z","last_downloaded_at":"2026-09-10T01:13:42.190Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not 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Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f18af938b28e43061929f5b6c3709a78a11514cbc149b9abda2d3163cb306ab3","downloaded_from":"2026-09-10T01:13:54.098Z","last_downloaded_at":"2026-09-10T01:14:12.248Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1567c470e76197b7fc032ca8018f777cb11918fe73cfad3bf1688c384c16b6ee","downloaded_from":"2026-09-10T01:13:44.169Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-974","topic":"720","title":"Real Estate—Real Estate Investment Trusts","area":"Expenses","paragraphs":7,"summary":"This subtopic governs how a real estate investment trust (REIT) accounts for \"operating support\" received from its external adviser — arrangements designed to guarantee the REIT a certain return, such as buying loans or property above fair value, debt forgiveness, advisory fee reductions, compensating balances, or cash payments. The REIT must adjust any transferred assets or liabilities to fair value at the transaction date and recognize the support effectively obtained as income or as a reduction of advisory fees. The effect of these transactions must be reported separately in the income statement and fully disclosed as a related party relationship.","concepts":["real estate investment trust","operating support from adviser","advisory fees","fair value adjustment on transfer","related party transactions","separate income statement presentation","debt forgiveness","compensating balances"],"categories":["Recognition","Presentation","Disclosure","Industry-specific"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-974-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Real Estate Investment TrustAddedAccounting Standards Update No. 2014-0905/28/2014
974-720-05-1AddedAccounting Standards Update No. 2014-0905/28/2014
974-720-15-1AddedAccounting Standards Update No. 2014-0905/28/2014
974-720-25-1AddedAccounting Standards Update No. 2014-0905/28/2014
974-720-25-2AddedAccounting Standards Update No. 2014-0905/28/2014
974-720-45-1AddedAccounting Standards Update No. 2014-0905/28/2014
974-720-50-1AddedAccounting Standards Update No. 2014-0905/28/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nReal Estate Investment Trust | Added | Accounting Standards Update No. 2014-09 | 05/28/2…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8f839de8cb2b7e5a59455b047781c858563a9939743c0408653399617f89d68f","downloaded_from":"2026-09-10T01:13:54.098Z","last_downloaded_at":"2026-09-10T01:13:54.098Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478341","source_sha256":"cf1026f91bb645a4ef1841869a57829d43441ff0f1ad3c4399c631f0d8b0bcba"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ff7e3590e163991899ef0a5d072974b4e7d939b03cb0978f34c561f656b121e7","downloaded_from":"2026-09-10T01:13:54.098Z","last_downloaded_at":"2026-09-10T01:13:54.098Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478341","source_sha256":"cf1026f91bb645a4ef1841869a57829d43441ff0f1ad3c4399c631f0d8b0bcba"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:84f7955154de8539ff5883ccb0f5dfa2fe07d32b366b96bf26c41f34ac870ab0","downloaded_from":"2026-09-10T01:13:54.098Z","last_downloaded_at":"2026-09-10T01:13:54.098Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478341","source_sha256":"cf1026f91bb645a4ef1841869a57829d43441ff0f1ad3c4399c631f0d8b0bcba"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-974-05-1","para":"05-1","html":"
This Subtopic addresses recognition, disclosure, and other presentation matters for real estate investment trusts.
","snippet":"This Subtopic addresses recognition, disclosure, and other presentation matters for real estate investment trusts.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1c6d7b01b8053ff272a54063a5191388d2db7ec59ddfd95745e24efc3874fee7","downloaded_from":"2026-09-10T01:13:56.431Z","last_downloaded_at":"2026-09-10T01:13:56.431Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477331","source_sha256":"bd42f9a48acc27bfb0417b81f97f524df7a072c7165fb5a185c9b8920b76ccb6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f7435bb883e40e09206f34920421a55c1bee3c872ce3275bbd819e2518cabb3","downloaded_from":"2026-09-10T01:13:56.431Z","last_downloaded_at":"2026-09-10T01:13:56.431Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477331","source_sha256":"bd42f9a48acc27bfb0417b81f97f524df7a072c7165fb5a185c9b8920b76ccb6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b7a53a0cd91dde433125554fb878b14f940cfee174d49b539cee70fbeb7c3091","downloaded_from":"2026-09-10T01:13:56.431Z","last_downloaded_at":"2026-09-10T01:13:56.431Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477331","source_sha256":"bd42f9a48acc27bfb0417b81f97f524df7a072c7165fb5a185c9b8920b76ccb6"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"720-974-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 974-10-15.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 974-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1c8c62ab5e03cc1a0efb6f2270686ea72d8c50c67fdc18fec80002a38a53230b","downloaded_from":"2026-09-10T01:13:58.077Z","last_downloaded_at":"2026-09-10T01:13:58.077Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478771","source_sha256":"595529be0f36e06f6e8ab8974fe71ba2536ca48d42ca53cd200e81c5840dca57"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:180361500beb653142d001a2d11fb6af14515b3d0526e915686d7088377cb56a","downloaded_from":"2026-09-10T01:13:58.077Z","last_downloaded_at":"2026-09-10T01:13:58.077Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478771","source_sha256":"595529be0f36e06f6e8ab8974fe71ba2536ca48d42ca53cd200e81c5840dca57"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47f8942f852bced0ea72a221e52e9329e89276343f7c02d1074ba69d6ae5782a","downloaded_from":"2026-09-10T01:13:58.077Z","last_downloaded_at":"2026-09-10T01:13:58.077Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478771","source_sha256":"595529be0f36e06f6e8ab8974fe71ba2536ca48d42ca53cd200e81c5840dca57"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Operating Support of the Real Estate Investment Trust by the Adviser","paragraphs":[{"citation":"720-974-25-1","para":"25-1","html":"
Various methods are employed by advisers to ensure a certain return to the real estate investment trust for certain periods. Some of these methods are:
  1. a
    Purchasing a loan or a property at an amount in excess of fair value
  2. b
    Forgiving indebtedness
  3. c
    Reducing advisory fees
  4. d
    Providing required compensating balances
  5. e
    Making outright cash payments.
","snippet":"Various methods are employed by advisers to ensure a certain return to the real estate investment trust for certain periods. Some of these methods are:\n(a) Purchasing a loan or a property at an amount in excess of fair v…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a86bd06f92b34d69b9dd4b53a1981c898ef4e440279a12b03e92c85f3ace2006","downloaded_from":"2026-09-10T01:14:03.031Z","last_downloaded_at":"2026-09-10T01:14:03.031Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478690","source_sha256":"ab1263d3ea38c8272a895f80a971bdd967663ad3ff335bc05d744810600f0f01"}},{"citation":"720-974-25-2","para":"25-2","html":"
Accounting by a real estate investment trust for operating support from its adviser would include either of the following:
  1. a
    Adjustment of any assets (or liabilities) which will be transferred between the entities to fair value as of the date of the transaction
  2. b
    Recognition, as income or as a reduction of advisory fees, of the operating support effectively obtained.
","snippet":"Accounting by a real estate investment trust for operating support from its adviser would include either of the following:\n(a) Adjustment of any assets (or liabilities) which will be transferred between the entities to f…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b50f126a56bfb58776d5eeef32c5638283691be56e93a7b6954236e9b5455ee3","downloaded_from":"2026-09-10T01:14:03.031Z","last_downloaded_at":"2026-09-10T01:14:03.031Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478690","source_sha256":"ab1263d3ea38c8272a895f80a971bdd967663ad3ff335bc05d744810600f0f01"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:061d03b54f17a481c6ed151aca430a1fd9db7b9a43729e393f357de5d06098af","downloaded_from":"2026-09-10T01:14:03.031Z","last_downloaded_at":"2026-09-10T01:14:03.031Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478690","source_sha256":"ab1263d3ea38c8272a895f80a971bdd967663ad3ff335bc05d744810600f0f01"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8ac1cc4bb6da0efd3b0251934fed1875bf4b7b9961467132c3345cda1511975a","downloaded_from":"2026-09-10T01:14:03.031Z","last_downloaded_at":"2026-09-10T01:14:03.031Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478690","source_sha256":"ab1263d3ea38c8272a895f80a971bdd967663ad3ff335bc05d744810600f0f01"}},{"number":"45","label":"45 Other Presentation Matters","anchor":"45-other-presentation-matters","is_sec":false,"groups":[{"block":null,"heading":"Operating Support of the Real Estate Investment Trust by the Adviser","paragraphs":[{"citation":"720-974-45-1","para":"45-1","html":"
The effect of the operating support transactions described in paragraphs 974-720-25-2 and 974-720-50-1 shall be reported separately in the income statement.
","snippet":"The effect of the operating support transactions described in paragraphs 974-720-25-2 and 974-720-50-1 shall be reported separately in the income statement.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:673ca05d19ceba0fc3b21d8414433a3b94d32ef8c90f892da645b4d530f36a43","downloaded_from":"2026-09-10T01:14:05.868Z","last_downloaded_at":"2026-09-10T01:14:05.868Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478425","source_sha256":"88d434b4647bfdfd82a18b5acfc56b67fa77564d4d9f8d4a814bc90c5d65b210"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a842a55bbc8236f4bc2aa602ff5b36d872787b4e3e1310ea87a1a36f47c358c0","downloaded_from":"2026-09-10T01:14:05.868Z","last_downloaded_at":"2026-09-10T01:14:05.868Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478425","source_sha256":"88d434b4647bfdfd82a18b5acfc56b67fa77564d4d9f8d4a814bc90c5d65b210"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:de66f6a0507eafb8972d85d72f3919fabf8f67eee7db1a1c9af7579c774c9a21","downloaded_from":"2026-09-10T01:14:05.868Z","last_downloaded_at":"2026-09-10T01:14:05.868Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478425","source_sha256":"88d434b4647bfdfd82a18b5acfc56b67fa77564d4d9f8d4a814bc90c5d65b210"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":"Operating Support of the Real Estate Investment Trust by the Adviser","paragraphs":[{"citation":"720-974-50-1","para":"50-1","html":"
A real estate investment trust with operating support from its adviser shall make full disclosure of the relationship between the parties and the nature and amount of the transactions.
","snippet":"A real estate investment trust with operating support from its adviser shall make full disclosure of the relationship between the parties and the nature and amount of the transactions.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3884f98323011b09ee5ba16904ddc5a738982a53ec2903caa0b004a102959558","downloaded_from":"2026-09-10T01:14:08.726Z","last_downloaded_at":"2026-09-10T01:14:08.726Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477728","source_sha256":"7f44d6a2bfd297bd0663b5b50066102edd2fe5b17c19f3c34877a967b083876b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8c8a85f6ded0690b0d211f97c4cc033968c76d5fd1e2b9cf5a970d7d818b3efc","downloaded_from":"2026-09-10T01:14:08.726Z","last_downloaded_at":"2026-09-10T01:14:08.726Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477728","source_sha256":"7f44d6a2bfd297bd0663b5b50066102edd2fe5b17c19f3c34877a967b083876b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1b19e524c3e759e8a9ec5ef8879e36a817107ff3bfd4b74205cc534f78e640ac","downloaded_from":"2026-09-10T01:14:08.726Z","last_downloaded_at":"2026-09-10T01:14:08.726Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477728","source_sha256":"7f44d6a2bfd297bd0663b5b50066102edd2fe5b17c19f3c34877a967b083876b"}}],"enrichment":{"summary":"This subtopic governs how a real estate investment trust (REIT) accounts for \"operating support\" received from its external adviser — arrangements designed to guarantee the REIT a certain return, such as buying loans or property above fair value, debt forgiveness, advisory fee reductions, compensating balances, or cash payments. The REIT must adjust any transferred assets or liabilities to fair value at the transaction date and recognize the support effectively obtained as income or as a reduction of advisory fees. The effect of these transactions must be reported separately in the income statement and fully disclosed as a related party relationship.","key_points":["Adviser support methods that can produce a guaranteed return to the REIT include purchasing a loan or property above fair value, forgiving indebtedness, reducing advisory fees, providing compensating balances, and outright cash payments (720-974-25-1).","Accounting for operating support requires adjusting assets or liabilities transferred between the REIT and its adviser to fair value as of the transaction date (720-974-25-2(a)).","Alternatively (or additionally), the operating support effectively obtained is recognized as income or as a reduction of advisory fees (720-974-25-2(b)).","The effect of operating support transactions must be reported separately in the income statement (720-974-45-1).","A REIT receiving operating support must make full disclosure of the relationship between the parties and the nature and amount of the transactions (720-974-50-1).","Scope follows the Overall REIT Subtopic, Section 974-10-15 (720-974-15-1)."],"categories":["Recognition","Presentation","Disclosure","Industry-specific"],"audience_level":"intermediate","student_note":"The point is substance over form: an adviser cannot dress up a subsidy as an ordinary purchase or fee arrangement — the excess over fair value is income (or a fee reduction) that must be shown separately, not buried in operating results. A common misunderstanding is treating an above-fair-value asset purchase by the adviser as a normal sale rather than recognizing support income and writing the transferred asset to fair value.","related_topics":["974-10","974-720","850","820","946"],"key_concepts":["real estate investment trust","operating support from adviser","advisory fees","fair value adjustment on transfer","related party transactions","separate income statement presentation","debt forgiveness","compensating balances"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc83d895b832bf7aa54dbc182fe8c1067e9a0222eeef322c3e604d6d5172ab46","downloaded_from":"2026-09-10T01:13:54.098Z","last_downloaded_at":"2026-09-10T01:14:12.248Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"974-10","title":"Overall","topic_title":"Real Estate—Real Estate Investment Trusts","score":0.7755,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5095c047d71ee75311d13f1c9a870577f74d881a40828d1dd759ab911c91b603","downloaded_from":"2026-09-10T02:26:25.491Z","last_downloaded_at":"2026-09-10T02:26:47.600Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"323-974","title":"Real Estate—Real Estate Investment Trusts","topic_title":"Investments—Equity Method and Joint Ventures","score":0.762,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2a2ca9cacdded6c3d7b7a68e4aa49d77890bfeab60224e3023f2db4e3569d086","downloaded_from":"2026-09-09T23:43:04.021Z","last_downloaded_at":"2026-09-09T23:43:16.668Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"842-974","title":"Real Estate—Real Estate Investment Trusts","topic_title":"Leases","score":0.7581,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:82af6aa79a567ecab27ca49a4b5f0840ac65103da8eb7bfc11d92e479b2826ae","downloaded_from":"2026-09-10T01:58:41.636Z","last_downloaded_at":"2026-09-10T01:58:53.121Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not 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Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:400dc7111e3025654c0ab36c889070e2a1531ec7c41f820f393a4527322d7f71","downloaded_from":"2026-09-10T01:13:44.169Z","last_downloaded_at":"2026-09-10T01:13:52.448Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"720-978","title":"Real Estate—Time-Sharing Activities","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5d3bfde625006a1adc0488c617184a96fe948c4052f256990a6d2d9b5af36dec","downloaded_from":"2026-09-10T01:14:14.996Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:30e482915a757325fa3c411978668ba0b246dda0ae66f9dbc1947d490286c9e8","downloaded_from":"2026-09-10T01:13:54.098Z","last_downloaded_at":"2026-09-10T01:14:12.248Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-978","topic":"720","title":"Real Estate—Time-Sharing Activities","area":"Expenses","paragraphs":9,"summary":"This subtopic governs how a time-share seller accounts for other expenses of time-sharing activities — chiefly selling and marketing costs and subsidies of the owners association. The core rule is that all costs incurred to sell time-sharing intervals are expensed as incurred unless they qualify for capitalization as costs to obtain a contract under ASC 340-40-25-1 through 25-4, and seller payments of dues, maintenance fees, or subsidies of owners association losses are likewise expensed as incurred.","concepts":["time-sharing intervals","selling and marketing costs","costs to obtain a contract","owners association","seller subsidy","tour fulfillment costs","maintenance fees and dues","recoverability of subsidy"],"categories":["Recognition","Industry-specific","Revenue","Inventory and PP&E"],"level":"intermediate","topic_title":"Other Expenses","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-978-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Time-Sharing Amended Accounting Standards Update No. 2014-06 03/14/2014
Undivided Interest (2nd def.) Superseded Accounting Standards Update No. 2014-06 03/14/2014
978-720-25-1 through 25-3
 Amended Accounting Standards Update No. 2014-09 05/28/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nTime-Sharing | Amended | Accounting Standards Update No. 2014-06 | 03/14/2014 |\nUndivide…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b1c34a141a181642da5abf87fb0c5bfb6e1c4cd92d6c6c3bc3bd70d1c540ef0a","downloaded_from":"2026-09-10T01:14:14.996Z","last_downloaded_at":"2026-09-10T01:14:14.996Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479713","source_sha256":"62eec8455b33a393f59ee37d4fa18b5313b43db171ff5ec068ad17601e3a6414"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8eff0cb5923aa9e734a4f13b43295682aee9f319cdddd3011a8a32202e3aa9e6","downloaded_from":"2026-09-10T01:14:14.996Z","last_downloaded_at":"2026-09-10T01:14:14.996Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479713","source_sha256":"62eec8455b33a393f59ee37d4fa18b5313b43db171ff5ec068ad17601e3a6414"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a62fc160f7d307b5a42e0ef0eceba4a8bcbfae609102c1b1b91b82253fd0ff6c","downloaded_from":"2026-09-10T01:14:14.996Z","last_downloaded_at":"2026-09-10T01:14:14.996Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479713","source_sha256":"62eec8455b33a393f59ee37d4fa18b5313b43db171ff5ec068ad17601e3a6414"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-978-05-1","para":"05-1","html":"
This Subtopic addresses real estate time-sharing recognition issues for other expenses. Other expenses may include selling costs, seller subsidies, and owners association costs.
","snippet":"This Subtopic addresses real estate time-sharing recognition issues for other expenses. Other expenses may include selling costs, seller subsidies, and owners association costs.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:64181cb192d4b18a544840928a35d176e99b0df835a5969b55b9527e6033aa3f","downloaded_from":"2026-09-10T01:14:18.950Z","last_downloaded_at":"2026-09-10T01:14:18.950Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477557","source_sha256":"09e466f76571493c2dd33a7804b66c1a1e3901fbe1f2b5385f6074dc95f2558d"}},{"citation":"720-978-05-2","para":"05-2","html":"
Time-share projects typically incur significant operating costs, such as costs of property taxes, repairs and maintenance, and reservation systems. Time-share owners are responsible for paying for the costs of owning their intervals. Because there are many time-share owners for a given project, a centralized mechanism generally is used to collect each owner's share of those costs of ownership and to pay for operating costs.
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A time-share seller typically forms an owners association to manage the day-to-day operations of a project. Time-share owners pay assessments to the owners association. The activities of an owners association are governed by its bylaws and by a board of directors. Typically, an owners association will hire a manager to handle the day-to-day operations. Often, an affiliate of the original time-share seller is hired by an owners association to manage a project. Because the time-share seller owns a majority of units at the beginning of the sellout of a project, it typically will appoint members of the owners association's board of directors.
","snippet":"A time-share seller typically forms an owners association to manage the day-to-day operations of a project. Time-share owners pay assessments to the owners association. The activities of an owners association are governe…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9d6579a585d5c951f79357149360b6723b7a6bb775829d13565e9233c8ee5fec","downloaded_from":"2026-09-10T01:14:18.950Z","last_downloaded_at":"2026-09-10T01:14:18.950Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477557","source_sha256":"09e466f76571493c2dd33a7804b66c1a1e3901fbe1f2b5385f6074dc95f2558d"}},{"citation":"720-978-05-4","para":"05-4","html":"
Selling and marketing costs are significant in relation to sales revenue, and sales incentives and inducements are common.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 978-10-15.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 978-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0fd004b2ac3cc2b926756982f31dec7df90961bd03785154cb49ab3a5534c26a","downloaded_from":"2026-09-10T01:14:22.587Z","last_downloaded_at":"2026-09-10T01:14:22.587Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478031","source_sha256":"ac33c62949688962d428fde65ef4ef774875a5495f745b326d3fb467b0c61709"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2a0f85c8766a3c002a73a05a3e442f09b9e1cb5c3917c1a1944bf64ceaf7fbda","downloaded_from":"2026-09-10T01:14:22.587Z","last_downloaded_at":"2026-09-10T01:14:22.587Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478031","source_sha256":"ac33c62949688962d428fde65ef4ef774875a5495f745b326d3fb467b0c61709"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:78a19cf0dd11f2cd5369123ccf17f86eaaadf9a236d414504bd1a7207f1a20b9","downloaded_from":"2026-09-10T01:14:22.587Z","last_downloaded_at":"2026-09-10T01:14:22.587Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478031","source_sha256":"ac33c62949688962d428fde65ef4ef774875a5495f745b326d3fb467b0c61709"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Selling Costs","paragraphs":[{"citation":"720-978-25-1","para":"25-1","html":"
All costs incurred to sell time-sharing intervals shall be charged to expense as incurred unless they specifically qualify for capitalization under paragraphs
340-40-25-1 through 25-4
.
","snippet":"All costs incurred to sell time-sharing intervals shall be charged to expense as incurred unless they specifically qualify for capitalization under paragraphs 340-40-25-1 through 25-4.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1176aaecec34252103bbbcd04f3663dc2d9c93a99b6712a25519a960a1c01c9f","downloaded_from":"2026-09-10T01:14:26.123Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478164","source_sha256":"fbe466cef98ef1b0fe204622733965d8f7d0525234f375080a0b4ad06987ef67"}},{"citation":"720-978-25-2","para":"25-2","html":"
Examples of costs that do not meet the requirements in paragraphs
340-40-25-1 through 25-4
for capitalization, and that shall therefore be charged to expense as incurred, include all costs incurred to induce potential buyers to take sales tours (for example, the costs of telemarketing call centers); all costs incurred for unsuccessful sales transactions; and all sales overhead such as on-site and off-site sales office rent, utilities, maintenance, and telephone expenses. Advertising costs shall be accounted for in accordance with Subtopic 720-35. Direct incremental costs of tour fulfillment, such as costs of airline tickets to bring customers to a tour location, shall be charged to expense at the time the tour takes place.
","snippet":"Examples of costs that do not meet the requirements in paragraphs 340-40-25-1 through 25-4 for capitalization, and that shall therefore be charged to expense as incurred, include all costs incurred to induce potential bu…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b28f7195f7646a13fe4875733d163c582ca02f08bbb3d34a359f25ac689a59ae","downloaded_from":"2026-09-10T01:14:26.123Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478164","source_sha256":"fbe466cef98ef1b0fe204622733965d8f7d0525234f375080a0b4ad06987ef67"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:74186191af0b34bffe80f6e4a78600859fa57b1e2f84a557fedb09866f948b9f","downloaded_from":"2026-09-10T01:14:26.123Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478164","source_sha256":"fbe466cef98ef1b0fe204622733965d8f7d0525234f375080a0b4ad06987ef67"}},{"block":null,"heading":"Seller Subsidies","paragraphs":[{"citation":"720-978-25-3","para":"25-3","html":"
During early stages of project sellout, there are typically not enough dues-paying time-sharing interval owners to support the financial obligations of the owners association. Often a time-share seller, for a limited period of time, subsidizes the operations of the owners association rather than paying the dues or maintenance fees on the time-sharing intervals that it owns (that is, the unsold intervals in the project). Subsequent to that period, the time-share seller pays dues or maintenance fees on the time-sharing intervals that it owns. Payments by the seller of dues or maintenance fees, except when accounted for as incidental operations during holding periods under paragraphs
978-330-35-3 through 35-6
, shall be charged to expense as incurred. Payments by the seller of additional amounts to subsidize losses shall be charged to expense as incurred. If a seller is contractually entitled to recover from the owners association all or a portion of its subsidy, the seller shall record a receivable only if recovery is probable and measurable with reasonable reliability.
","snippet":"During early stages of project sellout, there are typically not enough dues-paying time-sharing interval owners to support the financial obligations of the owners association. Often a time-share seller, for a limited per…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4fecca32af64fc10056e46164b2fdb42cbb4a71cefce76050bf756c4c7c940ca","downloaded_from":"2026-09-10T01:14:26.123Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478164","source_sha256":"fbe466cef98ef1b0fe204622733965d8f7d0525234f375080a0b4ad06987ef67"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ea5a06144aeb74f564f4a3048749d28c708ba7366ec696563d9178e1ef31d926","downloaded_from":"2026-09-10T01:14:26.123Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478164","source_sha256":"fbe466cef98ef1b0fe204622733965d8f7d0525234f375080a0b4ad06987ef67"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55d80b26ab9ed91597c0de755d3a0c39ea017ac3bae86c0f1a5ed4e096e98ac0","downloaded_from":"2026-09-10T01:14:26.123Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478164","source_sha256":"fbe466cef98ef1b0fe204622733965d8f7d0525234f375080a0b4ad06987ef67"}}],"enrichment":{"summary":"This subtopic governs how a time-share seller accounts for other expenses of time-sharing activities — chiefly selling and marketing costs and subsidies of the owners association. The core rule is that all costs incurred to sell time-sharing intervals are expensed as incurred unless they qualify for capitalization as costs to obtain a contract under ASC 340-40-25-1 through 25-4, and seller payments of dues, maintenance fees, or subsidies of owners association losses are likewise expensed as incurred.","key_points":["All costs incurred to sell time-sharing intervals are charged to expense as incurred unless they specifically qualify for capitalization under paragraphs 340-40-25-1 through 25-4 (720-978-25-1).","Costs that must be expensed include costs to induce potential buyers to take sales tours (e.g., telemarketing call centers), all costs of unsuccessful sales transactions, and all sales overhead such as on-site and off-site sales office rent, utilities, maintenance, and telephone (720-978-25-2).","Advertising costs are accounted for under Subtopic 720-35; direct incremental costs of tour fulfillment, such as airline tickets to bring customers to a tour location, are expensed at the time the tour takes place (720-978-25-2).","Seller payments of dues or maintenance fees on unsold intervals are expensed as incurred, except when accounted for as incidental operations during holding periods under 978-330-35-3 through 35-6 (720-978-25-3).","Seller payments of additional amounts to subsidize owners association losses are charged to expense as incurred (720-978-25-3).","If the seller is contractually entitled to recover all or part of its subsidy from the owners association, a receivable is recorded only if recovery is probable and measurable with reasonable reliability (720-978-25-3).","A time-share seller typically forms the owners association, appoints its board during sellout, and often has an affiliate manage the project (720-978-05-3)."],"categories":["Recognition","Industry-specific","Revenue","Inventory and PP&E"],"audience_level":"intermediate","student_note":"Exam traps here are the presumption of expensing: students often assume heavy selling and marketing outlays in time-share projects can be capitalized as project costs, when only incremental costs meeting ASC 340-40-25-1 through 25-4 qualify, and tour-generation, failed-sale, and sales overhead costs never do. Also remember a subsidy receivable from the owners association requires recovery to be both probable and measurable with reasonable reliability.","related_topics":["340-40","978-10","978-330","720-35","606","970"],"key_concepts":["time-sharing intervals","selling and marketing costs","costs to obtain a contract","owners association","seller subsidy","tour fulfillment costs","maintenance fees and dues","recoverability of subsidy"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a86331b309ae772c991722ce6ff62d077ba8463d2265d8da7f3b56f1b8f63e1d","downloaded_from":"2026-09-10T01:14:14.996Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"340-978","title":"Real Estate—Time-Sharing Activities","topic_title":"Other Assets and Deferred Costs","score":0.8316,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:17eafd6baa5bc98f6305a864ec736d6c7bbac610f250381e2ed19cf9ca96eded","downloaded_from":"2026-09-09T23:59:19.735Z","last_downloaded_at":"2026-09-09T23:59:36.956Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"330-978","title":"Real Estate—Time-Sharing Activities","topic_title":"Inventory","score":0.8019,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f9134c83e9f5b6b944d44b2865119e0f4a7b749e7cfc9aaf2f2685a5d0afd10e","downloaded_from":"2026-09-09T23:53:35.942Z","last_downloaded_at":"2026-09-09T23:53:56.981Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"978-10","title":"Overall","topic_title":"Real Estate—Time-Sharing Activities","score":0.7762,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a532493f877160810deee7b67fa77b2345c3f942fab6b72e10d6e2a920f9b70","downloaded_from":"2026-09-10T02:27:02.409Z","last_downloaded_at":"2026-09-10T02:27:14.744Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"310-978","title":"Real Estate—Time-Sharing 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Corrections","score":0.6821,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bdd66646aff7383c0a0cb8e21c4a69f3c95af226cae29b765268802daf14467c","downloaded_from":"2026-09-09T23:17:35.160Z","last_downloaded_at":"2026-09-09T23:17:44.112Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"720-974","title":"Real Estate—Real Estate Investment Trusts","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f18af938b28e43061929f5b6c3709a78a11514cbc149b9abda2d3163cb306ab3","downloaded_from":"2026-09-10T01:13:54.098Z","last_downloaded_at":"2026-09-10T01:14:12.248Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"730-10","title":"Overall","topic_title":"Research and Development","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:adcf81f884d802636228b370f24bdc30bf4255450e6b7c092ce104d318623234","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:10722cb4af9e62297d64fd6e1a87205f82d2b60f06ebe2ef76e0cd35767d407d","downloaded_from":"2026-09-10T01:14:14.996Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"paragraphs":569,"summary":"ASC 720 is a residual \"Other Expenses\" Topic that gathers unrelated cost categories not covered elsewhere in GAAP; 720-10-05-2 stresses that each subtopic is standalone, so guidance cannot be analogized from one to another. The dominant theme running through the general subtopics is expense-as-incurred: start-up and organization costs (720-15-25-1), advertising (720-35-25-1, either as incurred or the first time the advertising takes place), business process reengineering (720-45-25-1), and contributions made measured at the fair value of assets given (720-25-25-1, 720-25-30-1); exceptions with special timing include property taxes accrued monthly over the taxing authority's fiscal period (720-30-25-7), purchased retroactive/claims-made and multiple-year retrospectively rated insurance (720-20), WEEE historical waste liabilities recognized only over the measurement period (720-40-25-1), and ACA annual fees recognized in full at the first qualifying event with a deferred cost amortized over the calendar year (720-50-25-1). Industry subtopics (720-908 airlines, 720-922 cable, 720-924 casinos, 720-926 films, 720-928 music, 720-932 oil and gas, 720-942 depository institutions, 720-946/940 fund distribution, 720-948 mortgage banking, 720-954 health care, 720-958 not-for-profit functional expense reporting and joint costs, 720-970/972/974/978 real estate and time-share) mostly identify particular costs that fail the definition of an asset and must be charged to expense. The key takeaway: absent a specific rule permitting capitalization, these miscellaneous costs are period costs, and the analysis is always subtopic-specific.","concepts":["expense as incurred","start-up and organization costs","advertising costs policy election","contributions made at fair value","property tax accrual","insurance purchased by a policyholder","business process reengineering costs","functional expense classification and joint costs"],"categories":["Recognition","Initial measurement","Not-for-profit","Industry-specific"],"level":"intermediate","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:11c2deda956f2db85ff0707ebbb6d57c479ebabbfb539d21f32b58e2a5953fe0","downloaded_from":"2026-09-10T00:48:39.704Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}