# ASC 805-958-30: Business Combinations — Not-for-Profit Entities — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/958/#30-initial-measurement) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:ddb5a2d90622496a09d875675304ee2912b8e3b1a1137e65738aedd3f1614fae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-958-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/805/958/#30-initial-measurement) SEC content: no ### Merger of Not-for-Profit Entities ##### [805-958-30-1](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:b2f0295f50f9b924ea7e297dd9a7ec22707c7065f2d970f1aa384e4a60704803 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. **The new [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) shall measure the assets and liabilities in its financial statements as of the [merger date](https://asc.understandingaccounting.org/glossary/m/#merger-date "The date on which the merger becomes effective.") at the amounts reported in the financial statements of the merging entities as of that date prepared in accordance with GAAP, adjusted as necessary in accordance with paragraphs [958-805-30-2 through 30-3](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-2) .** ##### [805-958-30-2](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:37672415b865f535866f85da51672c0a070ddc167e592ed923df810b26c817a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The merging entities may have measured assets and liabilities using different methods of accounting in their separate financial statements. The new NFP shall adjust the amounts of those assets and liabilities as necessary to reflect a consistent method of accounting. ##### [805-958-30-3](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:657618d3fdd4d91a099684a864861de65c53b5e6b8e3257d1b26fa42f4365357 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, because the carryover method does not reflect a fresh-start measurement, a merger is not an event that permits the election of accounting options that are restricted to the entity's initial acquisition or recognition of an item (or the reversal of a previous election). Thus, for example, one merging entity's election to apply the Fair Value Option Subsections of Subtopic 825-10 for a particular financial asset or liability permits neither the new NFP's election of the fair value option for other financial assets or liabilities at the merger date nor the reversal of the previous selection of the fair value option. ##### [805-958-30-4](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:5087eadfa367bb93fb9b107ddf5924c1bca0df268a7d0b388dd9db6c553804a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The new NFP shall eliminate the effects of any intra-entity transactions on its assets, liabilities, and net assets as of the merger date. ### Acquisition by a Not-for-Profit Entity ##### [805-958-30-5](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-5) Pending content: yes Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:c2315654a39fbe13f1efcf1bfd916c46e4a6b26554dc9e013f54fb684b0751cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) that is an [acquirer](https://asc.understandingaccounting.org/glossary/a/#acquirer "The entity that obtains control of the acquiree. However, in a business combination in which a variable interest entity (VIE) is acquired, the primary beneficiary of that entity always is the acquirer. (P) December 16, 2026; (N) December 16, 2026805-10-65-5The entity that obtains control of the acquiree.See paragraphs 805-10-25-4805-10-25-5 for guidance on determining the acquirer.") applies the guidance in this Subsection instead of Subtopic 805-30 for the measurement of the following items: 1. a [Goodwill](https://asc.understandingaccounting.org/glossary/g/#goodwill "An asset representing the future economic benefits arising from other assets acquired in a business combination, acquired in an acquisition by a not-for-profit entity, or recognized by a joint venture upon formation that are not individually identified and separately recognized. For ease of reference, this term also includes the immediate charge recognized by not-for-profit entities in accordance with paragraph 958-805-25-29.") acquired, whether recognized as an asset or an immediate charge to the statement of activities 2. b A [contribution](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") received in an acquisition 3. c Consideration transferred, including [contingent consideration](https://asc.understandingaccounting.org/glossary/c/#contingent-consideration "Usually an obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree if specified future events occur or conditions are met. However, contingent consideration also may give the acquirer the right to the return of previously transferred consideration if specified conditions are met."). Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)A [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) that is an [acquirer](https://asc.understandingaccounting.org/glossary/a/#acquirer "The entity that obtains control of the acquiree. However, in a business combination in which a variable interest entity (VIE) is acquired, the primary beneficiary of that entity always is the acquirer. (P) December 16, 2026; (N) December 16, 2026805-10-65-5The entity that obtains control of the acquiree.See paragraphs 805-10-25-4805-10-25-5 for guidance on determining the acquirer.") applies the guidance in this Subsection instead of Subtopics 805-20 and 805-30 for the measurement of the following items: 1. a [Goodwill](https://asc.understandingaccounting.org/glossary/g/#goodwill "An asset representing the future economic benefits arising from other assets acquired in a business combination, acquired in an acquisition by a not-for-profit entity, or recognized by a joint venture upon formation that are not individually identified and separately recognized. For ease of reference, this term also includes the immediate charge recognized by not-for-profit entities in accordance with paragraph 958-805-25-29.") acquired, whether recognized as an asset or an immediate charge to the statement of activities 2. b A [contribution](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") received in an acquisition 3. c Consideration transferred, including [contingent consideration](https://asc.understandingaccounting.org/glossary/c/#contingent-consideration "Usually an obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree if specified future events occur or conditions are met. However, contingent consideration also may give the acquirer the right to the return of previously transferred consideration if specified conditions are met."). #### Goodwill Acquired, Whether Recognized as an Asset or an Immediate Charge to the Statement of Activities ##### [805-958-30-6](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:58ccf4de33a1b00d50c353f54e884466ed86e3613a17765af6ee5a668e1f2bd5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP acquirer shall measure goodwill acquired, including goodwill recognized as an immediate charge to the statement of activities, as of the [acquisition date](https://asc.understandingaccounting.org/glossary/a/#acquisition-date "The date on which the acquirer obtains control of the acquiree.") as the excess of (a) over (b): 1. a The aggregate of the following: 1. 1 The consideration transferred measured at its acquisition-date fair value (see paragraphs [958-805-30-10 through 30-13](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-10) ) 2. 2 The fair value of any [noncontrolling interest](https://asc.understandingaccounting.org/glossary/n/#noncontrolling-interest "The portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. A noncontrolling interest is sometimes called a minority interest.") in the [acquiree](https://asc.understandingaccounting.org/glossary/a/#acquiree "The business or businesses that the acquirer obtains control of in a business combination. This term also includes a nonprofit activity or business that a not-for-profit acquirer obtains control of in an acquisition by a not-for-profit entity.") 3. 3 In an [acquisition by a not-for-profit entity](https://asc.understandingaccounting.org/glossary/a/#acquisition-by-a-not-for-profit-entity "A transaction or other event in which a not-for-profit acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer's financial statements. When applicable guidance in Topic 805 is applied by a not-for-profit entity, the term business combination has the same meaning as this term has for a for-profit entity. Likewise, a reference to business combinations in guidance that links to Topic 805 has the same meaning as a reference to acquisitions by not-for-profit entities.") achieved in stages, the acquisition-date fair value of the acquirer's previously held [equity interest](https://asc.understandingaccounting.org/glossary/e/#equity-interests "Used broadly to mean ownership interests of investor-owned entities; owner, member, or participant interests of mutual entities; and owner or member interests in the net assets of not-for-profit entities.") in the acquiree. 2. b The net of the acquisition-date amounts of the [identifiable](https://asc.understandingaccounting.org/glossary/i/#identifiable "An asset is identifiable if it meets either of the following criteria: It is separable, that is, capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability, regardless of whether the entity intends to do so. It arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.") assets acquired and the liabilities assumed measured in accordance with Subtopic 805-20 and this Subtopic. ##### [805-958-30-7](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:be7bcb29ec60f93d45da98450be450bb131cae0af83a655def2ddf1ca4945e8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The result of the equation in the preceding paragraph will be to measure goodwill or the separate charge to the statement of activities as the excess of liabilities assumed over assets acquired if the acquisition by the NFP meets all of the following criteria: 1. a No consideration is transferred. 2. b There is no noncontrolling interest in an acquiree. 3. c The acquisition was not achieved in stages. #### A Contribution Received in an Acquisition ##### [805-958-30-8](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:c962c408acb89cfd3e5533032db04e03ca329dd7bfb385481c5e913392bf6d81 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. **An [inherent contribution](https://asc.understandingaccounting.org/glossary/i/#inherent-contribution "A contribution that results if an entity voluntarily transfers assets (or net assets) or performs services for another entity in exchange for either no assets or for assets of substantially lower value and unstated rights or privileges of a commensurate value are not involved.") recognized in accordance with paragraph [958-805-25-31](https://asc.understandingaccounting.org/asc/805/958/#805-958-25-31) shall be measured as the excess of the amount in paragraph [958-805-30-6(b)](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-6) over the amount in paragraph [958-805-30-6(a)](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-6).** ##### [805-958-30-9](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:f3a0f16ed103d7b6e4a126752a9261c275708775ab142a16cb75daf302939621 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The inherent contribution received will be measured as the excess of assets acquired over liabilities assumed if the acquisition meets all of the following criteria: 1. a That acquisition is effected without the transfer of consideration. 2. b There is no noncontrolling interest in an acquiree. 3. c The acquisition was not achieved in stages. Example 6 (see paragraphs [958-805-55-62 through 55-67](https://asc.understandingaccounting.org/asc/805/958/#805-958-55-62) ) illustrates an inherent contribution. #### Consideration Transferred, Including Contingent Consideration ##### [805-958-30-10](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:71e2b8e8640e6eed8cb6ea8780ac10c35ef981b70113dc736b8385feb6a42f15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The consideration transferred in an acquisition by an NFP shall be measured at fair value, which shall be calculated as the sum of the acquisition-date fair values of the assets transferred by the acquirer and the liabilities incurred by the acquirer. ##### [805-958-30-11](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:c262fc985f07a07c954eb15aef3be04b0053d31408a98b5f48fabbb598889c7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the consideration transferred includes assets or liabilities of the NFP acquirer that have carrying amounts that differ from their fair values at the acquisition date, as discussed in paragraph [958-805-25-34](https://asc.understandingaccounting.org/asc/805/958/#805-958-25-34), the NFP acquirer shall remeasure the transferred assets or liabilities to their fair values as of the acquisition date. ##### [805-958-30-12](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:a4c8aacbb015bf9223e7a7c4bfbba3358d8525bf4ec2de27998e887ee21d407a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP acquirer that retains control over the transferred assets as described in paragraphs [958-805-25-33 through 25-34](https://asc.understandingaccounting.org/asc/805/958/#805-958-25-33) shall measure those assets and liabilities at their carrying amounts immediately before the acquisition date. ##### [805-958-30-13](https://asc.understandingaccounting.org/asc/805/958/#805-958-30-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:27:56.788Z to 2026-09-10T01:27:56.788Z Record version: sha256:00517dc4d5e2e102b0709887e85e797c03c4429cce1a3e653bd54f4217c45223 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Contingent consideration shall be measured initially at acquisition-date fair value.