# ASC 810-958-15: Consolidation — Not-for-Profit Entities — 15 Scope and Scope Exceptions

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/810/958/#15-scope-and-scope-exceptions)

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## ASC 810-958-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/810/958/#15-scope-and-scope-exceptions)

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#### Overall Guidance

##### [810-958-15-1](https://asc.understandingaccounting.org/asc/810/958/#810-958-15-1)

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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15, with specific exceptions noted below.

##### [810-958-15-2](https://asc.understandingaccounting.org/asc/810/958/#810-958-15-2)

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#### Other Considerations

##### [810-958-15-3](https://asc.understandingaccounting.org/asc/810/958/#810-958-15-3)

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This Subtopic does not provide guidance on the following subjects:

1.  a
    
    How to prepare consolidated financial statements, other than to provide guidance on the presentation of noncontrolling interests
    
2.  b
    
    Commonly controlled [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs) or [combined financial statements](https://asc.understandingaccounting.org/glossary/c/#combined-financial-statements "The financial statements of a combined group of commonly controlled entities or commonly managed entities presented as those of a single economic entity. The combined group does not include the parent.") of commonly controlled NFPs, which may be presented, in certain circumstances, in conformity with the guidance in paragraph [810-10-55-1B](https://asc.understandingaccounting.org/asc/810/10/#810-10-55-1B)
    
3.  c
    
    Parent-entity-only or subsidiary-entity-only financial statements (see paragraph [810-10-45-11](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-11) if parent-entity financial statements are needed)
    
4.  d
    
    All the conceptual issues underlying the reporting of relationships not evidenced by ownership.

##### [810-958-15-4](https://asc.understandingaccounting.org/asc/810/958/#810-958-15-4)

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Additional guidance for reporting relationships between NFPs and for-profit entities resides in the following locations in the Codification:

1.  a
    
    An NFP with a controlling financial interest through direct or indirect ownership of a majority voting interest in a for-profit entity that is other than a [limited partnership](https://asc.understandingaccounting.org/glossary/l/#limited-partnership "An association in which one or more general partners have unlimited liability and one or more partners have limited liability. A limited partnership is usually managed by the general partner or partners, subject to limitations, if any, imposed by the partnership agreement.") or similar [legal entity](https://asc.understandingaccounting.org/glossary/l/#legal-entity "Any legal structure used to conduct activities or to hold assets. Some examples of such structures are corporations, partnerships, limited liability companies, grantor trusts, and other trusts.")shall apply the guidance in the General Subsections of Subtopic 810-10. However, in accordance with paragraph [810-10-15-17](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-17), NFPs are not subject to the Variable Interest Entities Subsections of that Subtopic.
    
2.  b
    
    An NFP that is a general partner or a limited partner of a for-profit limited partnership or a similar legal entity (such as a limited liability company that has governing provisions that are the functional equivalent of a limited partnership) shall apply the guidance in paragraphs
    
    [958-810-25-11 through 25-29](https://asc.understandingaccounting.org/asc/810/958/#810-958-25-11)
    
    and
    
    [958-810-55-16A through 55-16I](https://asc.understandingaccounting.org/asc/810/958/#810-958-55-16A)
    
    . However, the guidance in those paragraphs does not apply to the following:
    
    1.  1
        
        A general partner or a limited partner that reports its partnership interest at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") in accordance with (e)
        
    2.  2
        
        Entities in industries, such as the construction or extractive industries, in which it is appropriate for a general partner to use the pro rata method of consolidation for its investment in a limited partnership (see paragraph [810-10-45-14](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-14)).
        
3.  c
    
    An NFP that owns 50 percent or less of the voting stock in a for-profit entity shall apply the guidance in Subtopic 323-10 unless the investment is measured at fair value in accordance with applicable GAAP, including the guidance described in (e). If the NFP is unable to exercise significant influence, the NFP shall apply the guidance for equity securities in Topic 321.
    
4.  d
    
    An NFP with a more than minor noncontrolling interest in a for-profit real estate partnership, limited liability company, or similar legal entity shall report its noncontrolling interests in such entities using the equity method in accordance with the guidance in Subtopic 970-323 unless that interest is reported at fair value in accordance with applicable GAAP, including the guidance described in (e). An NFP shall apply the guidance in paragraph [970-810-25-1](https://asc.understandingaccounting.org/asc/810/970/#810-970-25-1) to determine whether its interests in a general partnership are controlling financial interests or noncontrolling interests. An NFP shall apply the guidance in paragraphs
    
    [958-810-25-11 through 25-29](https://asc.understandingaccounting.org/asc/810/958/#810-958-25-11)
    
    and
    
    [958-810-55-16A through 55-16I](https://asc.understandingaccounting.org/asc/810/958/#810-958-55-16A)
    
    to determine whether its interests in a for-profit limited partnership, limited liability company, or similar legal entity are controlling financial interests or noncontrolling interests. An NFP shall apply the guidance in paragraph [323-30-35-3](https://asc.understandingaccounting.org/asc/323/30/#323-30-35-3) to determine whether a limited liability company should be viewed as similar to a partnership, as opposed to a corporation, for purposes of determining whether noncontrolling interests in a limited liability company or a similar legal entity should be accounted for in accordance with Subtopic 970-323 or Subtopic 323-10.
    
5.  e
    
    An NFP that is not within the scope of Topic 954 on health care entities may elect to report the investments described in (b) through (d) and paragraph [958-325-15-2](https://asc.understandingaccounting.org/asc/325/958/#325-958-15-2) at fair value, with changes in fair value reported in the statement of activities, provided that all such investments are measured at fair value.