# ASC 958-20-15: Not-for-Profit Entities — Financially Interrelated Entities — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/958/20/#15-scope-and-scope-exceptions) 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): 2026-09-10T02:21:36.095Z to 2026-09-10T02:21:36.095Z Record version: sha256:a41ec3b278c8b4197e85dffd3aabb793ca014d9a5f4d00f8e5dbe7f097e5c5d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/958/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [958-20-15-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:36.095Z to 2026-09-10T02:21:36.095Z Record version: sha256:46955f5dc727d07c521856ad536a4f8078ce02c5c8feca515ea72ed80b9c5e7b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15, with specific qualifications noted below. #### Entities ##### [958-20-15-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:36.095Z to 2026-09-10T02:21:36.095Z Record version: sha256:f947174ebed592cf8b24cc62aed01da354cc7c42fa39e74cd22a9dee6bce39b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to entities that are financially interrelated. A [recipient entity](https://asc.understandingaccounting.org/glossary/r/#recipient-entity "A not-for-profit entity (NFP) or charitable trust that accepts assets from a donor or other resource provider and agrees to use those assets on behalf of or transfer those assets, the return on investment of those assets, or both to a beneficiary that is specified by the donor or resource provider.") and a specified beneficiary are [financially interrelated entities](https://asc.understandingaccounting.org/glossary/f/#financially-interrelated-entities "A recipient entity and a specified beneficiary are financially interrelated entities if the relationship between them has both of the following characteristics: One of the entities has the ability to influence the operating and financial decisions of the other. One of the entities has an ongoing economic interest in the net assets of the other.") if the relationship between them has both of the following characteristics: 1. a One entity has the ability to influence the operating and financial decisions of the other. The ability to exercise that influence may be demonstrated in several ways, including the following: 1. 1 The entities are [affiliates](https://asc.understandingaccounting.org/glossary/a/#affiliate "A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control."). 2. 2 One entity has considerable representation on the governing board of the other entity. 3. 3 The charter or bylaws of one entity limit its activities to those that are beneficial to the other entity. 4. 4 An agreement between the entities allows one entity to actively participate in policymaking processes of the other, such as setting organizational priorities, budgets, and management compensation. 2. b One entity has an [ongoing economic interest in the net assets of the other](https://asc.understandingaccounting.org/glossary/o/#ongoing-economic-interest-in-the-net-assets-of-another "A residual right to another not-for-profit entity's (NFP's) net assets that results from an ongoing relationship. The value of those rights increases or decreases as a result of the investment, fundraising, operating, and other activities of the other entity."). If the specified beneficiary has an ongoing economic interest in the net assets of the recipient entity, the beneficiary's rights to the assets held by the recipient entity are residual rights; that is, the value of those rights increases or decreases as a result of the investment, fundraising, operating, and other activities of the recipient entity. Alternatively, but less common, a recipient entity may have an ongoing economic interest in the net assets of the specified beneficiary. If so, the recipient entity's rights are residual rights, and their value changes as a result of the operations of the beneficiary. #### Transactions ##### [958-20-15-3](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:36.095Z to 2026-09-10T02:21:36.095Z Record version: sha256:2f3674749a222d525bbbe9493d83bf3d1ec9748c721b776037b31cce72f15ea5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to the following types of transactions: 1. a Transactions in which an entity—the donor—makes 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.") by transferring assets to 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) or charitable trust—the recipient entity—that accepts the assets from the donor and agrees to use those assets on behalf of or transfer those assets, the return on investment of those assets, or both to a financially interrelated entity—the beneficiary—that is specified by the donor 2. b Transfers that take place in a similar manner to (a) but are not contributions for either of the following reasons: 1. 1 The entity that transfers the assets to the recipient entity—the resource provider—is related to the beneficiary in a way that causes the transfer to be reciprocal. 2. 2 Conditions imposed by the resource provider or the relationships between the parties make the transfer of assets to the recipient entity revocable or repayable. ##### [958-20-15-4](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:36.095Z to 2026-09-10T02:21:36.095Z Record version: sha256:557d0c185df69d9692edd0a859a0432125788d92cfbb5c1e8af4ab4f6e7cf293 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to transfers addressed by the preceding paragraph of cash and other assets, including securities, land, buildings, use of facilities or utilities, materials and supplies, intangible assets, services, and [unconditional promises to give](https://asc.understandingaccounting.org/glossary/u/#unconditional-promise-to-give "A promise to give that depends only on passage of time or demand by the promisee for performance.") those items in the future.