{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/958/20/#55-implementation-guidance-and-illustrations","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.","topic":"958","topic_title":"Not-for-Profit Entities","subtopic":"958-20","subtopic_title":"Financially Interrelated Entities","section":{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"958-20-55-1","para":"55-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used by a <a href=\"/glossary/n/#not-for-profit-entity\" class=\"term\" title=\"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.\"><span>not-for-profit entity</span></a> (NFP) in reporting relationships with <a href=\"/glossary/f/#financially-interrelated-entities\" class=\"term\" title=\"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.\"><span>financially interrelated entities</span></a>.</div> </div>","snippet":"This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used by a not-for-profit entity (NFP) in reporting relationships with financially interrelated entities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b4d45a99daf7291f18bead1522c922ad4d1900e32312557b1ca8cf4901fe0eb9","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2190871924c8100d62638c69137af5163fdb3d324d8051ccb0e5e8193d4230f7","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"958-20-55-2","para":"55-2","html":"<div class=\"asc-body\"><div class=\"norm-text\">The flowchart in paragraph <a href=\"/asc/605/958/#605-958-55-74\" class=\"xref\">958-605-55-74</a> depicts the process of applying the requirements of Sections <a altsource=\"GUID-7F7856B7-B9B5-484B-992F-8CDBAFDA7A95.ditamap\" class=\"ditamap\">958-20-15</a> and <a altsource=\"GUID-CC32726F-B3DB-4871-94E5-825CE5A1C141.ditamap\" class=\"ditamap\">958-20-25</a>.</div> </div>","snippet":"The flowchart in paragraph 958-605-55-74 depicts the process of applying the requirements of Sections 958-20-15 and 958-20-25.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3b40de02c6116c1aa635dba35ebdad37b35cb68469bb35929ca8b3fd7a33156b","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-2A","para":"55-2A","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA77986-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Although most of the relationships described in the definition of <a href=\"/glossary/e/#economic-interest\" class=\"term\" title=\"A not-for-profit entity's (NFP's) interest in another entity that exists if any of the following criteria are met: The other entity holds or utilizes significant resources that must be used for the purposes of the NFP, either directly or indirectly by producing income or providing services. The NFP is responsible for the liabilities of the other entity. See paragraph 958-810-55-6 for examples of economic interests.\"><span>economic interest</span></a> used in Subtopic <a altsource=\"GUID-8C9AC891-494F-4CFB-A809-44DB140CC1D5.ditamap\" class=\"ditamap\">958-810</a> are potentially <a href=\"/glossary/o/#ongoing-economic-interest-in-the-net-assets-of-another\" class=\"term\" title=\"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.\"><span>ongoing economic interests in the net assets of another</span></a>, some do not meet the criterion in paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2(b)</a>. Only economic interests that are both ongoing and residual interests in the net assets are ongoing economic interests in the net assets of another. </span></span> </div> </div>","snippet":"Although most of the relationships described in the definition of economic interest used in Subtopic 958-810 are potentially ongoing economic interests in the net assets of another, some do not meet the criterion in para…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:79762a32134e127199cc605b2422c54a54e3806b4fffce4c11c9133cea56483a","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-2B","para":"55-2B","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA77B72-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An equity transaction differs from an <a href=\"/glossary/e/#equity-transfer\" class=\"term\" title=\"An equity transfer is nonreciprocal. An equity transfer is a transaction directly between a transferor and a transferee. Equity transfers are similar to ownership transactions between a for-profit parent and its owned subsidiary (for example, additional paid-in capital or dividends). However, equity transfers can occur only between related not-for-profit entities (NFPs) if one controls the other or both are under common control. An equity transfer embodies no expectation of repayment, nor does the transferor receive anything of immediate economic value (such as a financial interest or ownership).\"><span>equity transfer</span></a> in that an equity transaction, as described in paragraph <a href=\"/asc/958/20/#958-20-25-4\" class=\"xref\">958-20-25-4</a>, involves a financially interrelated party either as a third party in a transfer from an entity to one of its affiliates or as a counterparty in a transfer from an entity to itself. </span></span> <span class=\"sfragment\" id=\"sfr_2CA77D7B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">In addition, an equity transaction, unlike an equity transfer, is reciprocal; the NFP or its affiliate named as the beneficiary receives an ongoing economic interest in the assets held by the recipient entity. </span></span> <span class=\"sfragment\" id=\"sfr_2CA77EB7-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">See paragraph <a href=\"/asc/220/954/#220-954-45-2\" class=\"xref\">954-220-45-2</a> for guidance on how to present equity transfers for not-for-profit, business-oriented health care entities that present a <a href=\"/glossary/p/#performance-indicator\" class=\"term\" title=\"A performance indicator reports results of operations. A performance indicator and the income from continuing operations reported by for-profit health care entities generally are consistent, except for transactions that clearly are not applicable to one kind of entity (for example, for-profit health care entities typically would not receive contributions, and not-for-profit health care entities would not award stock compensation). That is, a performance indicator is analogous to income from continuing operations of a for-profit entity.\"><span>performance indicator</span></a>. </span></span> </div> </div>","snippet":"An equity transaction differs from an equity transfer in that an equity transaction, as described in paragraph 958-20-25-4, involves a financially interrelated party either as a third party in a transfer from an entity t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:92f95334855df6b5287aac844d1a1c4c854be0fee39f5ee4078bd294575212a5","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e3ec5b1543c6e1eef947ebbd8a704a5e2ed47158bd6117565cad0f31b220a896","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"958-20-55-3","para":"55-3","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Example illustrates the guidance in paragraphs <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2</a> and <div class=\"xref-range displayInline\"><a href=\"/asc/958/20/#958-20-25-1\" class=\"xref\">958-20-25-1 through 25-2</a></div>.</div> </div>","snippet":"This Example illustrates the guidance in paragraphs 958-20-15-2 and 958-20-25-1 through 25-2.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b26ddd759b4da23967a1dbf107f8d2590b66b2fe14307ed26a37a63a711587ef","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-4","para":"55-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA78065-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Corporation sends dental supplies to University Foundation to be used by students in University's dental clinic. University Foundation's bylaws state that it is organized for the purpose of stimulating voluntary financial support from alumni and other donors for the benefit of University, especially for addressing the long-term academic priorities of University. As with most gifts it receives, University Foundation can choose the timing of the distribution to University and can place additional limitations on the distribution if those limitations are consistent with Corporation's restrictions. University does not control University Foundation. </span></span> </div> </div>","snippet":"Corporation sends dental supplies to University Foundation to be used by students in University's dental clinic. University Foundation's bylaws state that it is organized for the purpose of stimulating voluntary financia…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23310d1c165e65bc8a5a22ac8ac086b1b2ce5176339ade6aa93b71fe63f8c3fc","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-5","para":"55-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA7824D-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">University Foundation recognizes the <a href=\"/glossary/f/#fair-value\" class=\"term\" title=\"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.\"><span>fair value</span></a> of the dental supplies (<a href=\"/glossary/n/#nonfinancial-asset\" class=\"term\" title=\"An asset that is not a financial asset. Nonfinancial assets include land, buildings, use of facilities or utilities, materials and supplies, intangible assets, or services.\"><span>nonfinancial assets</span></a>) as an increase in assets and as <a href=\"/glossary/c/#contribution\" class=\"term\" title=\"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.\"><span>contribution</span></a> revenue that increases <a href=\"/glossary/n/#net-assets-with-donor-restrictions\" class=\"term\" title=\"The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).\"><span>net assets with donor restrictions</span></a> because there are <a href=\"/glossary/d/#donor-imposed-restriction\" class=\"term\" title=\"A donor stipulation (donors include other types of contributors, including makers of certain grants) that specifies a use for a contributed asset that is more specific than broad limits resulting from the following: The nature of the not-for-profit entity (NFP) The environment in which it operates The purposes specified in its articles of incorporation or bylaws or comparable documents for an unincorporated association. Some donors impose restrictions that are temporary in nature, for example, stipulating that resources be used after a specified date, for particular programs or services, or to acquire buildings or equipment. Other donors impose restrictions that are perpetual in nature, for example, stipulating that resources be maintained in perpetuity. Laws may extend those limits to investment returns from those resources and to other enhancements (diminishments) of those resources. Thus, those laws extend donor-imposed restrictions.\"><span>donor-imposed restrictions</span></a> and because University and University Foundation are financially interrelated entities (see paragraph <a href=\"/asc/958/20/#958-20-25-1\" class=\"xref\">958-20-25-1</a>). University can influence the financial and operating decisions of University Foundation because the bylaws of University Foundation limit its activities to those that benefit University (see paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2(a)</a>). University has an ongoing economic interest in the net assets of University Foundation because the results of University Foundation's activities accrue to the benefit of University (see paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2(b)</a>). When University Foundation distributes the dental supplies to University, it reduces its assets and recognizes an expense and the expiration of the restriction. </span></span> </div> </div>","snippet":"University Foundation recognizes the fair value of the dental supplies (nonfinancial assets) as an increase in assets and as contribution revenue that increases net assets with donor restrictions because there are donor-…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:79a4b984d453dc2afd97a56a951e68e2bf52385062be7d0ef4830a6a540fbb5a","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-6","para":"55-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA7843A-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Periodically, in conjunction with preparing its financial statements, University recognizes the change in its interest in the net assets of University Foundation, which would include the gift of nonfinancial assets received by the foundation (see paragraph <a href=\"/asc/958/20/#958-20-25-2\" class=\"xref\">958-20-25-2</a>). Because payments from University Foundation are due in future periods, the increase (or decrease) in University's interest would be classified as a change in net assets with donor restrictions to reflect the time restriction. When the dental supplies and other assets are distributed to it, University would recognize the assets received and decrease its interest in the net assets of University Foundation. </span></span> </div> </div>","snippet":"Periodically, in conjunction with preparing its financial statements, University recognizes the change in its interest in the net assets of University Foundation, which would include the gift of nonfinancial assets recei…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:388d4769823778f7bd2ec5f3ac9c4f130894189728c47f11f63144e0557afdda","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-7","para":"55-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA785C2-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If, instead, University controlled University Foundation, University would be able to access at will any assets held by University Foundation. Implying a time restriction on the gifts held by University Foundation would be inappropriate. When recognizing the change in its interest in University Foundation, University would report the resulting net assets in the same net asset classifications as University Foundation. </span></span> </div> </div>","snippet":"If, instead, University controlled University Foundation, University would be able to access at will any assets held by University Foundation. Implying a time restriction on the gifts held by University Foundation would …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:237a0eadfd58aad26bf8686ccc8e06eca425643805c6c476779181cf789ee696","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-8","para":"55-8","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Example illustrates the guidance in paragraphs <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2</a> and <div class=\"xref-range displayInline\"><a href=\"/asc/958/20/#958-20-25-1\" class=\"xref\">958-20-25-1 through 25-2</a></div>.</div> </div>","snippet":"This Example illustrates the guidance in paragraphs 958-20-15-2 and 958-20-25-1 through 25-2.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:de5de5839645ede52401410a67403ad62c640e61002ee3811cda018045ee37a0","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-9","para":"55-9","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA7870C-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Corporation transfers cash to Healthcare Foundation and requests that Healthcare Foundation use the gift to provide healthcare benefits to the community. Healthcare Foundation's bylaws state that it is organized for the purpose of stimulating voluntary financial support from donors for the benefit of Hospital, Nursing Home, and Walk-in Clinic, all of which are located in the community. Hospital, Nursing Home, Walk-in Clinic, and Healthcare Foundation are affiliates that are controlled by Healthcare System. </span></span> </div> </div>","snippet":"Corporation transfers cash to Healthcare Foundation and requests that Healthcare Foundation use the gift to provide healthcare benefits to the community. Healthcare Foundation's bylaws state that it is organized for the …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fdbd3c667acbf2fa33e9cf7e3ef4a7b12cf65ce90dc599245af9da8502144b7a","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-10","para":"55-10","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA788BA-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Healthcare Foundation would recognize cash and <a href=\"/glossary/c/#contribution\" class=\"term\" title=\"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.\"><span>contribution</span></a> revenue that increases <a href=\"/glossary/n/#net-assets-without-donor-restrictions\" class=\"term\" title=\"The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).\"><span>net assets without donor restrictions</span></a> because Corporation did not specify a beneficiary for its gift. Healthcare Foundation can choose how to distribute the gift among the three affiliates (see paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/605/958/#605-958-55-76\" class=\"xref\">958-605-55-76 through 55-77</a></div>). </span></span> </div> </div>","snippet":"Healthcare Foundation would recognize cash and contribution revenue that increases net assets without donor restrictions because Corporation did not specify a beneficiary for its gift. Healthcare Foundation can choose ho…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:af93f8c71062eca907fc05e36879beeb492c85aa3b260b631bc72c472743d229","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-11","para":"55-11","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA78A37-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Periodically, in conjunction with preparing their financial statements, Hospital, Nursing Home, and Walk-in Clinic recognize the changes in their interests in the net assets of Healthcare Foundation (see paragraph <a href=\"/asc/958/20/#958-20-25-2\" class=\"xref\">958-20-25-2</a>). When measuring its interest in Healthcare Foundation, each <a href=\"/glossary/a/#affiliate\" class=\"term\" title=\"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.\"><span>affiliate</span></a> would include only the net assets of Healthcare Foundation that are restricted to that affiliate's use. None of them would include in their individual interest the net assets resulting from the gift received from Corporation because Healthcare Foundation can choose how to distribute the gift among the three affiliates. Healthcare System's financial statements would include the net assets resulting from the gift received from Corporation, as well as other changes in the net assets of Healthcare Foundation, in its interest in the net assets of the foundation. </span></span> <span class=\"sfragment\" id=\"sfr_2CA78B3E-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">(An interest in the net assets of an affiliate would be eliminated if that affiliate were included in the consolidated financial statements of the interest holder.) </span></span> </div> </div>","snippet":"Periodically, in conjunction with preparing their financial statements, Hospital, Nursing Home, and Walk-in Clinic recognize the changes in their interests in the net assets of Healthcare Foundation (see paragraph 958-20…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:59660cbb3b9e6b1e2241478355e455b910b97ccb7fd117d99ef3ba33907c47ff","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-12","para":"55-12","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA78C4C-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If Healthcare Foundation, Hospital, Nursing Home, and Walk-in Clinic entered into an agreement that specified how gifts without donor restrictions to Healthcare Foundation should be divided, each affiliate would also include its share of Healthcare Foundation's net assets without donor restrictions, computed in accordance with that agreement, when it measured its interest in Healthcare Foundation. Similarly, if Healthcare System directed that gifts without donor restrictions to Healthcare Foundation be distributed to the three affiliates in accordance with a specified formula, each affiliate would include its share of net assets without donor restrictions, computed in accordance with that formula, when it measured its interest in Healthcare Foundation. </span></span> </div> </div>","snippet":"If Healthcare Foundation, Hospital, Nursing Home, and Walk-in Clinic entered into an agreement that specified how gifts without donor restrictions to Healthcare Foundation should be divided, each affiliate would also inc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1b886abcc94e5b8902c5e87f5afa5455b8b605153e519dc969e9b48eccc2452a","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-13","para":"55-13","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA78D5B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If Corporation had specified that its gift be used for the benefit of Walk-in Clinic rather than giving without restriction, Healthcare Foundation would recognize contribution revenue that increases <a href=\"/glossary/n/#net-assets-with-donor-restrictions\" class=\"term\" title=\"The part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).\"><span>net assets with donor restrictions</span></a> because Hospital, Nursing Home, Walk-in Clinic, and Healthcare Foundation are financially interrelated entities (see paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2</a>). Their relationship meets both requirements of paragraph <a href=\"/asc/958/20/#958-20-25-1\" class=\"xref\">958-20-25-1</a>. Hospital, Nursing Home, and Walk-in Clinic can influence the financial and operating decisions of Healthcare Foundation because all four NFPs are under common control and the bylaws of Healthcare Foundation limit its activities to support of its three affiliates (see paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2(a)</a>). Hospital, Nursing Home, and Walk-in Clinic each have an ongoing economic interest in the net assets of Healthcare Foundation because their rights to the assets held by Healthcare Foundation are residual rights in an ongoing relationship (see paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2(b)</a>). Walk-in Clinic would include the net assets resulting from the gift received from Corporation in its interest in the net assets of Healthcare Foundation. </span></span> </div> </div>","snippet":"If Corporation had specified that its gift be used for the benefit of Walk-in Clinic rather than giving without restriction, Healthcare Foundation would recognize contribution revenue that increases net assets with donor…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2206455e7758c82688039aeb547380be864f13d1e721ab99789a54f3fa315769","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-14","para":"55-14","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Example illustrates the guidance in paragraphs <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2</a> and <div class=\"xref-range displayInline\"><a href=\"/asc/958/20/#958-20-25-1\" class=\"xref\">958-20-25-1 through 25-2</a></div>.</div> </div>","snippet":"This Example illustrates the guidance in paragraphs 958-20-15-2 and 958-20-25-1 through 25-2.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:72e1f17a632b8bcbf8c31fe6327ef4f406ee921f2f4957bc7e85672b93f5dfd7","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-15","para":"55-15","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA78ED8-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Individual transfers cash to Arts Foundation and specifies that the money be used to support the expenses of the ballet. Arts Foundation's bylaws state that it is organized for the purpose of stimulating voluntary financial support from donors for the benefit of Community Ballet and Community Theater. At the time Arts Foundation was created, the three NFPs entered into an agreement that specifies that if a donor does not specify the NFP to which the gift should be transferred, the gift will be split equally between Community Ballet and Community Theater. The agreement also specifies that representatives from the three NFPs will meet annually and determine campaign priorities for the next year and the costs of operating Arts Foundation will be equally split between Community Ballet and Community Theater. Arts Foundation is not controlled by Community Ballet, Community Theater, or Individual. </span></span> </div> </div>","snippet":"Individual transfers cash to Arts Foundation and specifies that the money be used to support the expenses of the ballet. Arts Foundation's bylaws state that it is organized for the purpose of stimulating voluntary financ…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d874e361c28524b2ba30d4a7e2cb6a66e2bbb01e8114d67a61a396bbb1a9ef7c","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-16","para":"55-16","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA7901B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Arts Foundation would report assets and contribution revenue that increases net assets with donor restrictions because there are donor-imposed restrictions and because Community Ballet and Arts Foundation are financially interrelated entities (see paragraph <a href=\"/asc/958/20/#958-20-25-1\" class=\"xref\">958-20-25-1</a>). Community Ballet has the ability to influence the operating and financial decisions of Arts Foundation because the agreement allows Community Ballet to participate in the policymaking processes of Arts Foundation (see paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2(a)</a>). The agreement also establishes Community Ballet's rights as residual rights because it specifies how the revenues and expenses of Arts Foundation will be shared (see paragraph <a href=\"/asc/958/20/#958-20-15-2\" class=\"xref\">958-20-15-2(b)</a>). When Arts Foundation distributes assets to Community Ballet, it reduces its assets and recognizes an expense. </span></span> </div> </div>","snippet":"Arts Foundation would report assets and contribution revenue that increases net assets with donor restrictions because there are donor-imposed restrictions and because Community Ballet and Arts Foundation are financially…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:59bac0429016c57e3555a9486eda4571a86c6cc445df53e569490f7ba6acbab7","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},{"citation":"958-20-55-17","para":"55-17","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_2CA79173-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Periodically, in conjunction with preparing their financial statements, Community Ballet and Community Theater recognize the changes in their interests in the net assets of Arts Foundation (see paragraph <a href=\"/asc/958/20/#958-20-25-2\" class=\"xref\">958-20-25-2</a>). Community Ballet would include the net assets resulting from the gift received from Individual in its interest in the net assets of Arts Foundation because Individual specified that the gift be used to support the ballet and Arts Foundation's bylaws limit it to supporting Community Ballet. Community Ballet would also include in its interest all other gifts restricted to its benefit and its share of </span></span> <span class=\"sfragment\" id=\"sfr_2CA7928B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">net assets without donor restrictions because of the agreement among the three organizations that gifts to Arts Foundation that are not donor-restricted should be split equally between Community Ballet and Community Theater. </span></span> <span class=\"sfragment\" id=\"sfr_2CA7935A-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Because payments from Arts Foundation are due in future periods, the increase (or decrease) in Community Ballet's interest would be classified as a change in net assets with donor restrictions to reflect the time restriction. When assets are distributed to Community Ballet, it recognizes the assets received and decreases its interest in the net assets of Arts Foundation. </span></span> </div> </div>","snippet":"Periodically, in conjunction with preparing their financial statements, Community Ballet and Community Theater recognize the changes in their interests in the net assets of Arts Foundation (see paragraph 958-20-25-2). Co…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0bdc4f08be545831bea21b465c14b72e0f9255f28c6bae30c10a0ef2079d69e7","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:80d74788d02b6922d277db3cb8563fc12f4a4d60f262e38c30d2ea68f2cfb63a","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b480d09583cf7acb81568c062cbc16e3a0ffa8a71b3619ddf4d9971be29120d","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b480d09583cf7acb81568c062cbc16e3a0ffa8a71b3619ddf4d9971be29120d","downloaded_from":"2026-09-10T02:21:53.308Z","last_downloaded_at":"2026-09-10T02:21:53.308Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480892","source_sha256":"c8433e7594add4c32270826d9fe722bc660fd155b069986fd65e805581d41dd0"}}