# ASC 958-20: Not-for-Profit Entities — Financially Interrelated Entities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/958/20/) 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): 2026-09-10T02:21:31.090Z to 2026-09-10T02:21:57.175Z Record version: sha256:63bb11c7fa374224fe266247910246216f11dd01e1726934cc7bde8d83c61ebc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20: Not-for-Profit Entities — Financially Interrelated Entities ### Machine-generated study aids ```json { "summary": "ASC 958-20 governs accounting by two NFPs that are \"financially interrelated\" — one entity can influence the other's operating and financial decisions AND one has an ongoing, residual economic interest in the other's net assets (958-20-15-2). When a donor transfers assets to a recipient entity (e.g., a fundraising foundation) for a financially interrelated specified beneficiary and the recipient is not a trustee, the recipient recognizes contribution revenue on receipt (958-20-25-1) and the beneficiary recognizes an interest in the recipient's net assets, adjusted for its share of changes in those net assets in a manner similar to the equity method (958-20-25-2; 35-1). Transfers in which the resource provider names itself or an affiliate as beneficiary and expects no repayment are \"equity transactions\" reported as a separate line in the statement of activities (958-20-25-4; 45-1).", "key_points": [ "Two entities are financially interrelated only if BOTH criteria in 958-20-15-2 are met: ability to influence the other's operating and financial decisions (e.g., affiliates, considerable board representation, limiting bylaws, policymaking agreement) and an ongoing economic interest in the other's net assets that is residual in nature (958-20-55-2A).", "If the recipient entity and specified beneficiary are financially interrelated and the recipient is not a trustee, the recipient recognizes a contribution received when it receives the donor's assets (958-20-25-1, per 958-605-25-27).", "The beneficiary recognizes its interest in the recipient entity's net assets (958-20-25-2) and adjusts that interest for its share of the change in the recipient's net assets (958-20-35-1) — a method similar to the equity method in Subtopic 323-10 (958-20-60-1).", "A transfer is an equity transaction only if the resource provider specifies itself or an affiliate as beneficiary, the provider and recipient are financially interrelated, and no repayment of the transferred assets is expected (958-20-25-4); the recipient reports it as a separate line item in its statement of activities (958-20-45-1).", "If the provider names itself, it reports the equity transaction as an interest in the recipient's net assets (958-20-25-5); if it names an affiliate, the provider reports a separate line in its statement of activities and the affiliate reports the interest (958-20-25-6, 45-2).", "If the provider names itself or an affiliate but the financially-interrelated or no-repayment conditions of 958-20-25-4(b)-(c) fail, the transfer is an asset to the provider and a liability to the recipient (958-20-25-7, per 958-605-25-33).", "The beneficiary's interest in the recipient's net assets is eliminated when both are included in consolidated financial statements (958-20-45-3; 810-10-45-1), and transferors in equity transactions must give the 958-605-50-6 disclosures (958-20-50-1)." ], "categories": [ "Not-for-profit", "Recognition", "Presentation", "Consolidation" ], "audience_level": "intermediate", "student_note": "This is the classic \"university/hospital foundation\" fact pattern: the foundation books contribution revenue while the supported NFP books an equity-method-like interest in the foundation's net assets — so the gift appears in two sets of financial statements unless consolidated. Students often forget that BOTH the influence and the ongoing *residual* economic interest tests must be met (an economic interest under 958-810 is not automatically enough), and confuse an \"equity transaction\" (reciprocal, financially interrelated) with an \"equity transfer.\"", "related_topics": [ "958-605", "958-810", "323-10", "810-10", "954-220", "850" ], "key_concepts": [ "financially interrelated entities", "recipient entity", "specified beneficiary", "ongoing economic interest in net assets", "residual rights", "equity transaction", "interest in net assets (equity-method-like)", "implied time restriction" ] } ``` Source downloaded (UTC): 2026-09-10T02:21:31.090Z to 2026-09-10T02:21:31.090Z Record version: sha256:31ebad11476816f3fdfa245a3192fb52ba2c6419045f98572ac213960d031c53 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/958/20/#00-status) SEC content: no ##### [958-20-00-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:31.090Z to 2026-09-10T02:21:31.090Z Record version: sha256:2abbf28166d4ddac5d97160fd8eb80e97a2f0e4fc8992cdfb3c7969bf0e4750b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
AffiliateAmendedMaintenance Update 2018-12 (PDF)09/10/2018
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
Donor-Imposed RestrictionAddedAccounting Standards Update No. 2016-1408/18/2016
Economic InterestAmendedAccounting Standards Update No. 2016-1408/18/2016
Equity TransferAddedAccounting Standards Update No. 2016-1408/18/2016
Financial Asset (2nd def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Net Assets with Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Net Assets without Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Performance IndicatorAddedAccounting Standards Update No. 2016-1408/18/2016
Temporarily Restricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
Unrestricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
958-20-45-1AmendedAccounting Standards Update No. 2016-1408/18/2016
958-20-55-2BAddedAccounting Standards Update No. 2016-1408/18/2016
958-20-55-5AmendedAccounting Standards Update No. 2016-1408/18/2016
958-20-55-6AmendedAccounting Standards Update No. 2016-1408/18/2016
958-20-55-10 through 55-13
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-20-55-16AmendedAccounting Standards Update No. 2016-1408/18/2016
958-20-55-17AmendedAccounting Standards Update No. 2016-1408/18/2016
Source downloaded (UTC): 2026-09-10T02:21:33.238Z to 2026-09-10T02:21:33.238Z Record version: sha256:bb87f9b546da88424eb434bca4983577c7493de58156c4bc1539f28b133a160f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/958/20/#05-overview-and-background) SEC content: no ##### [958-20-05-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:33.238Z to 2026-09-10T02:21:33.238Z Record version: sha256:dbe33eb2831061838cf5c427e59c2678a25e6f0078af5d3ef02152890adbb077 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for certain transactions between two [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) if the relationship between them has both of the following characteristics: 1. a One of the entities has the ability to influence the operating and financial decisions of the other. 2. b One of the entities 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."). ##### [958-20-05-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:33.238Z to 2026-09-10T02:21:33.238Z Record version: sha256:3e98bcedd5431c633e829b2a32574ef1b47371976e33b2f4663efedf4f95ccd8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some cases, the relationship between the [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.") requires consolidation, as discussed in Subtopic 958-810. 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. Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:3df955b72a262fa0968741d1a7984ad312a0e6250549d1e5424889adce7ffa85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/958/20/#25-recognition) SEC content: no #### Contributions Received for a Financially Interrelated Beneficiary ##### [958-20-25-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:bc1da91e24aed0d6d1008bc3c9f45aab26305808b2831a7a7da58724a72c08b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to paragraph [958-605-25-27](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-27), if 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.") and the recipient entity is not a [trustee](https://asc.understandingaccounting.org/glossary/t/#trustee "An entity that has a duty to hold and manage assets for the benefit of a specified beneficiary in accordance with a charitable trust agreement. In some states, not-for-profit entities (NFPs) are organized under trust law rather than as corporations. Those NFPs are not trustees as defined because, under those statutes, they hold assets in trust for the community or some other broadly described group, rather than for a specific beneficiary."), the recipient entity shall recognize 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 when it receives assets ([financial](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity.") or [nonfinancial](https://asc.understandingaccounting.org/glossary/n/#nonfinancial-asset "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.")) from the donor that are specified for the beneficiary. For example, a foundation that exists to raise, hold, and invest assets for the specified beneficiary or for a group of affiliates of which the specified beneficiary is a member generally is financially interrelated with the [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.") or entities (NFPs) it supports and recognizes contribution revenue when it receives assets from the donor. See Examples 1 through 3 (paragraphs [958-20-55-3 through 55-17](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-3) ) for illustrations of this guidance. #### Beneficiary's Recognition of Interest in a Financially Interrelated Recipient Entity ##### [958-20-25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:d3aed13d7073b8e684d2e5d3d472ef0c8e3b062f21633a26cfd7735c21718744 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a beneficiary and a recipient entity are financially interrelated entities, the beneficiary shall recognize its interest in the net assets of the recipient entity. See Examples 1 through 3 (paragraphs [958-20-55-3 through 55-17](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-3) ) for illustrations of this guidance. Recognizing an interest in the net assets of the recipient entity and adjusting that interest for a share of the change in net assets of the recipient entity is similar to the equity method, which is described in Subtopic 323-10. ##### [958-20-25-3](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:2b54d2a2bbbaccd4f55604dba2c91dce983f78147ba4c4c1f0762a19e2a81472 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Equity Transactions ##### [958-20-25-4](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:a2c65e382fb06bea7d842e14d0e0dc6742c7d8f5ad6f45f1f3516493b5ece3bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transfer of assets to a recipient entity is an equity transaction if all of the following conditions are present: 1. a The resource provider specifies itself or its [affiliate](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.") as the beneficiary. 2. b The resource provider and the recipient entity are financially interrelated entities. 3. c Neither the resource provider nor its affiliate expects payment of the transferred assets, although payment of investment return on the transferred assets may be expected. ##### [958-20-25-5](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:aeebaea9b17faf104e23093e6d84fba2e9cef224d5475dfe70d8fbfe22dd01b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a resource provider specifies itself as beneficiary, it shall report an equity transaction as an interest in the net assets of the recipient entity (or as an increase in a previously recognized interest) (see paragraph [958-20-25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-2)). ##### [958-20-25-6](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:d65db1e9a4d90ec007965d925f0fe116fed5d19378dd4b884cde265bd36e00b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a resource provider specifies an affiliate as beneficiary of an equity transaction, the resource provider shall report an equity transaction as a separate line in its statement of activities, and the affiliate named as beneficiary shall report an interest in the net assets of the recipient entity (see paragraph [958-20-25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-2)). ##### [958-20-25-7](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:40.938Z to 2026-09-10T02:21:40.938Z Record version: sha256:fc273a11b16a689178f493ce986bcf4845f19c416d2e0694ea491f75e49e25dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the resource provider specifies itself or its affiliate as the beneficiary and any of the conditions in paragraph [958-20-25-4(b)](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4) and [958-20-25-4(c)](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4) are not met, the transfer shall be accounted for as an asset by the resource provider and as a liability by the recipient entity, in accordance with paragraph [958-605-25-33](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-33). Source downloaded (UTC): 2026-09-10T02:21:43.724Z to 2026-09-10T02:21:43.724Z Record version: sha256:b1f894738f053e3f20c516f74fe6512363b95c987f676edc6edf4777bbb08144 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/958/20/#35-subsequent-measurement) SEC content: no ##### [958-20-35-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:43.724Z to 2026-09-10T02:21:43.724Z Record version: sha256:c1867001dad740d5acaac59b52d6783a3c82015a20eb6263e3174446cdc6fde6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the beneficiary has recognized an interest in the net assets of the [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.") pursuant to paragraph [958-20-25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-2), it shall adjust that interest for its share of the change in net assets of the recipient entity. Source downloaded (UTC): 2026-09-10T02:21:46.276Z to 2026-09-10T02:21:46.276Z Record version: sha256:ad06e5967f9228342543a44d4667ebc748d74502a502586d7694a352bfdd86bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/958/20/#45-other-presentation-matters) SEC content: no #### Equity Transactions ##### [958-20-45-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:46.276Z to 2026-09-10T02:21:46.276Z Record version: sha256:f5898422bdd69261c09bdd5b7efcd78053d1da43dfdd8cc9ed53b056ef185192 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.") shall report an equity transaction as a separate line item in its statement of activities. Paragraph [958-20-55-2B](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-2B) describes the difference between an equity transfer and an equity transaction. See paragraph [954-220-45-2](https://asc.understandingaccounting.org/asc/220/954/#220-954-45-2) for guidance on how to present equity transfers for not-for-profit, business-oriented health care entities that present a [performance indicator](https://asc.understandingaccounting.org/glossary/p/#performance-indicator "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."). ##### [958-20-45-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:46.276Z to 2026-09-10T02:21:46.276Z Record version: sha256:1c34dddeeadfd3ccaf85457c07fab7f2a3690629326c0b54a974b927ab545756 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A resource provider shall report an equity transaction as a separate line in its statement of activities if it specifies an [affiliate](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.") as beneficiary. See paragraph [958-20-25-4](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4) for the conditions that determine if a transfer is an equity transaction. #### Beneficiary's Interest in the Net Assets of a Recipient Entity ##### [958-20-45-3](https://asc.understandingaccounting.org/asc/958/20/#958-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:46.276Z to 2026-09-10T02:21:46.276Z Record version: sha256:b48f4b74f43d4f09fe3fdd07424105d730acb447568f9bff7f6aa325c79ef8af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the beneficiary and the recipient entity are included in consolidated financial statements, the beneficiary's interest in the net assets of the recipient entity shall be eliminated in accordance with paragraph [810-10-45-1](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-1). Source downloaded (UTC): 2026-09-10T02:21:49.971Z to 2026-09-10T02:21:49.971Z Record version: sha256:3e9b95fece245e5849ad9607875150631931a6dc4ced79f71b5a685ede971875 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/958/20/#50-disclosure) SEC content: no ##### [958-20-50-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:49.971Z to 2026-09-10T02:21:49.971Z Record version: sha256:7341e048b2e01948d8f11a547670e6b41aed9432d88a00a1d14d72b3456cb055 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If 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) transfers assets to 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.") in an equity transaction (see paragraph [958-20-25-4](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4)), it shall disclose the information required by paragraph [958-605-50-6](https://asc.understandingaccounting.org/asc/605/958/#605-958-50-6) for each period for which a statement of financial position is presented. Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:9b480d09583cf7acb81568c062cbc16e3a0ffa8a71b3619ddf4d9971be29120d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/958/20/#55-implementation-guidance-and-illustrations) SEC content: no ##### [958-20-55-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:b4d45a99daf7291f18bead1522c922ad4d1900e32312557b1ca8cf4901fe0eb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](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) in reporting relationships with [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."). #### Implementation Guidance ##### [958-20-55-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:3b40de02c6116c1aa635dba35ebdad37b35cb68469bb35929ca8b3fd7a33156b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The flowchart in paragraph [958-605-55-74](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-74) depicts the process of applying the requirements of Sections 958-20-15 and 958-20-25. ##### [958-20-55-2A](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-2A) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:79762a32134e127199cc605b2422c54a54e3806b4fffce4c11c9133cea56483a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although most of the relationships described in the definition of [economic interest](https://asc.understandingaccounting.org/glossary/e/#economic-interest "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.") used in Subtopic 958-810 are potentially [ongoing economic interests in the net assets of another](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."), some do not meet the criterion in paragraph [958-20-15-2(b)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2). Only economic interests that are both ongoing and residual interests in the net assets are ongoing economic interests in the net assets of another. ##### [958-20-55-2B](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-2B) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:92f95334855df6b5287aac844d1a1c4c854be0fee39f5ee4078bd294575212a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An equity transaction differs from an [equity transfer](https://asc.understandingaccounting.org/glossary/e/#equity-transfer "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).") in that an equity transaction, as described in paragraph [958-20-25-4](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-4), 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. 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. See paragraph [954-220-45-2](https://asc.understandingaccounting.org/asc/220/954/#220-954-45-2) for guidance on how to present equity transfers for not-for-profit, business-oriented health care entities that present a [performance indicator](https://asc.understandingaccounting.org/glossary/p/#performance-indicator "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."). #### Illustrations ##### [958-20-55-3](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:b26ddd759b4da23967a1dbf107f8d2590b66b2fe14307ed26a37a63a711587ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-20-15-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2) and [958-20-25-1 through 25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-1) . ##### [958-20-55-4](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:23310d1c165e65bc8a5a22ac8ac086b1b2ce5176339ade6aa93b71fe63f8c3fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [958-20-55-5](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:79a4b984d453dc2afd97a56a951e68e2bf52385062be7d0ef4830a6a540fbb5a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. University Foundation recognizes the [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.") of the dental supplies ([nonfinancial assets](https://asc.understandingaccounting.org/glossary/n/#nonfinancial-asset "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.")) as an increase in assets and as [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.") revenue that increases [net assets with donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "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).") because there are [donor-imposed restrictions](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-restriction "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.") and because University and University Foundation are financially interrelated entities (see paragraph [958-20-25-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-1)). 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 [958-20-15-2(a)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). 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 [958-20-15-2(b)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). When University Foundation distributes the dental supplies to University, it reduces its assets and recognizes an expense and the expiration of the restriction. ##### [958-20-55-6](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:388d4769823778f7bd2ec5f3ac9c4f130894189728c47f11f63144e0557afdda Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [958-20-25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-2)). 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. ##### [958-20-55-7](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:237a0eadfd58aad26bf8686ccc8e06eca425643805c6c476779181cf789ee696 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [958-20-55-8](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:de5de5839645ede52401410a67403ad62c640e61002ee3811cda018045ee37a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-20-15-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2) and [958-20-25-1 through 25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-1) . ##### [958-20-55-9](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:fdbd3c667acbf2fa33e9cf7e3ef4a7b12cf65ce90dc599245af9da8502144b7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [958-20-55-10](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:af93f8c71062eca907fc05e36879beeb492c85aa3b260b631bc72c472743d229 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Healthcare Foundation would recognize cash and [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.") revenue that increases [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "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).") 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 [958-605-55-76 through 55-77](https://asc.understandingaccounting.org/asc/605/958/#605-958-55-76) ). ##### [958-20-55-11](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:59660cbb3b9e6b1e2241478355e455b910b97ccb7fd117d99ef3ba33907c47ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [958-20-25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-2)). When measuring its interest in Healthcare Foundation, each [affiliate](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.") 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. (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.) ##### [958-20-55-12](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:1b886abcc94e5b8902c5e87f5afa5455b8b605153e519dc969e9b48eccc2452a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [958-20-55-13](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:2206455e7758c82688039aeb547380be864f13d1e721ab99789a54f3fa315769 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-with-donor-restrictions "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).") because Hospital, Nursing Home, Walk-in Clinic, and Healthcare Foundation are financially interrelated entities (see paragraph [958-20-15-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). Their relationship meets both requirements of paragraph [958-20-25-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-1). 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 [958-20-15-2(a)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). 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 [958-20-15-2(b)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). 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. ##### [958-20-55-14](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:72e1f17a632b8bcbf8c31fe6327ef4f406ee921f2f4957bc7e85672b93f5dfd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [958-20-15-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2) and [958-20-25-1 through 25-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-1) . ##### [958-20-55-15](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:d874e361c28524b2ba30d4a7e2cb6a66e2bbb01e8114d67a61a396bbb1a9ef7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [958-20-55-16](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:59bac0429016c57e3555a9486eda4571a86c6cc445df53e569490f7ba6acbab7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [958-20-25-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-1)). 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 [958-20-15-2(a)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). 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 [958-20-15-2(b)](https://asc.understandingaccounting.org/asc/958/20/#958-20-15-2)). When Arts Foundation distributes assets to Community Ballet, it reduces its assets and recognizes an expense. ##### [958-20-55-17](https://asc.understandingaccounting.org/asc/958/20/#958-20-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:53.308Z to 2026-09-10T02:21:53.308Z Record version: sha256:0bdc4f08be545831bea21b465c14b72e0f9255f28c6bae30c10a0ef2079d69e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/958/20/#958-20-25-2)). 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 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. 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. Source downloaded (UTC): 2026-09-10T02:21:57.175Z to 2026-09-10T02:21:57.175Z Record version: sha256:7e3e2a651cc911d55e87469ae976cc7d810ae307fc4b3ad4c883b1ceed756b80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-20-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/958/20/#60-relationships) SEC content: no #### Investments—Equity Method and Joint Ventures ##### [958-20-60-1](https://asc.understandingaccounting.org/asc/958/20/#958-20-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:57.175Z to 2026-09-10T02:21:57.175Z Record version: sha256:8d486e30526f35523873e6b4b4f064280976f1432e0986a98a61aefd5ecea564 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the procedures required to report an interest in the net assets of 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.") using a method similar to the equity method, see Subtopic 323-10. #### Related Party Disclosures ##### [958-20-60-2](https://asc.understandingaccounting.org/asc/958/20/#958-20-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:21:57.175Z to 2026-09-10T02:21:57.175Z Record version: sha256:6c209684083ace90266fdf58e40949baf7d654a42151f5ef0ffca7f7e9890fe3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a definition of a related party and the required disclosures of material related party transactions, see Topic 850.