# ASC 958-30-05: Not-for-Profit Entities — Split-Interest Agreements — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/958/30/#05-overview-and-background) 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): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:db1f4163f9eec882cec4714ed01e76faad4b98c21e1f83ad243c1ea6c421df41 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/958/30/#05-overview-and-background) SEC content: no ##### [958-30-05-1](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:036d9377a3e2b5c1873bee56e3534338790f004bbf41f5b990d08313cf9b4059 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for reporting arrangements under which 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) shares the benefits of assets with other beneficiaries (a [split-interest agreement](https://asc.understandingaccounting.org/glossary/s/#split-interest-agreement "An agreement in which a donor enters into a trust or other arrangement under which a not-for-profit entity (NFP) receives benefits that are shared with other beneficiaries. A typical split-interest agreement has the following two components: A lead interest A remainder interest.")). Those other beneficiaries generally are not NFPs. For example, a donor may give an NFP the right to receive all or a portion of the specified cash flows from a charitable trust or other identifiable pool of assets that is held either by the NFP or by an unrelated third party (such as a bank, trust company, foundation, or private individual). ##### [958-30-05-2](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:0379c27cefe5b0c337eb6b4f2456a111116a6c49484a7e93733b6e4327f56711 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the NFP shares the cash flows with another beneficiary, that agreement is subject to the guidance in this Subtopic. ##### [958-30-05-3](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:17c692c3babf53b3d2100bac9f63b7e486571914932e46075071c05aeaa374dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the NFP controls the rights to all of the specified cash flows from the trust or other identifiable pool of assets, the agreement is subject to the guidance in paragraphs [958-605-25-28 through 25-30](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-28) . #### General Structure ##### [958-30-05-4](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:9cd6ce395a073dc14d38be0c2937ab03b7b24ca0f74e59afb45ac411cee4beb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Split-interest agreements are agreements in which donors enter into trusts or other arrangements under which an NFP receives benefits that are shared with other beneficiaries that generally are not NFPs. A typical split-interest agreement has the following two components: 1. a A [lead interest](https://asc.understandingaccounting.org/glossary/l/#lead-interest "The right to the benefits (cash flows or use) of assets during the term of a split-interest agreement, which generally starts upon the signing of the agreement and terminates at either of the following times: After a specified number of years (period-certain) Upon the occurrence of a certain event, commonly either the death of the donor or the death of the lead interest beneficiary (life-contingent).") 2. b A [remainder interest](https://asc.understandingaccounting.org/glossary/r/#remainder-interest "The right to receive all or a portion of the assets of a split-interest agreement remaining at the end of the agreement's term."). ##### [958-30-05-5](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:3b4f3eb6ef46cf34643f7be0c00bbb9cd3ff6d14f6b20334643e3eddd1e8fd72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The lead interest is the right to the benefits (cash flows or use) of assets during the term of the split-interest agreement, which generally starts upon the signing of the agreement and terminates at either of the following times: 1. a After a specified number of years (period-certain) 2. b Upon the occurrence of a certain event, commonly either the death of the donor or the death of the lead interest beneficiary (life-contingent). The remainder interest is the right to receive all or a portion of the assets of a split-interest agreement remaining at the end of the agreement's term. ##### [958-30-05-6](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:02016f3e3b0cd8f8e1fa5a87a4959826522d2b29e2cf15b753dfa689695a3f74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Split-interest agreements can take any one of the following forms: 1. a [Charitable lead annuity trust](https://asc.understandingaccounting.org/glossary/c/#charitable-lead-annuity-trust "A trust established in connection with a split-interest agreement, in which a not-for-profit entity (NFP) receives distributions of a fixed amount during the agreement's term. Upon termination of the trust, the remainder of the trust assets is paid to the donor or to third-party beneficiaries designated by the donor.") 2. b [Charitable lead unitrust](https://asc.understandingaccounting.org/glossary/c/#charitable-lead-unitrust "A trust established in connection with a split-interest agreement, in which a not-for-profit entity (NFP) receives distributions of a fixed percentage of the fair value of the trust's assets during the agreement's term. Upon termination of the trust, the remainder of the trust assets is paid to the donor or to third-party beneficiaries designated by the donor.") 3. c [Charitable remainder annuity trust](https://asc.understandingaccounting.org/glossary/c/#charitable-remainder-annuity-trust "A trust established in connection with a split-interest agreement, in which the donor or a third-party beneficiary receives distributions of a fixed amount during the agreement's term. Upon termination of the trust, a not-for-profit entity (NFP) receives the assets remaining in the trust.") 4. d [Charitable remainder unitrust](https://asc.understandingaccounting.org/glossary/c/#charitable-remainder-unitrust "A trust established in connection with a split-interest agreement, in which the donor or a third-party beneficiary receives distributions of a fixed percentage of the fair value of the trust's assets during the agreement's term. Upon termination of the trust, a not-for-profit entity (NFP) receives the assets remaining in the trust.") 5. e [Charitable gift annuities](https://asc.understandingaccounting.org/glossary/c/#charitable-gift-annuity "A transfer of assets to a not-for-profit entity (NFP) in connection with a split-interest agreement that is in part a contribution and in part an exchange transaction. The NFP accepts the contribution and is obligated to make periodic stipulated payments to the donor or a third-party beneficiary for a specified period of time, usually either a specified number of years or until the death of the donor or third-party beneficiary.") 6. f [Pooled income funds](https://asc.understandingaccounting.org/glossary/p/#pooled-income-fund "A trust in which donors are assigned a specific number of units based on the proportion of the fair value of their contributions to the total fair value of the pooled income fund on the date of the donor's entry to the pooled fund. Until a donor's death, the donor (or the donor's designated beneficiary or beneficiaries) is paid the actual income (as defined under the arrangement) earned on the donor's assigned units. Upon the donor's death, the value of these assigned units reverts to the NFP."). ##### [958-30-05-7](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:6af735fb2a6ee36a1995dffdac76ec91584968564e1375e83bd871e674434a26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The terms of some agreements do not allow donors to revoke their gifts; other agreements may be revocable by donors in certain situations. This Subtopic addresses the accounting for both revocable and irrevocable split-interest agreements. ##### [958-30-05-8](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:8b66a0de542b755b5aa2bcfb217a06d07af2aaab677a09d968f478ac414d90fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The donor may transfer the assets to an unrelated third party (such as a bank, trust company, foundation, or private individual) or may give the NFP the right to control the contributed assets by either of the following: 1. a Naming the NFP as [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.") of the trust holding the assets 2. b Granting the NFP the right to hold the assets as general assets of the entity. This Subtopic addresses the accounting for all of those situations. #### Charitable Lead Annuity Trusts and Lead Unitrusts ##### [958-30-05-9](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:6533249fb0bb47e47548a0990a9974b4d69d88eb9172d86099fb27e9b56f6530 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assets such as cash or shares of stock are contributed by the donor either to the control of the NFP through its role as trustee of a trust holding the assets or to a third-party trustee. The NFP receives periodic cash payments (the lead interest) that are either a fixed dollar amount (an [annuity trust](https://asc.understandingaccounting.org/glossary/a/#annuity-trust "See Charitable Remainder Trust.")) or a specified percentage of 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 assets as of the beginning of each period (a unitrust). Some of the assets may need to be liquidated to make the required payments. At the termination of the agreement, the remaining assets revert to the donor or the donor's beneficiary (the remainder interest). #### Charitable Remainder Annuity Trusts and Remainder Unitrusts ##### [958-30-05-10](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:ca1b1a15a750a635e4c7d4b99f037497651358170f2ac1aaaa9cb52f9241dd6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assets such as cash or shares of stock are contributed by the donor either to the control of the NFP through its role as trustee of a trust holding the assets or to a third-party trustee. The NFP (or the trust) makes periodic payments to the donor or the donor's beneficiary that are either a fixed dollar amount (an annuity trust) or a specified percentage of the fair value of the assets during the term of the agreement (a unitrust). Some of the assets may need to be liquidated to make the payments. At the termination of the agreement, the remaining assets revert to the NFP. #### Charitable Gift Annuities ##### [958-30-05-11](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:dd60c8cc5b7b55b2b530d82652563adcc09bee2dbc001049fe32eb00d73e1f96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A charitable gift annuity is an arrangement between a donor and an NFP in which the donor contributes assets to the NFP in exchange for a promise by the NFP to pay a fixed amount for a specified period of time to the donor or to individuals or entities designated by the donor. The agreements are similar to charitable remainder annuity trusts except that no trust exists, the assets received are held as general assets of the NFP, and the annuity liability is a general obligation of the NFP. #### Pooled Income Fund ##### [958-30-05-12](https://asc.understandingaccounting.org/asc/958/30/#958-30-05-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:01.739Z to 2026-09-10T02:22:01.739Z Record version: sha256:398e4728a84dbb5e6ea8c9904c81745d902bb8644393707792de5d76867f5519 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some NFPs form, invest, and manage pooled income funds. These funds are divided into units, and [contributions](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.") of many donors' life income gifts are pooled and invested as a group.