# ASC 958-30-25: Not-for-Profit Entities — Split-Interest Agreements — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/958/30/#25-recognition) 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): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:c40c3102a970d201b3e161160377cc6426f56ce86a5304fe04d734510631561a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/958/30/#25-recognition) SEC content: no ##### [958-30-25-1](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:6fa72a3d20da40259d18d9dd9d6907d1f5616961ff03a2f77b7504b0fe9db72d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section provides recognition guidance for two types of split-interest agreements: 1. a Revocable agreements 2. b Irrevocable agreements. #### Revocable Agreements ##### [958-30-25-2](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:ed6aa4a0b938656798d69a917c094334927e069988d5c7a33a4aa4edccaa5fdb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Revocable split-interest agreements shall be accounted for as intentions to give. Assets received 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) acting as 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.") under a revocable [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.") shall be recognized when received as assets and as a refundable advance. If those assets are investments, they shall be recognized in conformity with Section 958-320-25, 958-321-25, or 958-325-25, as appropriate. [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 for the assets received shall be recognized when the agreement becomes irrevocable or when the assets are distributed to the NFP for its unconditional use, whichever occurs first. #### Irrevocable Agreements ##### [958-30-25-3](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:53f5d8f45f885645748743feca6ef01db8994b7f1220513b16d9aceca3c20033 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under irrevocable split-interest agreements the assets contributed by the donor may be either: 1. a Held by an NFP 2. b Held by a third party. ##### [958-30-25-4](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:c7ed425072d64654063731d76f53b5b476ff4b3df9247b6a6a650156a9a326ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the absence of [donor-imposed conditions](https://asc.understandingaccounting.org/glossary/d/#donor-imposed-condition "A donor stipulation (donors include other types of contributors, including makers of certain grants) that represents a barrier that must be overcome before the recipient is entitled to the assets transferred or promised. Failure to overcome the barrier gives the contributor a right of return of the assets it has transferred or gives the promisor a right of release from its obligation to transfer its assets."), an NFP shall recognize contribution revenue and related assets and liabilities when an irrevocable split-interest agreement naming it trustee or fiscal [agent](https://asc.understandingaccounting.org/glossary/a/#agent "An entity that acts for and on behalf of another. Although the term agency has a legal definition, the term is used broadly to encompass not only legal agency, but also the relationships described in Topic 958. A recipient entity acts as an agent for and on behalf of a donor if it receives 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 specified beneficiary. A recipient entity acts as an agent for and on behalf of a beneficiary if it agrees to solicit assets from potential donors specifically for the beneficiary's use and to distribute those assets to the beneficiary. A recipient entity also acts as an agent if a beneficiary can compel the recipient entity to make distributions to it or on its behalf.") is executed. Assets received under those agreements shall be recorded when received. If those assets are investments, they shall be recognized in conformity with Section 958-320-25, 958-321-25, or 958-325-25, as appropriate. The contribution portion of the agreement (that is, the part that represents the unconditional transfer of assets in a voluntary nonreciprocal transaction) shall be recognized as revenue or gain (see paragraph [958-30-45-7](https://asc.understandingaccounting.org/asc/958/30/#958-30-45-7)). ##### [958-30-25-5](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:f93c0835c733b17b8afb79ea7fa20039108760171bd201378dc2038605b408f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [958-30-25-6 through 25-15](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-6) provide guidance on the following types of donor agreements: 1. a Split-interest agreements other than pooled income funds or net income unitrusts 2. b Pooled income funds or net income unitrusts. ##### [958-30-25-6](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:a5c1895ef2000e376af9d987c657eb5017c9e1807eacf789824dec0cc1c31d84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the split-interest agreement is other than a pooled income fund or net income unitrust (for example, a [charitable gift annuity](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."), a [charitable lead trust](https://asc.understandingaccounting.org/glossary/c/#charitable-lead-trust "A trust established in connection with a split-interest agreement, in which a not-for-profit entity (NFP) receives distributions 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."), or a [charitable remainder trust](https://asc.understandingaccounting.org/glossary/c/#charitable-remainder-trust "A trust established in connection with a split-interest agreement, in which the donor or a third-party beneficiary receives specified distributions during the agreement's term. Upon termination of the trust, a not-for-profit entity (NFP) receives the assets remaining in the trust.")), the transferred assets, or a portion of those assets, are being held for the benefit of others, such as the donor or third parties designated by the donor. A liability for the future payments to be made to those other beneficiaries shall also be recognized at the date of initial recognition. See paragraphs [958-30-25-7 through 25-14](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-7) to determine whether the agreement contains an embedded derivative. ##### [958-30-25-7](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:49ec7e1c86e5935fd55a9465988c1b7cf2ee19d2bf476182dd307b9946027103 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following two aspects of a split-interest agreement's payment terms affect the accounting treatment for an NFP's liability for the payment or payments to the donor or the donor's beneficiary: 1. a Whether the payments are a fixed or variable cash amount 2. b Whether the agreement is period-certain or life-contingent. ##### [958-30-25-8](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:14f071d75e96642fb2801950ddedba5807a5077aa4ed07428ba9801e121e8d0e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP's liability for its obligation to the donor or the donor's beneficiary under an irrevocable split-interest agreement shall be analyzed to determine whether it qualifies for the exception in paragraphs [815-10-15-52 through 15-57](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-52) , in which case that liability would not be subject to the requirements of Topic 815. For example, if the obligation is solely life-contingent (that is, contingent upon the survival of an identified individual, in which case the payments are made only if the individual is alive when the payments are due), that obligation would qualify for the exception in paragraphs [815-10-15-52 through 15-57](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-52) . ##### [958-30-25-9](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:e734dc06edd95b4d007a1b29d5c089db0c44a99952d2f42fdc8a649a6859cec8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an NFP's liability for its obligation under the split-interest agreement does not qualify for the exception in paragraphs [815-10-15-52 through 15-57](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-52) because the agreement is not solely life-contingent, the NFP shall determine whether that liability meets the definition of a derivative instrument in its entirety under paragraph [815-10-15-83](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-83) or whether it contains an embedded derivative that could warrant separate accounting under paragraph [815-15-25-1](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-1) unless a fair value election is made pursuant to Section 815-15-25. ##### [958-30-25-10](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:0daf4c319935a06be32b8d1d156154c6762272d6d44ad0d594fa2f89f55a3cf3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The NFP's liability for its obligation under a split-interest agreement would typically not meet the definition of a derivative instrument in its entirety because it would not meet the criterion in paragraph [815-10-15-83(b)](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-83) that requires the contract to have no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors. In contrast, the initial net investment for the liability recognized for typical split-interest agreements is its [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."). ##### [958-30-25-11](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:5b017d3bd85ef02e2ec6b74b5524d232992e3db03558f3d8279a264443089278 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an NFP's liability for its obligation under the split-interest agreement does not in its entirety meet the definition of a derivative instrument in paragraph [815-10-15-83](https://asc.understandingaccounting.org/asc/815/10/#815-10-15-83), that liability shall be analyzed to determine whether it contains provisions that constitute an embedded derivative that warrants separate accounting under paragraph [815-15-25-1](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-1). ##### [958-30-25-12](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:75f5de4d3488b1bf30920cf042793f1f62e1b45e8f207698414ea74b73508cff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Generally, the liability representing an obligation under a split-interest agreement contains an embedded derivative if the payments are variable and the agreement is period-certain (rather than life-contingent). The embedded derivative shall be bifurcated and accounted for as a derivative instrument pursuant to the requirements of paragraph [815-15-25-1](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-1) unless a fair value election is made pursuant to Section 815-15-25 or the Fair Value Option Subsections of Subtopic 825-10. ##### [958-30-25-13](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:4277dca4475aad1515d2c77abd1f796d2d89e9e50b23747ea519f1ea875ef563 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 2, Cases A through H (see paragraphs [958-30-55-6 through 55-29](https://asc.understandingaccounting.org/asc/958/30/#958-30-55-6) ) illustrate the applicability of paragraphs [958-30-25-7 through 25-12](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-7) to various split-interest agreements that are invested in shares of common stock. ##### [958-30-25-14](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:12df925db1feaa2007c23c4268f1c92129e0afd761dd8fb4e8789f36ff6bff49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other split-interest agreements may involve the gift of corporate or U.S. government debt securities, or other securities that are not equity. In determining whether or not those split-interest agreements contain an embedded derivative, the same analysis outlined in paragraph [815-15-25-1](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-1) shall be applied. The notion of clearly and closely related, as defined in paragraph [815-15-25-1(a)](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-1), shall involve an assessment of the economic characteristics and risks associated with the nonequity securities in relation to the economic characteristics and risks of the NFP's debt host contract. Generally, because of the differences in credit risk, the change in the fair value of corporate bonds (based on that corporation's credit and interest rate risk) will not be clearly and closely related to the change in the economic characteristics and risks of the NFP's debt host contract. Thus, an embedded derivative requiring bifurcation and separate accounting for the embedded derivative would exist unless a fair value election is made pursuant to Section 815-15-25 or the Fair Value Option Subsections of Subtopic 825-10. ##### [958-30-25-15](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:b43a6420b4d8a12e98e81dd84d35a9b348ba1eec4a7eaf93968476c78eb0fccd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The assets received from the donor under a pooled income fund agreement or a [net income unitrust](https://asc.understandingaccounting.org/glossary/n/#net-income-unitrust "A trust established in connection with a split-interest agreement, in which the donor or a third-party beneficiary receives distributions during the agreement's term of the lesser of the net income earned by the trust or a fixed percentage of the fair value of the trust's assets, with or without recovery and distribution of the shortfall in a subsequent year. Upon termination of the trust, a not-for-profit entity (NFP) receives the assets remaining in the trust.") shall be recognized when received. An NFP also shall recognize its [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.") in the assets received as contribution revenue in the period in which the assets are received from the donor. The difference between the assets recognized and the revenue recognized shall be recorded as deferred revenue, representing the amount of the discount for future interest. ##### [958-30-25-16](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:d1084de856731d3267a1d2ab848a2588c03d10a77ed877e3f17ecd21187d4b4a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some NFPs are parties to split-interest agreements that involve a third party who maintains control of the donor's contributed assets. In a split-interest agreement in which cash or other assets contributed by a donor are held by an independent trustee (such as a charitable trust for which a bank, trust company, foundation, or private individual is the trustee) or by another fiscal agent of the donor or the cash or other assets are otherwise not controlled by the NFP, the NFP shall recognize its beneficial interest in those assets. ##### [958-30-25-17](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:40b8df408efb5799999b3632eb4e3efa56dcb4b0dc6f6ef47aa313927ff80c57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to paragraphs [958-605-25-28 through 25-30](https://asc.understandingaccounting.org/asc/605/958/#605-958-25-28) , if an NFP is the beneficiary of a split-interest agreement held by a third party and has an unconditional right to receive all or a portion of the specified cash flows from the assets held pursuant to that agreement, the NFP shall recognize that beneficial interest as an asset and contribution revenue. That asset and contribution revenue represents its entitlement to the [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).") payments or the remainder interest, as stipulated in the agreement. The contribution shall be recognized when the NFP is notified of the split-interest agreement's existence. ##### [958-30-25-18](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:63efdea3747619366987ef6cb8a82b505e9fb7db9ce08714ef64d015035b3c36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, if the trustee or fiscal agent has [variance power](https://asc.understandingaccounting.org/glossary/v/#variance-power "The unilateral power to redirect the use of the transferred assets to another beneficiary. A donor explicitly grants variance power if the recipient entity's unilateral power to redirect the use of the assets is explicitly referred to in the instrument transferring the assets. Unilateral power means that the recipient entity can override the donor's instructions without approval from the donor, specified beneficiary, or any other interested party.") to redirect the benefits to another entity or if the NFP's rights to the benefits are conditional, the NFP shall not recognize its potential for future distributions from the split-interest agreement until the NFP has an unconditional right to receive benefits under the agreement. ##### [958-30-25-19](https://asc.understandingaccounting.org/asc/958/30/#958-30-25-19) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:08.355Z to 2026-09-10T02:22:08.355Z Record version: sha256:2e028e76e23a2f832faa0d6781c871831ea714174babf3dec127c8f2de34b310 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The NFP does not have an obligation to pay either the remainder or lead interest to the designated beneficiary, as that responsibility remains with the third party who maintains control of the assets (thus, the NFP does not recognize a liability). Further, under paragraph [815-15-25-1](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-1), the embedded derivative would not be bifurcated, as the criterion in paragraph [815-15-25-1(b)](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-1) is not met.