# ASC 958-30-35: Not-for-Profit Entities — Split-Interest Agreements — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/958/30/#35-subsequent-measurement) 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): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:1cdffee8e2316299620e06a77982934be3410aeef8df36a3ae8a7333670561e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 958-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/958/30/#35-subsequent-measurement) SEC content: no #### Fair Value Measurement ##### [958-30-35-1](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:496cd0fb6ef79a81fb52583c34fd8b49bb04ddd98a513e2ce1c392b28e691065 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Topic 820 establishes a framework for measuring [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."). This Subtopic uses present value techniques as one possible technique to measure the obligation to other beneficiaries of 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."). See paragraphs [820-10-55-4 through 55-20](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-4) for implementation guidance for using present value techniques if the measurement objective is fair value. ##### [958-30-35-2](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:6cd064f3d1b33a9af0923f329e839af83fccc26434fcb3bd98e8f2e0b7b21d14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurement objective is fair value for the following split-interest obligations: 1. a Embedded derivatives subject to the measurement provisions of Topic 815 2. b Obligations for which 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.") (NFP) elects the fair value option pursuant to the Fair Value Option Subsections of Subtopic 825-10 3. c Obligations containing embedded derivatives that the NFP has irrevocably elected to measure in their entirety at fair value in conformity with Section 815-15-25. Additionally, in circumstances in which cash or other assets contributed by donors under split-interest agreements are held by independent trustees, such as a charitable trust for which a bank is 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."), or by other fiscal agents of the donors or otherwise not controlled by the NFP, the measurement objective for the beneficial interest in periods after the period of initial recognition is fair value. ##### [958-30-35-3](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:631a81f50ece52ac09ced45f964c94abf06d3c66435fc1e668ef59d38b46b8a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances in which the fair value is measured at the present value of the future cash flows, all elements discussed in paragraph [820-10-55-5](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-5), including discount rate assumptions, shall be revised at each measurement date to reflect current market conditions. #### Irrevocable Agreements ##### [958-30-35-4](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:de39dc80676206812a5a7ec8de0c8c4049db91e809e34db374f7914ed8c66cdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assets held by the NFP under irrevocable split-interest agreements as investments shall be subsequently measured in conformity with Section 958-320-35, 958-321-35, or 958-325-35. ##### [958-30-35-5](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:e074beca858526166f2344c1c1c74eee582a5b16c9224bafd86180596ee22acd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition, if assets and related liabilities are recognized under a split-interest agreement other than a [pooled income fund](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.") 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."), [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 [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.") agreement) for which an NFP serves as a 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."), the following shall be reported in the NFP's statements of financial position, activities, and cash flows: 1. a Income earned on those assets 2. b Gains and losses 3. c Distributions made to other beneficiaries under the agreements. Those transactions generally are recognized as either an increase or a reduction in the liability to the other beneficiaries. For example, in subsequent periods, payments to an annuity beneficiary reduce the annuity liability. ##### [958-30-35-6](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:7c80300eb3d8f6a8a6acd8dfb86759ae1a843a82a4843c39d930a8a251aba3af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the term of the agreement, the following adjustments to the liability shall be recognized as changes in the value of split-interest agreements in a statement of activities. In circumstances in which assets held in trust and related liabilities are recognized under lead and [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.") agreements for which an NFP serves as a trustee or fiscal agent, the liability for future payments to be made to other beneficiaries is measured at fair value if the NFP elects the fair value option as described in paragraph [958-30-35-2](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-2). If the NFP does not elect the fair value option, the following transactions and events shall be included in the remeasurement of the liability: 1. a Amortization of the discount associated with the [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.") 2. b Revaluations of future payments to beneficiaries, based on changes in life expectancy, and other actuarial assumptions. In conformity with paragraph [310-10-30-6](https://asc.understandingaccounting.org/asc/310/10/#310-10-30-6), unless the measurement objective for periods after the period of initial recognition is fair value, the discount rate shall not be revised after initial recognition. ##### [958-30-35-7](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:fe86a615ca8113afd58e217b0dd5d0fa871cc706c8c921be55c8b932a1d22bbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an NFP does not elect to report a split-interest obligation at fair value as described in paragraph [958-30-35-2](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-2), a split-interest obligation with an embedded derivative is bifurcated into its debt host contract and embedded derivative. The debt host contract is the liability for the payment to the beneficiary that would be required if the fair value of the trust assets does not change over the specified period. The embedded derivative represents the liability (or contraliability) for the increase (or decrease) in the payments to the beneficiary due to changes in the fair value of the trust assets over the specified period. In circumstances in which the liability is measured using present value techniques, the discount rate assumptions on the debt host contract shall not be revised after initial recognition, consistent with the preceding paragraph. In accordance with paragraph [815-10-35-1](https://asc.understandingaccounting.org/asc/815/10/#815-10-35-1), the embedded derivative is subsequently measured at fair value. If the fair value of the embedded derivative is measured using present value techniques, all elements discussed in paragraph [820-10-55-5](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-5), including the discount rate assumptions on the embedded derivative, shall be revised at each measurement date to reflect current market conditions. ##### [958-30-35-8](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:e6e146ec16bb576a238e484eb543cd677800e88603626ba08149dcedb2947de6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In conformity with paragraph [815-15-25-53](https://asc.understandingaccounting.org/asc/815/15/#815-15-25-53), if an NFP cannot reliably identify and measure the embedded derivative, the entire split-interest liability shall be measured at fair value (that is, all elements discussed in paragraph [820-10-55-5](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-5), including discount rate assumptions, shall be revised to reflect current market conditions). ##### [958-30-35-9](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:fb2c4915562452950b0f6d67ff590d0be8b89ad34c35eae0298756c2e5295be4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Periodic income on a [pooled income fund](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.") or net-income unitrust and payments to the beneficiary shall be reflected as increases and decreases in a liability to the beneficiary. Amortization of the discount for future interest shall be recognized as a reduction in the deferred revenue account and as a change in the value of split-interest agreements. ##### [958-30-35-10](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:13e3bd12e8c5be8525fa8033f841d775a9c1e51ef0841175629ed9ea46b4b589 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to paragraph [958-605-35-3](https://asc.understandingaccounting.org/asc/605/958/#605-958-35-3), 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 subsequently remeasure that beneficial interest at fair value. Changes in the fair value of the beneficial interest shall be recognized in the statement of activities. The change in the value of split-interest agreements is the change in the fair value of the NFP's beneficial interest, which shall be determined using the same valuation technique that was used to measure the asset initially. Distributions from the trust shall be reflected as a reduction in the beneficial interest. #### Revocable Agreements ##### [958-30-35-11](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:3808ab1e7eb19d125ad35e1bd77a571bcf82bf297afad03991b72af913319abc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assets held by the NFP under revocable split-interest agreements as investments shall be subsequently measured in conformity with Section 958-320-35, 958-321-35, or 958-325-35. ##### [958-30-35-12](https://asc.understandingaccounting.org/asc/958/30/#958-30-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:13.243Z to 2026-09-10T02:22:13.243Z Record version: sha256:41abb8a6c817498f6f45491fb6807c4e252929c8a13188ed388906e13bc276cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Income earned on assets held under such agreements that is not available for the NFP's unconditional use, and any subsequent adjustments to the carrying value of those assets, shall be recognized as adjustments to the assets and as refundable advances.