agency transactions

This subtopic provides implementation guidance for how not-for-profit entities (NFPs) prepare a statement of cash flows under Topic 230. It addresses when otherwise-qualifying short-term investments cannot be treated as cash equivalents because of donor restrictions, how donor-restricted contributions for long-term purposes must be reclassified as financing inflows, and how agency transactions, noncash contributions, and collection items are reported.

ASC 940-20 governs specific broker-dealer activities, organized into General (commissions, soft-dollar arrangements, mutual fund distribution fees, agency transactions, financial presentation), Clearing (fails, due bills, suspense accounts, trading errors), and Underwriting Subsections. Its core rules are that agency transactions stay off the broker-dealer's statement of financial condition unless they fail to settle on the contracted settlement date, commission income is recognized under Topic 606 while related expenses accrue on trade date, and fails-to-deliver/fails-to-receive are recorded at selling/purchase price including accrued interest.