Glossary
Compliance & Tax

FASB ASC 958

By: Alec Hollingsworth
Updated:  
June 2, 2025

DEFINITION:

FASB ASC 958 is the U.S. accounting standard for nonprofit financial reporting, covering revenue, net assets, and disclosures.
FASB ASC 958 refers to the Financial Accounting Standards Board’s Accounting Standards Codification Topic 958, which sets the authoritative standards for accounting and financial reporting by nonprofit organizations in the United States. ASC 958 provides guidance on recognizing, measuring, presenting, and disclosing contributions, net assets, and other transactions unique to nonprofits. It aims to ensure consistency and transparency in nonprofit financial statements, making it easier for stakeholders to assess an organization’s financial health and stewardship. Key areas governed by ASC 958 include revenue recognition, reporting of gifts-in-kind, functional expense allocation, and classification of net assets. Compliance is essential for maintaining donor trust and meeting the requirements of auditors, grantors, and regulatory agencies.

Key Takeaways

  • Sets accounting standards for nonprofits in the U.S.
  • Covers recognition and reporting of contributions and net assets.
  • Ensures transparency and consistency in nonprofit financial statements.
  • Required for GAAP compliance and successful audits.

Why It Matters

It ensures nonprofit financial statements are transparent, consistent, and in compliance with U.S. GAAP.

Real World Example

A nonprofit animal rescue receives both cash donations and donated veterinary services. Under FASB ASC 958, the organization must properly recognize cash contributions and also determine the fair value of donated services, recording them as both revenue and expense. Additionally, the nonprofit is required to report its net assets in categories: with donor restrictions and without donor restrictions. By following ASC 958, the organization ensures its financial statements clearly show how resources are used and that all contributions are accurately reported, which is critical for audits, grant applications, and maintaining donor confidence.

How Aplos Helps

Aplos accounting software is designed with nonprofit compliance in mind, including support for FASB ASC 958 standards. With Aplos, organizations can easily track and report contributions, net asset classifications, and expenses in alignment with ASC 958 requirements, ensuring their financial statements meet current accounting standards and auditor expectations.
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Frequently Asked Questions

What does FASB ASC 958 cover?

It covers accounting and reporting standards for nonprofit organizations, including contributions, net assets, and expense allocations.

Why is ASC 958 compliance important?

Compliance ensures nonprofits meet GAAP standards, produce transparent financial statements, and satisfy auditors and grantors.

How does Aplos help with ASC 958?

Aplos provides tools for tracking contributions, net assets, and expenses in accordance with ASC 958, simplifying compliance and reporting.

Who must follow FASB ASC 958?

All nonprofit organizations in the U.S. preparing financial statements under GAAP must adhere to ASC 958.

What are the net asset classifications under ASC 958?

ASC 958 requires nonprofits to classify net assets as either with donor restrictions or without donor restrictions.

Related Terms

Audit Committee
Endowment Fund
Trial Balance
Matching Gift
Nonprofit Corporation
Double‐Entry Accounting

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