FASB ASC 958
The accounting standard governing financial reporting for not-for-profit entities.
Definition
FASB ASC 958 (formerly SFAS 116 and 117) is the primary accounting standard for nonprofit organizations. It governs how nonprofits classify net assets (with donor restrictions vs. without), recognize contributions, and present financial statements including the statement of activities and statement of functional expenses.
Why It Matters
Compliance with ASC 958 is required for nonprofit GAAP reporting. AP teams must properly classify expenses by function and nature, and track net asset restrictions for accurate financial statements.
Examples
Net asset classification
Expenses paid from a restricted grant reduce "net assets with donor restrictions" while general operating expenses reduce "net assets without donor restrictions."
Functional expense presentation
ASC 958 requires presenting expenses by both nature (salaries, rent, supplies) and function (program, management, fundraising).
How Nexus AP Helps
Nexus AP captures both natural and functional expense classifications at the invoice level, supporting ASC 958-compliant financial reporting.
Start Free TrialFrequently Asked Questions
What are the net asset classes under ASC 958?
Two classes: "with donor restrictions" (temporarily and permanently restricted) and "without donor restrictions" (unrestricted).
Does ASC 958 affect how AP processes invoices?
Yes. AP must code expenses by function (program, management, fundraising) and track which net asset class funds each expense.
Category
nonprofitRelated Terms
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