12 SPLIT-INTEREST AGREEMENTS
Revocable Split-Interest Agreements
Irrevocable Split-Interest Agreements
Initial recognition of unconditional irrevocable agreements
Recognition during the agreement's term
Recognition upon termination of agreement
Financial Statement Presentation
Examples of Split-Interest Agreements
Perpetual Trust Held by a Third Party
Split-Interest Agreements with Embedded Derivative Instruments
Determining if a split-interest agreement contains a derivative instrument
PERSPECTIVE AND ISSUES
Split-interest agreements are a special type of contribution that result from sharing of legal rights to certain assets by the not-for-profit organization and other beneficiaries. Some donors find it beneficial to enter into trust or other arrangements under which the not-for-profit organization receives benefits that are shared with other beneficiaries. Chapter 6 of the AICPA Audit & Accounting Guide Not-for-Profit Entities (the AICPA Guide) provides significant guidance and background on split-interest agreements that is incorporated in this chapter. Applicable GAAP requirements have been incorporated into the FASB Codification primarily at FASB ASC 958-325.
NOTE: In October 2011, the AICPA issued a whitepaper, “Measurement of Fair Value for Certain Transactions of Not-for-Profit Entities,” designed ...
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