Perspective and Issues

Concepts, Rules, and Examples

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

Charitable Lead Trust

Perpetual Trust Held by a Third Party

Charitable Remainder Trust

Charitable Gift Annuity

Pooled (Life) Income Fund

Split-Interest Agreements with Embedded Derivative Instruments

Determining if a split-interest agreement contains a derivative instrument

Disclosure Requirements


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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