ASC 958-320, Not-for-profit entities—Investments—debt and equity securities, addresses the accounting and reporting for (1) investments in equity securities with readily determinable fair value that either (a) do not result in consolidation or (b) are not reported using the equity method, and (2) all investments in debt securities. NFPs apply this guidance instead of the guidance in ASC 320. The scope and definitions are consistent with those of ASC 320 prior to the effective date of ASU 2016-01. Significant differences from the ASC 320 model include:

For NFP HCOs, incremental guidance in ASC 954-320 tailors the guidance in ASC 958-320 to more closely resemble the business entity reporting model in ASC 320. NFP HCOs must classify their securities using “trading” and “other-than-trading” (i.e., available-for-sale) categories so that investment gains, losses, and impairments are included in or excluded from the performance indicator in the same manner as those items would be included in or excluded from net income of a business entity. Because of the overarching requirement in ASC 958-320 to carry all securities at fair value, use of the held-to-maturity classification (which permits measurement of debt securities using an amortized cost basis for business entities) is not permitted for NFPs or HCOs. For securities classified as other than trading, changes in fair value are reported below the performance indicator (consistent with the reporting of such items in other comprehensive income by business entities). ASC 954-320-55 illustrates the accounting and reporting considerations for other-than-trading securities. Other NFPs desiring to more closely parallel business entity reporting may voluntarily classify securities into categories using the NFP HCO classification parameters.

Neither ASC 958 nor ASC 954 provide guidance on evaluating impairment of securities carried at other than fair value; thus, NFP HCOs (and other NFPs that voluntarily classify securities into categories) look to ASC 320-10 for that guidance, as required by ASC 320-10-15-4 and ASC 954-320-35-1.