Proposed Updates to Nonfinancial Assets Reporting
- Feb 28, 2020
The Financial Accounting Standards Board (“FASB”) has just issued proposed regulations surrounding not-for-profit’s reporting of contributed non-financial assets, better known as “gifts-in-kind”. These proposed amendments to Accounting Standards Codification are aimed at providing increased transparency and reporting of contributed nonfinancial assets. Many not-for-profits receive an array of these types of gifts including land, buildings, materials and supplies, food, clothing, etc. along with contributed services that meet the long-standing recognition and reporting requirements. The proposed regulations, as drafted, would require organizations receiving such nonfinancial assets to present these contributions as a separate line item in the statement of activities as well as to require enhanced disclosures of: (i) a description by category that illustrates the type of contributed nonfinancial asset; (ii) a description of any donor restrictions accompanying the contribution; (iii) the valuation techniques and inputs used to arrive at a fair value measurement; and (iv) qualitative information about whether the contributed nonfinancial asset is expected to be monetized or utilized in the current or a future period. If the decision is to utilize the contribution, further disclosure would be required to describe the programs or other activities in which those assets were or are intended to be used. Comments on these proposed regulations are due to the FASB by April 10, 2020.
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Jenifer Keiser is a Director in the Not-for-Profit Services Group, and her background encompasses the full range of not-for-profit client service activities. She has planned, directed and participated in scores of audit engagements.
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