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Guest Post: Disclosure Requirements for Not-for-Profit Entities

 

Article at a Glance:

  • FASBA issues new accounting standard for Not-for-Profit entities that addresses contributions
  • There was no specific guidance tied to contributions of non-financial assets before FASBA issued the new standard
  • Update requires that non-financial asset contributions be listed as a separate line item in the statement of operations
  • The new requirements will be effective for annual fiscal periods beginning after June 15, 2021
  • The complete update details can be found at the FASB website in “Accounting Standards Update 2020-07”

In case you haven’t heard, the FASB issued a new accounting standard for Not-for-Profit entities that addresses the accounting for the receipt of contributions of non-financial assets. Until recently, there has been no specific guidance for the contribution of non-financial assets other than contributed services.

Non-Financial Asset Requirements

Non-financial assets include land, buildings, equipment, materials, supplies, intangible assets, services, or the use of assets or utilities.

This update requires that the non-financial asset contributions be presented as a separate line item in the statement of operations and not included with contributions of cash and other financial assets. Also, there are multiple new disclosures required concerning those contributions. Among the new disclosures is the requirement to indicate the valuation techniques and inputs used to determine the fair value of the contribution and the principle market used to arrive at that value.

As with all contributions, the entity will need to separate the non-financial contributions between those with donor-imposed restrictions and those without.

These new requirements will be effective for annual fiscal periods beginning after June 15, 2021, and for interim periods beginning after June 15, 2022. Early adoption is allowed.

FASB Standards

The complete details of this update can be found at the FASB website in “Accounting Standards Update 2020-07.” In addition, I will be highlighting these new requirements in the latest revision of my NPF webcast coming soon.

I hope to see you at a seminar sometime in the near future.

Stay healthy,

Jeff Sailor

P.S. Here’s my new course preview, Step By Step: Accounting For Income Taxes

Step By Step: Accounting for Income Taxes

In this course, Jeff takes you step by step through the process to insure that you understand both the professional as well as the practical requirements.

  • Instructor: Jeff Sailor, CPA
  • Credits: 2
  • NASBA Category:  Accounting
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Jeff Sailor, CPA


Jeff Sailor, CPA, received a master’s degree in accounting from the University of Florida. Upon graduation, he joined the auditing staff at Peat Marwick in Jacksonville, Florida, where he worked on a large number of national accounts. Jeff has managed his own accounting firm in Ocala, Florida, since 1984. During that time, he has also developed unique auditing approaches and auditing software.

Since 1992, Jeff has been teaching accounting and auditing courses he developed to combat traditional “boring CPE.” Using a variety of creative teaching methods sprinkled with humorous video spoofs, Jeff is able to combine his in-depth accounting insights with humor in high-energy presentations. He’s also adept at presenting complex topics in a very practical, easy-to-understand manner, thus earning him rave reviews for more than 20 years. Jeff currently presents seminars, webcasts, and in-house instruction for Western CPE. He’s also a featured speaker at national conferences as well as at state and regional meetings.

For more than 10 years, Jeff has served as an AICPA peer reviewer, focusing on small firms and sole practitioners. He also served on the Resource Committee for the Private Company Financial Reporting Committee (PCFRC). Jeff has spoken at two NASBA national conferences on how to make education more engaging for practitioners.

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