Government Accountability Office Revises Yellow Book Standards
The U.S. Government Accountability Office (“GAO”) has updated its generally accepted government auditing standards to improve the quality of governmental audits. Commonly known as the “Yellow Book,” the revised standards supersede their 2011 counterparts and provide transparency and accountability for auditors when providing the public with unbiased analysis and information. Some of the changes include reformatting the chapters that distinguish requirements from application guidance, adding a definition for waste and related examples, and specific considerations for when internal control is significant to the audit objectives for performance audits. The revised standards must be applied to financial audits, attestation engagements, and. Read More.
Proposed Taxonomy Improvements to Impact Leases and Nonprofit Entities
Financial Accounting Standards Board (“FASB”) staff members have issued proposed Taxonomy improvements to the following Accounting Standards Updates (“ASU”): ASU No. 2018-09, Codification Improvements: Comments on the proposed amendments are due Tuesday, August 14. ASU No. 2018-10, Codification Improvements to Topic 842, Leases: Comments on the proposed amendments are due Friday, August 17. FASB staff also proposed Taxonomy improvements for the Proposed ASU, Not-for-Profit Entities (Topic 958): Updating the Definition of Collections. Comments are due Friday, August 10. All comments on the proposed Taxonomy improvements must be emailed to firstname.lastname@example.org .
North Carolina Passes UBIT Provision on Nonprofit Parking
In case you missed it, the North Carolina Legislature last month passed a bill that decouples state unrelated business income tax (“UBIT”) on nonprofit parking from the Tax Cuts and Jobs Act. The provision safeguards tax-exempt organizations from being taxed an additional 3-percent state UBIT or filing state tax forms for employees’ parking expenses. The North Carolina Center for Nonprofits had asked state legislators to decouple the state tax code to prevent state income tax for expenses. North Carolina’s governor had previously vetoed a budget bill that featured the UBIT amendment, but the Legislature overruled the veto. Thus, the UBIT provision is effective. Read More.
Treasury Department and IRS Asked to Postpone New Taxes on Nonprofits
Nonprofits are asking for a delay concerning two provisions of the Tax Cuts and Jobs Act enacted earlier this year. The provisions, one relating to business income and the other on expenses incurred for employee transportation and parking, have caused confusion for several tax-exempt organizations since their applicability is uncertain without additional guidance from the Treasury Department and the Internal Revenue Service. Impacted organizations and nonprofit advocates have also submitted to both agencies extensive comments and requests for a delay in the taxes being implemented. More about the requested delay is available in the National Council of Nonprofits’ latest newsletter.
FASB Suggests Aligning Collections Definition for Museums
Last week, the Financial Accounting Standards Board (“FASB”) announced a proposal to match the U.S. GAAP definition of a “collection” of priceless artwork and historical treasures with the description museums rely on for operability and accreditation. Issued in Proposed Accounting Standards Update No. 2018-250, Not-for-Profit Entities (Topic 958): Updating the Definition of Collections, the amendment would change one of the criteria under the collection definition. It would also let proceeds from a sold art piece or artifact to be used to protect the rest of the collection. As a result of the amendment, museums and related entities would only have. Read More.
FASB Issues Standard for Contributions
A new Accounting Standards Update (“ASU”) by the Financial Accounting Standards Board (“FASB”) will have a significant impact on financial statements of entities who receive grants. ASU No. 2018-08, Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made , differentiates grants and similar contracts with government agencies and others as reciprocal transactions (exchanges) or nonreciprocal transactions (contributions). The new standard also establishes new indicators for when a contribution is conditional. The amendments in ASU No. 2018-08 apply to all entities that receive or distribute contributions, but they do not apply to transfers of assets from governments to companies. Public companies and nonprofits that have issues, or is a conduit bond obligor for,. Read More.