College Endowments Continue to Struggle
College endowments last year posted their worst returns since the 2008 financial crisis. A recent National Association of College and University Business survey revealed that endowments averaged -1.9 percent for the 2016 fiscal year. The drop marks another decline for colleges and universities, which had a return of only 2.4 percent during the 2015 fiscal year. More on the 2016 fiscal year college endowment numbers is available on Inside Higher Ed.
FASB Goodwill Impairment Standard Issued
Last week, the Financial Accounting Standards Board (“FASB”) published Accounting Standards Update (“ASU”) No. 2017-04, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment. A result of the Simplification Initiative, the standard simplifies how a company tests goodwill for impairment by eliminating “Step 2”, which measures impairment loss by comparing the carrying amount of goodwill to its implied fair value. In its news release, the FASB said the ASU will allow companies to measure goodwill impairment as the excess of the reporting unit’s carrying value over its fair value. Stakeholders had complained that the current impairment test creates. Read More.
Topics: Accounting Standards Update "ASU", Business Combinations (Topic 805), Financial Accounting Standards Board "FASB", Goodwill Impairment Testing, Intangibles (Topic 350), Nonprofits, Securities and Exchange Commission "SEC", simplification initiative
Support for Students with Disabilities in Supreme Court’s Hands
The U.S. Supreme Court has been asked to detail which services are deemed appropriate for a student’s educational experience. The basis of the inquiry involves parents discovering their autistic son made further progress at a specialized private school. After the parents asked the local public school to offer the same level of services the private school provided their son, the district office declined. As a result, the parents sued the district to cover the private school’s $70,000 tuition. More on the case is available on the Insider Higher Ed website.
Navient Sued Over Failure to Help Borrowers
Student loan servicing company Navient is being sued by the Consumer Financial Protection Bureau over claims of failing to assist borrowers during the repayment period. Bureau Director Richard Cordray alleges that Navient makes it difficult for borrowers to pay back loans by incorrectly applying or allocating payments. Cordray believes the company often fails to fix errors unless a borrower is vigilant to have the problem resolved. In response to the lawsuit, Navient claims the allegations are unfounded and questions the timing of the lawsuit, as it was filed on the eve of a new presidential administration. More on the Navient lawsuit is available at Inside Higher Ed.
FASB Announces Top Priorities for 2017
After issuing several key Accounting Standards Updates and announcing new board members last year, the Financial Accounting Standards Board (“FASB”) is preparing for a busy 2017. In a five-minute video, FASB Technical Director Sue Cosper outlines the FASB’s top priorities for this year. The FASB’s top priorities for 2017 include: Finalizing the hedging and long-duration insurance standards; Supporting the implementation of its revenue recognition, leases, and credit losses standards; Potential improvements to nonprofit financial reporting, particularly distinguishing between exchanges and contributions; and Redeliberating feedback on the Invitation to Comment and continuing to focus on its Conceptual Framework. Click here to watch the video.
Topics: Accounting Standards Update "ASU", Conceptual Framework Project, FASB Nonprofit Standard, Financial Accounting Standards Board "FASB", Hedging, Invitation to Comment, leases, Leases (Topic 842), Long-Duration Insurance, Revenue from Contracts with Customers (Topic 606), Revenue Recognition
Nonprofits Receive Updated Consolidation Reporting Guidance
Helping nonprofits with consolidated reporting disclosures, the Financial Accounting Standards Board (“FASB”) recently issued Accounting Standards Update (“ASU”) No. 2017-02, Not-for-Profit Entities—Consolidation (Subtopic 958-810): Clarifying When a Not-for-Profit Entity That Is a General Partner or a Limited Partner Should Consolidate a For-Profit Limited Partnership or Similar Entity. ASU No. 2017-02 clarifies when nonprofits that are general partners should consolidate their holdings in a for-profit limited partnership. The ASU will move the current content from Subtopic 810-20, Consolidation—Control of Partnerships and Similar Entities, that was deleted in ASU 2015-02 and move it to Subtopic 958-810 for nonprofits. The FASB says the. Read More.