Forthcoming Accounting Guidance Updates to Impact Nonprofits
Some of the Financial Accounting Standards Board’s Accounting Standards Updates will certainly have an effect on nonprofit organizations. As the standards’ effective dates draw near, the American Institute of Certified Public Accountants (“AICPA”) has highlighted five standards nonprofits should become familiar with: Going concern requirements Consolidation requirements Simplifying the presentation of debt issuance costs Fair value disclosures when net asset value per share is used Inventory measurement More on these standards is available on AICPA.org. In addition, Cherry Bekaert’s Melisa Galasso will host an AICPA webinar on April 25 to offer nonprofits guidance on these Accounting Standards Updates.
Topics: Accounting Standards Update "ASU", AICPA, American Institute of Certified Public Accountants "AICPA", Consolidation, Debt Issuance Costs, Fair Value Accounting, FASB, Financial Accounting Standards Board "FASB", Going Concern, Inventory, Nonprofits
FASB Member Questions Revenue Standard
Last week during a meeting of the Financial Accounting Standards Board’s (“FASB”) Financial Accounting Standards Advisory Council, FASB member Lawrence Smith expressed uncertainty about Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers. Smith said that implementation of the revenue recognition standard will be of significant costs to companies, and the FASB would’ve been better off making targeted improvements to its revenue guidance instead of a complete rewrite. He also noted that smaller accounting firms and companies do not have experts to help with the standard or Codification. As a result, those firms and companies are making mistakes because they are. Read More.
FASB Issues Amended Guidance for Amortized Premiums
The Financial Accounting Standards Board (“FASB”) has issued new guidance on the amortization of premiums for purchased callable debt securities. Released as Accounting Standards Update No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities , the standard reduces the amortization period for a premium to the earliest call date to improve when the interest income is recorded on bonds held either at a premium or a discount with the underlying instrument. ASU No. 2017-08 takes effect for public companies for the fiscal years, and interim periods within those years, starting after December 15, 2018. All other companies must apply the amendments to fiscal years starting after December 15, 2019, and interim periods. Read More.
FASB Addresses General Expenditure Questions for Nonprofit Standard
With the 2018 effective date approaching for Accounting Standards Update (“ASU”) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, a project manager with the Financial Accounting Standards Board’s (“FASB”) research team has advised nonprofit groups not to overthink the concept of “general expenditure.” Addressing concerns over the disclosure of funds for general expenditure at last week’s FASB Not-for-Profit Advisory Committee meeting, Rick Cole said donor restrictions on certain funds would not be exempt from general expenditures. He remarked that many of the illustrations should be taken as they are, not as absolute law. FASB Assistant Director. Read More.
Topics: Accounting Standards Update "ASU", FASB, FASB Nonprofit Standard, FASB Not-for-Profit Advisory Committee, Financial Accounting Standards Board "FASB", Financial Statement Disclosures, Not-for-Profit Entities (Topic 958)
Revenue Recognition Draft Guidance Issued for Utilities and Time-Share Companies
The American Institute of Certified Public Accountants’ Financial Reporting Executive Committee has issued the following working drafts to address implementation of Accounting Standards Update No. 2016-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board (“FASB”): Working Draft: Proposed Implementation Issues for Revenue Recognition: Power & Utility Entities (#13-1): Accounting for Tariff Sales to Regulated Customers. Intended to help power and utility companies with applying ASU No. 2016-09 to revenues caused by regulated utility tariffs, this working draft explains that agreements between utilities and customers for services provided under a regulated tariff must be disclosed as a customer. Read More.
Topics: Accounting Standards Update "ASU", AICPA, American Institute of Certified Public Accountants "AICPA", FASB, Financial Accounting Standards Board "FASB", Financial Reporting Executive Committee "FinREC", Proposed Implementation Issues, Revenue Recognition, Working Drafts
New FASB Standard Impacts Master Trust Investments
Updates have been issued regarding the Financial Accounting Standards Board’s (“FASB”) master trust investments guidance. The amendments in Accounting Standards Update No. 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting, primarily deal with an employee benefit plan reporting its interest in a master trust. The amendments address diversity in practice regarding the presentation of master trust investments in the statement of net assets available for benefits. For every master trust wherein an employee benefit plan holds an interest, the interest. Read More.
Topics: Accounting Standards Update "ASU", Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Diversity in Practice, Employee Benefit Plans, FASB, Financial Accounting Standards Board "FASB", Health and Welfare Benefit Plans (Topic 965), Master Trust Investments