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.
Proposed Grants and Contributions Guidance Receives Support
With the comment period ending last week for Proposed Accounting Standards Update (ASU) No. 2017-270, Not-for-Profit Entities (Topic 958) Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, nonprofit and professional groups and audit firms have expressed support for the Financial Accounting Standards Board’s (“FASB”) attempts to simplify how organizations disclose revenue from grants and contributions. Mostly impacting nonprofits like charities and foundations, the proposal revises the guidance on determining whether gifts to nonprofit groups must be presented as contributions subject to ASC 958-605, Not-for-Profit Entities—Revenue Recognition, or as reciprocal transactions (i.e., exchanges) subject to ASC 605/606. The. Read More.
Topics: FASB, Financial Accounting Standards Board "FASB", Financial Reporting Executive Committee "FinREC", Grants & Contributions, Nonprofits, Not-for-Profit Entities (Topic 958), Proposed Accounting Standards Update