Nonprofits Concerned with Contribution Classifications for Revenue Standard
Several nonprofits are confused over whether to classify a contribution as having a restriction or a condition with respect to the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard. The issue is significant to nonprofits because it impacts the timing of recording the revenue from the contribution, but FASB Assistant Director Jeffrey Mechanick recently cautioned that it will ultimately be in the hands of an organization’s financial report preparers to decide. At last week’s meeting between the FASB and its Not-for-Profit Advisory Committee, Mechanick said due to the amount of judgment in practice, the board is attempting to offer improved. Read More.
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
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.
FASB Working to Address Revenue Standard Guidance for Nonprofit Grants
Before nonprofits implement the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard, the board needs to decide how and when such organizations should disclose revenues from conditional grants. In particular, the FASB needs to resolve whether grants and contracts with government agencies should be characterized as exchanges or contributions, and how to distinguish between conditions and restrictions on such contributions. Some progress on the matter was made during the FASB’s December 14 meeting. The FASB approved adding illustrative examples to its nonprofit guidance, which will help differentiate between grants and related contracts that must be disclosed as contributions, as opposed. Read More.
How Nonprofits Use Videos to Advance Mission
Cisco predicts video streaming will account for 69 percent of the world’s Internet traffic next year. Part of the reason can be attributed to several nonprofits incorporating video production into their marketing strategies. Nonprofits like Breaking the Waves, for instance, produce video content to advance programs, tell a story about who or what they serve, and drive website traffic. In turn, website visitors will likely seek details about a nonprofit’s mission, and possibly make a donation. Some options for nonprofits to get started on video marketing include hiring young filmmakers, having a professional volunteer, and using the YouTube Nonprofit Program . More on this topic is available at the Nonprofit Quarterly website.
Auditor Strikes Back: No Changes to Alcohol Allowability Guidance
As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the thirteen areas of cost updated related to alcoholic beverages. This topic is covered in Chapter 2 of the new Selected Areas of Cost Guidebook. The revised guidance has not reflected a change in position by DCAA or the Federal Acquisition Regulation with respect to allowability on alcoholic beverages. The guidebook has added a frequently asked question related to whether alcoholic beverages are unallowable for nonprofit entities. The short (and long) answer is yes, alcoholic beverages are expressly unallowable in accordance with. Read More.