FASB Issues Lease Accounting Standard
Today, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). The long-awaited guidance is intended to improve financial reporting for leasing transactions. The FASB estimates that there is over $1 trillion of off-balance sheet operating lease commitments for SEC registrants based on a 2005 Securities and Exchange Commission report. The new guidance will require lessees to recognize a right of use asset and related lease liability. Using the classification similar to Topic 840, the ASU identifies financing leases and operating leases. Financing leases would recognize amortization and interest expenses, while operating leases would. Read More.
FASB Discusses Phase 1 of Nonprofit Accounting Project
On Friday, the Financial Accounting Standards Board (“FASB”) met to discuss Phase 1 of redeliberations for its proposed Accounting Standards Update (ASU), Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities. In particular, the discussion focused on the following issues: Methods of Presenting Operating Cash Flows. The FASB agreed not to require the direct method of presenting operating cash flows, but will continue to allow nonprofit entities to use the direct method or indirect method. The FASB also decided to no longer require the indirect reconciliation if a nonprofit entity uses the. Read More.
Federal Audit Clearinghouse Reopens & Extends Single Audit Deadline
After a security incident caused a shutdown in July, the Federal Audit Clearinghouse (“FAC”) is once again accepting single audit submissions. Boosting its security and perform system testing efforts, the reopened FAC website requires users to update their passwords. The process for users to update passwords is the same as before the FAC closure. The FAC also extended the deadline for submitting single audits to January 31, 2016. The submission extension language, which is accessible on the FAC’s submit an Audit page , has been updated to reflect the new deadline. While an extended deadline has been announced, earlier submissions are encouraged.
FASB Divides Nonprofit Accounting Project into Two Phases
After receiving conflicting feedback on its proposal calling for changes to nonprofit accounting guidance, the Financial Accounting Standards Board (“FASB”) recently decided to split the project into two segments. The standard setter plans to focus on the parts of Proposed Accounting Standards Update (ASU) No. 2015-230, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities, that have received general support and postpone work on some of the more contentious aspects. Over 250 comment letters were received regarding the Exposure Draft. In addition, the FASB held 10 workshops across the US as well. Read More.
Non-Financial Performance Data Reporting an Issue for Nonprofits
A recent AccuFund study has revealed that nonprofit organizations are struggling with reporting non-financial performance data. According to the software developer’s survey, 73 percent of nonprofit professionals reported spending up to five hours a week handling data outside their financial system. Additionally, 81 percent spend almost five hours every week collecting data and reports within their financial system, and most respondents said their financial software does not store and support the reporting of non-financial performance data. Accounting Technology has a full article on the survey and an infographic summarizing AccuFund’s findings.
Arne Duncan Resigns as Education Secretary
On Tuesday, October 2nd, Secretary of Education Arne Duncan announced his resignation effective in December. While many expected him to stay through the end of Obama’s two-term presidency, Duncan leaves behind a legacy that included a focus on elementary and secondary education. He was a staunch supporter of the Common Core standards, which drew the ire of teachers unions and advocates of states’ rights. Duncan also helped the Department of Education take a more active role in higher education policies such as overhauling student loan programs, and increasing the accountability and regulation of colleges. More on Arne Duncan’s legacy is discussed in Inside. Read More.