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 standard mainly impacts nonprofits involved with certain affordable housing agreements.
Nonprofits must apply the new standard for fiscal years starting after December 15, 2016. Quarterly periods starting after December 15, 2017, will also be affected. Early adoption is permitted, even for quarterly periods.