FASB Looks to Resolve Accounting Issues with Cloud Computing Costs
A solution is in the works to help frustrated organizations account for their cloud computing software costs. At the Financial Accounting Standards Board’s (“FASB”) Not-for-Profit Advisory Committee meeting on September 8, Project Manager Jamie Dordik stated that the FASB’s research staff is currently reviewing opportunities to improve transparency of the accounting guidance for expenses associated with implementing cloud computing arrangements. Research staff members are looking at accounting options the FASB’s Emerging Issues Task Force (“EITF”) had considered at its July meeting. In that meeting, the EITF failed to reach a consensus on providing clear cloud computing guidance to businesses. One. Read More.
Topics: and Equipment (Topic 360), Cloud Computing, Cloud Computing Arrangements, Emerging Issues Task Force "EITF", FASB, FASB Not-for-Profit Advisory Committee, Financial Accounting Standards Board "FASB", Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40), Other Assets and Deferred Costs (Topic 340), Other Expenses — Business and Technology Reengineering (Subtopic 720-45), Plant, property
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)
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.
Guidance for Contributions to Nonprofits to be Revisited
Unable to reach conclusions last month on its guidance for nonprofits regarding contributions and exchange transactions, the Financial Accounting Standards Board (“FASB”) is expected to continue to discuss the issue at future meetings. The FASB’s Not-for-Profit Advisory Committee previously said that nonprofit organizations needed better guidance to comply with ASC 958-605 for contributions and the forthcoming requirements under Topic 606, Revenue From Contracts With Customers, for exchange transactions. Panel members said that accounting practices are usually inconsistent among nonprofits when determining if funds received should be treated as contributions or exchange transactions. Many organizations have had difficulty interpreting the guidance. Read More.