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
Audit Guides Help IRS Review Nonprofit Organizations
The Internal Revenue Service (“IRS”) wants to help nonprofits and their tax preparers avoid the possibility of being audited. Available for download on the IRS website are Audit Technique Guides for nonprofits exempt under IRC Section 501(c)(3) and other IRC Section 501(c) sub-sections. Used by IRS staff members, the guides give insight into what the IRS examines when deciding whether to audit tax-exempt organizations. More on the IRS’ Audit Technique Guides is available on the Nonprofit Quarterly website. Need help with audits? Contact a member of our Education or Nonprofits group.
Faux Donor Scams Nonprofit for Veterans
An Oregon-based nonprofit gym for veterans has fallen victim to a con artist. Alleged wealthy businessman named Garyn Bowen had pledged $425,000 to Lift for the 22, and claimed that supplement retailer GNC would match his gift. Since Bowen was a frequent attendee of the gym’s workout programs, the organization did not bother to check his background. After arranging a Facebook live-stream of the check presentation, the gym never received Bowen’s check. Later, the gym discovered that Bowen had stolen another member’s wallet to make purchases. More on Lift for the 22’s story is available on the Nonprofit Quarterly website.
FASB Grant Accounting Proposal Issued
The Financial Accounting Standards Board (“FASB”) is proposing new guidance for contributions made or received by organizations, especially nonprofits. The proposed Accounting Standards Update (“ASU”) will help decide whether an organization’s transactions are treated as either a contribution or an exchange. This would be achieved by clarifying guidance on assessing whether a resource provider receives value in exchange for the transferred resources. The proposal also provides an improved framework that helps organizations decide whether a contribution is conditional or unconditional. In addition, the proposed amendments help distinguish between a donor-imposed condition and a donor-imposed restriction. Transfers of assets from a. Read More.
Audit Standard Issued for Exempt Securities Offerings
Earlier this week, the American Institute of Certified Public Accountants’ Auditing Standards Board published a new standard for auditor reports that supplement securities offerings not registered with the Securities and Exchange Commission. The new standard, Statement on Auditing Standards No. 133, Auditor Involvement With Exempt Offering Documents, will be effective for audit reports used with offerings sold on or after June 15, 2018. Municipal bonds, securities issued by nonprofits or religious organizations, crowdfunded offerings, securities issued in accordance with Regulation A, and franchise offerings qualify as securities offerings.
Topics: AICPA, AICPA Auditing Standards Board, American Institute of Certified Public Accountants "AICPA", Audit Standard, Nonprofits, Securities and Exchange Commission "SEC", Securities Offerings, Statement on Auditing Standards "SAS"
FASB Continues Discussions on Disclosure Framework Project
During a discussion at last Wednesday’s meeting, the Financial Accounting Standards Board (“FASB”) made the following decisions on proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8, Notes to Financial Statements: Nonprofits and private companies must be retained on the notes to financial statements. A discussion on the possible negative consequences of disclosures will be included. The disclosure of changes in line items not easily understood will be considered. The disclosure of alternative measures clearly useful in reviewing prospects for future cash flows will be considered. No disclosure objectives were established without giving specific requirements on how those objectives. Read More.