FASB extends GAAP alternatives to not-for-profits

The amendments took effect immediately.

Not-for-profit financial statement preparers will be able to take advantage of two GAAP alternatives that FASB originally developed for private companies.

FASB recently issued a standard that will make not-for-profits eligible for the private company alternatives on accounting for goodwill and accounting for identifiable intangible assets in a business combination.

The alternatives for private companies were issued in 2014 as a result of work that originated with the Private Company Council. The new standard will enable not-for-profits to recognize fewer items as separate intangible assets in acquisitions and to account for goodwill in a more cost-effective manner. This can make accounting less complicated and less costly for not-for-profits.

The amendments took effect upon the issuance of the standard, and not-for-profits have the same open-ended effective date and unconditional one-time election that private companies have.

  • FASB eases transition to credit losses standard. FASB addressed a transition challenge to its new credit losses standard by issuing Accounting Standards Update No. 2019-05, Financial Instruments — Credit Losses (Topic 326): Targeted Transition Relief. Under the new standard, preparers are permitted to irrevocably elect the fair value option, on an instrument-by-instrument basis, for eligible financial assets measured at amortized cost basis upon adoption of the credit losses standard.

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100th ANNIVERSARY

Black CPA Centennial, 1921–2021

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