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.

Where to find December’s flipbook issue

The Journal of Accountancy is now completely digital. 

 

 

 

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