After numerous effective date delays, not-for-profits are running out of time to implement the Financial Accounting Standards Board’s new lease accounting standard.
FASB Not-for-Profit Reporting
Many private companies and not-for-profits are adopting new lease accounting standards, and public companies that have adopted the guidance are applying it amid a pandemic-fueled surge in lease renegotiations.
For-profit entities are permitted to use the not-for-profit conditional contribution accounting model to account for Paycheck Protection Program loans. The accounting requires reasoned judgment, careful evaluation of barriers and thorough documentation.
Private companies and not-for-profits have the option to perform goodwill impairment triggering assessments at the end of an interim or annual reporting period under an accounting alternative issued by FASB.
Private companies and not-for-profits will have an option to perform goodwill impairment triggering event assessments at the reporting date (versus on the date of a triggering event as currently required), under an accounting alternative FASB voted to approve.
FASB issued a proposal that would permit certain private companies and not-for-profits to elect not to perform goodwill assessments related to triggering events.
FASB added a project to its technical agenda that would give certain private companies and not-for-profits the option to perform goodwill triggering event evaluation only on the annual reporting date.
Not-for-profit financial statements will include more information on contributed nonfinancial assets, also known as gifts-in-kind, under a new standard issued by FASB.
The Proposed ASU would require not-for-profits to present contributed nonfinancial assets as a separate line item in the statement of activities.
Not-for-profits have their own specific concerns related to the Financial Accounting Standards Board’s new revenue recognition standard. Find out in this episode how the new standard applies to not-for-profits.
The new FASB standard allows not-for-profits to use alternatives on accounting for goodwill and accounting for identifiable intangible assets in a business combination.
Tax-exempt organizations are working through the biggest change to not-for-profit financial reporting in 25 years. Smaller organizations with limited resources can smoothly implement FASB’s new rules by following some best practices.
Smaller organizations with limited staff may have difficulty implementing FASB’s new standard on presentation of not-for-profit financial statements. These best practices can make the work easier.