Tag Archives: fasb

FASB Update

by Josh Bryant

Throughout the calendar year, the Financial Accounting Standards Board, or FASB, meets in order to deliberate on proposed standards and amendments. On March 30, 2016, the authoritative board redeliberated on Topics 954 and 958- of which relate to the presentation of Financial Statements of Not-for-Profit Entities. These pronouncements affect entities that are required to evaluate whether they should consolidate certain legal entities either using the variable interest entity, or the voting interest entity model for consolidation of limited partnerships and similar legal entities.

The discussion was primarily focused on the effective date and the transition method utilized for any not-for-profit or health care entity for which the standard applies.

Effective Date

The Board has decided that the amendments will take affect for financial statements relating to fiscal years beginning after December 15, 2017, and for interim statements following December 15, 2017.

Transition Method

“The Board has decided that not-for-profit entities, or NFPs, should apply the amendments on a retrospective basis for all years presented in the financial statements.”  The Board also made concessions for NFPs during this transitional stage to enable the organization to do so cost effectively. The following two items are optional for any organization that uses presents financials statements on a comparative basis for any years before adoption:

  • Analysis of expenses by both functional and natural classification.
  • Disclosures regarding liquidity and availability of resources.

Furthermore, the Board decided it would be permitted for NFPs to present interim financial statements in the year of adoption as they did prior to the amendment, however, subsequent restatement of the financial statements at year-end would be required on a retrospective basis.

The Board also discussed the application of the consolidation process for not-for-profit entities that are a general partner in a for-profit limited partnership. A result of these discussions is still forthcoming, however, they have decided to reinstate the current guidance that existed in Subtopic 910-20, Consolidation- Control of Partnerships and Similar Entities, and included it within Subtopic 958-810, Not-For-Profit Entities- Consolidation.

To conclude, however long it may be before these amendments become effective- it is always prudent to plan ahead in order to maintain forward longevity in the competitive business environment for not-for-profits.

If you have additional questions about these differences, please contact our office.  We would appreciate the opportunity to share with you the impact to your organization and ways to prepare for the upcoming changes.

Josh ([email protected]) is an audit staff working primarily with not-for-profits and healthcare organizations.

 

Refer to this site for additional updates.

FASB Delays Effective Date for Revenue Recognition Standard

by Rebecca Lunn

On May 28, 2014, Financial Accounting Standards Board (FASB) released Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. However, due to response from stakeholders, the FASB has delayed the effective date by one year. New effective dates are as follows:

  • Public business entities, certain not-for-profit entities, and certain employee benefit plans would apply ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that year. Early application permitted only as of years beginning after December 15, 2016, including interim reporting periods within that year.
  • For all other entities, the ASU is effective beginning after December 15, 2018, and interim reporting periods within years beginning after December 15, 2019. Early application permitted as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period; or an annual reporting period beginning after December 15, 2016.

For additional details on ASU 2014-09, please see the earlier blog post written by Lee Byrd.  You can also contact our office with any questions.

 

Overview of Possible FASB Changes in Non-Profit Reporting Rules

Non ProfitThe Financial Accounting Standards Board recently evaluated the way in which non-profit organizations record and report their financial information and is seeking to make changes that would enable charities to provide more accurate financial information to the general public.

To start with, FASB board members have created a draft document that can be used as a formal operating measure to evaluate any organization that is set up to serve the public good.

Continue reading Overview of Possible FASB Changes in Non-Profit Reporting Rules