FASB Proposes ASU on Transparency Disclosures for Gifts-in-Kind to Not-for-Profit Entities

The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU), Not-for-Profit Entities (Topic 958)—Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The proposal includes amendments intended to improve transparency disclosures around how not-for-profit organizations present and disclose contributed nonfinancial assets, also known as gifts-in-kind.

Examples of contributed nonfinancial assets include fixed assets such as land, buildings, and equipment; the use of fixed assets or utilities; materials and supplies, such as food, clothing, or pharmaceuticals; intangible assets; and/or recognized contributed services.

The proposed ASU, if adopted as proposed, would require a not-for-profit organization to present contributed nonfinancial assets as a separate line item in the statement of activities, apart from contributions of cash or other financial assets.

Proposed Transparency Disclosures

The proposed amendments also would require a not-for-profit to disclose:

  • Contributed nonfinancial assets received disaggregated by category that depicts the type of contributed nonfinancial assets, and
  • For each category of contributed nonfinancial assets received (as identified above): (a) qualitative information about whether the contributed nonfinancial assets were or are intended to be either monetized or utilized during the reporting period and future periods. If utilized, a description of the programs or other activities in which those assets were or are intended to be used; (b) A description of any donor restrictions associated with the contributed nonfinancial assets; and (c) The valuation techniques and inputs used to arrive at a fair value measure, including the principal market (or most advantageous market) if significant, in accordance with the requirements in Topic 820, Fair Value Measurement.

Comment Due Date

The comment deadline is April 10, 2020

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