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On September 17, 2020, the Financial Accounting Standards Board (FASB) released Accounting Standards Update (ASU) No. 2020-07, Not-for-Profit Entities (Topic 958), Presentation and Disclosures by Not-for-Profits Entities for Contributed Nonfinancial Assets. This standard was issued to improve generally accepted accounting principles (GAAP) by increasing the transparency of contributed nonfinancial assets through enhancements to presentation and disclosure.

This standard impacts all not-for-profit entities that receive contributed nonfinancial asset. Contributed nonfinancial asset include:

  • Fixed assets (such as land, buildings, and equipment)
  • The use of fixed assets or utilities
  • Materials and supplies
  • Intangible assets
  •  Services
  •  Unconditional promises of the above assets

The amendments included in this ASU require that all not-for-profit entities:

  1. Present contributed nonfinancial asset as a separate line item in the statement of activities (apart from contributions of cash and other financial assets).
  2. Disclose the following –
    1. Contributed nonfinancial assets recognized within the statement of activities, disaggregated by category.
    2. For each category of contributed nonfinancial assets recognized: 
      1. Qualitative information about whether the contributed nonfinancial asset were either monetized or utilized during the reporting period. If utilized, a description of the programs or other activities in which those assets were used.
      2. The not-for-profit’s policy (if any) about monetizing rather than utilizing contributed nonfinancial asset.
      3. A description of any donor-imposed restrictions associated with the contributed nonfinancial asset.
      4.  A description of the valuation techniques and inputs used to arrive at a fair value measure, in accordance with the requirements in Topic 820, Fair Value Measurement, at initial recognition.
      5. The principal market (or most advantageous market) used to arrive at a fair value measure if it is a market in which the recipient not-for-profit is prohibited by a donor-imposed restriction from selling or using the contributed nonfinancial asset.

This standard should be applied on a retrospective basis and is effective for annual periods beginning after June 15, 2021.  Early adoption is permitted.

The Anderson ZurMuehlen Nonprofit Specialty Team looks forward to working with your organization to implement these upcoming changes.  If we can be of any assistance to you, please reach out.


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