FASB Approve Accounting Update to Presentation and Disclosure by Not-For-Profit Entities for Contributed Nonfinancial Assets
Originally Published in The Cooperative Accountant, Winter 2020 Issue.
On September 17, 2020, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) intended to improve transparency in the reporting of contributed nonfinancial assets, also known as gifts-in-kind, for not-for-profit organizations.
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 recognized contributed services.
“The ASU responds to feedback from not-for-profit stakeholders who identified gifts-in-kind as an area where the reporting could be improved,” stated FASB Member Susan Cosper. “It addresses their concerns by requiring more prominent presentation of contributed nonfinancial assets and enhanced disclosures about the valuation of those contributions and their use in programs and other activities, including any donor-imposed restrictions on such use.”
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