FASB proposes changes for nonprofits receiving non-financial assets
The Financial Accounting Standards Board proposed an accounting standards update Monday to enhance the transparency of how not-for-profit organizations present and disclose contributed non-financial assets, also referred to as gifts-in-kind.
These types of contributions can 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 services.
The proposed standards update would require a not-for-profit to present its contributed non-financial assets as a separate line item in the statement of activities, apart from contributions of cash or other financial assets. It would also require a not-for-profit to disclose contributed non-financial assets received disaggregated by category that depicts the type of contributed non-financial assets. For each category of contributed non-financial assets received, the nonprofit would also have to disclose qualitative information about whether the assets were or are intended to be either monetized or used during the reporting period and future periods.
If they are utilized, the nonprofit would have to provide a description of the programs or other activities in which those assets were or are intended to be used. Nonprofits would also need to give a description of any donor restrictions associated with the assets. And they would need to disclose 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."