The AIPCA has completed its first comprehensive update to the Not-For-Profit Entities Audit and Accounting Guide since 1996. The updated guide, available now, includes changes to AICPA literature that stem from the Auditing Standards Board’s Clarity project and authoritative guidance from the FASB ASC Codification.
The updated guide includes simplified explanations, examples, guidance and recommendations provided by the Financial Report Executive Committee.
Changes to Note
The most significant changes include:
- New sections or updated guidance related to specific accounting areas such as:
- Noncash gifts (including gifts- in-kind)
- Contributions of fund-raising materials, informational materials, advertising and media time or space
- Below-market interest rate loans
- Bargain purchases
- Programmatic investments
- Microfinance loans
- Expiration of donor-imposed restrictions
- A vastly expanded section related to reporting relationships with other entities. The guide includes examples and guidance related to the reporting relationships with not-for-profit entities and for-profit entities. These entities include, but are not limited to, limited liability partnerships, general partnerships and financially interrelated entities.
- Significant expanded sections about municipal bond debt. This expanded section includes IRS considerations, third-party credit enhancements, capitalization of interest, extinguishment of debt modifications, and the effect of maturity terms (for example, subjective acceleration clauses) on the classification of debt.
- Additional guidance for auditing net asset classifications as well as revenue and expense recognition.
- General updates to the unique accounting and auditing areas associated with not-for-profit entities.
- Significantly enhanced discussions regarding the legal and regulatory environment in which not-for-profits operate.
This guide is a great resource that you can turn to often; it provides clear, straightforward information to help with some of the unique not-for-profit reporting issues that you may encounter.
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