March 9, 2020

On February 10, 2020, the Financial Accounting Standards Board (FASB) proposed a new accounting standard that would increase the transparency of certain types of in-kind donations to not-for-profit entities (NFPs). The proposal is in the form of an exposure draft that will be open for public comment through April 10, 2020. A full copy of the proposal may be obtained from the FASB’s website.

Why is the FASB Proposing Changes?

The FASB is proposing these changes to respond to ongoing concerns from stakeholders about the lack of transparency around the valuation of in-kind donations received by NFPs, and the impact those donations have on the reported expenses of not-for-profit entities.

Who Do the Proposed Changes Impact?

The proposed changes would apply to NFPs that received contributed nonfinancial assets. The FASB uses the term “nonfinancial assets” to cover a wide range of donations, including fixed assets, goods, services, intangible assets, and use of fixed assets.

What Are the Proposed Changes?

The FASB is proposing changes relating to the presentation and disclosure of contributed nonfinancial assets.

The proposal would require two categories of changes:

  1. Presentation: NFPs that receive in-kind donations would be required to present contributed nonfinancial assets as a separate revenue line item in the statement of activities, separate from other types of revenues.
  2. Disclosure: NFPs that receive in-kind donations would be required to include the following disclosures in their footnotes:
    1. The amounts of those contributions received, disaggregated by category.
    2. For each category of contribution, disclose the following:
      1. Whether the contributions were, or are intended to be, either a) monetized (sold) or b) utilized in the NFP’s activities.
      2. For donations that are utilized in the NFP’s activities, provide a description of the programs or other activities in which the donations were utilized.
      3. A description of any donor restrictions on the contributions.
      4. The valuation techniques used to determine the recorded fair value of the contributions.

When Are the Proposed Changes Effective?

The proposal is currently in the form of an exposure draft that is open for public comment and feedback. After the comment period ends, the FASB will review the input and then decide next steps. If a final standard is issued, it will include an effective date for applying the new requirements.

How Do I Submit Comments on the Proposal?

The FASB will receive comments on the proposal through April 10, 2020. The easiest way to submit comments is by using the electronic feedback form on the FASB’s website. Alternatively, you may email comments to or send a letter to the Technical Director at the FASB.

Clark Nuber will continue to keep you updated as this process continues. Please contact your Clark Nuber service team if you would like to discuss how these proposed new accounting requirements for in-kind donations might specifically impact your organization.

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This article contains general information only and should not be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. Before making any decision or taking any action, you should engage a qualified professional advisor.