Last updated on February 21, 2020. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Sections updated on the date above are indicated with an asterisk *)
Project Objective and Background
Objective:The objective of this project is to provide additional transparency in the reporting of gifts-in-kind (GIKs) through potential enhancements to presentation and disclosure.
Stakeholders have expressed concern about not-for profit organizations (NFPs) using U.S. wholesale market prices to determine the fair value of pharmaceuticals received as GIKs in situations in which the sale of those pharmaceuticals is prohibited in the United States by donors. NFPs are required to follow the same fair value measurement guidance as other entities; however, the fair value guidance in Topic 820, Fair Value Measurement, does not specifically address restrictions on geographic distribution and how they affect the determination of the principal (or most advantageous) market. Some regulators are concerned that inflating the fair value measurement of donated pharmaceuticals increases an NFP’s revenue and program expenses, which would make the NFP appear larger and more efficient in its use of resources than a smaller NFP or an NFP that had lower values for its GIKs received.
To address the fair value questions, concerns, and diversity in practice noted by stakeholders, the FASB chairman added a project to the research agenda on June 26, 2019, about the presentation, disclosure, and valuation of GIK contributions, including donated pharmaceuticals. On August 21, 2019, the project was moved to the FASB’s technical agenda to focus on bringing transparency about GIK that will focus on presentation and disclosure.
Exposure Draft(s):On February 10, 2020 the Board issued a proposed Accounting Standards Update, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The due date for comment letters is April 10, 2020.
Download the proposed Accounting Standards Update, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets.
Read comment letters on the proposed Accounting Standards Update.
Decisions Reached at Last Meeting (November 6, 2019):
The Board discussed the scope, presentation, and disclosures of gifts-in-kind (GIKs).
The Board decided that the scope of the project should be limited to GIKs of nonfinancial assets.
Presentation and Disclosure
The Board decided to require a not-for-profit entity (NFP) to present GIKs of nonfinancial assets received in a separate line item in revenue in the statement of activities.
The Board decided to require an NFP to disclose GIKs received by category in the footnotes to the financial statements. An NFP also would be required to disclose the following for each category of GIKs received:
- Qualitative information about whether the GIKs were monetized or utilized and, if utilized, a description of the specific programs or other activities in which those GIKs were used
- Description of any associated donor restrictions
- The principal market (or most advantageous market) used in the valuation (in addition to the disclosures required by Topic 820, Fair Value Measurement, relating to valuation techniques and inputs used to arrive at a fair value measure).
The Board decided that an NFP should apply a retrospective method of transition.
The Board meeting minutes, handouts, and videos are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
Board Meeting Materials and Information
The following are links to the minutes for each meeting. To view Board meetings and handouts from the past 90 days, click here.
|November 6, 2019||Board Meeting—The Board discussed the scope, presentation, and disclosures of gifts-in-kind.|
|August 21, 2019||Board Meeting—The Board discussed its research project on the potential approaches for presentation, disclosure, and valuation of gifts-in-kind, including donated pharmaceuticals, and decided to add a project to the Board’s technical agenda.|