Not-for-Profit Reporting of Gifts-in-Kind

Accounting Standards Update 2020-07—Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-For-Profit Enities for Contributed Nonfinancial Assets



On September 17, 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-07Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The Update is expected to increase transparency around contributed nonfinancial assets (also known as “gifts-in-kind”) received by not-for-profit (NFP) organizations, including transparency on how those assets are used and how they are valued.

The Update requires that an NFP present contributed nonfinancial assets as a separate line item in the statement of activities, apart from contributions of cash or other financial assets. It also requires that an NFP disclose:  
  1. A disaggregation of the amount of contributed nonfinancial assets recognized within the statement of activities by category that depicts the type of contributed nonfinancial assets.
  2. For each category of contributed nonfinancial assets recognized (as identified in (a)):
    1. Qualitative information about whether the contributed nonfinancial assets were either monetized or utilized during the reporting period. If utilized, a description of the programs or other activities in which those assets were used
    2. The NFP’s policy (if any) about monetizing rather than utilizing contributed nonfinancial assets
    3. A description of any donor-imposed restrictions associated with the contributed nonfinancial assets
    4. A description of the valuation techniques and inputs used to arrive at a fair value measure in accordance with the requirements in Topic 820, Fair Value Measurement, at initial recognition.
    5. The principal market (or most advantageous market) used to arrive at a fair value measure if it is a market in which the recipient NFP is prohibited by a donor-imposed restriction from selling or using the contributed nonfinancial assets.

Transition and Effective Dates

The amendments in this Update should be applied on a retrospective basis and are effective for annual periods beginning after June 15, 2021, and interim periods with annual periods beginning after June 15, 2022. Early adoption is permitted.

Additional Information

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