WHAT IS THE FASB NOT-FOR-PROFIT ENTITY TEAM, AND WHAT DO THEY DO?

The FASB has a long-standing commitment to the not-for-profit sector as part of the FASB’s standard-setting process for U.S. generally accepted accounting principles (GAAP). Over the years, the FASB has addressed the accounting and reporting needs of the sector, both for transactions that are unique to the sector (e.g., contributions received) and for transactions that it has in common with public and private business enterprises (e.g., revenue recognition from contracts with customers, leases). The FASB has staff members dedicated to advising the Board and other staff on issues pertinent to the not-for-profit sector and communicating with members of the sector. To reinforce and broaden such consultation and communication, in October 2009 the FASB established the Not-for-Profit Advisory Committee (NAC). In addition, the FASB’s NAC is supported by a standing Not-for-Profit Resource Group.

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WHY DOES THE FASB WANT TO HEAR FROM NOT-FOR-PROFIT STAKEHOLDERS?

In order to improve U.S. GAAP and to consider the costs and benefits of proposed improvements, the FASB and its staff need to hear directly from (a) stakeholders of not-for-profit entities (NFPs) about the type of financial information they need and (b) NFPs about the costs required to provide the information that their stakeholders seek. Among other things, we want to learn whether:

• Financial statements are providing useful information that appropriately reflect the economics of the entity’s activities, resources and obligations
• Financial statements include information that is unnecessary, redundant, or confusing
• Proposed changes in accounting and reporting will result in communication from an organization that is clearer, more complete, and more comparable
• The costs of implementing and complying with a new standard are justified by the increased benefits of the information improvements.

The FASB would like to hear from all stakeholders interested in the financial reports of NFPs, including the preparers, practitioners, and users of those financial reports. Among those stakeholders is a broad range of users that include:

• Donors, including foundations and grantors
• Lenders, significant vendors, lessors, and other creditors
• Regulators, accrediting bodies, and other similar oversight bodies
• Insurance providers

The not-for-profit entity team is available to explain any aspects of proposed, ongoing, or completed projects, including questions that may arise during the implementation of new standards.

The members of the not-for-profit team include:

Jeffrey D. Mechanick
Assistant Director—Nonpublic Entities/ Chairman, Not-for-Profit Advisory Committee
jdmechanick@fasb.org
203-956-5301
 
Jenifer J. Wyss
Supervising Project Manager
Coordinator, Private Company Council and FASB Not-for-Profit Advisory Committee
jjwyss@fasb.org
203-956-3479
 
Jeffrey J. Gabello
Supervising Project Manager
jjgabello@fasb.org
203-956-5254

NOT-FOR-PROFIT ADVISORY COMMITTEE (NAC)

The Not-for-Profit Advisory Committee (NAC) was established in October 2009. The NAC is a standing committee that is expected to work closely with the FASB in an advisory capacity to ensure that perspectives from the not-for-profit (NFP) sector are effectively communicated to the FASB on a timely basis in connection with the development of financial accounting and reporting standards. The principal responsibilities of the Committee are to:

• Provide focused input and feedback relating to (a) the need for and relative priority of proposed projects, (b) conceptual and practical implications of proposals under development in active projects, (c) practice issues, including implementation issues arising from new standards and potential areas for improvement pertinent to the NFP sector, and (d) longer-term issues important to the NFP sector.
• Assist the FASB and its staff with communication and outreach activities to the NFP sector on recent standards and other existing guidance, current and proposed projects, and longer-term issues. NAC members are encouraged to communicate with the NFP sector, both to educate the sector about the roles of the FASB and the NAC and to encourage the sector to communicate with the FASB on financial reporting matters.
• Advise on other matters for which the FASB may seek guidance. 

The next NAC meetings are tentatively scheduled for March 31, 2022 and September 13, 2022.

NOT-FOR-PROFIT STANDING RESOURCE GROUP

The FASB also has a standing Not-for-Profit Resource Group. Although the Board and staff may call on resource group members, its members primarily serve as a resource to the NAC. From time to time all members or particular types of members (for example, only preparers or only creditors, donors and grantors) are surveyed on matters of interest to the NAC. The time requirements generally are light, but we do expect and have received a reasonably high rate of participation from these resource group members. If you are interested in serving on the standing NFP resource group, please contact Jeff Mechanick at jdmechanick@fasb.org or 203-956-5301.

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ACCOUNTING STANDARDS UPDATES, PROJECTS, AND IMPLEMENTATION INFORMATION

Not-for-profit entities are affected by various general standards throughout the guidance and by many of the projects currently on the FASB’s technical agenda. Additionally, sometimes there are standards issued or projects on the Board’s technical agenda that specifically pertain to not-for-profit entities.

RECENTLY ISSUED ACCOUNTING STANDARDS UPDATES

Intangibles—Goodwill and Other (Topic 350): Accounting Alternative for Evaluating Triggering Events (ASU 2021-03)

Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets (ASU 2020-07)

Intangibles—Goodwill and Other (Topic 350), Business Combinations (Topic 805), and Not-for-Profit Entities (Topic 958): Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities (ASU 2019-06)

Not-for-Profit Entities (Topic 958): Updating the Definition of Collections (ASU 2019-03)

Revenue Recognition of Grants and Contracts by Not-for-Profit Entities (ASU 2018-08)

Presentation of Financial Statements of Not-for-Profit Entities (ASU 2016-14)

RELEVANT PROJECTS

There currently are no projects on the Board’s technical agenda that specifically pertain to not-for-profit entities.

IMPLEMENTATION INFORMATION

Further information about the implementation of recent ASUs affecting not-for-profit entities can be found on the FASB’s Implementing New Standards webpage.  

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