FASB decided on 7/17/19 to postpone four major accounting rule changes for non-public companies. Journal of Accountancy reported the news on 7/17/19: FASB to propose delaying effective dates for 4 major standards.
Two of the rules are particularly significant to the non-profit community while two will affect few charities.
The article uses a new method of identifying effective dates. It mentions January 1 of the year the standard will first be effective instead of the ol’ “fiscal years beginning after December 15” phrasing usually used..
There has been relatively little public discussion of California AB 1181. Here are a few articles I’ve been able to find. Previous public comments discussed here.
CharityWatch publicly supported AB 1181 on 7/12/19: CharityWatch Supports California’s Bill to Discourage Charities from Exaggerating Non-Cash Contributions. Comments in the article provide background on the issue. CharityWatch has long opposed the valuation methodology in place for the sector, mentioning there is an overvaluation issue.
CharityWatch perceives the application of current accounting rules creates enough variability and inconsistency in reporting that they remove all GIK from their ratings calculations.
Here is a one sentence summary of the underlying issue from the article:
AB 1181, which will require specific accounting treatment for GIKs when donors require the donation be used overseas, was approved by the Senate Judiciary Committee on a 7 to 1 vote, with 1 committee member not voting.
The bill was referred to the Senate Appropriations Committee. Mark Hrywna (@mhrywna) reports the committee will hold hearings on August 12. The last day to approve bills is September 13, when the legislature adjourns for this session.
FAF and FASB input
A sentence has been handed down in the first of the college admission scandal cases to reach a judge. The former sailing coach at Stanford received:
Prosecutors recommended 13 months in prison.
Several articles pointed out this person is the lease culpable of those lined up for sentencing. He did not receive any money directly.
If I read the articles correctly, the only student admitted as part of this scheme was not actually an athlete and has since been expelled. No other students were admitted.
One key point of detention is an assessment of what type of crime is present.
(Following discussion of nonprofit accounting issues was posted at my other blog, Attestation Update, since the string of posts are more focused on the audit community. These comments may be helpful for the nonprofit community so the discussion is cross-posted here.)
Here are some fun or interesting or useful tidbits from the October 2018 A&A and the June 2019 Not-for-profit conferences presented by California Society of CPAs that apply to not-for-profit organizations.
Previous posts had comments on
Non-attest services and Yellow Book independence. Everyone probably knows that charities with more than $2 million of revenue who are registered with the California Attorney General must have an audit. Excluded from the requirement would be religious organizations, who are exempt from registering with the AG.
That requirement was created by the Nonprofit Integrity Act of 2004, so it’s old news.
The best payoff from attending CPE conferences is to compare every piece of information you hear to what you think you know. So, here is one of the big rewards for me attending this class…
On June 28, 2019, the Senate Judiciary Committee made some minor changes to AB 1181. In one sentence, the bill under consideration would require charities to recognize gifts in kind at the fair value in the location where the items will likely be distributed if the items have a geographic restriction.
Comment at the legislature’s website says:
From committee chair, with author’s amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on JUD.
I am not quite sure how to read that, but think it means the author made some changes, probably at the suggestion of the committee chair, the bill was technically put back to the committee after that change, the committee made additional changes and the bill was technically put back to the committee again.
All that to say there were minor changes to the proposed bill.
Based on the “compare versions” tab at the website, changes made at this point include: