Senate Appropriations Committee sends AB 1181 to Senate floor without a hearing.

August 20, 2019, 8:10 am

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The draft bill to essentially change one phrase of an AICPA audit guide on valuation of donated pharmaceuticals is on its way to the floor of the Senate without a hearing in the Appropriations committee.

On August 19, 2019, the following comment was posted on Assembly Bill 1181:

From committee: Be ordered to second reading pursuant to Senate Rule 28.8

That raises two questions. What is Senate Rule 28.8? What is the next step?

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Proposed delay in effective date for two accounting changes affecting charities.

August 17, 2019, 9:29 am

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FASB officially issued an exposure draft on August 15, 2019 which proposes a one year delay for implementing three new accounting standards. Two of these proposed delays will affect many charities.

Effective date for SEC filers would not be changed.

I won’t discuss any changes for public business entities (PBE). Readers of my blog who fall into that category would be non-profits that are considered to be conduit bond obligors and EBPs that file their financials with the SEC.

You can find the exposure draft here.

The proposed delays for not-for-profit entities and private companies:

Leases

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Minor change to AB 1181 on 8/12/19

August 13, 2019, 6:48 am

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Subtle changes were made to AB 1181 on August 12, 2019 by Assembly member Limón (the bill’s author) and the chair of the Senate Judiciary Committee. The bill was re-referred to the Appropriations Committee, which is still scheduled to hold hearings on August 19.

Two changes were made yesterday.

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Senate Appropriations committee to hold hearing on AB 1181 on August 19.

August 9, 2019, 5:00 am

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Information posted yesterday on the California Legislature’s web site shows the Appropriations Committee will hold hearings on AB 1181 next month, on August 19, 2019.

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FASB plans to postpone changes in lease and credit loss standards for non-public companies.

July 19, 2019, 7:00 am

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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..

Changes include:

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Additional public comments on AB 1181

July 16, 2019, 9:00 am

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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

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:

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Proposed GIK legislation in California passes Senate Judiciary Committee

July 15, 2019, 7:59 am

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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

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