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

August 20, 2019, 8:10 am

California capital building. Image Courtesy of Adobe Stock.

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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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

Sacramento Capitol Building in California. Image courtesy of Adobe Stock.

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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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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Minor revisions to California AB 1181, with bill re-referred to Senate Judiciary Committee.

July 3, 2019, 9:17 am

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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:

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FASB working group looking at GIK valuation issue

June 18, 2019, 10:26 am

Committee meeting. Image courtesy of Adobe Stock.

Yesterday I watched a webcast from FASB providing an update on Private Company Council and Not-for-Profit organization accounting issues  By the way, there are a couple of nice accounting options in the PCC world that have been extended to the NFP world. (Yeah, yeah, pray for me since I sort of enjoy those kinds of discussions.)

One of the speakers mentioned FASB has formed a working group to look at the issue of valuation of GIK, especially donated pharmaceuticals.

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