What not-for-profits need to know about FASB deferrals

As noted in our earlier article, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU), which delays the effective dates for certain entities including not-for profit organizations.

Revenue from Contracts with Customers (Topic 606)

The effective date for a not-for-profit that has issued, or is a conduit bond obligor for, securities that are traded, listed or quoted on an exchange or an over-the-counter market is not affected by the amendments in this ASU.

Additionally, FASB decided to retain the effective date of ASU No. 2018-08, Not-for-Profit Entities (Topic 958) Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. 

Leases (Topic 842)

The FASB has provided important clarification for public not-for-profits (defined as not-for-profits that have issued or are conduit obligors for securities that are traded, listed or quoted on an exchange or over-the-counter market) in the Basis for Conclusions section of the ASU.

Many public not-for-profit organizations are required to post interim financial information or interim financial statements in the Electronic Municipal Market Access (EMMA) system.  A public not-for-profit is eligible for the deferral if it has posted only interim financial information in EMMA. Conversely, a public not-for-profit is ineligible for the deferral if it has posted interim or annual U. S. GAAP-compliant financial statements in EMMA because that would be an issuance of financial statements. While financial information is a broad term that can vary widely in content from an earnings release to a balance sheet and income statement, U. S. GAAP-compliant financial statements is a widely understood term and includes a full set of disclosures.

For more information on this topic, or to learn how Baker Tilly not-for-profit accounting specialists can help, contact our team.

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