SFAS 157 – A Not-for-Profit Perspective
By Dick Larkin
Nonprofit organizations use fair value accounting when they are:
(1) required by certain accounting standards to use fair value for certain transactions and balances, and
(2) permitted by certain other accounting standards to use fair value for certain other transactions and balances.
Endowment Funds and FSP 117-1
By Dick Larkin
A question has come up as to just what constitutes an endowment fund for purposes of application of Financial Accounting Standards Board (FASB) Staff Position (FSP) 117-1, Endowments of Not-for-Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act (UPMIFA) and Enhanced Disclosures for All Endowment Funds, (now part of ASC 958-205). For example,must a perpetual, irrevocable third-party trust be included with endowments?
Budgeting in the Current Economic Environment
By Lee Klumpp
In the not-for-profit world it is often the case that the budget is not issued on time, nor is the first issuance typically the last. Instead there are a multitude of last minute changes that force the budget process to continue into the next year. As a result the budget may not be usable on a comparison basis as an effective management tool until several months into the next year.
The Financial Accounting Standards Board (FASB) has issued its "Accounting Standards Codification" (ASC) which includes all Statements on Financial Accounting Standards and Interpretations (SFAS’s and FIN’s), Emerging Issues Task Force (EITF) consensuses, Accounting Principles Board (APB) opinions, American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) and AICPA Audit Guides and other literature. The codification was formally issued July 1, 2009 and is effective for all periods ending after September 15, 2009.
Summary of Recent Accounting Pronouncements and Effective Dates
By Tammy Ricciardella
There have been numerous accounting pronouncements issued and the following is a brief summary of those applicable to nonprofit organizations and their effective dates.
FIN 48, Accounting for Uncertainty in Income Taxes
Effective for fiscal years beginning after December 15, 2008 for a nonpublic entity unless they are a consolidated entity of a public enterprise or have already issued a full set of financial statements in accordance with generally accepted accounting principles that included the disclosure requirements of FIN 48. A nonpublic entity is one that does not have (a) debt or equity securities that are traded in a public market or (b) whose financial statements are filed in accordance with a regulatory authority.
The effective date above reflects the two deferrals of FIN 48 for nonpublic entities addressed by FSP FIN 48-2 and FSP FIN 48-3.
Schedule of Expenditures of Federal Awards Illustrative Auditee Practice Aids
By Tammy Ricciardella
In response to the federal study on the quality of audits performed under Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations (OMB Circular A-133) the American Institute of Certified Public Accountants’ Governmental Audit Quality Center (GAQC) launched a series of task forces to address the deficiencies noted in the study. One of the task forces established was the SEFA (Schedule of Expenditures of Federal Awards) task force.
IRS Extends FBAR Filing Deadline for Persons with Signature Authority
By R.Michael Sorrells
With the growing number of investments in offshore funds, the IRS is boosting its scrutiny of accounts established in certain tax havens to identify possible sources of income that are not currently being taxed. As part of its efforts, the IRS is focusing more attention on Form TD 90-22.1, Report of Foreign Bank and Financial Accounts ("FBAR"). The FBAR is required to be filed by US persons (including tax-exempt organizations) having a financial interest in or signature authority over any financial account in a foreign country if the aggregate value of those accounts exceeded $10,000 at any time during the calendar year. The FBAR is due annually on June 30, with no permissible extension. Penalties for failure to file this form are significant: $10,000 per return.
by Bob Lavenberg
On July 20, 2009 the Department of Labor ("DOL") Employee Benefits Security Administration ("EBSA") issued Field Assistance Bulletin ("FAB") 2009-02 Annual Reporting Requirements for 403(b) Plans which provides some relief with regard to the reporting requirements for 403(b) plans beginning with the 2009 plan year.
Update on Management and Governance
By Laura Kalick
Although there is no specific Internal Revenue Code section that grants IRS authority to ask management and governance questions on the new Form 990, IRS takes the position that a well-governed organization is more likely to be tax compliant. In fact, the IRS has agent training materials on its website and will produce a post-audit checklist to see if an organization has fewer adjustments to an audit if the organization has used best management and governance practices.
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