FASB Deliberates Changes to Reporting for Gifts-in-Kind

By Mark Piszko, CPA, CGMA, Partner

The Financial Accounting Standards Board (FASB or Board) discussed at its November 6, 2019 meeting its project on not-for-profit reporting of gifts-in-kind (GIKs). According to its website, the FASB made the following tentative decisions about the scope, presentation, and disclosures which would apply to gifts-in-kind.

Scope 

The Board decided that the scope of the project should be limited to gifts-in-kind of nonfinancial assets.  

Presentation and Disclosure 

The Board decided to require a not-for-profit entity to present gifts-in-kind of nonfinancial assets received in a separate line item in revenue in the statement of activities.  

The Board decided to require a not-for-profit entity to disclose gifts-in-kind received by category in the note disclosures to the financial statements. A not-for-profit organization also would be required to disclose the following for each category of GIKs received:

• Qualitative information about whether the gifts-in-kind were monetized or utilized and, if utilized, a description of the specific programs or other activities in which those gifts–in-kind were used;
• Description of any associated donor restrictions; and
• The principal market (or most advantageous market) used in the valuation (in addition to the disclosures required by Topic 820, Fair Value Measurement, relating to valuation techniques and inputs used to arrive at a fair value measure).
  
  

Transition

The FASB decided that a not-for-profit entity should apply a retrospective method of transition.

Next Steps

The FASB will draft a proposed Accounting Standards Update for vote by written ballot, with a comment period ending on the later of 60 days after issuance or February 28, 2020. 

Contact Us

If your not-for-profit organization needs assistance understanding the revisions to reporting for gifts-in-kind, or with any accounting, auditing, tax or business consulting services, please contact the partner in charge of your account or:

Mark J. Piszko, CPA, CGMA
Partner-in-Charge, Not-for-Profit Services
mpiszko@pkfod.com  | 646.449.6316