FASB proposes extending 2 GAAP alternatives to not-for-profits

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FASB proposes extending 2 GAAP alternatives to not-for-profits

FASB is proposing that not-for-profits be permitted to use two GAAP alternatives that are currently available only to private companies.

A proposed Accounting Standards Update issued Thursday would allow not-for-profits to elect the private company alternatives on accounting for goodwill and accounting for identifiable intangible assets in a business combination.

Under the proposal, instead of testing goodwill for impairment annually at the reporting unit level, a not-for-profit that chooses the GAAP alternative would:

FASB Chairman Russell Golden said the proposal was developed in response to concerns from stakeholders that the costs for not-for-profits of the current accounting for goodwill and intangible assets in a business combination were not justified by the benefits.

“This proposed standard … will enable them to recognize fewer items as separate intangible assets in acquisitions and to account for goodwill in a more cost-effective manner,” Golden said in a news release.

Comments can be submitted through Feb. 18 at FASB’s website.

Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.

Research & References of FASB proposes extending 2 GAAP alternatives to not-for-profits|A&C Accounting And Tax Services
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FASB proposes extending 2 GAAP alternatives to not-for-profits

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