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Changes in Reporting Endowments Affects Non-Profit Organizations

 

The Financial Accounting Standards Board (FASB) has released a proposed position titled "Endowments of Non-Profit Organizations" (FASB Staff Position (FSP) 117-a). This proposal addresses how nonprofits will modify their reporting of endowment funds under the new Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA).

 

As states adopt UPMIFA, each nonprofit organization will need to modify the way it is reporting its endowment funds, including its true endowment funds that are permanently restricted, as well as its board designated "quasi-endowment" unrestricted funds. As of March 20, 2008, the State of California has not yet adopted UPMIFA. More information about the proposal can be found at http://www.upmifa.org/.

 

We would also like to point out the disclosures in Appendix C to the FSP, which are currently required for all June 30, 2008 year-end nonprofit organizations regardless of whether UPMIFA is adopted in California.

 

Various associations, including NACUBO (National Association of College and Universities Business Officers) and the AICPA will be conducting webcasts on the proposed staff position, and recommend your participation.

 

SLGG's partners in Nonprofit Services Practice Group can offer practical guidance once the FSP has been issued in final form. Until then, we urge you to read the FSP and comment to the FASB by April 18, 2008.

 

Jeff Holt, CPA, MBA and Lewis Sharpstone, CPA,

Partners in Nonprofit Services Practice Group,
Singer Lewak Greenbaum and Goldstein LLP

 


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