Accounting policies – your opinion counts

The AICPA recently released a proposed guide to tackle current issues faced by nonprofit organizations. It’s a working guide, so nothing is definitive – yet. You have an opportunity to review the proposed issues that affect your organization and provide feedback by October 15, 2012. And your opinion, combined with that of other nonprofit organizations, can make an impact on policies that may have long-term consequences to your organization. Here are some of the issues that are addressed:

–         Reporting relationships with other entities, including for-profit companies and other nonprofit organizations, partnerships and groups with whom you have a financial relationship.

–         Measuring and reporting all non-cash gifts and in-kind services, including the definition of fair value.

–         Valuing investments initially and accounting for gains or declines, including endowment funds.

–         Accounting for debt, such as municipal bonds, third-party credit, debt modifications and classification of debt.

–         Navigating the tax and regulatory environment for nonprofit organizations, including governance and executive compensation.

Other topics in the guide include a discussion of financial and cash flow statements, mergers and acquisitions, split interest agreements, recognition of donations, and accounting for tangible and intangible assets. There are more topics than listed here; it’s a very comprehensive guide. I recommend that you at least look at the table of contents to see which issues are relevant to your organization.

While the guide released by the AICPA Financial Reporting Executive Committee (FinREC) is created for CPAs working with nonprofit entities, it is your organization that will be ultimately affected by the policies. Download the guide, Not-for-Profit Entities, and let the AICPA know your suggestions or concerns.