The American Institute of Certified Public Accountants (AICPA) has completed its first comprehensive update since 1996 to the Not-For-Profit Entities Audit and Accounting Guide. Available now, the updated guide includes changes to AICPA literature that stem from the Auditing Standards Board’s Clarity project and authoritative guidance from the FASB ASC Codification.

The updated guide includes simplified explanations, examples, guidance and recommendations provided by the Financial Report Executive Committee.

You can purchase the guide directly from the AICPA in eBook format at this link.

Nonprofit Guide Changes

The most significant changes include:

  • New sections or updated guidance related to specific accounting areas, such as:
    • Noncash gifts (including gifts-in-kind)
    • Contributions of fundraising materials, informational materials, advertising and media time or space
    • Below-market interest rate loans
    • Bargain purchases
    • Programmatic investments
    • Microfinance loans
    • Expiration of donor-imposed restrictions
  • A vastly expanded section related to reporting relationships with other entities. The guide includes examples and advice related to the reporting relationships with not-for-profit entities and for-profit entities. These entities include, but are not limited to, limited liability partnerships, general partnerships and financially interrelated entities.
  • Significant expanded sections about municipal bond debt. This expanded section includes Internal Revenue Service (IRS) considerations, third-party credit enhancements, capitalization of interest, extinguishment of debt modifications, and the effect of maturity terms (for example, subjective acceleration clauses) on the classification of debt.
  • Additional guidance for auditing net asset classifications as well as revenue and expense recognition.
  • General updates to the unique accounting and auditing areas associated with not-for-profit entities.
  • Significantly enhanced discussions regarding the legal and regulatory environment in which not-for-profits operate.

This Not-For-Profit Entities Audit and Accounting Guide is a great resource that nonprofit organizations can consult often. The guide provides clear, straightforward information to help with some of the unique not-for-profit reporting issues that you may encounter.