FASB proposes changes for nonprofits receiving non-financial assets

The Financial Accounting Standards Board proposed an accounting standards update Monday to enhance the transparency of how not-for-profit organizations present and disclose contributed nonfinancial assets, also referred to as gifts-in-kind.

These types of contributions can include fixed assets such as land, buildings and equipment; the use of fixed assets or utilities; materials and supplies, such as food, clothing or pharmaceuticals; intangible assets and recognized services.

The proposed standards update would require a not-for-profit to present its contributed nonfinancial assets as a separate line item in the statement of activities, apart from contributions of cash or other financial assets. It would also require a not-for-profit to disclose contributed nonfinancial assets received disaggregated by category that depicts the type of contributed nonfinancial assets. For each category of contributed nonfinancial assets received, the nonprofit would also have to disclose qualitative information about whether the contributed nonfinancial assets were or are intended to be either monetized or used during the reporting period and future periods.

If they are utilized, the nonprofit would have to provide a description of the programs or other activities in which those assets were or are intended to be used. Nonprofits would also need to give a description of any donor restrictions associated with the contributed nonfinancial assets. Plus, they would need to disclose the valuation techniques and inputs used to arrive at a fair value measure, including the principal market (or most advantageous market) if significant, in accordance with the requirements in Topic 820, Fair Value Measurement.

FASB is asking for comments on the proposal by April 10, 2020. The proposed accounting standards update, along with a “FASB In Focus” overview of it, and information about how to send comments, are available at