FASB Example of a Not-for-Profit Organization’s Disclosure Under the New ASU

FASB Example of a Not-for-Profit Organization’s Disclosure Under the New ASU

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By Preston A. Jones, CPA, Business Assurance & Advisory Services Manager

In September 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-07: Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. This ASU aims to increase transparency of contributed nonfinancial assets, commonly known as gifts in kind, through enhancements to presentation and disclosures.

In our article, ‘FASB Changes to Disclosures for Gifts in Kind‘, we provide an overview of the new disclosure requirements. Below is an example of a nonprofit disclosure under the new ASU.


Sample of Nonprofit Disclosure for Gifts in Kind

Contributed Nonfinancial Assets (Gifts in Kind)

For the years ended December 31, contributed nonfinancial assets recognized within the statement of activities included:

 20222021
Building$550,000--
Household Goods95,556100,486
Food85,40786,633
Medical Supplies90,389115,173
Pharmaceuticals111,876113,982
Clothing85,76583,890
Vehicles127,900--
Services73,89065,392
$1,220,783$ 565,556

The Organization recognized contributed nonfinancial assets within revenue, including a contributed building, vehicles, household goods, food, medical supplies, pharmaceuticals, clothing, and services. Unless otherwise noted, contributed nonfinancial assets did not have donor-imposed restrictions.

It is the Organization’s policy to sell all contributed vehicles immediately upon receipt at auction or for salvage unless the vehicle is restricted for use in a specific program by the donor. No vehicles received during the period were restricted for use. All vehicles were sold and valued according to the actual cash proceeds on their disposition.

Contributed Building

The contributed building will be used for general and administrative activities. In valuing the contributed building, which is located in Richmond, Virginia, the Organization estimated the fair value on the basis of recent comparable sales prices in Richmond, Virginia’s real estate market.

Contributed Food

Contributed food was utilized in the following programs: natural disaster services, domestic community development, and services to community shelters. Contributed household goods were used in domestic community development and services to community shelters. Contributed clothing was used in specific community shelters. Contributed medical supplies were utilized in natural disaster services. In valuing household goods, food, clothing, and medical supplies, the Organization estimated the fair value on the basis of estimates of wholesale values that would be received for selling similar products in the United States.

Contributed Pharmaceuticals

Contributed pharmaceuticals were restricted by donors to use outside the United States and were utilized in international health services and natural disaster services. In valuing contributed pharmaceuticals otherwise legally permissible for sale in the United States, the Organization used the Federal Upper Limit based on the weighted average of the most recently reported monthly Average Manufacturer Prices (AMP) that approximate wholesale prices in the United States (that is, the principal market). In valuing pharmaceuticals not legally permissible for sale in the United States (and primarily consumed in developing markets), the Organization used third-party sources representing wholesale exit prices in the developing markets in which the products are approved for sale (that is, the principal markets). Contributed services recognized comprise professional services from attorneys advising the Organization on various administrative legal matters.

Contributed Services

Contributed services are valued and are reported at the estimated fair value in the financial statements based on current rates for similar legal services.

Questions on how the new ASU applies to your not-for-profit organization? Contact your Keiter Opportunity Advisor or Email | Call 804.747.0000. We are here to help.

Source: Financial Accounting Standards Board


Additional Resources

Not-for-Profit Accounting and Tax News and Updates


About the Author

Preston partners with his clients to identify compliance opportunities. He develops, performs, and supervises completion of audit procedures for numerous not-for-profit entities as well as for-profit businesses. Read more of Preston’s insights on our blog

More Insights from Preston Jones, CPA


The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.

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