FSP 117-1 PDF

FSP FAS (now included in the FASB Accounting Standards Codification This FSP provides guidance on the net asset classification of. The Financial Accounting Standards Board (FASB) has issued FASB Staff Position (FSP) FAS , “Endowments of Not-for-Profit. DRAFT DISCLOSURE-FSP “Interpretation of Relevant Law”. In approving endowment, spending and related policies, as part of the prudent and diligent.

Author: Jukazahn Samugami
Country: French Guiana
Language: English (Spanish)
Genre: Education
Published (Last): 28 October 2015
Pages: 24
PDF File Size: 12.97 Mb
ePub File Size: 9.93 Mb
ISBN: 541-9-70020-686-5
Downloads: 94749
Price: Free* [*Free Regsitration Required]
Uploader: Malagis

For example, should a third-party trust held for the benefit of, but not managed by, the organization be included in the endowment? Net Asset Reclassification If in prior years amounts have been reported as released from restrictions under paragraph that were not actually intended to be an expenditure of endowment earnings, such as expenditures in excess of the approved spending policy, a prior period adjustment will be required.

The FSP does change the accounting for temporarily restricted net 11-71. The description shall include the organization’s return objectives and risk parameters, how those objectives relate to the organization’s endowment spending policy iesand the strategies employed for achieving those objectives.

This FSP also requires additional disclosures about endowments both donor-restricted funds and board-designated funds for all organizations, including those that are not yet subject to an enacted version of UPMIFA.

FSP FAS (as issued)

Both the purpose restriction and gsp time restriction have to be met before the funds are released. Questions have also arisen as to just what is considered an “endowment” for this purpose. I would reword it. Definition of ‘Endowment’ Questions have also arisen as to just what is considered an “endowment” for this purpose. At a minimum, an organization shall disclose the following information for each period for which the organization presents financial statements: What Did I Miss in Washington?

The composition of the organization’s endowment by net asset class at the end of the period, in total and by type of endowment fund, showing donor-restricted endowment funds separately from board-designated endowment funds. However, the funds would still not be released from restrictions until the purpose restriction if any is also met. Under previous guidance, if an expense was incurred for a purpose for which both unrestricted and temporarily restricted net assets were available, the donor-imposed restriction was considered fulfilled to the extent of the expense incurred.


Under the new guidance, independent institutions will not be required to implement the standard until FY This pronouncement the FSP is effective for years ending after December 15, The guidance is intended to improve the quality and consistency of financial reporting of endowments held by not-for-profit organizations.

Consequently, the FSP will result in possibly significant net asset category reclassifications for independent institutions and the not-for-profit foundations of public institutions that are in UPMIFA states. We have updated our Privacy Policy. SFASwhich governs accounting for investments held by non-profit organizations, has not been modified and thus permanently restricted net assets are not reduced by losses on the investments in the fund, except to the extent required by the donor.

FASB does not say specifically, but this author believes it 117-1. Thus this author believes that assets under the organization’s control such as the remainder trust should be included, but the third-party trust and the pledge probably not.

If the 1171- initially applies the provisions of the FSP subsequent to the period in which UPMIFA is first effective, the reclassification shall be reported in those financial statements in the earliest comparative period presented for which UPMIFA was effective.

The provisions of the FSP are effective for fiscal years ending after December 15,or FY for the vast majority of independent institutions and foundations affiliated with public institutions. Capital Losses SFASwhich governs accounting for investments held 11-71 non-profit organizations, has not been modified and thus permanently restricted net assets are not reduced by losses on the investments in the fund, except to the extent required by the donor.


This reclassification should be reported in a separate line item within the organization’s statement of activities, outside a 1171 indicator or other intermediate measure of operations. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information.

FASB Releases FSP 117-1 addressing UPMIFA and Endowments

In accordance with the requirements of Statements andan organization also shall provide information about the net assets of its endowment funds, including: Core Form Form The classification rules in the FSP apply to any not-for-profit organization that maintains a donor-restricted endowment fund. If material in accordance with AU For more information about the FASB, visit our website at www. Questions have arisen about just what qualifies as an “appropriation” for this purpose.

If you like what you see here, please consider sponsoring this website.

Generally there is no difference in the accounting for the permanently restricted portion of the endowment fund. In the absence of interpretation by legal or regulatory authorities, “appropriation for expenditure” is deemed to occur upon approval for expenditure, unless approval is for a future period, fsl which case appropriation is deemed to occur when that period is reached. How about a pledge receivable, which upon collection will be added to the endowment per donor stipulation?

The provisions of this FSP are effective for fiscal years ending after December 15, FAS to provide guidance. In addition, the FSP disclosures are applicable to organizations that maintain quasi-endowment funds, including funds that are board-designated or otherwise internally identified as endowments.