OUR THOUGHTS ON:

How Will FASB's Private Company Council Impact not-for-profit companies?

Not-for-Profit

By Scott Seapker

FASB’s Private Company Council recently released a proposed change to the definitions of public business entity, which could impact your not-for-profit.

In the most recent in Focus released by FASB, an amendment to the definition of public business entity was proposed. The proposal would define a public business entity as:

  1. An entity that files with the SEC. 
  2. An entity that is required to file with a regulatory agency under the Securities Exchange act of 1934 or if filing for the purpose of issuing securities
  3. The entity has unrestricted securities that are traded or can be traded on an exchange or an over-the-counter-market. Or the entity is a conduit bond obligor.
  4. Its securities are unrestricted, and it is required to provide U.S. GAAP financial statements to be made publicly available on a periodic basis because of legal or regulatory requirement.

The proposed accounting treatment would exclude most Not-for-Profit entities from the definition of a public business entity. The proposal’s purpose is to increase consistency across the board in how public entities are defined. However, under the new definition, not-for-profit entities that have outstanding public bonds would be required to file under the standards of a public entity, which would differ from previous standards. FASB is currently receiving comments on the proposed definition change through September 20, 2013.

© 2013 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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