Where Do Stock Donations Go on the Statement of Cash Flows?

Nonprofit organizations receive donations from a variety of sources and in a variety of ways. Some donations are in cash, others are in the form of property, and some are in the form of stock. There has been diversity in the treatment of stock donations in the statement of cash flows over the years. On October 22, 2012, the Financial Accounting Standards Board issued an Accounting Standards Update (ASU) to address this diversity in practice.

ASU 2012-05 provides clarification to the proper classification of these stock donations. If a nonprofit receives a stock donation and immediately converts it to cash, those cash receipts from donated stock are to be classified as inflows from operating activities, unless the donor restricted the use to long-term purposes. If that’s the case, the cash receipt from the sale of the stock is classified as cash flows from financing activities. If the donated stock is not immediately converted to cash, the sale of those financial assets would follow other sales of stock and should be classified as cash flows from investing activities.

This update is effective prospectively for fiscal years beginning after June 15, 2013. Retrospective application to all prior periods presented upon the date of the adoption is permitted. Early adoption is also permitted.

© 2012 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

our thoughts on

array(1) { [0]=> string(1) "6" }
It's Budget Season Again!
Preparing for Enhanced Disclosure: Liquidity and Availability
Making the Most of Your Charitable Contributions
What's New Under TCJA for Education Expenses?
Reminder: Increased Limit for Charitable Deductions

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office
Pittsburgh

One PPG Place, Suite 1700
Pittsburgh, PA 15222

contactsd@schneiderdowns.com
p:412.261.3644     f:412.261.4876

Map of Columbus Office
Columbus

65 East State Street, Suite 2000
Columbus, OH 43215

contactsd@schneiderdowns.com
p:614.621.4060     f:614.621.4062