Accounting

Financial statements should not refer to FASB documents

Just a reminder that financial statements should not be referring to FASB documents or other accounting literature, such as FIN 48, FAS 157, FAS 13, FSP 117-1 or any of those other things we know by heart.  FASB Statement #168 established the Accounting Standards Codification to replace all the accounting literature then in effect. …

Revised accounting for leases – proposed changes to Topic 840

FASB has proposed massive changes to lease accounting.  Essentially, all leases with a term over 12 months will be recorded as an asset with an offsetting liability for the lease payments.

This is a casual summary (well, as casual as I can get when discussing accounting).  A separate post goes into more technical details.

A very rough analogy is that all leases in the future will be treated in somewhat the same way as a capital lease is handled today.  …

Increased fair value disclosures – ASU 10-06

Fair value disclosures will increase for December 2010 financial statements.  Accounting Standards Update 2010-06, Fair Value Measurements and Disclosures (Topic 820) will require a few new items.  The two main items I see for small and medium-sized NPOs are first, disclosing transfers in & out of Level 1 & 2, and second, disaggregation of fair value disclosures. …

Merger and acquisition accounting

New accounting rules for mergers and acquisitions of nonprofit organizations are now in effect.  In the past, when two nonprofit organizations came together, the accounting was essentially to combine the accounting information of the two entities.  This is no longer allowed.

Under the new rules, there are mergers and acquisitions. The accounting for each is quite different. …