Nonprofit Accounting Basics

Accounting Standards Updates (ASU) 2019 Effective Date Reminder

Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.

Updated: 
Apr 30, 2020
Author: 

This Effective Date Reminder lists only those pronouncements issued as of November 1, 2019.

ASU 2014-09 Revenue from Contracts with Customers (Topic 606)

This ASU provides a robust framework for addressing revenue recognition issues and, upon its effective date, replaces almost all existing revenue recognition guidance, including industry-specific guidance, in current U.S. GAAP.

For a public business entity, a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed or quoted on an exchange or an over-the-counter market, and an employee benefit plan that files or furnishes financial statements with or to the SEC, the ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. (If an entity is a public business entity solely because its financial statements or financial information is included in another entity’s filing with the SEC pursuant to certain SEC rules and regulations, see the alternative effective date provided by ASU 2017-13 as discussed below.) For all other entities, the ASU is effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018.

ASU  2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date

The amendments in this Update defer the effective date of Update 2014-09 for all entities by one year.

For a public business entity, a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed or quoted on an exchange or an over-the-counter market, and an employee benefit plan that files or furnishes financial statements with or to the SEC, the ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. (If an entity is a public business entity solely because its financial statements or financial information is included in another entity’s filing with the SEC pursuant to certain SEC rules and regulations, see the alternative effective date provided by ASU 2017-13 as discussed below.) For all other entities, the ASU is effective for annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

 

 

 

ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

This ASU updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments and applies to all entities that hold financial assets or owe financial liabilities.  Among other provisions, it significantly changes the accounting for equity securities and for liabilities accounted for under a fair value option.

The ASU was effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For those entities that are not public business entities, the ASU is effective for fiscal years beginning after December 15, 2018, and for interim periods within fiscal years beginning after December 15, 2019.

 

ASU 2016-02, Leases (Topic 842)

Among many other provisions, this ASU requires lessees to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases.

The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for (a) a public business entity, (b) a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market and (c) an employee benefit plan that files or furnishes financial statements with or to the SEC. (If an entity is a public business entity solely because its financial statements or financial information is included in another entity’s filing with the SEC pursuant to certain SEC rules and regulations, see the alternative effective date provided by ASU 2017-13 as discussed below.) For all other entities, the ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021.

ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

This ASU clarifies the implementation guidance on principal-versus-agent considerations in Topic 606. The effective date and transition requirements for ASU 2016-08 are the same as the effective date and transition requirements in Topic 606 (see the ASU 2015-14 effective date discussed earlier).

ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing

This ASU clarifies two aspects of Topic 606—identifying performance obligations and the licensing implementation guidance. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements in Topic 606 (see the ASU 2015-14 effective date discussed earlier).

ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients 

This ASU addresses various implementation issues by making narrow-scope amendments to the guidance originally included in ASU 2014-09 and providing practical expedients. The effective date and transition requirements for ASU 2016-12 are the same as the effective date and transition requirements in Topic 606 (see the ASU 2015-14 effective date discussed earlier).

ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the FASB Emerging Issues Task Force)

 

To reduce diversity in practice, this ASU provides guidance on eight specific statement of cash flows classification issues. The ASU was effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory

This ASU requires that an entity recognize the current and deferred income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. For public business entities, the ASU was effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For all other entities, the ASU is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)

Per this ASU, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.

 The ASU was effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers

This ASU makes certain changes to the new revenue recognition guidance added to the FASB’s Accounting Standards Codification by ASU 2014-09. The effective date and transition requirements for ASU 2016-20 are the same as the effective date and transition requirements in Topic 606 (see the ASU 2015-14 effective date discussed earlier). 

ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business

This ASU clarifies the definition of a business, which affects many areas of accounting, such as acquisitions, disposals, goodwill impairment and consolidation. For public companies, the ASU was effective for annual periods beginning after December 15, 2017, including interim periods within those periods. For all other companies and organizations, the ASU is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

This ASU simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. A public business entity that is an SEC filer, except for entities eligible to be smaller reporting companies (as defined by the SEC), should adopt the amendments in ASU 2017-04 for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. All other entities, including not-for-profit entities, that are adopting the amendments should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2022.

ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

This ASU provides guidance related to the presentation of defined benefit costs in the income statement. The ASU was effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For other entities, the ASU is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

 

ASU 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made

A public company or a not-for-profit organization that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market would apply the new standard for transactions in which the entity serves as a resource recipient to annual reporting periods beginning after June 15, 2018, including interim periods within that annual period. Other organizations would apply the standard to annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

A public company or a not-for-profit organization that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market would apply the new standard for transactions in which the entity serves as a resource provider to annual reporting periods beginning after December 15, 2018, including interim periods within that annual period. Other organizations would apply the standard to annual reporting periods beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020.

 

 

ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

This ASU removes, modifies and adds certain disclosure requirements of ASC Topic 820. The ASU is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. 

ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) 

This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the ASU is effective for annual reporting periods beginning after December 15, 2020 and interim periods within annual periods beginning after December 15, 2021. 

ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance Variable Interest Entities

Under the ASU, a private company (reporting entity) may elect not to apply variable interest entity guidance to legal entities under common control (including common control leasing arrangements) if both the parent and the legal entity being evaluated for consolidation are not public business entities. ASU 2018-17 also amends certain VIE guidance for related party arrangements. For entities other than private companies, ASU 2018-17 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The ASU is effective for a private company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. 

ASU 2019-03, Not-for-Profit Entities (Topic 958): Updating the Definition of Collections

ASU 2019-03 modifies the definition of “collections” to allow proceeds from sales of collection items to be used to support the direct care of existing collections, in addition to the acquisition of other items for collections. The ASU also requires a collection-holding entity to disclose its policy for the use of proceeds from when collection items are deaccessioned. ASU 2019-03 is effective for annual financial statements issued for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020.

ASU 2019-06, Intangibles – Goodwill and Other (Topic 350), Business Combinations (Topic 805), and Not-for-Profit Entities (Topic 958): Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities

ASU 2019-06 extends the scope of two private company accounting alternatives to not-for-profit entities – the accounting for goodwill and the accounting for identifiable intangible assets in a business combination. ASU 2019-06 was effective upon issuance on May 30, 2019.

Statement on Standards for Accounting and Review Services 24, Omnibus Statement on Standards for Accounting and Review Services—2018

This standard address various issues related to the performance of compilations and reviews of financial statements. Except for a technical correction that was effective upon issuance, SSARS 24 is effective for compilations and reviews of financial statements for periods ending on or after June 15, 2019.

Government Auditing Standards—2018 Revision

The July 2018 revision of the Yellow Book (Government Auditing Standards) provides standards and guidance for auditors and audit organizations, outlining the requirements for audit reports, professional qualifications for auditors, and audit organization quality control. Auditors of federal, state and local government programs use these standards to perform their audits and produce their reports. The 2018 revision of the Yellow Book is effective for financial audits, attestation engagements and reviews of financial statements for periods ending on or after June 30, 2020, and for performance audits beginning on or after July 1, 2019. Early implementation is not permitted.