The 501 S(c)ene

The latest view on not-for-profit accounting issues

Gifts-in-kind: Presentation and disclosure changes

FASB has issued a proposed Accounting Standards Update intended to increase transparency regarding such contributed nonfinancial assets like gifts-in-kind. As many nonprofit organizations rely on these contributions to carry out their programs and related activities – the following is a brief overview of the changes, and how they may apply to your organization.

ASU – Not-for-Profit Entities (Topic 958) – Presentation and Disclosure by Not-for-Profit Entities for Contributed Nonfinancial Assets

The Proposed Changes:

The proposed changes are intended to improve financial reporting by providing new presentation and disclosure requirements about contributed nonfinancial assets for NFPs, including additional disclosure requirements for recognized contributed services.

Important: The proposed update would not change the recognition and measurement requirements currently in effect for nonprofit organizations (Subtopic 958-605).

Contributed Nonfinancial Assets

The changes apply to contributed nonfinancial assets. So, what are contributed nonfinancial assets?

Don’t miss: How should a nonprofit record a PPP loan?

Contributions – these are likely presented already using terms like contributions, gifts, donations, grants, gifts-in-kind, donated services, and other similar terms.

Nonfinancial Asset – includes fixed assets (such as land, buildings, and equipment), materials and supplies, intangible assets, services, and unconditional promises of those assets.

Presentation and Disclosure:

Contributed Nonfinancial Assets:                          

Presentation Requirements:

When adopted, present contributed nonfinancial assets as a separate line item in the statement of activities, apart from contributions of cash or other financial assets.

Disclosure Requirements:

  1. Disclosure of contributed nonfinancial assets received disaggregated by category that depicts the type of contributed nonfinancial assets
  2. For each category identified in (a):
    1. Qualitative information about whether contributed nonfinancial assets were or are intended to be either monetized or utilized during the reporting period and future periods. If utilized, a description of the programs or other activities in which those assets were or are intended to be used.
    2. A description of any donor restrictions associated with the contributed nonfinancial assets.
    3. A description of the valuation techniques and inputs used to arrive at a fair value measure


Illustration (Continued):

Contributed Services:

Disclosure Requirements:

Disclosure that describes the programs or activities for which those services were used, including the nature and extent of contributed services received for the period and the amount recognized as revenues for the period.

The nature and extent of contributed services received can be described by nonmonetary information or nonmonetary information (such as donated hours).

Important: The disclosure of contributed services is required regardless of whether the services received are recognized as revenue in the financial statements.

For more information, check out this article on Gifts-in-kind.

We understand that this information may be overwhelming. Feel free to contact your Henry + Horne tax advisor or team member with any questions.

DISCLAIMER: These changes are currently part of a proposed Update and have not yet been finalized and the above information is therefore subject to possible change.

Kyle Tevis