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NFPO Combinations – AcSB

Date recorded:

At its meeting on July 15, 2020, the AcSB deliberated stakeholder feedback on its Exposure Draft The Board re-affirmed that each combination needs to be evaluated with criteria to determine if the combination should be accounted for as a merger or acquisition. In addition, the Board tentatively decided to:

  1. provide clarity to distinguish a combination of not-for-profit organizations (NFPOs) from the acquisition of assets;
  2. direct NFPOs to the guidance for measuring liabilities when a for-profit enterprise is contributed to an NFPO;
  3. revise its criterion that a reduction in client communities of only one of the combining organizations indicates an acquisition; and
  4. revise the illustrative examples in the standard to better demonstrate the criteria distinguishing a merger from an acquisition.

The AcSB will seek the advice of its Not-for-Profit Advisory Committee at its July 2020 meeting and will continue its deliberations in September 2020.

Review the Executive Summary on the AcSB's Web site.

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