Accounting Standards Improvements for NFPOs - NFP Advisory Committee

Date recorded:

At its meeting on June 21, 2016, the Committee discussed the following:

Tangible Capital Assets and Intangible Assets

The Committee members discussed decisions the AcSB made at its March 22, 2016 meeting:

  • Tangible and intangible assets should be written down to their replacement cost or fair value to reflect partial impairment of the assets.
  • Works of art, historical treasures and similar items not part of a collection should continue to be recognized in the same manner as other items (i.e., as capital assets or as inventory type items depending on their intended use).
  • An exposure draft will be issued later this year and include proposals for  tangible capital assets, intangible assets, works of art, historical treasures, and similar items not part of a collection, and collections.


Committee members noted that the proposal to direct NFPOs to apply Section 3061, Property, Plant and Equipment, requires NFPOs to address the concept of componentization, which is not included in Section 4431, Tangible Capital Assets Held by Not-for-Profit Organizations.  Committee members discussed whether requiring NFPOs to consider the guidance on componentization in Section 3061 would cause issues in practice for NFPOs.  In discussing the matter, Committee members did not identify any unique characteristics or reasons why NFPOs should be different than other entities and not be required to consider componentization.  The Committee agreed to suggest to the AcSB that NFPOs should apply the guidance in Section 3061 on componentization.


Committee members continued their discussion of Section 4440, Collections Held by Not-for-Profit Organizations.  They discussed the various approaches in other jurisdictions to account for collections. In many jurisdictions, collections are accounted for the same as other assets.  Committee members noted that based on the definition of a collection, a collection has attributes that are different from other assets.

Review the summary of discussions on the AcSB's Web site.

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