At its meeting on February 10, 2022, the Not-for-Profit Advisory Committee (NFPAC), considered feedback from stakeholders on the AcSB’s previously deferred project to improve Section 4450, Reporting Controlled and Related Entities by Not-for-Profit Organizations. The Committee advised the Board that assessing whether a NFPO has control over a related entity under the existing guidance continues to cause diversity in practice. Members also noted that providing optionality in accounting for controlled and significantly influenced entities allows NFPOs to best reflect the results of their operations. However, this prevents comparability among similar NFPOs. The Committee also advised the AcSB that consolidating certain entities can cause significant issues for some NFPOs and, in some cases, may not accurately reflect the financial position and results of the NFPOs. For example, consolidating certain types of entities may affect the ability of some NFPOs to raise or receive funding. The Committee advised the AcSB to reconsider the criteria used to assess control relationships in a not-for-profit group to reduce diversity in how the guidance is interpreted. The Board will discuss the Committee’s feedback at its March 2022 meeting and consider whether to recommence work on this project as part of its 2022-2023 Annual Plan.

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