Overview

This Section deals with accounting for tangible capital assets held by not-for-profit organizations.

In accordance with the Section, a tangible capital asset would be recorded at cost (and where the tangible capital asset is contributed, cost would be considered fair value at the date of contribution except where the fair value cannot be reasonably determined when it is recorded at a nominal amount). The cost less residual value of an asset with a limited life, is amortized over the asset's useful with the amortization recognized as an expense in the statement of operations. When a tangible asset no longer has any long-term service potential, the excess of its carrying amount over any residual value is recognized as an expense in the statement of operations. A write-down taken is not subsequently reversed.

The Section provides for a simplification - if the NPO (and any entities that it controls) has average annual revenues recognized in the current and preceding period that is less than $500,000, it need not apply the Section. Instead, it would make certain required disclosures about its tangible capital assets.

History of Section 4431

Note: The above summary does not include details of consequential amendments made as the result of other projects.

Not-for-Profit Advisory Committee meetings

• November 17, 2016 - Effective date of the proposals
• January 6, 2016 - Accounting Standards Improvements for NFPOs
• January 6, 2016 - Tangible Capital Assets and Intangible Assets
• January 6, 2016 - Works of Art, Historical Treasures and Similar Items Not Part of a Collection

Amendments under consideration

• None