Academic journal article Journal of Accountancy

AcSEC Becomes Strict on Fundraising

Academic journal article Journal of Accountancy

AcSEC Becomes Strict on Fundraising

Article excerpt

The American Institute of CPAs accounting standards executive committee is issuing a new Statement of Position, Accounting for Costs of Activities of Not-for-Profit Organizations and State and Local Governmental Entities That Include Fund Raising. It supersedes guidance in SOP 87-2, Accounting for Joint Costs of Informational Materials and Activities of Not-for-Profit Organizations That Include a Fund-Raising Appeal, which was incorporated into the 1996 Audit and Accounting Guide Not-for-Profit Organizations.

"The new statement is broader and stricter than SOP 87-2," Kenneth Williams, past chairman of the not-for-profit organizations committee, told the Journal. "Reporting criteria are delineated more clearly. Reporting in this area had been problematic even before SOP 87-2, and we wanted to provide preparers and practitioners with some guidance to improve comparability of statements."

Definition problems

NPOs have had a lot of latitude in deciding what was a fundraising activity and what was a program activity, that is, an activity related to another aspect of the entity, such as providing shelter to the homeless. …

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