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FASB proposed changes in accounting standards

New proposed accounting standards would affect nonprofit organizations and som

Three new Accounting Standards Updates from the Financial Accounting Standards Board are available for public review, the agency recently announced. Firms working with nonprofit organizations and some

Three new Accounting Standards Updates from the Financial Accounting Standards Board are available for public review, the agency recently announced. Firms working with nonprofit organizations and some entertainment companies might want to chime in on the proposed rule changes.

One proposed rule change governs the sale of donated securities by nonprofit entities. When these organizations immediately convert the donated securities into cash, a move usually done to avoid investment risks, the resulting cash receipts should be treated as operating cash flows, according to FASB. Those receipts could, however, be treated as financing cash flows if the donor specified his or her gift be used for the "acquisition, construction, or improvement of long-lived assets or to establish a permanent or term endowment."

In entertainment accounting, FASB seeks to eliminate a rebuttable presumption regarding the write-down of unamortized film costs as is pertinent to Topic 926, specifically that "the conditions leading to the write-down of unamortized film costs after the balance sheet date existed as of the balance sheet date."

Furthermore, FASB would no longer require that the effects of changes in estimates be incorporated into the fair value measurements used in impairment tests, assuming that the information would not have been considered by market participants at the measurement date.

 

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