Nonprofit & Government Times Q1 2020

• the total of the amounts promised; and • a description and amount of each group of promises having similar characteristics, such as amounts of promises conditioned on establishing new programs, completing a new building, and raising matching gifts by a specified date. For unconditional promises to give, an organization needs to disclose the following: • the amount of promises to give that are receivable in less than one year, in one to five years, and in more than five years; • the amount of the allowance for uncollectible promises to give; and • the discount rate to present value for the receiv- ables due more than one year. DISCLOSURES REQUIRED BY ASU 2014-09 REVENUE FROM CONTRACTS WITH CUSTOMERS (ASC TOPIC 606) The core principle of Topic 606 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The objective of the disclosure requirements in Topic 606 is for an entity to disclose sufficient information to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The nature and extent of this information differs between public and nonpublic entities (nonprofits are considered to be public entities if they issue public debt or are a conduit debt obligor for debt that is not privately placed). This ASU requires an entity to provide information about the following: • revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; • contract balances, including the opening and closing balances of receivables, contract assets and contract liabilities;

• performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; and • significant judgments, and changes in judgments, made in applying the requirements to those contracts. Additionally, an entity is required to provide quantitative and/or qualitative information about assets recognized from the costs to obtain or fulfill a contract with a customer. DISCLOSURES REQUIRED BY ASU 2016-02 LEASES (ASC TOPIC 842) The FASB issued this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrange- ments. The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities classified as operating leases under previous GAAP. There are specific required disclosures as follows: a) Information about the nature of its leases, including the following: 1. a general description of those leases; 2. the basis and terms and conditions on which vari- able lease payments are determined; 3. the existence and terms and conditions of options to extend or terminate the lease; 4. the existence and terms and conditions of residual value guarantees provided by the lessee; and 5. the restrictions or covenants imposed by leases (such as incurring additional financial obligations). b) A lessee should provide narrative disclosure about the options that are recognized as part of its right-of- use assets and lease liabilities and those that are not. c) A lessee should identify the information relating to subleases included in the disclosures provided in (a.1) through (a.5), as applicable. d) Information about leases that have not yet commenced but that create significant rights and obligations for the lessee, including the nature of FIRST QUARTER, 2020 Nonprofit & Government Times 11

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