Nonprofit Update: February 2019

Determining an appropriate reserve level for nonprofit organizations
Setting a financial reserve level is a key process for a nonprofit organization, providing necessary funding to continue operations during a host of potential challenges or taking advantage of strategic opportunities. However, many nonprofits do not have a defined process to establish reserves, exposing the organization to undue risks. In an environment of economic and political uncertainty, implementing an effective method to set reserves is critical to long-term organizational sustainability.

Proposed accounting alternatives for not-for-profit entities
The Financial Accounting Standards Board has proposed accounting alternatives for not-for-profit entities for goodwill and certain identifiable intangible assets. The Financial Accounting Standards Board recently issued a proposed Accounting Standards Update (ASU) that, if finalized, would extend the scope of two private company accounting alternatives to not-for-profit entities – the accounting for goodwill and the accounting for identifiable intangible assets in a business combination. Also, in a business combination, a not-for-profit entity would have the option to subsume into goodwill and amortize certain customer-related intangible assets and all non-compete agreements.

Setting up a security steering committee
In many cases, companies isolate security into its own segment. Responsibilities are typically split between low-level IT staff, who must juggle break/fix situations with technology investments, as well as security tasks. However, this scenario often results in security best practices being overlooked for the sake of convenience, and little alignment between the IT group and the rest of the organization regarding security decisions.

District of Columbia government issues notices concerning exemption expiration
The notice states that over the 2019 calendar year the District of Columbia Office of Tax and Revenue (OTR) will begin to expire tax exemptions granted under District law.  The notice states that all exempt entities will be required to renew their exemptions or they will have their classifications changed to being taxable entities.

 

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP. This includes regular updates on the latest insights for nonprofit organizations.

Nonprofit Update: December 2018

Foundations for Board Governance
Looking to increase the effectiveness of your nonprofit’s board? RSM’s guide highlights common problems and practical solutions related to board governance.

The evolving role of outsourcing within nonprofit organizations
Adjusting existing outsourcing strategies can help streamline service delivery and further increase efficiency and productivity.

Phishing awareness: Recognizing, addressing and avoiding threats
Phishing is one of the most common and most successful forms of cyberattack. Learn how to recognize the warning signs of potential phishing.

IRS issues guidance for determining UBTI for separate businesses
The IRS issued Notice 2018-67, providing interim and transition rules for determining UBTI for separate trades or businesses.
Read more.

Recorded webcast: Annual tax update webcast for nonprofit organizations
Learn about the current tax landscape for exempt organizations as well as look ahead to 2019.
View the webcast.

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP. This includes regular updates on the latest insights for nonprofit organizations.

Nonprofit Update: October 2018

Is there really a tax cut in the TCJA for exempt organizations?
Potential tax increase for exempt organizations hidden in the TCJA as part of the corporate tax cut.

Cybersecurity: Understanding the threat
Answer our five-question online assessment to help evaluate how your security program stacks up.

Changes to accounting for grants and contributions made and received
An overview of the clarifications to identifying reciprocal and nonreciprocal transactions and conditional and unconditional contributions.

Managing lease accounting for public and private higher education
Colleges and universities must adjust to the new level of judgments and estimates required under ASC 842 and GASB 87 lease accounting.

Recorded webcast: 2018 federal grants management update
Learn about current developments in grants management compliance requirements for nonprofits.

 

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP. This includes regular updates on the latest insights for nonprofit organizations.

What Non-Profits Need to Know About ASU 2018-08

The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2018-08. This update improves and clarifies the guidance regarding contributions received and contributions made.

The board found that there was a lack of clarity and consistency in how grants and contracts were characterized as either exchanges or contributions. In addition, they found that non-profit organizations differed in how they determined if contributions were conditional or unconditional.

“That’s important because that distinction between conditional vs. unconditional impacts the pattern of revenue recognition,” said Christine Botosan, FASB Board Member.

top tab folder labeled grants related to ASU 2018-08

ASU 2018-08 provides criteria for determining between exchanges or contributions by looking at whether the provider is receiving commensurate value in return for resources transferred. This clarification will help organizations determine if the transfer should be treated as a contribution (nonreciprocal transaction) or an exchange (reciprocal) transaction.

Note that the “commensurate value” described above is value to the provider, not to the general public. So, funds transferred from New York State would be considered a contribution unless New York State itself receives commensurate value.

If commensurate value is not provided, the organization should determine if the transaction is a third-party payment for an existing exchange transaction (such as Medicare, Medicaid, Pell Grant, etc.) If commensurate value is not provided, and the transaction isn’t a third-party payment, it should be accounted for as a contribution.

The ASU also provides additional detail on how to distinguish conditional contributions from unconditional contributions, as well as the difference between donor-imposed conditions and donor-imposed restrictions. Conditional contributions must include a barrier that must be overcome and a right of return or right of release. If a contribution is determined to be unconditional, it must be analyzed to determine if it is restricted or unrestricted.

ASU 2018-08 applies primarily to non-profit organizations, however it can apply to organizations that receive or make contributions of cash and other assets, including businesses. It does not apply to transfers of assets from governments to businesses.

The amendments in this ASU are effective for reporting periods beginning after June 15, 2018 for non-profit organizations and public companies serving as resource recipients (and December 15, 2018 for other organizations). For non-profit organizations serving as resource providers, the amendments are effective for reporting periods beginning after December 15, 2018 (and December 15, 2019 for other organizations.) Early adoption is permitted.

For more information on ASU 2018-08, visit https://www.fasb.org/home.

For more information on Insero’s non-profit solutions, visit https://inserocpa.com/clients/non-profits.html or contact us today.

Non-Profit Update: July/August 2018

New standards for nonprofits present their own challenges
New standards for nonprofit financial statements and revenue recognition will need to be implemented over the next two or three years.

How IT outsourcing strengthens security for nonprofits
The evolving complexity of strong cybersecurity underscores the value of an outsourcing partner dedicated to keeping cybercriminals out. It often requires just a series of emails to get senior finance executives to begin looking beyond their own IT departments to safeguard their businesses against cyber-hackers.

GDPR enforcement is here…is your organization prepared?
General Data Protection Regulation (GDPR) noncompliance could mean potentially significant fines and penalties. Organizations must know where they stand and how to react before it’s too late. The following infographic provides key insights into GDPR compliance requirements, helping your organization understand critical elements of the regulation.

Nonprofit tax reform resource center
The recently enacted Tax Cuts and Jobs Act has produced widespread tax law changes for exempt organizations. Learn more about the latest updates in our resource center. Our resource center features the latest in developments related to the potential effects of the new tax law for exempt organizations.

 

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest insights for non-profit organizations.

Non-Profit Update: May/June 2018

Nonprofit tax reform resource center
The recently enacted Tax Cuts and Jobs Act has produced widespread tax law changes for exempt organizations. Learn more about the latest updates in our resource center.

Donor-advised funds: Accounting implications related to pledges
This article addresses the accounting implications related to a donor’s use of a donor-advised fund to service a pledge. According to the National Philanthropic Trust’s 2017 Donor-Advised Fund Report, there were approximately 285,000 individual donor-advised funds (DAFs) in 2016 with aggregate charitable assets of $85 billion.

Understanding and managing 2018’s key risks
RSM’s recent 2018 economic and risk webcast analyzed emerging economic and risk trends, and detailed four specific risks that your company will likely face this year. This infographic summarizes the webcast to help you understand new innovation, automation, cybersecurity, and data privacy risks and potential management responses.

Planned giving strategies: Strategies, tactics and tools
Once a nonprofit understands the charitable visions of its donors, it’s time to discuss strategies that will help the organization accomplish its goals.

On demand: Annual nonprofit accounting update webcast
Miss our webcast on Thursday, April 19? View the annual accounting update on demand, answer polling questions and complete the final exam to be eligible for CPE credit for this course.

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/muse.html

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest insights for non-profit organizations.

Non-Profit Update: March/April 2018

Nonprofit tax reform resource center
The recently enacted Tax Cuts and Jobs Act has produced widespread tax law changes for exempt organizations. Learn more about the latest updates in our resource center.

Important fringe benefit changes for exempt organizations
Certain fringe benefits now required to be included in exempt organizations’ unrelated business income subject to tax.

Planned giving strategies: The conversation that makes the difference
By discovering what matters most to the individual, nonprofits can uncover a donor’s passion and connection to the organization.

Annual nonprofit accounting update webcast
Join us on Thursday, April 19, for an informational session to discuss the latest accounting updates and issues that could affect nonprofit organizations.

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/muse.html

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest insights for non-profit organizations.

Not-for-Profit Update: January/February 2018

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest insights for not-for-profit organizations. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Nonprofit tax reform resource center
The recently enacted Tax Cuts and Jobs Act has produced widespread tax law changes for exempt organizations. Learn more about the latest updates in our resource center.

IT risk management for nonprofits: Securing your technology and data
Nonprofit organizations must understand how to implement strategies to protect technology and information assets.

IRS offers guidance on certain distribution from donor advised funds
The Treasury Department and the IRS are considering developing proposed regulations under section 4967 of the IRC.

What your nonprofit board members need to know about Form 990
A two-part white paper series to help board members develop a better understanding of why the IRS asks for the information contained in the Form 990.

The top 5 things nonprofits should expect from an outsourcing provider
Nonprofits need outsourcing providers who can not only help build a strategy for the future and help implement that strategy, but who can adjust and grow as your mission expands.

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/muse.html

Not-for-Profit Update: November/December 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest insights for not-for-profit organizations. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Exempt organization-specific provisions in the House Bill H.R. 1
The tax reform legislative process was formally kicked off Nov. 2, 2017, with the release of H.R. 1, the Tax Cuts and Jobs Act.
Read more

Going global: How to plan strategy and building local relationships
Nonprofit organizations can successfully expand operations around the world with strategic planning and cultivation of local relationships.
Read more

Nonprofit webcast series: Optimizing your nonprofit’s outsourcing strategy
Join us for this informative two-part webcast series as we discuss the importance of evaluating whether your outsourcing provider’s capabilities are meeting your needs and expectations.
Register now

On-demand webcast: Annual tax update for nonprofit organizations
Miss our webcast on Tuesday, Oct. 31? View the annual tax update on-demand, answer polling questions and complete the final exam to be eligible for CPE credit for this course.
View on demand now

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/muse.html

Not-for-Profit Update: September/October 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest insights for not-for-profit organizations. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

What your nonprofit board members need to know about Form 990
The first in a two-part series to help board members develop a better understanding of why the IRS asks for the information contained in the Form 990.
Read more

5 things to know about managing third-party relationship risks
Enforcement is scheduled to start on May 25, 2018. What do U.S. organizations need to do now? Here are five key considerations.
Read more

Do you know how managed IT services can help overcome your challenges?
A managed IT services agreement can provide peace of mind that you are making technology decisions to align with your strategy and goals.
Read more

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/muse.html