There is a new emphasis and an upcoming required change in how your NFP financials will present and disclose gifts-in-kind. Accounting Standard ASU No. 2020-07 has mandated this change. It will be effective for annual periods beginning after June 15, 2021. This Accounting Standard improves transparency for gift-in-kind transactions by requiring the following:
- Presenting contributed nonfinancial assets as a separate line item in the statement of activities
- Disclosure of the amount of contributed nonfinancial assets received, disaggregated by category, that depicts the type of contributed nonfinancial assets, as well as additional information for each category of contributed nonfinancial assets received
Make sure your NFP is keeping track of all gifts-in-kind received, whether used or not. Provide this information regularly to your accounting department or outside accountant to make sure they enter gifts-in-kind into your accounting system regularly.