FASB ASC 958 – Not for Profit Entities
FASB ASC Guide > FASB ASC 958
The Financial Accounting Standards Board (FASB) released Accounting Standards Codification 958 (ASC 958) to address broad information related to the not-for-profit sector. Non-profit entities have specific guidance within the code that need to be addressed in order to comply with the industry standards. As the main purpose of running a non-profit is public service, instead of profit, these objectives need to be served through financial reporting. Donors and supporters are concerned with how their dollars are being spent to a different degree than investors would.
Another important aspect to consider is UBI, or Unrelated Business Income which can jeopardize the tax exempt status of status a not for profit entity. If the is enough of this the IRS could deem the company to be for profit and subject it to paying income taxes.
Check out more high level explanations of the FASB ASC in our Guide to the Accounting Standards Codification!
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It is very important to be in compliance with FASB ASC 958 if you want to keep your tax exempt status!
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No doubt, the IRS will take this away if you are receiving too much unrelated business income and you can get hit with a big tax liability. Its best to stick with FASB ASC 958 if you want to maintain the tax exempt status.
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Wait, I cannot fathom it being so straghitfroward.
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