FASB Statement No. 136 clarifies transfers of assets

FASB Statement of Financial Accounting Standards No. 136, Transfers of Assets to a Not-for-Profit Organization or Charitable Trust That Raises or Holds Contributions for Others, provides guidance and establishes accounting standards for the transfer of assets from donors to not-for-profit organizations that may then transfer those same assets to a beneficiary organization. Recipient organizations that accept financial assets from a donor and agree to use those assets on behalf of a specified unaffiliated beneficiary or transfer those assets, the return on investment of those assets, or both to that beneficiary must recognize the assets received from the donor and recognize the assets' fair value as a liability to the beneficiary. The statement describes circumstances in which a transfer of assets to a recipient organization is accounted for as an asset and corresponding liability of the recipient organization, and as an asset and donation revenue by the beneficiary organization because the transfer is irrevocable.