The Impact of SFAS 116 & 117

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Executive Summary: The Impact of SFAS 116 & 117 The issuing of SFAS 116 and 117 marks the first time the Financial Accounting Standards Board (FASB) issues recommendations for how non-profit and charitable organizations recorded and reported donations accepted, and also marked a first-time occasion for the creation of guidelines for donors to report and control their donations (Davies, n.d.). Though these provisions do not affect that vast majority of governments and institutions that utilize the FASB guidelines and recommendations, at least not in a direct manner, they have an enormous impact on the preparation and ultimate presentation of financial statements made by non-profit and charitable organizations (Davies, n.d.; Fleming, n.d.). This executive summary contains a brief overview of the impact that the new guidelines in SFAS 116 and 117 will have on this organization and its preparation of financial statements. SFAS 116 is concerned with the manner in which contributions made and received are recorded and reported, with significant changes primarily for non profits but also affecting for-profit concerns including: Contributions must be a nonreciprocal transfer of assets, or they are considered part contribution and part fee for a product or service If the contribution has any donor-imposed restrictive conditions, it should not be recorded until the condition is met, however such contributions should be recognized by recipients immediately Contributions are

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