Defining Issues | January 2017

 

FASB restores NFP general partners’ control presumption

KPMG reports on the FASB’s ASU 2017-02, which amends ASU 2015-02. The amendments clarify the consolidation guidance for NFPs (ASC 958-810).

Applicability

ASU 2017-02

  • A not-for-profit entity

Relevant dates

Mandatory effective dates and early adoption provisions:

Effective date:


Annual periods – fiscal years beginning after

Interim periods – fiscal years beginning after

Early adoption permitted?

Not-for-profit entities


Dec. 15, 2016

Dec. 15, 2017

Immediately

Key impacts

  • The FASB has restored the pre-ASU 2015-02 consolidation guidance related to partnerships and similar entities that are not variable interest entities (VIEs)
  • NFPs that are general partners are, once again, presumed to control a limited partnership (regardless of the extent of their ownership interest) unless the limited partners have substantive participating or kick-out rights
  • The consolidation guidance under ASU 2015-02 does not apply to an NFP that invests in a for-profit limited partnership or similar legal entity if the partnership interest is reported at fair value under other US GAAP

Podcast

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Report contents

  • Implementation for NFPs (have adopted ASU 2015-02 vs. have not)
  • Impact on NFP general partners of for-profit limited partnerships and similar entities

 

 

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