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
- 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