FASB updates the definition of collections

KPMG reports on the FASB’s update to the definition of collections, which realigns the FASB’s definition with the definition used in the America Alliance of Museums’ Code of Ethics for Museums. The updated definition permits proceeds from sales of collections to be used for the direct care of existing collections.

Applicability

ASU 2019-03 

• All entities, including business entities, that maintain collections

Relevant dates

Key impacts

• Under current US GAAP, an entity need not recognize contributions of works of art, historical treasures and similar assets if they are added to collections and meet three criteria
• One of the criteria requires the entity to have an organizational policy that requires the proceeds from collection items that are sold to be used to acquire other collection items. This criterion has been expanded to permit the proceeds also to be used for the direct care of existing collections
• An entity that holds collections must disclose its policy for using proceeds from deaccessioned collection items; and if proceeds are used for direct care, how it defines direct care

Report contents

• Applicability
• Key facts and impacts
• Background
• Definition of collections
• What is direct care?
• New disclosure requirements
• Effective dates and transition

Related content

• KPMG's summary of the original proposals: FASB proposes changes to the definition of collections