New Accounting Standards for Endowments

Ohios version of the Uniform Prudent Management of Institutional Funds Act became effective June 1, 2009, changing the law applicable to the management and expenditure of charitable endowments. The Financial Accounting Standards Board issued FASB Staff Position FAS 117-1 to provide guidance as to the proper accounting treatment for endowments at not-for-profit organizations in states that adopted the new law. FAS 117-1 provides guidance on the net asset classification of donor-restricted endowment funds for an organization that is subject to the new law, and improves disclosures about an organizations endowment funds, whether or not the organization is subject to the new law. Organizations with donor-restricted endowment funds need to account for these funds in accordance with FAS 117-1.