Fall 2009 issue of Horizons

also would need to be recorded at fair value by the acquirer. The FASB guidance has specifically excluded the following items common to not-for-profit organizations, and thus they are not required to be measured at fair value at the acquisition date:

initial reported period for the new entity beginning on or after December 15, 2009. 2. Combinations classified as an acquisition for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2009.

1. Donor relationships of the acquired NPO. 2. Conditional promises to give.

Early adoption of this guidance is not allowed.

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In addition to the fair value determinations of assets received in a combination accounted for as an acquisition, theacquirermust account for thedifference between the consideration given to the acquired NPO and the net fair value of the assets and liabilities received. If the fair value of liabilities assumed and consideration transferred exceeds the fair value of identifiable assets acquired, the accounting differs depending on whether the acquired NPO’s operations are expected to be predominantly supported by contributions and investment return or, alternatively, by revenue earned in exchange transactions. • If the acquired NPO will be predominantly supported by contributions and investment return, the excess is reported as an expense on the statement of activities. • If the acquired NPO’s operations are expected to be predominantly supported by revenue earned in exchange transactions (i.e., billings for services provided by the NPO), the excess is reported as goodwill on the statement of financial position. The issuance of SFAS 164 now requires an NPO to begin applying the provisions of SFAS 142 to goodwill and other intangible assets. Under the provisions of SFAS 142, goodwill and certain intangible assets with indefinite useful lives will no longer be amortized, but rather will be evaluated for impairment on an annual basis.

Judy Murphy, CPA Partner-in-Charge Not-for-Profit Services Group 314.290.3496 judy.murphy@rubinbrown.com Brent Stevens, CPA Manager Not-for-Profit Services Group 314.290.3428 brent.stevens@rubinbrown.com

This guidance is effective for:

1. Combinations classified as mergers for which the merger date is on or after the beginning of an

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