Endowment Accounting under FASB Topic 958-205 (Formerly FSP 117-1) and NYPMIFA

By Michael McNee  |  August 14, 2011  |  Download PDF

A PREAMBLE NYPMIFA calls for: Prudence, donor notification and investment management. As the Beatles said, "Dear Prudence, won't you come out and play?" Do not mistake NYPMIFA and FASB 958-205 for being the same. Legal issues and accounting issues do not always agree. In legal terms, as it relates to endowments, you can "borrow", but you can't "steal". In accounting terms, you can't "hide".

EXAMPLES OF ENDOWMENT RESTRICTIONS

  • True endowment with no use restriction-My contribution should be kept intact and the income is to be used for the organization.
  • True endowment with use restriction-same as above except the income from the contribution is to be used for supplies for the organization.
  • Endowment for a term of years-keep the gift intact for 20 years, during which time the income is for supplies and after 20 years, the gift has no restrictions.

About Michael McNee

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Michael McNee, CPA, is the Partner-in-Charge of Attest Services and Co-Partner-in-Charge the Nonprofit, Government & Healthcare Group at Marks Paneth LLP. He is also a member of the firm’s Executive and Management Committees. In these roles, Mr. McNee is responsible for overseeing the execution of the firm’s audit and attest services and directing the operations of the Nonprofit, Government & Healthcare Group. He develops strategy, sets policy and acquires and develops talent. In addition to his managerial... READ MORE +


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