Proposed FSP on Prior-Year Misstatements
March 21, 2007
A FASB Staff Position (FSP) proposal would extend guidance issued by an SEC Staff Accounting Bulletin (SAB) to non-registrants, meaning not-for-profits and other nongovernmental entities.
In September 2006, the SEC staff issued SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," to clarify FASB Statement 154, "Accounting Changes and Error Corrections." SFAS 154 guidance addresses error corrections and restatement requirements when the reporting misstatement is material but does not address the evaluation of materiality. Because SAB 108 quantifies a misstatement as a basis for evaluating the materiality of the misstatement in current year's financial statements, its intention is to conform the reporting of error corrections by all registrants.
The proposed FSP seeks to conform the reporting of error corrections between SEC registrants and other entities. The FSP applies to nongovernmental entities that are not currently subject to the requirements of SAB 108. Consequently, entities subject to the FSP include privately held companies and not-for-profit organizations, such as independent higher education institutions.
The FSP proposal deals with evaluating the materiality of a misstatement by defining and illustrating approaches for quantifying the effect of the misstatement on an organization's current-year financial statements. The FSP would be effective for financial statements issued for fiscal years ending after June 15, 2007, or the current fiscal year for most institutions. The comment deadline for the proposed FSP is April 30, 2007. NACUBO encourages members to comment directly to FASB or to share thoughts with NACUBO by contacting Sue Menditto. The proposed FSP is available from FASB.
- ED Tightens New "Gainful Employment" Rules
- GASB Studies Irrevocable Charitable Trusts
- ED Negotiations Focus on Cash Management
- 2014 Higher Education Accounting Forum
April 27-29, 2014
- ON-DEMAND: Understanding the Results of the 2013 NACUBO-Commonfund Study of Endowments, and a Look to 2014 and Beyond
- ON-DEMAND: How Behavioral Changes Helped Cut Energy Usage in Half
- ON-DEMAND: Developing a Market-Informed Approach to Tuition Pricing
- ON-DEMAND: Responsibility Center Management: The Process Necessary to Complete a Successful Implementation
- ON-DEMAND: OD: Responsibility Center Management: How Innovations Have Changed the Nature of RCM
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis