FASB Proposes Delay of FIN 48 for Nonpublic Entities
January 10, 2008
The Financial Accounting Standards Board (FASB) tentatively approved, in November 2007, a deferral for nonpublic entities of Financial Interpretation 48. FIN 48 is an interpretation of FASB Statement No. 109, Accounting for Income Taxes, which increases the relevancy and comparability of financial reporting by clarifying the way companies account for uncertainty in income taxes. It makes recognition and measurement more consistent, while offering clear criteria for subsequently recognizing, derecognizing, and measuring such tax positions for financial statement purposes.
It is important for colleges and universities to note that the one-year deferral is only for nonpublic entities, and “nonpublic” excludes entities with publicly traded conduit debt. This definition of nonpublic likely knocks out many independent higher education institutions from the deferral. However, smaller schools with privately placed conduit debt or no conduit debt should take note of the proposed deferral.
According to chapter 1500, paragraph 1512 of NACUBO’s Federal Tax Guide, nonprofit organizations are considered "conduit borrowers" when a bond issuer lends proceeds to the organization. In addressing conduit debt and borrowers, FSP FAS 126-1 contains the phrase “traded in a public market (a domestic or foreign exchange or an over-the-counter market, including local or regional markets).” This means that an issuer does not have to be part of an organized exchange--it can be engaged in over-the-counter markets--to have its activities considered "publicy traded". In the fall of 2007, a NACUBO webcast provided members an opportunity to learn about the documentation requirements of FIN 48.
NACUBO Contact: Sue Menditto, director, accounting policy
- Lawmakers Introduce Bills to Simplify Student Aid
- CFPB Proposes Draft Template for Student Banking Options
- Data on Campus Law Enforcement Released
- 2015 Endowment and Debt Management Forum
February 4-6, 2015
- 2015 Unrelated Business Income Tax
February 25-27, 2015
- ON-DEMAND: How to Build, Develop, and Support a Compliance Program at Your Institution
- ON-DEMAND: Strategic Tuition Assessment and Tuition Restructuring
- ON-DEMAND: Are Shared Services Right for Your Organization – The KU Journey
- ON-DEMAND: VIRTUAL: 2014 Annual Meeting
- ON-DEMAND: VIRTUAL: Student Financial Services Conference
- ON-DEMAND: VIRTUAL: Higher Education Accounting Forum
- 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