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NACUBO's Accounting Principles Council (APC) are volunteers from public and private institutions with exceptional knowledge and skills in external financial reporting, internal operations, managerial analysis, and stakeholder communication.

Work in Process Matrix

APC activities and projects: September 2023

IPEDS Finance Working Group

NACUBO staff will participate in this working group and bring APC experts and NACUBO's FARM author into the conversation for guidance.

Project progress and information.

Tuition Discounting Project for Public Institutions

Project Progress

NACUBO has issued a new Advisory 2023-01, Public Institutions: Accounting for and Reporting Financial Aid as a Discount. This Advisory provides greater discussion about why new guidance was necessary, sets out a conceptual framework for public institutions to refer to as they develop better, more accurate ways to estimate the discount, and presents a number of example estimation methodologies, based on an actual student data set. Advisory Report 2023-01 supersedes Advisory Report 2000-05, Institutional Aid: Discounting: Public Institutions.

Final Q&A: FAQ Discounting for Public Institutions, from questions submitted during NACUBO Town Halls (February 6, 2023).

Example SQL script to extract data from Banner: Tuition discounting SQL - Banner (March 27, 2023)

Why New Guidance Has Been Issued for Public Institutions

In brief, the Alternate Method is an estimate that calculates scholarship expense first and uses the difference between total aid and estimated scholarship expense as the discount. The derived discount is then pro-rated between tuition and residential services based on institutional charges. Assumptions used to calculate scholarship expense treat all student disbursements (i.i., refunds, institutional aid grants, loans) equally, thus overstating the scholarship expense. The overstated expense undervalues the total discount. The discount is further distorted by an allocation between tuition and residential services based on relative institutional charges. Because less than a significant portion of students receive grants for housing, the already under valued discount attributable to tuition is understated and the amount allocated to housing is overstated.

Under the GAAP hierarchy in effect at the time AR 2000-05 was issued, the advisory represented industry guidance at the same level of authority as GASB pronouncements; it established GAAP. A subsequent revision of the GAAP hierarchy by GASB relegated sources that had not gone through the GASB's due process and review procedures (such as AR 2000-05) to non-authoritative standing. Further, systems conversions revealed problems with the alternate method and controllers coming to public institutions from private institutions and from outside higher education began questioning the assumptions underlying the Alternate Method.

GASB's current revenue and expense project is proposing that contractual arrangements with customers (students) drive revenue that is recognized for unique performance obligations. Education, housing, and other auxiliary services are distinct services with distinct performance obligations. In the future, tuition revenue and residential services revenue will need to agree with underlying contractual arrangements with students for a related performance period. The Alternate Method results do not reflect contractual agreements with students (when financial aid is provided) for the service to be performed in the academic (contractual) period.


In April 2021 NACUBO issued a proposed Advisory Report, Accounting and Reporting Financial Aid as a Discount to Tuition and Other Fee Revenues, that would update examples and consolidate decades old guidance for both public and independent institutions. However, because virtually all public institutions currently use the "Alternate Method" for estimating tuition, residential, and other auxiliary services discounts as well as scholarship expense attributable to excess aid of student charges under Advisory Report 2000-05, guidance was issued as a draft to solicit feedback from public institutions. Several public institutions commented and expressed concern.

A work group with members from those institutions was formed later in 2021. The work group and APC members from public institutions worked to develop a better theoretical framework and to identify possible approaches to estimate discount and expense that do not suffer from the shortcomings of the Alternate Method.

Work Group Meeting minutes:

Meeting with GASB Chair and Staff

Topics include majority equity interests, lessor income as operating or non-operating, fiduciary activities, revenue and expense recognition, capital assets.

Issues Paper and Nov 10 meeting discussion

FASB's Business Combination Project

  • The objective is to improve the accounting for asset acquisitions and business combinations by narrowing the differences between the recognition of assets and businesses
  • The project was introduced to FASB's Not-for-Profit Advisory Committee in March, 2021
  • NACUBO's APC will be reviewing current GAAP in tandem with the AICPAs NFP Expert Panel



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