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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: July 2022

November 10 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

June 4 Meeting with Several AICPA GAQC Representatives

Meeting Summary: Status of the OMB Compliance Supplement, Department of Education's request for audit sampling changes in the 2021 Compliance Supplement (NACUBO / NASFAA letter to FSA), and suggested SEFA guidance were reviewed.

Tuition Discounting Project for Public Institutions

Project Progress

NACUBO is holding several online town hall meetings to discuss the draft practice guidance on estimating and reporting tuition and auxiliary discounts for public institutions. Additional information on these town hall meetings can be found here.

Q&A from October and November town halls was published November 23.

NACUBO has issued a revised draft Advisory, Accounting for and Reporting Financial Aid as a Discount to Tuition and Other Fee Revenues - Public Institutions. This draft Advisory provides greater discussion about why new guidance is 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.

NACUBO requests feedback on the draft Advisory and/or the proposed issuance timeline from interested stakeholders. Please send comments and questions via email to

Meeting minutes:



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. The work group and APC members from public institutions have worked since then 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.

Why New Guidance is Being Proposed 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 refund sources equally, thus overstating the 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 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, controllers coming to public institutions from private institutions and from outside higher education began questioning the assumptions underlying the Alternate Method.

GASB's 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. The Alternate Method is not explicitly based on the underlying performance obligations.

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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