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 2021
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.
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
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 all public institutions currently use the "Alternate Method" for estimating tuition and residential 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.
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.
GASB's revenue and expense project is proposing that contractual arrangements with customers (students) drive revenue that is recognized for unique performance obligations. Education and housing 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.
Several public institutions commented and expressed concern. A work group with those institutions has been formed.
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