Wiley Not-for-Profit GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles

10 INVESTMENTS

Perspective and Issues

Concepts, Rules, and Examples

Reporting Realized Gains and Losses

Fair Value Disclosures of Investments

Application of premiums and discounts in a fair value measurement

Investments in Certain Entities That Calculate Net Asset Value Per Share

Liquidity Restrictions and Other Investment Disclosure Considerations

Loans Acquired in a Transfer

Donor-Restricted Endowment Funds

Investment Income

Investment expenses

Pooling of investments

Alternative Investments

Impairment of Equity Securities Reported at Cost

Equity Method of Accounting

Accounting Rules

Equity Method Application

Differences in fiscal years

Income taxes

Changes in the equity method

Fiscal year discrepancies

Disclosure Requirements

Investments

Equity Method

PERSPECTIVE AND ISSUES

The GAAP requirements for most investments held by not-for-profit organizations are primarily contained in FASB ASC 958-320 and 958-205. These GAAP requirements affect investments in equity securities with readily determinable fair values and all investments in debt securities. They also establish disclosure requirements for most investments held by not-for-profit organizations.

The FASB has also provided accounting guidance for derivative instruments and hedging activities, which is primarily contained in FASB ASC 815-10, 20, and 30. GAAP requires that entities recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. This ...