United States

Not-for-Profit Alert on Measurement of Fair Value

Oct 18, 2011
From the Healthcare & Life Sciences Institute

This edition of KPMG's Not-for-Profit Alert reports that the AICPA recently issued a white paper that addresses the Financial Reporting Executive Committee’s non-authoritative views on applying fair value measurement to not-for-profit entities.The white paper provides example fair value measurements and addresses:

  • Determining the appropriate unit-of-account;
  • Selecting an appropriate valuation technique;
  • Determining key pricing inputs, including an appropriate discount rate when using present value techniques;
  • Using market inputs when valuing split-interest obligations, including use of actuarial data and prices for annuity contracts;
  • Estimating the fair value of perpetual trusts using the fair value of the underlying trust assets;
  • Using commercially available software for split-interest agreements; and
  • Considering appropriate disclosures.

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