Perspective and Issues

Concepts, Rules, and Examples

Types of Relationships Often Found

The fundraising affiliate of a “parent” organization

The asset-holding affiliate

The program activity affiliate

Affiliates of a common parent

Definition of the Reporting Entity

Reporting of Related Entities

Concepts, Rules, and Examples

Related-Party Disclosures

Investments in For-Profit Entities

Financially Interrelated Not-for-Profit Organizations

Recent Guidance on Consolidations and Equity Method Guidance


Pass-Through Gifts


Accounting by Beneficiaries

Transfer of Assets That Are Not Contributions


Appendix A Checklist


Not-for-profit organizations are often associated with other organizations, either not-for-profit or for-profit. The association may result from many different types of relationships. Issues have arisen recently whereby the debt of a not-for-profit organization was moved to other affiliated organizations to present a picture of better financial health for itself. In applying the accounting principles discussed in this chapter, the reader should be aware that careful attention should be paid to make sure that all requirements for any affiliated organization are met.

In the not-for-profit world, true “ownership” of one entity by another rarely exists (although sometimes a not-for-profit will own an operating business which it either established or had donated to it). Affiliated organizations ...

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