Wiley Not-for-Profit GAAP 2017

11Affiliated Organizations

1. Perspective and Issues
2. Concepts, Rules, and Examples
   1. Types of Relationships Often Found
   2. Definition of the Reporting Entity
3. Reporting of Related Entities
4. Concepts, Rules, and Examples
   1. Related-Party Disclosures
   2. Investments in For-Profit Entities
   3. Financially Interrelated Not-for-Profit Organizations
   4. Recent Guidance on Consolidations and Equity Method Guidance
   5. Disclosures
5. Pass-Through Gifts
   1. Accounting by Beneficiaries
   2. Transfer of Assets That Are Not Contributions
   3. Disclosures
6. Appendix A Checklist

Perspective and Issues

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 are more often related by agreements of various sorts, but the level of control embodied in such agreements is usually far short of ownership. For ...