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On April 19, 2013 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-06, Services Received from Personnel of an Affiliate. The ASU was issued to provide guidance about recognizing and measuring services that a nonprofit organization receives for no cost from personnel employed by an affiliated entity.
The amendments included in this Update require a recipient not-for-profit entity to recognize all services received from personnel of an affiliate that directly benefit the recipient not-for-profit entity. Those services should be measured at the cost recognized by the affiliate for the personnel providing those services. However, if measuring a service received from personnel of an affiliate at cost will significantly overstate or understate the value of the service received, the recipient not-for-profit entity may elect to recognize that service received at either (1) the cost recognized by the affiliate for the personnel providing that service, or (2) the fair value of that service.
The amendments are effective for years beginning after June 14, 2014 and early adoption is permitted. The ASU can be downloaded for free from the FASB website at www.fasb.org.