Accounting Standards Update (ASU) No. 2013-06, Not-for-Profit Entities (ASC 958): Services Received from Personnel of an Affiliate

Abstract

To address current diversity in practice, the Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) No. 2013-06, Not-for-Profit (NFP) Entities (ASC 958): Services Received from Personnel of an Affiliate, which provides guidance to NFP entities on the accounting for personnel services provided to an NFP by an affiliated entity at no cost to the recipient. The amended guidance will provide users of NFP entities' financial statements with additional information about the costs of providing services and improve the comparability of those financial statements. The FASB has issued ASU No. 2013-06 because some have questioned whether a recipient NFP should recognize personnel costs regularly incurred on its behalf by an affiliated entity as contributed services in accordance with the guidance in ASC 958-605-25-17. The guidance in ASU No. 2013-06 applies to the financial statements of an NFP entity that receives personnel services from an affiliated entity.