Clarifying When a Not-For-Profit Entity That Is a
General Partner Should Consolidate a For-Profit
Limited Partnership (or Similar Entity)

ACCOUNTING STANDARDS UPDATE NO. 2017-02, NOT-FOR-PROFIT ENTITIES—CONSOLIDATION (SUBTOPIC 958-810): CLARIFYING WHEN A NOT-FOR-PROFIT ENTITY THAT IS A GENERAL PARTNER OR A LIMITED PARTNER SHOULD CONSOLIDATE A FOR-PROFIT LIMITED PARTNERSHIP OR SIMILAR ENTITY


Overview


On January 12, 2017, the FASB is issued Accounting Standards Update No. 2017-02, Not-for-Profit Entities—Consolidation (Subtopic 958-810): Clarifying When a Not-for-Profit Entity That Is a General Partner or a Limited Partner Should Consolidate a For-Profit Limited Partnership or Similar Entity. The new guidance amends the consolidation guidance in Subtopic 958-810, Not-for-Profit Entities—Consolidation, to clarify when a not-for-profit entity (NFP) that is a general partner or a limited partner should consolidate a for-profit limited partnership or similar legal entity once the amendments in Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, become effective.

To that end, the new guidance:
  • Maintains how NFP general partners currently apply the consolidation guidance in Subtopic 810-20 by including that guidance within Subtopic 958-810.
  • Adds to Subtopic 958-810 the general guidance in Subtopic 810-10 on when NFP limited partners should consolidate a limited partnership.

Effective Dates


The new guidance is effective for NFPs for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the new guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

NFPs that have not yet adopted the amendments in Update 2015-02 are required
to adopt the amendments in this Update at the same time they adopt the
amendments in Update 2015-02 and should apply the same transition method
elected for the application of Update 2015-02.

NFPs that already have adopted the amendments in Update 2015-02 are required to apply the amendments in this Update retrospectively to all relevant prior periods beginning with the fiscal year in which the amendments in Update 2015-02 initially were applied.

Additional Information

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