Consolidation Guidance for Not-for-profit
On June 11, 2026, the FASB declined to add a not-for-profit reporting project to its technical agenda.
On June 11, 2026, the FASB declined to add a not-for-profit reporting project to its technical agenda.
That decision deserves more scrutiny than it may receive.
The Board considered several NFP issues, including consolidation under Subtopic 958-810, and concluded that none justified a standard-setting project at this time.
I think that was the wrong call.
Nonprofit consolidation guidance is unclear. It allows sophisticated organizations to easily structure around consolidation, leaving users with financial statements that do not reflect the full picture of the business.
Not every point deserves a place on the board agenda, but nonprofit consolidation should not be dismissed as a niche technical matter. It is a structural reporting issue that affects many public issuers: Salesforce, Monday.com, Circle, Upwork, Akamai Technologies, and the list goes on.
I would like to reiterate that the current guidance on the consolidation of nonprofit entities is the biggest loophole that allows any business to easily abuse accounting rules. It is notable that on June 12, 2026, Accounting Today reported that US non-profit foundations are showing strong growth, with more than $2 billion in assets now held by these organizations. Yet the issue remains not pervasive.