Proposed statement of position : accounting for costs of materials and activities of not-for-profit organizations and state and local governmental entities that include a fund-raising appeal :(a revision of SOP 87-2, Accounting for joint costs of informational materials and activities of not-for-profit organizations that include a fund-raising appeal);Accounting for costs of materials and activities of not-for-profit organizations and state and local governmental entities that include a fund-raising appeal :(a revision of SOP 87-2, Accounting for joint costs of informational materials and activities of not-for-profit organizations that include a fund-raising appeal); Exposure draft (American Institute of Certified Public Accountants), 1993, Sept. 10

Abstract

This proposed statement of position (SOP) would supersede SOP 87-2, Accounting for Joint Costs of Informational Materials and Activities of Not-for-Profit Organizations That Include a Fund-Raising Appeal. The scope of this proposed SOP would be broader than the scope of SOP 87-2, because this proposed SOP would apply to all not-for-profit organizations (NPOs) and state and local governmental entities that report expenses or expenditures by function. It would amend the following, which include guidance for accounting for the costs of informational materials and activities that include a fund-raising appeal: 1. AICPA Industry Audit Guide Audits of Voluntary Health and Welfare Organizations; 2. SOP 78-10, Accounting Principles and Reporting Practices for Certain Nonprofit Organizations; 3. AICPA Audit and Accounting Guide Audits of Certain Nonprofit Organizations. Also, it would be applied by all not-for-profit organizations and state and local governmental entities in determining fund-raising costs. This proposed SOP sets forth the following: 1. The costs of all materials and activities that include a fund-raising appeal should be reported as fund-raising costs, including costs that are otherwise clearly identifiable with program or management and general functions, unless a bona fide program or management and general function has been conducted in conjunction with the appeal for funds. 2. If a bona fide program or management and general function has been conducted in conjunction with an appeal for funds, the joint costs of those activities should be allocated. Costs that are clearly identifiable with fund-raising, program, or management and general functions should be charged to that cost objective. 3. Criteria of purpose, audience, and content must be met in order to conclude that a bona fide program or management and general function has been conducted in conjunction with the appeal for funds. (The flowchart in Appendix B on page 29 illustrates the decision-making process for applying the conclusions in the SOP.) 4. Some commonly used and acceptable allocation methods are described and illustrated though no methods are prescribed or prohibited. 5. Certain information must be disclosed if joint costs are allocated. The proposed SOP would be effective for financial statements for years beginning on or after its issuance date. Earlier application would be encouraged in fiscal years for which financial statements have not been issued.https://egrove.olemiss.edu/aicpa_sop/1587/thumbnail.jp