Non-Profit Challenges With Alternative Investments and Restricted Funds

Making Defensible Valuations and Well-Crafted Disclosures in Financials

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, September 7, 2011

Recorded event now available

or call 1-800-926-7926
Program Materials

This teleconference will provide accounting advisors with a review of applicable standards and best practices for valuations and disclosures of non-profits' alternative investments and donor-restricted funds. The panel will also discuss potential audit issues with such investments.

Description

When working with non-profit organization clients on valuing and disclosing alternative investments to those actively traded on open markets (e.g., hedge and real estate funds), as well as donor-restricted funds, advisors face a number of challenges due to tougher scrutiny over accurate valuations.

What is the best approach to calculate the valuation of a non-profit's position in an alternative investment? What if the investment in question involves permanently or temporarily restricted donor funds? Is the correct information about these valuations disclosed in financial statement footnotes?

Making prudent and defensible valuations and disclosures with these investments and anticipating audit questions requires advisors to non-profits to be familiar with applicable standards such as ASU 2009-12 (FAS 157) and ASC 958-205 (FAS 117-1) and to be well versed in best practices for this area.

Listen as our seasoned panel of non-profit accounting professionals reviews important lessons learned in valuations and disclosures with alternative investments and restricted funds.

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Outline

  1. Relevant categorizations
    1. Types of alternative investments
      1. Examples: Hedge funds, real estate funds, managed futures
    2. Types of donor-restricted funds
      1. Examples of permanently and temporarily restricted funds
  2. Options to value alternative investments
    1. NAV per share option
    2. Other approaches
    3. Challenges with effective testing
  3. Which standards apply, and why
    1. ASU 2009-12 (FAS 157) on fair values
      1. Update to Topic 820
    2. ASC 958-205 (FAS 117-1) on non-profit endowments
    3. Other standards
    4. Applying these standards in common scenarios
  4. Footnote disclosure challenges
    1. Including necessary and correct information
    2. Striking a balance with disclosing too much information
  5. Audit preparation alternatives
    1. Making sure financial assertions can be supported with auditors

Benefits

The panel will review these and other key questions:

  • Valuing alternative investments given lack of pricing information and uncertainty over the property approach, and restricted funds given tougher scrutiny of financial positions.
  • Making required disclosures and including correct and relevant information in them.
  • Preparing for auditors with supportable valuations of financial positions.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Michael Sorrells
Michael Sorrells
National Director of Non-Profit Tax Services
BDO USA

He has 25 years of experience in providing tax services to tax-exempt clients.

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Rory Cohen
Rory Cohen

Partner
Venable

He advises private investment funds, funds of funds and investment managers on structuring and formation matters as...  |  Read More

C. Scott Meyer
C. Scott Meyer

Partner
Montgomery McCracken Walker & Rhoads

He is assigned to the firm's Business Department and Nonprofit Organization Practice Group. His practice emphasizes...  |  Read More

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