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SOP proposed on fund-raising.

The American Institute of CPAS released for public comment a 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 (product no. 800059JA).

Unlike the pronouncement it will supersede--SOP no. 87-2, Accounting for Joint Costs of Informational Materials and Activities of Not-for-Profit Organizations That Include a Fund-Raising Appeal--the proposed SOP is broader in scope, applying to all not-for-profit organizations as well as to all state and local government entities that report expenses or expenditures by function.

According to Kenneth D. Williams, a partner of Coopers & Lybrand in Syracuse, New York, SOP no. 87-2 was not definitive in many areas, resulting in "a significant divergence of practice and a need for more specific guidance" to ensure consistency.

The proposed SOP, among other things, requires the cost of all materials and activities that include a fund-raising appeal to be reported as fund-raising costs--including costs otherwise identifiable with program or management functions--unless those functions were part of a bona fide program conducted in conjunction with the fund-raising appeal. In such cases, the activities' joint costs should be allocated.

As a result, client organizations will find they have to perform "an awful lot more analysis to understand the allocation process," said Williams. (For a more detailed analysis of the proposed SOP, see "New Rules Proposed for Joint Activities of NPOS," by Mark Gorman and Joel Tanenbaum, JofA, Oct.93, page 103.

Comments are requested by January 10, 1994. Copies can by ordered by calling 1-800-TO-AICPA.
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Title Annotation:Statement of Position
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Dec 1, 1993
Words:256
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