SAE Foundation Annual Report 2016 - 29

SAE Foundation
Notes to the Financial Statements (continued)

participants would use in pricing
the asset or liability. The fair value
measurements of the Foundation's
investments are disclosed in Note
8.
Recently Issued Accounting
Standards
In August 2016, the Financial
Accounting Standards Board
(FASB) issued Accounting
Standards Update (ASU) 201614, Not-for-Profit Entities (Topic
958) and Health Care Entities
(Topic 954) - Presentation of
Financial Statements of Not-forProfit Entities. The ASU amends
the current reporting model
for nonprofit organizations
and enhances their required
disclosures. The major changes
include: (a) requiring the
presentation of only two classes of
net assets now entitled "net

assets without donor restrictions"
and "net assets with donor
restrictions", (b) modifying the
presentation of underwater
endowment funds and related
disclosures, (c) requiring the
use of the placed in service
approach to recognize the
expirations of restrictions on
gifts used to acquire or construct
long-lived assets absent explicit
donor stipulations otherwise,
(d) requiring that all nonprofits
present an analysis of expenses
by function and nature in either
the statement of activities, a
separate statement, or in the
notes and disclose a summary
of the allocation methods used
to allocate costs, (e) requiring
the disclosure of quantitative
and qualitative information
regarding liquidity and availability
of resources, (f) presenting
investment return net of external

and direct expenses, and (g)
modifying other financial
statement reporting requirements
and disclosures intended to
increase the usefulness of
nonprofit financial statements.
The ASU is effective for fiscal
years beginning after December
15, 2017. Early adoption is
permitted. The provisions of
the ASU must be applied on a
retrospective basis for all years
presented although certain
optional practical expedients
are available for periods prior to
adoption. Management is currently
evaluating the impact of this ASU
on its financial statements.
In May 2015, the FASB issued
ASU 2015-07, Fair Value (Topic
820) - Disclosures for Investments
in Certain Entities That Calculate
Net Asset Value per Share (or

Equivalent). This ASU provides
updated guidance to remove
the requirement to categorize
within the fair value hierarchy all
investments for which fair value
is measured using the net asset
value (NAV) per share practical
expedient. The practical expedient
criteria differ from the criteria
used to categorize other fair
value measurements within the
hierarchy. Currently, investments
valued using the practical
expedient are categorized within
the fair value hierarchy on the
basis of whether the investment
is redeemable with the investee
at NAV on the measurement
date, never redeemable with the
investee at NAV, or redeemable
with the investee at NAV at a
future date. Under this updated
guidance, investments for which
fair value is measured at NAV
per share (or its equivalent)
using the practical expedient
Inspiring Curiosity in STEM | 29
SAE Foundation Annual Report 2016

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