SAE Foundation Annual Report 2017 - SAE-13

SAE Foundation
Notes to the Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)
Recently Issued Accounting Standards
In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
(ASU) 2015-07, Fair Value Measurement (Topic 820) updating 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 should not be
categorized in the fair value hierarchy. A reporting entity should continue to disclose information
on investments for which fair value is measured at NAV (or its equivalent) as a practical expedient
to help users understand the nature and risks of the investments and whether the investments, if
sold, are probable of being sold at amounts different from NAV. The guidance is effective for
fiscal years beginning after December 15, 2016 and interim periods within those fiscal years, and
should be applied retrospectively. Early adoption is permitted. The retrospective approach
requires that an investment for which fair value is measured using the NAV per share practical
expedient be removed from the fair value hierarchy in all periods presented in an entity's
financial statements. The Foundation has elected to adopt the provisions of this pronouncement
effective December 31, 2017. As such, all investments measured at NAV are excluded from the
fair value hierarchy for 2017 and 2016.
In August 2016, the FASB issued ASU 2016-14, Not-for-Profit Entities (Topic 958) and Health Care
Entities (Topic 954) - Presentation of Financial Statements of Not-for-Profit 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.

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SAE Foundation Annual Report 2017

Table of Contents for the Digital Edition of SAE Foundation Annual Report 2017
