Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Certificates of deposit are not ‘investments’ so they are not subject to the accounting and disclosures of Topic 320–Investments

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Sometimes I’m late to the party.  Just read an AICPA TIS saying that certificates of deposit are not investments subject to the accounting and disclosure requirements of topic 320 – investments.  The reason?  Because CDs do not meet the definition of an investment.

Implication is you don’t have to make all the investment disclosures for them and don’t have to have a policy that they are carried at fair value.  They can be classified as investment – other.  For nonprofit organizations that means you can carry them at either fair value or lower of cost or fair value – take your pick.

The TIS has a sample disclosure for the accounting policy.

Here’s the source document: TIS 2130.38–.40 issued in June 2010, Certificates of Deposit and Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures.

Written by Jim Ulvog

April 22, 2011, 6:35 am at 6:35 am

Posted in Accounting

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