Explain the Purpose of FASB ASC 958-720-45 on Joint-Cost Accounting

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The Answer is The purpose of the standard is to provide guidance on when costs of joint activities that involve fund-raising and a program purpose can be allocated between fund-raising and programs. The FASB requires three criteria to be met before a cost can be reported as a program expense, 1) the purpose must be to advance the mission of the organization, 2) the cost must be directed to an audience who is capable of advancing that mission, and 3) the content of the material that is produced must include a call to action on the part of the audience to advance the mission of the organization. If all three of these criteria are met, the costs identifiable with a specific program function can be reported as a program expense rather than a fund-raising expense. If one of the criteria is not met the costs must be reported as fund-raising, they cannot be allocated.

Explain the Purpose of FASB ASC 958-720-45 on Joint-Cost Accounting

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