The amendments in this final Update improve
the definition of the term collections in the Master Glossary by realigning
it with the definition in the American Alliance of Museums’ (AAM) Code of Ethics for Museums (the Code)
in order to eliminate the diversity in practice that exists today
between the application of the Master Glossary’s definition compared
with the definition that many entities use for accreditation purposes.
The amendments in this Update also are an improvement because aligning
the definition and permitting proceeds to be utilized for the direct
care of collections is consistent with the basis for conclusions in
FASB Statement No. 116, Accounting
for Contributions Received and Contributions Made, about the care
and preservation of collections. The amendments in this Update require
that a collection-holding entity disclose its policy for the use of
proceeds from when collection items are deaccessioned (that is, removed
from a collection). If a collection-holding entity has a policy that
allows proceeds from deaccessioned collection items to be used for
direct care, it should disclose its definition of the term direct care.
The amendments in this Update also make a Codification
improvement in Topic 360, Property, Plant, and Equipment, to clarify
that the collections guidance in Subtopic 958-360, Not-for-Profit
Entities—Property, Plant, and Equipment, applies to business entities
as well as not-for-profit entities, consistent with what was indicated
in Statement 116.
This Accounting Standards Update is the final
version of Proposed Accounting Standards Update 2018-250—Not-for-Profit Entities (Topic 958): Updating
the Definition of Collections, which has been deleted.
Issued: March 21, 2019