Bloomberg Tax
Sept. 13, 2019, 5:32 PMUpdated: Sept. 13, 2019, 9:03 PM

California Charity Crackdown Bill Upends Accounting Rules (1)

Nicola M. White
Nicola M. White

California lawmakers sent Gov. Gavin Newsom (D) a bill attempting to make bad-actor charities value donated pharmaceuticals more accurately so they don’t mislead donors and watchdogs.

The bill, A.B. 1181, would make California charities bypass U.S. accounting rules on valuing noncash donations so organizations sending drugs and medical devices overseas don’t inflate their worth by pricing them based on the U.S. market.

The Legislature’s action has raised concerns in the accounting profession that states will enact laws that supersede U.S. generally accepted accounting principles and usurp the authority of standard setters.

The bill makes charities value drugs and devices ...