Crackdown May Stop Charities From Inflating Cost of Donations

U.S. standard setters may tighten accounting rules that state regulators say offer too much leeway for charities to dupe donors.

The Financial Accounting Standards Board voted unanimously Aug. 21 to examine how charities account for noncash donations and come up with guidance so they don’t inflate their worth.

Ideas include requiring not-for-profit groups to offer more details about the valuation methods they use to measure noncash gifts or having them break down gifts by type—like donations of food versus drugs—or the geographic region where these gifts get used. FASB also could consider making charities break out details about noncash gifts ...