Aug 25

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FASB Issues New Guidance for Not-for-Profit Entities

The Financial Accounting Standards Board (“FASB”) recently issued ASU 2016-14 “Presentation of Financial Statements of Not-for-Profit Entities” in an effort to improve transparency and understanding.  Changes effected therein include:

  • The 3 formerly applied classes of unrestricted, temporarily restricted, and permanently restricted assets will be simplified into two classes based on whether they are donor-restricted.
  • Additional disclosures are required with respect to liquidity, including the availability of financial assets to meet cash needs in the coming year
  •  Expenses must be presented in one location by natural and functional classification
  • Cost allocation methods must be disclosed
  • Expenses netted against investment return need not be separately disclosed

These changes are effective for fiscal years beginning after December 15, 2017 and interim periods beginning after December 15, 2018.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2016/08/fasb-issue-new-guidance-for-not-for-profit-entities/

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