MHFA | Upcoming Changes for Not-for-Profit Financial Statements
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Upcoming Changes for Not-for-Profit Financial Statements

New standards will be in effect for the financial statements of Non-Profit entities with fiscal years beginning after 12/15/17. Read up on the highlights of this new standard and find the link to the full article below.

 

Accounting Standards Update No. 2016-14Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities:

  • decreases the number of net asset classes from three to two. The new classes will be net assets with donor restrictions and net assets without donor restrictions.
  • Requires reporting of the underwater amounts of donor-restricted endowment funds in net assets with donor restrictions and enhances disclosures about underwater endowments.
  • Continues to allow preparers to choose between the direct method and indirect method for presenting operating cash flows, eliminating the requirement for those who use the direct method to perform reconciliation with the indirect method.
  • Requires a not-for-profit to provide in the notes qualitative information on how it manages its liquid available resources and liquidity risks. Quantitative information that communicates the availability of a not-for-profit’s financial assets at the balance sheet date to meet cash needs for general expenditures within one year is required to be presented on the face of the financial statement and/or in the notes.
  • Requires reporting of expenses by function and nature, as well as an analysis of expenses by both function and nature.

 

Read the full article here: http://www.journalofaccountancy.com/news/2016/aug/fasb-modifies-not-for-profit-financial-reporting-201615022.html