Proposed Nonprofit Financial Statement Changes

Posted on Wednesday, January 14, 2015

The Financial Accounting Standards Board (FASB), created in 1973, establishes standards of financial accounting and reporting.  In 2009 the Not-for-Profit Advisory Committee (NAC) was established to provide the FASB with input from the nonprofit sector.  In 2011 the FASB announced two new projects, Not-for-Profit Financial Reporting: Financial Statements (a standards-setting project) and Not-for-Profit Financial Reporting: Other Financial Communications (a research project), to improve financial reporting of nonprofits.  Not-for-Profit Financial Reporting: Other Financial Communications was later removed from the FASB’s agenda and Not-for-Profit Financial Reporting: Financial Statements was renamed to Financial Statements of Not-for-Profit Entities.  The remaining project is supposed to provide better information and understanding for readers of nonprofit financial statements.

An exposure draft of the changes to nonprofit financial statements project was originally supposed to be issued mid-2014; however, according to the FASB’s Technical Agenda, the exposure draft is expected to be completed during the first quarter of 2015.  Although no changes have been officially made, here is a summary of tentative FASB board decisions on the project as of October 8, 2014.

Statement of Financial Position

Statement of Activities

Statement of Cash Flows

Footnotes

Although these have not yet been approved, it is important to know what may be coming in the future for nonprofit organizations, as these would be significant changes to current reporting. 

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

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