FASB Not-for-Profit Project: Statement of Financial Position

Posted on Wednesday, December 16, 2015

The Financial Accounting and Standards Board (FASB) has an ongoing review of the GAAP (generally accepted accounting principles) standards to ensure that they continue to meet the needs of the changing financial reporting environment.  While existing standards are sound, FASB feels that they could be improved to provide better information to donors, creditors and other uses of financial statements, resulting in FASB’s not-for-profit financial statement project. 

In April 2015, FASB issued an exposure draft of proposed changes to nonprofit financial statements with a comment period ending August 20, 2015.  While the AICPA (American Institute of Certified Public Accountants) agrees with some of the proposed changes, it has given alternatives for others. 

The proposed changes will affect the statement of financial position, activities, functional expenses and cash flows.  This is the first of three blog posts that will discuss the proposed changes to the statements along with the AICPA’s recommendations.

Below is a summary of the current requirements under GAAP, the proposed changes made by FASB with expected benefits and whether the AICPA agrees with the proposed changes.

The AICPA does not agree with the proposed enhanced disclosures for liquidity but would rather see the use of a classified statement to address liquidity.

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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