Recommended By: Kim Fusco
FASB is proposing many changes to the financial reporting standards for not-for-profit organizations. The net asset classification will change from the current three class structure (unrestricted, temporarily restricted, and permanent restricted) to a two class structure (with donor-imposed restrictions and without donor-imposed restrictions). The statement of activities will require an intermediate operating measure in which the organization can choose a one or two statement presentation. The direct method will be required for the statement of cash flows, and there will be revisions to the classification of transactions between operating, investing, and financing activities. In addition, there will be new disclosure requirements regarding liquidity, underwater endowments, expenses reported by both their nature and function, the methodology used to determine expense allocations, and more. The proposed Accounting Standards Update (ASU) is expected to be issued in mid-April 2015. The effective date of these changes will be determined based on information gathered during the ASU comment period.
Click to read FASB to propose new not-for-profit reporting requirements By: Ken Tysiac
As a Principal in Ellin & Tucker’s Audit, Accounting, and Consulting Department, Kim is dedicated to performing high-quality audit, tax, and advisory services to numerous not-for-profit organizations and foundations. As Chair of the firm’s Not-For-Profit Services Group, Kim’s extensive knowledge of not-for-profit audit and accounting standards, including OMB A-133 audits, have helped grow the firm’s not-for-profit services group practice to more than 100 organizations in the Baltimore region.