FASB changes presentation of not-for-profit financial statements
Defining Issues | August 2016
KPMG reports on changes to NFP disclosures in ASC 958. The FASB’s new ASU on NFP disclosures simplifies net asset classes but requires additional information on expenses and liquidity.
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KPMG reports on changes to NFP disclosures in ASC 958. The FASB’s new ASU on NFP disclosures simplifies net asset classes but requires additional information on expenses and liquidity.
Applicability
ASU 2016-14
- Not-for-profit entities
- Reporting net asset classes, expenses and liquidity in the financial statements
Relevant dates
Effective date | Not-for-Profit entities |
Annual periods – Fiscal years beginning after | Dec. 15, 2017 |
Interim periods – In fiscal years beginning after | Dec. 15, 2018 |
Early adoption allowed? | Immediately
|
Key impacts
- Amendments to FASB ASC Topic 958
- Distinction between temporary and permanent restrictions eliminated – will reduce reporting complexity and enhance understandability
- Expenses presented by nature and function – will provide financial statement users with greater transparency about how an NFP uses its resources
- Liquidity and availability disclosures enhanced – intended to provide financial statement users with additional information about how an NFP manages its cash needs and how limits on resources may affect liquidity and financial flexibility
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Report contents
- Changes to net asset classification
- Reporting expenses by function and nature
- Presentation of investment return and expenses
- Liquidity and availability disclosures
- Other changes
- Effective date and transition
- Next steps
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FASB changes presentation of NFP financial statements
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