December 31, 2018 will see significant changes to not-for profit (NFP) financial reporting. ASU 2016-14, Presentation of Financial Statements of not-for-profit entities will become effective. It is essential to understand the various aspects of the Accounting Standards Update (ASU).
The previous reporting requirements for not-for-profit entities fell under the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (FAS) No. 116 and 117, issued in 1993. In November 2011, the FASB announced two projects intended to improve the financial reporting of not-for-profit entities. This was the first change to reporting in over 20 years.
In April 2015, an exposure draft was released with the comment period ending in August 2015.
In October 2015, the board split the proposed update into two phases:
- Phase 1 Included issues that weren’t dependent on other FASB projects and were improvements the FASB believed could be finalized in the near term.
- The ASU that was issued in August 2016 includes the items that were included in Phase 1.
- Phase 2 This phase includes matters that need further consideration as they may be impacted by decisions made in the Financial Performance Reporting project, which the FASB currently has on its agenda.
FASB views ASU 2016-14 as Phase 1—the beginning of guidance to result from its multiyear review of the not-for-profit financial reporting model. There are critical enhancements to the reporting process which all not-for-profit entities should be aware of including:
- Changes in net asset classification
- Changes in investment returns
- Changes in reporting of expenditures
- Changes in reporting and disclosing liquidity and cash flow
- Changes to the physical financial statements of the not-for-profit entity.
This course reviews the new requirements and provides examples on how they will impact the not-for-profit financial statements. This particular segment focuses on the changes relevant to net assets and how that impacts financial reporting. We also explore options available for implementing requirements. Future segments will focus on the other aspects of ASU 2016-14.
Learning Objectives
- Explore the history of not-for-profit financial reporting and the evolution to Accounting Standards Update (ASU) 2016-14 - Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities.
- Explore variances in reporting for not-for-profit entities under Topic 958.
- Explore changes in reporting of net assets
- Explore the impact to the statement of financial position (SFP).
- Explore example formats for the statement of financial position as well as relevant disclosure requirements related to net assets.
Included In Certifications
This course is included in the following Certification Programs:
15 CoursesNot-For-Profit and Small Business Entities Certification
- Introduction to Not-for-Profit Entities
- Introduction to Accounting for Not-For-Profit Entities
- Identifying and Implementing the Proper Balance of Internal Controls
- Segregation of Duties for Core Business Processes
- Bookkeeping: Journals, Subsidiary Ledgers and General Ledger
- Bookkeeping: Payroll And Expenses
- Bookkeeping: Accounts Payable/Accounts Receivable And Receipts
- Effectively Managing and Controlling Travel and Entertainment (T&E) Expenses
- Management Internal Control Essentials
- Financial Statement Essentials for Not-for-Profits
- Not-for-Profit Financial Statements Part 2
- Not for Profit Financials - Focus on Net Assets
- Cyber Risk in Small-Medium Entities
- Fraud in Small-Medium Entities
- Not-For-Profit Accountability and Responsibility
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Prerequisites
No advanced preparation or prerequisites are required for this course.