With its effective date mere weeks away, the FASB on Dec. 19, 2017, plans to hold a webcast to explain implementation of the amended accounting requirements for charities, foundations, universities, and other not-for-profit groups that become effective in 2018.
The FASB published Accounting Standards Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, in August 2016 to provide more transparency to donors, watchdogs, and regulators about how not-for-profit organizations spend and invest their money. The update to U.S. GAAP is the first significant change to not-for-profit reporting in more than 20 years, and it will be effective for fiscal years starting after Dec. 15.
The standard requires more information about not-for-profit groups’ access to cash, expenses, and endowments that have dropped below their initial value or the value set by law or a contract. It also attempts to shine more light on the restrictions on an organization’s funds by changing the way groups label assets. The new standard says not-for-profit groups must differentiate between assets with donor restrictions and assets that are unrestricted, versus the current guidance that calls for three categories — unrestricted, temporarily restricted, and permanently restricted.
The webcast is scheduled to focus on the requirements in ASU No. 2016-14 for asset classification, the disclosure requirements about liquidity and availability of financial assets, the reporting requirements for expenses and investment returns, and other areas, the FASB said.
The agenda also includes a question-and-answer segment. The scheduled presenters include FASB Assistant Director Jeff Mechanick, and Rick Cole, a supervising project manager with the accounting board’s staff. Andrew Prather, shareholder of Clark Nuber P.S., an accounting and consulting firm in Bellevue, Washington, and a member of the FASB’s Not-for-Profit Advisory Committee, also is scheduled to speak.
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