Defining Issues | August 2016

FASB changes presentation of not-for-profit financial statements

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.


ASU 2016-14

  • Not-for-profit entities
  • Reporting net asset classes, expenses and liquidity in the financial statements

Relevant dates

Effective date:

Annual periods – Fiscal years beginning after

Interim periods – In fiscal years beginning after

Early adoption allowed?

Not-for-Profit entities

Dec. 15, 2017

Dec. 15, 2018


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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