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.
Applicability
- 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
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