Issues In-Depth | October 2016

Not-for-Profit: Presentation of financial statements

KPMG’s insights on changes to NFP disclosures in ASC 958. KPMG explains the new standard on financial statement presentation for NFPs, providing our observations and analysis.


ASU 2016-14

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

Effective dates

Mandatory effective dates and early adoption provisions:

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 ASC Topic 958
  • Reduces the number of net asset classes presented from three to two: with and without donor restrictions
  • Presents expenses by their functional and their natural classifications in one location in the financial statements
  • Presents investment return net of external and direct internal expenses
  • Discloses quantitative and qualitative information about management of liquid resources and availability of financial assets to meet cash needs within one year of the balance sheet date

Report contents

  • Changes to net asset classifications
  • Reporting of expenses by function and nature
  • Presentation of investment expenses and return
  • Liquidity and availability disclosures
  • Statement of cash flows
  • Intermediate measure of operations
  • Expiration of restrictions on long-lived assets
  • Equity transfers
  • Effective date and transition



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