Top Five Upcoming GAAP Changes Nonprofits Should Know
Originally published on June 4, 2017
Updated on October 30th, 2023
As we all know, the only constant in life is change. And generally accepted accounting principles (GAAP) are no exception to that rule. Paying attention to updates issued by the Financial Accounting Standards Board (FASB) helps ensure that your financial documents are in the best possible shape for audits, donor review and other uses.
The American Institute of Certified Public Accountants (AICPA) has identified five upcoming GAAP changes that are of particular importance to nonprofit organizations. These changes affect the following areas of interest:
- Going concern requirements (addresses the responsibility of an entity to determine and reveal whether it can continue operating indefinitely)
- Consolidation requirements for nonprofits (reinstatement of previous requirements because new standards issued in 2015 were unclear for nonprofits)
- Simplifying the presentation of debt issuance costs (resolves the confusion of having different requirements for multiple types of balance sheets)
- Fair value disclosures when net asset value per share is used (revisions to requirements when using net asset value per share to measure fair value)
- Inventory measurement (simplifies and clarifies guidance for measurement of inventory)
The effective dates for these changes are approaching quickly, so reading about them now will help you better prepare and make any adjustments necessary. Click here to read the complete article from the AICPA regarding these changes.
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