Key Aspects of FASB’s New Nonprofit Standards
Originally published on May 4, 2017
Updated on October 30th, 2023
In April of 2016, the Financial Accounting Standards Board (FASB) proposed several new guidelines for nonprofits regarding their financial reporting. These changes, classified as ASU No. 2016-14 and finalized later that year, were created to make reporting practices more straightforward for nonprofits and make their statements more uniform and easy to understand for potential contributors.
With the new standards now firmly in place (and effective for fiscal years starting after Dec. 15, 2017), it is a good time to revisit them and consider how they affect your nonprofit organization. The American Institute of Certified Public Accountants (AICPA) has identified four key facts about these standards:
- It is an update, not an overhaul.
- It will enhance reporting of expenses.
- Reduction in net asset clarifications puts more focus on disaggregation and disclosure.
- It requires new disclosures on liquidity.
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