Major changes are on the horizon for not-for-profit financial reporting. On April 22, 2015 the Financial Accounting Standards Board (FASB) released an exposure draft of a proposed new accounting standard that will overhaul how NFP entities convey their financial information to donors and regulators. The exposure draft proposes the most significant change to financial reporting for NFPs since 1993 when the FASB published Statement No. 116, Accounting for Contributions Received and Contributions Made, and Statement No. 117, Financial Statements of Not-for-Profit Organizations. The FASB has given the public until August 20, 2015 to submit comments.
Since 2011, the FASB has been working on a standards-setting project that is intended to improve financial reporting of NFP entities to better help them tell their “financial story”. The objectives of this project encompass suggestions received by the FASB from its NFP Advisory Committee (NAC) who works closely with the FASB in an advisory capacity to develop financial accounting and reporting standards for the NFP sector.
Based on the decisions reached to date, the FASB is proposing the following changes, among others, to financial reporting for NFP organizations:
▪ Statement of Financial Position
▪ Statement of Activities
▪ Statement of Cash Flows
▪ Disclosure
