FASB Issues New Guidance to Improve Financial Reporting for Not-for-Profit Organizations
This work examines the August 2016 guidance in ASC 2016-14, Not-for-Profit Entities (Topic 958) issued by the Financial Accounting Standards Board. Through examples and discussion, this work concludes that given the diversity of reporting practices around contributions, this proposed Update is necessary to add clarity to and strengthen not-for-profit financial reporting. The Financial Accounting Standards Board (FASB) recently issued new guidance in ASC 2016-14, Not-for-Profit Entities (Topic 958). This Update is the first significant change to financial statement reporting for not-for-profit (NFP) entities. This new guidance improves requirements for net asset classifications. In particular, the new standard will examine the absence or presence of donor-imposed restrictions, and whether such restrictions are temporary or permanent.