Renee Bishop, CPA

Recommendations on FASB’s Final ASU Topic 958: Presentation of Financial Statements of Not-for-Profit Entities


Our team of Not-for-Profit experts have reviewed the final FASB ASU 2016-14, and recommend the following five actions you should take in order to be well prepared. In short:

Examine your liquidity position

Determine how you will best present information related to the new liquidity disclosures, and plan now for potential ways to improve liquidity if that is a challenge for your organization. Answer the question now of how you manage your liquidity risks.

Review your Accounting System

Ensure that you have an accounting system in place that will be able to produce expenses by their natural classification within the functional classifications. While there are options with the new standard, we believe many organizations will opt for a statement of functional expenses as a way to address this part of the new standard.

Revisit your Expense Allocations

It’s also a good time to revisit your expense allocation methodology to ensure you are spreading your expenses to the appropriate functions.

Attend a Webinar

The FASB and the AICPA are both holding Webinars on this topic. FASB’s webcast is September 13th from 1:00 to 2:15pm and the AICPA’s webinar is September 28th from 1:00 to 3:00pm. Please note: a fee applies for the AICPA’s webinar. The FASB webcast is free.

FASB Webcast AICPA Webinar

Identify Internal Investment Expenses

If you have internal investment expenses (including compensation costs for employees who spend part of their time in this area), make sure you can separate them out readily, as these will now be required to be netted against investment income.

Beyond these five steps to take, we have also delved more deeply into the update, and summarized the requirements here.

If you have further questions or concerns, please don’t hesitate to contact one of our Not-for-Profit experts, Renee Bishop, Sarah Belliveau, Mark LaPrade or Tammy Michaud, today.