Proposed Changes in Nonprofit GAAP

Share Button

Zemanta Related Posts ThumbnailThomson Reuters reports that the FASB expects to issue their proposals of changes to nonprofit GAAP by late March 2015. These proposals would represent the first major changes to nonprofit accounting in over 20 years.

The key proposals are expected to address the following aspects of nonprofit GAAP:

  • Clarified reporting related to the restriction of funds relative to the total amount of funds available.
  • Improved performance reporting by altering the statement of activities to include an operating measure showing expenditures related to the organization’s mission as well as donated funds available to be spent.
  • Significant changes to the statement of cash flows which would propose changing from the indirect cash flow method of reporting to requiring the direct cash flow method which separates the reporting of cash receipts and payments tied to operating activities.
  • Expanded disclosures on endowments.
  • New disclosures on the organization’s access to immediate cash.

The objective of the proposals would be to increase transparency in nonprofit financial statements by providing more information to donors, creditors, and watchdogs about how funds are spent and invested. The FASB is planning to weigh the cost benefit of the proposals during the first quarter of 2015. If an agreement is reached that the benefit outweighs the costs then the proposals will be released for public comment.

Read more about it here.

About Carol Barnard

Carol Barnard has written 183 post in this blog.

Comments are closed.

View Archives

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 12 other subscribers

Latest Webinar Videos