FASB Issues New Standards for Not-for-Profit Financial Reporting
For the first time in more than 20 years, not-for-profit financial reporting will receive a much-needed makeover. On August 18, 2016, the Financial Accounting Standards Board (FASB) issued its new accounting standards for not-for-profit organizations. These rules are designed to help not-for-profits communicate their financial condition more effectively and eliminate unnecessary requirements from the previous standard.
In a world of heightened scrutiny and demand for transparency from stakeholders, donors and regulators, this is welcome news for not-for-profits, who can now tell their whole financial story through a more streamlined and modern reporting model.
According to the FASB, the new rules also make the following improvements:
- Reduced costs and complexities in preparing financial statements
- More relevant information about resources to simplify financial statements and enhance disclosures
- Improved user assessments of liquidity, financial performance, availability of resources to meet cash needs for general expenditures, service efforts and execution of stewardship responsibilities
The standard will take effect for annual financial statements issued for fiscal years beginning after December 15, 2017 and for interim periods within fiscal years beginning after December 15, 2018. For more information on specific rule changes and the impact on your organization, contact Todd Polyniak, CPA at (973) 472-6250 or [email protected].