The issuance of FASB ASU 2016-14 marked a watershed moment for NFPs, ushering in amendments that completely overhauled how NFPs classify net assets and present financial information, and replacing guidance dating back to 1993.
Since 2016, the FASB has issued several new accounting standards that are designed to enhance the usefulness and transparency of information provided to donors, grantors, and other users of NFP financial statements, while decreasing the cost and complexity for NFPs in preparing their financial statements.
Compounding this specific guidance, NFPs are wrestling with other major new accounting standards that impact all entities, such as the new leasing standard, along with general accounting and financial reporting issues that could impact an NFP’s preparation of its financial statements, such as the accounting alternatives related to subsequent accounting for goodwill.
And, like many companies, NFPs are faced with unique challenges precipitated by COVID-19 and related legislation, such as assessing asset impairments and debt modifications, and accounting for funds received through government programs intended to sustain entities with related business disruptions.
This Viewpoint, complete with original FASB citations, as well as insights gleaned from our professionals, helps to unravel the multifaceted financial reporting challenges currently facing NFPs.
To read our guide in a user-friendly format, download it here.