FASB Outlines Improved Financial Statements for Non-profits
The Financial Accounting Standards Board (FASB) issued a proposed accounting standards update (ASU) that aims to improve the information provided in not-for-profit financial statements and notes to financial statements.
Stakeholders are encouraged to review and comment on the proposed ASU, Presentation of Financial Statements of Not-for-Profit Entities, by August 20.
“The proposed ASU contains recommended enhancements to the fundamental reporting model for not-for-profit organisations – a model that has existed for more than 20 years,” said FASB member Lawrence W. Smith. “We believe that these changes will refresh the model in ways that will make not-for-profit financial statements even more useful to donors, lenders, and other users.”
The document outlines the FASB’s proposed improvements to current net asset classification requirements and information presented in financial statements and notes to financial statements about a not-for-profit organisation’s liquidity, financial performance, and cash flows. Specifically, they are intended to:
The proposed ASU and a FASB in Focus overview are available at www.fasb.org.