Just yesterday, on August 19th, the Financial Accounting Standards Board (FASB) announced changes to how nonprofits present their financial reporting. This is the first change to these standards since the current rules were established in 1993. The new rules are designed to help nonprofits do a better job of telling their financial story and provide more relevant information about their resources or any changes to those resources for creditors, grantors, donors, and any other consumers of their financials statements. According to Russell Golden, FASB Chairman, in a FASB Press Release, “The new guidance simplifies and improves the face of the financial statements and enhances the disclosures in the notes.”
The Accounting Standards Updates (ASU) requires improved presentation in the following areas:
- Investment Return
- Presentation of Operating Cash Flows
- Net Asset Classes
- Liquidity and Availability of Resources
These changes will affect charities, religious organizations, nonprofit healthcare providers, educational organizations, cultural institutions, trade associates, and more.
The changes will go into effect for annual financial statements for fiscal years beginning after Dec. 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018. Application to interim financial statements is permitted but not required in the initial year of application. Early application of the amendments is permitted.
Compliance with the new changes will require an accounting system with powerful and configurable reporting capabilities. You might have questions about what options you have and what systems are available to present a complete view of the consolidated numbers, summaries, and details you need to optimally manage your organization, as well as remain complaint with these new standards. We can help. With real-time visibility, you can proactively manage key initiatives, take action, and improve outcomes across funding sources, locations, grants, programs, and other dimensions. Please visit AcctTwo’s contact page and drop us a line to start the conversation.