Major changes to not-for-profit organizations’ financial statement presentation were recently finalized with the issuance of the Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958) Presentation of Financial Statements of Not-for-Profit Entities.
Designed to enhance and clarify the information provided in a not-for-profit’s financial statements, the accounting standards update makes changes to the guidance for net assets classification, governing board designations, investment return, underwater endowment funds, expenses, liquidity and presentation of operating cash flows.