AICPA Advises Nonprofits on Financial Reporting Model Changes
In the first of a two-part blog series on its website, the American Institute of Certified Public Accountants (“AICPA”) discusses the upcoming changes to the nonprofit financial reporting model. The changes are part of the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, which affects certain line items on nonprofits’ financial statements. The blog series’ first installment features suggestions on an organization’s chart of account modifications in five areas: liquidity, net assets, investment return, statement of cash flows and expense reporting. To read part one of the blog series, visit AICPA.org.
Study Cautions Nonprofits on Barriers to Growth
If you’re a nonprofit seeking future growth, a new study has identified several issues that your organization must consider. According to the Abila Nonprofit Finance Study, nonprofits should factor in potential difficulties dealing with personnel and risk management, an increased burden on administrative duties, and compliance matters. Of course, nonprofits, such as Make A Stand, that did not prepare for these issues fell short in their organizational growth efforts. More on the Abila Nonprofit Finance Study is available on the Nonprofit Quarterly website.
Gift Acceptance Policy Tips for Nonprofits
In a recent blog on the American Institute of Certified Public Accountants’ (“AICPA”) website, Foundation of the Carolinas Vice President Alyssa Federico shares her insights on developing a gift acceptance policy for a nonprofit organization. According to Federico, a well-developed policy can protect a nonprofit from potential risks and educate staff members on when to decline gifts. Some of the guidance Federico outlines concerns handling non-cash gifts, the process for deciding whether or not to accept a gift, and determining what is required prior to acceptance. Federico’s blog can be read in its entirety on the AICPA website.
Forthcoming Revenue Standard Proposal to Help Nonprofits
New Financial Accounting Standards Board (“FASB”) guidance could make it easier for nonprofits to record revenue from grants and donations with restrictions. On June 7, the FASB unanimously agreed on a proposal to help nonprofits differentiate between a condition and a restriction in U.S. GAAP for received grants and donations. Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606) removed guidance on “exchange” transactions. Furthermore, many nonprofit organizations have had trouble distinguishing between a condition and restrictions. To address the matter, the FASB will clarify that when a gift comes with a donor-imposed condition, the agreement must. Read More.
Topics: Accounting Standards Update "ASU", Charitable Giving, FASB, Financial Accounting Standards Board "FASB", Nonprofits, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, U.S. GAAP
2017 Compliance Supplement Draft Issued
Due to delays, the Office of Management and Budget recently issued a final draft of the 2017 Compliance Supplement . The final draft allows auditors to plan their 2017 Single Audit engagements. Substantial revisions are not expected, but the draft 2017 compliance supplement might change in the final clearance phase.
University of Louisville Foundation Engaging in Wasteful Spending
The University of Louisville Foundation has released a 135-page report outlining a series of wasteful spending practices. According to the independent investigating firm that authored the report, foundation officers repeatedly spent money on unbudgeted expenses and unapproved actions. Board directors were often kept in the dark on such actions, which prevented them from making informed financial decisions. Further, the report says that the foundation combined cash reserves, which made funding sources for certain transactions difficult to identify. J. David Grissom, chairman of the University of Louisville’s Board of Trustees, said legal action has not been ruled out, but he expects that. Read More.