Small Edit to Nonprofit Guidance Approved
A phrase accidentally included in Accounting Standards Update (“ASU”) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, has been removed by the Financial Accounting Standards Board (“FASB”). On Wednesday, the FASB unanimously agreed to remove “that contain no purpose restrictions” from its most significant update to nonprofit accounting guidance in over two decades. The slight clarification will help nonprofits meet the minimum reconciliation requirements for disclosing their endowment funds.
The FASB called for the small edit in Proposed ASU No. 2016-350, Technical Correction to Update No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements — Endowment Reporting. Nonprofits must apply the new guidance to annual statements issued for fiscal years starting after December 15, 2017, and interim periods within those fiscal years starting after December 15, 2018.