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ASU 2016-14, Topic 958
• First major set of changes to Not for Profit (NFP) financial statement
presentation standards since the issuance of FASB Statement No. 117,
Financial Statements for Not-for-Profit Organizations, in 1993.
• This new standard is part of the FASB’s ongoing review of Generally
Accepted Accounting Principles (GAAP) to ensure that they continue
to meet the evolving needs of a dynamic financial reporting
environment.
NET ASSETS
Balance Sheet Presentation
Example Footnote Disclosure – With Donor Restrictions
Net assets with donor restrictions are restricted for the following purposes or
periods:
Subject to expenditure for specified purpose:
Program A activities:
Purchase of Equipment
Research
Program B activities: general
Buildings and equipment
$
3,060
950
2,000
2,240
8,250
Subject to the passing of time:
For periods after 20X1
5,250
Subject to Entity’s spending policy and appropriation:
Investment in perpetuity
Total Net Assets with Donor Restrictions
102,157
$
115,657
Example Footnote Disclosure – Board Designations
Note XX – Net Assets Without Donor Restrictions
Text disclosure
in notes
Tabular disclosure or on
face of the SOFP
The Board of Directors of XYZ Organization has several standing board policies that affect the presentation
of board designations on net assets. Bequests without donor restrictions are $3,700, designated for longterm investment (quasi-endowment). The quasi-endowment balance totaled $3,500 at December 31, 20XX.
Additionally, the Board of Directors has established an operating reserve with the objective of setting funds
aside to be drawn upon in the event of financial distress or immediate liquidity need, The operating reserve
totaled $1,300 at December 31, 20XX.
Net assets without donor restrictions:
Undesignated
$ 92,677
Quasi-endowment
3,700
Operating reserve
1,300
Total
97,677
Statement of Activities
LIQUIDITY AND RISK
Qualitative Liquidity Disclosure - Example
The Board periodically designates a portion of any operating surplus to
its liquidity reserve. As of December 31, 20XX, the liquidity reserve was
$1,300. This is a governing board-designated fund with the objective of
setting funds aside to be drawn upon in the event of financial distress
or an immediate liquidity need resulting from events outside the
typical life cycle of converting financial assets to cash or settling
financial liabilities. In the event of an unanticipated liquidity need, NFP
A also could draw upon $10,000 of available line of credit (as further
discussed in Note XX) or the quasi-endowment fund.
EXPENSE REPORTING
OTHER CHANGES