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FINANCIAL STATEMENTS PRESENTATION FOR NONPROFITS –IMPLEMENTATION PERSPECTIVE

April 26, 2018

Financial Statements Presentation for Nonprofits – Implementation Perspective 2

LEE KLUMPPNational Assurance Partner

[email protected]

CARLA DEMARTINIDirector

[email protected]

With you today

3 Financial Statements Presentation for Nonprofits – Implementation Perspective

Presentation of Financial Statements of NFP Entities (ASU 2016-14)


Key Provisions of ASU 2016-14

Net Asset ClassificationUpdated net asset classification

scheme to two classes, changes to underwater endowment

accounting, enhanced disclosures

Liquidity & AvailabilityQuantitative & qualitative

disclosures about liquidity and availability of resources Expenses

Requirement to report expenses by function (already required), nature,

and an analysis showing the relationship between function and

nature

Statement of Cash FlowsContinue to allow direct or indirect method for operating cash flows; indirect reconciliation no longer

required for direct method

Investment ReturnPresent investment return net of

external and direct internal investment expenses, no longer

required to disclose netted expenses


Objectives and Effective Date


Update, not overhaul, the current model Improve net asset classification scheme Improve information in financial statements and notes about:

• Financial performance• Cash flows• Liquidity

Better enable NFPs to “tell their financial story” Provide more useful information to donors and other users of the financial

statements

NFP Financial Statements Project—Key Objectives (recommended by FASB’s NFP Advisory Committee (NAC))

6


Effective Date

Presentation of Financial Statements of NFPs, ASU 2016-14

Effective Date: For fiscal years beginning after 12/15/2017 Interim financials the following year• Calendar year ending 12/31/18

• Fiscal year ending 6/30/19


Net Assets


Net Assets

Unrestricted Temp. RestrictedPerm.

Restricted

Without Donor Restrictions With Donor Restrictions

Amount, purpose, and type of board

designations *

Nature and amount of donor restrictions

CurrentGAAP

Proposed GAAP

Disclosures

+

* New disclosure requirement


Example Effect on Statement of Financial Position

Note: Shaded lines are required to be presented.

Source: ASU 958

Not-for-Profit Entity A

Statements of Financial Position

June 30, 20X1 and 20X0

(in thousands)

20X1 20X0

Assets:

Cash and cash equivalents $ 4,575 $ 4,960

Accounts and interest receivable 2,130 1,670

Inventories and prepaid expenses 610 1,000

Contributions receivable 3,025 2,700

Short-term investments 1,400 1,000

Assets restricted to investment in land, buildings, and equipment 5,210 4,560

Land, buildings, and equipment 61,700 63,590

Long-term investments 218,070 203,500

Total assets $ 296,720 $ 282,980

Liabilities and net assets:

Accounts payable $ 2,570 $ 1,050

Refundable advance - 650

Grants payable 875 1,300

Notes payable - 1,140

Annuity trust obligations 1,685 1,700

Long-term debt 5,500 6,500

Total liabilities 10,630 12,340

Net assets:

Without donor restrictions (Note DD) 92,600 84,570

With donor restrictions (Note B) 193,490 186,070

Total net assets 286,090 270,640

Total liabilities and net assets $ 296,720 $ 282,980


Example Effect on Statement of Financial Position


Source: ASU 958

Net assets:Without donor restrictions (Note DD) 92,600 84,570 With donor restrictions (Note B) 193,490 186,070 Total net assets 286,090 270,640

Total liabilities and net assets $ 296,720 $ 282,980



Source: ASU 958-205-55-14

EXAMPLE OF EFFECT ON STATEMENT OF ACTIVITIES - COLUMNAR FORMAT

Example of Effect on Statement of Activities -Columnar Format


Disclosures Related to Net Assets

Amounts and purposes of governing board designations, appropriations, and similar actions that result in self-imposed limits on the use of resources without donor-imposed restrictions as of the end of the period.

Composition of net assets with donor restrictions at the end of the period and how the restrictions affect the use of resources.

Additional information related to underwater endowment funds.


Disclosures Related to Net Assets

Information about the nature and amounts of different types of donor-imposed restrictions should be reported either on the face of the statements or in the notes. Separate line items that distinguish between the different types of restrictions may be used such as:

• Assets, such as land or works of art, donated with stipulations that they be used for a specified purpose, be preserved, and not be sold.

• Assets donated with stipulations that they be invested to provide a permanent source of income.

• Support of particular operating activities. • Investment for a specified term.• Use in a specified future period.• Acquisition of long-lived assets.


Net Asset Disclosure Example

Excerpt from ASC 958-210-55-3

With donor restrictionsPerpetual in nature 200,000$ Purpose restricted 1,840,000 Time-restricted only, for periods after 20X1 150,000

2,190,000$ Without donor restrictions

Designated by the Board for [purpose] 1,000,000$ Undesignated 24,000,000 25,000,000

Net assets 27,190,000$

Sheet1




(in thousands)

20X120X0

Assets:

Cash and cash equivalents$ 4,575$ 4,960

Accounts and interest receivable2,1301,670

Inventories and prepaid expenses6101,000

Contributions receivable3,0252,700

Short-term investments1,4001,000

Assets restricted to investment in land, buildings, and equipment5,2104,560

Land, buildings, and equipment61,70063,590

Long-term investments218,070203,500

Total assets$ 296,720$ 282,980


Accounts payable$ 2,570$ 1,050

Refundable advance650

Grants payable8751,300

Notes payable1,140

Annuity trust obligations1,6851,700

Long-term debt5,5006,500

Total liabilities10,63012,340

Net assets:

Without donor restrictions (Note DD)92,60084,570

With donor restrictions (Note B)193,490186,070

Total net assets286,090270,640

Total liabilities and net assets$ 296,720$ 282,980

Sheet 2

With donor restrictions

Perpetual in nature$ 200,000

Purpose restricted1,840,000

Time-restricted only, for periods after 20X1150,000

$ 2,190,000

Without donor restrictions

Designated by the Board for [purpose]$ 1,000,000-

Undesignated24,000,00025,000,000

Net assets$ 27,190,000

3


“Underwater” Endowments

17

• To be reflected in net assets with donor restrictions rather than in net assets without donor restrictions

Revised net asset classification

• In addition to aggregate amounts by which funds are underwater (current GAAP), also disclose aggregate of original gift amounts (or level required by donor or law) for such funds, fair value, and any governing board policy or decision to reduce or not spend from such funds.

Enhanced disclosures


Operating Measure: Improved Disclosures

For those NFPs that utilize an operating measure and show governing board designations, appropriations, and similar actions (internal transfers) in the measure:

These NFPs must report these types of internal transfers appropriately disaggregated and described by type (either on the face of the financial statements or in the notes).


Example of Operating Measure Presentation

Source: ASU 958-225-55-17


Implementation Issues – Net Assets

In order to change from three classes of net assets to only two classes, NFPs willhave to perform a detailed review of their organization’s records to make sureall funds are classified correctly.

The new standard requires reporting of underwater amounts of donor-restricted endowment funds in net assets with donor restrictions. The standard also enhances disclosures about underwater endowments. Therefore, underwater amounts previously reported in unrestricted funds must be reclassified to net assets with donor restrictions.

Subcategories of net assets classes should be established and reviewed withaudit committee, if organization wishes to report subcategories.

Organizations should ensure policies are in place to reflect new disclosurerequirements in relation to net assets.


Expiration of Capital Restrictions

Gifts of cash restricted for acquisition or construction of PP&E NFPs would be required to use the placed-in-service approach (no more

implied time restrictions) unless there is a donor explicit stipulation of a time period for the use of assets

Reclassify any amounts from net assets with donor restrictions to net assetswithout donor restrictions for such long-lived assets that have been placed inservice as of the beginning of the period of adoption (thus eliminating thecurrent option to release the donor-imposed restriction over the estimateduseful life of the acquired asset).

Approach for reporting expirations on gifts of capital assets:Does your organization use the placed-in-service approach? If not, your organization will have to adopt it, taking into account any donor explicit stipulations


Implementation Issues – Capital Restrictions

When examining the effect of the ASU on your organization, you should look atwhether you have any contributions of long-lived assets that are beingreclassified over time without any explicit stipulation of a time period for the useof the asset. If these assets have already been placed in service, the amount ofthese long-lived assets should be reclassified from net assets with donorrestrictions to net assets without donor restrictions upon adoption of the ASU.

In addition, the organization will have to modify its policy with regard to thereceipt of contributions for the construction of long-lived assets or donated long-lived assets. Upon adoption of the ASU, an organization will have to recognizerevenue without donor restrictions when the donated assets are placed in serviceabsent any explicit donor stipulations otherwise. In the past, organizations hadan option to either follow the placed-in-service approach or to place an impliedtime restriction on the long-lived assets.


Liquidity


Liquidity and Availability of Resources

NFPs required to

provide:

Qualitative information on how an NFP manages its liquid available resources and its liquidity risk (in

the notes)

Quantitative information that communicates the availability of an NFP’s financial assets at the

statement of financial position date to meet cash needs for general expenditures within one year (on

the face and/or in the notes)

Examples from early adopters demonstrate three ways to provide the required information



Qualitative

NFPs are required to communicate how they manage their liquid resources available to meet cash needs for general expenditures within one year of the date of the statement of financial position. Additionally, NFPs should disclose any of the following:

a. Unusual circumstances, such as special borrowingarrangements, requirements imposed by resource providers thatcash be held in separate accounts, and known significantliquidity problems.

b. The fact that the NFP has not maintained appropriateamounts of cash and cash equivalents to comply with donor-imposed restrictions.

c. Information about significant limits resulting fromcontractual agreements with suppliers, creditors, and others,including the existence of loan covenants.



Quantitative

NFPs are required to communicate the availability of their financial assets at the statement of financial position date to meet cash needs for general expenditures within one year (on the face and/or in the notes).

Availability of a financial asset may be affected by (1) its nature, (2) external limits imposed by donors, grantors, laws, and contracts with others, and (3) internal limits imposed by governing board decisions.


Quantitative and Qualitative Liquidity and Availability of Resources Disclosure Example

Source: ASU 958-210-55-8


Quantitative and Qualitative Liquidity and Availability of Resources Disclosure Example

Source: ASU 958-210-55-8

Note T (Continued)

NFP A’s endowment funds consist of donor-restricted endowments and a quasi-endowment. Incomefrom donor-restricted endowments is restricted for specific purposes and, therefore, is notavailable for general expenditure. As described in Note Y, the quasi-endowment has a spendingrate of 5 percent. $1.65 million of appropriations from the quasi-endowment will be availablewithin the next 12 months.

As part of NFP A’s liquidity management, it has a policy to structure its financial assets to beavailable as its general expenditures, liabilities, and other obligations come due. In addition, NFPA invests cash in excess of daily requirements in short-term investments. To help manageunanticipated liquidity needs, NFP A has committed lines of credit in the amount of $20 million,which it could draw upon. Additionally, NFP A has a quasi-endowment of $33 million. Although NFPA does not intend to spend from its quasi-endowment other than amounts appropriated forgeneral expenditure as part of its annual budget approval and appropriation process, amountsfrom its quasi-endowment could be made available if necessary. However, both the quasi-endowment and donor-restricted endowments contain investments with lock-up provisions thatwould reduce the total investments that could be made available (see Note X for disclosures aboutinvestments).


Quantitative Disclosure of Financial Asset Availability

Financial assets, at year end* 234,410$

Less those unavailable for general expenditures within one year, due to: Contractual or donor-imposed restrictions:

Restricted by donor with time or purpose restrictions (11,940) Subject to apropriation and satisfaction of donor restrictions** (174,700) Investments held in annuity trust (4,500)

Board designations: Quasi-endowment fund, primarily for long-term investing** (36,600) Amounts set aside for liquidity reserve (1,300)

Financial assets available to meet cash needs for general expenditures within one year 5,370$

* Total assets, less nonfinancial assets (e.g., PP&E, inventory, prepaids)

** Excludes amounts that have been appropriated for next 12 months that do not have purpose restrictions

Source: ASU 958-205-55-21

Sheet1




(in thousands)

20X120X0

Assets:

Cash and cash equivalents$ 4,575$ 4,960

Accounts and interest receivable2,1301,670

Inventories and prepaid expenses6101,000

Contributions receivable3,0252,700

Short-term investments1,4001,000

Assets restricted to investment in land, buildings, and equipment5,2104,560

Land, buildings, and equipment61,70063,590

Long-term investments218,070203,500

Total assets$ 296,720$ 282,980


Accounts payable$ 2,570$ 1,050

Refundable advance650

Grants payable8751,300

Notes payable1,140

Annuity trust obligations1,6851,700

Long-term debt5,5006,500

Total liabilities10,63012,340

Net assets:

Without donor restrictions (Note DD)92,60084,570

With donor restrictions (Note B)193,490186,070

Total net assets286,090270,640

Total liabilities and net assets$ 296,720$ 282,980

Sheet 2

With donor restrictions

Perpetual in nature$ -$ -

Purpose restricted--

Time-restricted only, for periods after 20X1--

Without donor restrictions

Designated by the Board for [purpose]$ --

Undesignated--

Net assets$ -

Sheet1 (2)

Purpose restrictions accomplished:

Program A expense$ 4,350

Program B expense3,450

Program C expense1,190

8,990

Program A equipment acquired and placed in service1,500

Time restrictions expired:

Passage of specified time850

Death of annuity beneficiary400

Total liabilities1,250

Release of appropriated endowment amounts without purpose restrictions4,500

Release of appropriated endowment amounts with purpose restrictions3,000

Total restrictions released$ 19,240

3

Sheet1 (3)

Financial assets, at year end*$ 234,410

Less those unavailable for general expenditures within one year, due to:*

Contractual or donor-imposed restrictions:

Restricted by donor with time or purpose restrictions(11,940)

Subject to apropriation and satisfaction of donor restrictions**(174,700)

Investments held in annuity trust(4,500)

Board designations:

Quasi-endowment fund, primarily for long-term investing**(36,600)

Amounts set aside for liquidity reserve(1,300)

Financial assets available to meet cash needs for general expenditures within one year$ 5,370

* Total assets, less nonfinancial assets (e.g., PP&E, inventory, prepaids)

** Excludes amounts that have been appropriated for next 12 months that do not have purpose restrictions


Implementation Issues –Liquidity and Availability

NFPs will now have to show disclosures that will reflect how much of their assetsare in reserve and not available for use. If these analyses were not done in thepast, some results may be surprising.

NFPs will have to decide whether they should report a classified statement offinancial position.

If not previously formalized, NFPs will now have to have an established plan inplace to report on availability of unrestricted liquid assets as of the date of thestatement of financial position to meet operating cash needs within one year ofthe statement date.

NFPs may want to look at establishing an operating reserve as part of its processof managing liquidity. We suggest looking at the Net Operating Reserve InitiativeProject.


Expenses


Expense Reporting

Report expenses, either on the face of financial statements or in the notes, by:

• Function *• Natural classification• Analysis (disaggregate function by nature)• Cannot be presented as supplemental information* currently required in GAAP

NFPs are now required to provide qualitative disclosures about methods used to allocate costs among program activities and supporting services

ASU 2016-14 also provides enhanced guidance on allocations from management and general (M&G) expenses

• Key concept: direct conduct or direct supervision


Expense Reporting

Additional Information

• If expenses are reported in other line items within the statement of activities (e.g., salaries are included in costs of goods sold) they should be included in the functional reporting schedule by their natural classification.

• External and direct internal investment expenses that are netted against investment return should not be included in the functional expense analysis.


For example: 958-205-55-21 Note F (Page 66 of ASU)

Expenses By Both Nature and Function


Management and General Expenses (958-720-45-7)

Management and general activities include the following:

a. Oversightb. Business managementc. General recordkeeping and payrolld. Budgetinge. Financingf. Soliciting funds other than contributions and membership dues (see examples included in above section) g. Administering government, foundation, and similar customer-sponsored contracts, including billing and collecting fees and grant and contract financial reporting


Management and General Expenses (958-720-45-7)

Management and general activities include the following (continued):

h. Disseminating information to inform the public of the NFP’s stewardshipof contributed fundsi. Making announcements concerning appointmentsj. Producing and disseminating the annual reportk. Employee benefits management and oversight (human resources)l. All other management and administration except for direct conduct ofprogram services (see paragraphs 958-720-55-171-55-176 for examples)


Management and General Expenses

“The costs of oversight and management usually include the salaries

and expenses of the governing board, the chief executive officer of

the NFP, and the supporting staff. If such staff spend a portion of

their time directly conducting or supervising program services or

categories of other supporting services, however, their salaries and

expenses shall be allocated among those functions.” (958-720-45-8)


Direct Conduct or Direct Supervision

“Activities that represent direct conduct or direct supervision of

program or other supporting activities require allocation from

management and general activities. Additionally, certain costs benefit

more than one function and, therefore, shall be allocated. For

example, information technology generally can be identified as

benefiting various functions, such as management and general (for

example, accounting and financial reporting and human resources),

fundraising, and program delivery. Therefore, information technology

costs generally would be allocated among the functions receiving

direct benefit.” (958-720-45-2A)



Case A in ASU: Chief Executive Officer Allocation958-720-55-172: The broad responsibilities of a chief executive officergenerally include administrative and programmatic oversight. At Not-for-Profit Entity A (NFP A), the chief executive officer spends a portionof time directly overseeing the research program. Additionally, aportion of time is spent with current and potential donors onfundraising cultivation activities. A portion of the chief executiveofficer’s compensation and benefits and other expenses would beallocated to the research program and to the fundraising functionrepresenting the portion of time spent on those activities because theyreflect direct conduct or direct supervision. If the remainder of thechief executive officer’s time is spent indirectly supervising the otherareas of NFP A, including the administrative areas, those activitieswould not constitute direct conduct or direct supervision, and theratable portion of compensation and benefit amounts would remain inmanagement and general activities.



Case C in ASU: Human Resources Department Allocation958-720-55-174 The human resources department at Not-for-ProfitEntity C (NFP C) generally is involved in the benefits administration forall personnel of NFP C. The human resources department’s relatedcosts would not be allocated to any specific program. Rather, thosecosts would remain a component of management and general activitiesbecause benefits administration is a supporting activity for the entireentity.


Example Disclosure for Expense Allocation Disclosure

NOTE X. METHODS USED FOR ALLOCATION OF EXPENSES FROM MANAGEMENT AND GENERAL ACTIVITIES (ASU 958-720-55-176)

The financial statements report certain categories of expenses that areattributable to one or more program or supporting functions of the Organization.Those expenses include depreciation and amortization, the president’s office,communications department, and information technology department.Depreciation is allocated based on square footage, the president’s office isallocated based on estimates of time and effort, certain costs of thecommunications department are allocated based on estimates of time and effort,and the information technology department is allocated based on estimates oftime and costs of specific technology utilized.


Implementation Issues – Reporting of Expenses

Nonprofits should review their allocation methodologies to determine if there are anychanges that are necessary to comply with the ASU.

Once the allocation methodologies are implemented, nonprofits should decide how topresent this analysis in their financial statements and develop the format.

Nonprofits may need to evaluate the different programs and supporting activities todetermine if the methodology and presentation is complete and accurate.

Nonprofits will also have to develop wording for its allocation methodology disclosure.

In developing the disclosures, a nonprofit should assess which activities constitutedirect conduct or direct supervision of a program or supporting function, and,therefore require an allocation of costs.


Investment Return


Reporting of Investment Return

Net presentation of investment expenses against investment return on the face of the statement of activities

• Netting limited to external and direct internal expenses

Disclosure of investment expenses no longer required

No longer require disclosure of investment income components


Investment Return

Direct internal investment expenses involve the direct conduct or directsupervision of the strategic and tactical activities involved in generatinginvestment return including:• Salaries, benefits, travel, and other costs associated with the officer and

staff responsible for the development and execution of investmentstrategy.

• Allocable costs associated with internal investment management andsupervising, selecting, and monitoring of external investment managementfirms.

Direct internal investment expenses do not include items that are notassociated with generating investment return. For example, the costsassociated with unitization and other such aspects of endowmentmanagement would not be allocated.


Implementation Issues – Reporting of Investment Return

Only the net amount of the investment return related to total return investing isrequired to be presented in the statement of activities.

Programmatic investing, or any financial activity that directly carries out anonprofit’s mission or purpose, such as a loan made to lower-income individualsto promote home ownership is not included in this net presentation.

To comply with this presentation, organizations need to fully understand thedefinitions of these terms and then consider how to appropriately and accuratelycapture this information.

Accounting for investment expenses and the related allocation of costs is aprocess that organizations will have to develop to properly present theseinvestment costs under the provisions of the ASU. The complexity will depend onthe type of organization and the amount and nature of their investments.


Cash Flow Statement


Cash Flow Statement

Continue to allow free choice between the Direct Method and the Indirect Method • However the Indirect Reconciliation will no longer be required if the NFP

chooses to use the Direct Method


Implementation Issues – Cash Flow Statement

Discussion should be held among management and those charged withgovernance on current method of cash flow and determination of whether anychanges will be made in terms of direct versus indirect methods.

Discussion should include the pros and cons of both methods.

If determination is made to switch to alternative cash flow method,information gathering should take place to ensure the information is accessiblefor the desired reporting structure.


Implementation Reminders


Early Adoption and Transition

Presentation of Financial Statements of NFPs, ASU 2016-14

Early Adoption: Permitted, but must apply the regular transition provisions

Transition: • For year of adoption: apply all provisions.• For comparative years presented: apply all provisions, except can choose

not to present for the prior year(s) presented:- Analysis of expenses by nature and function, and/or- Disclosures around liquidity and availability of resources


Important Notes

NFPs are already permitted to incorporate many of the changes in the ASU. The only changes that cannot be done without formally adopting the ASU are:

(1) Presenting one class of restricted net assets (consolidating temporarily and permanently restricted)

(2) Underwater endowment presentation(3) Eliminate disclosures of investment return components and netted expenses(4) Eliminate requirement to provide indirect reconciliation if using direct

method for operating cash flows


Implementation Issues - General

Each NFP needs to develop an implementation plan for ASU 2016-14.

Policies and procedures may have to be updated in order to comply with theFASB update. This should be done as early as possible and not wait until theend of the first fiscal year under implementation.


How to Get Ready – Items to Consider


How to Get Ready – Items to Consider! Item #1

Financial Report changes

Consider whether it would be helpful to

prepare a “classified” Statement of Financial

Position

Revise report columns to reflect new net asset

classes

Determine whether your organization wants to present comparative

statements in the year of adoption

Determine whether your organization wants to

present direct or indirect method of cash flow

statement



Board-designated

funds

Does the policy outline how board-designatedfunds are funded and

drawn down?

Does your organization have a policy for the

commitment of board-designated funds?

Does the board periodically review disbursements from

board designated funds?



Endowment Spending

Has your organization followed its own

endowment spending policy?

How are appropriationamounts determined?

What is your board’s interpretation of its ability to allow spending from donor-

restricted endowment funds if amounts fall below original gift

amounts?



Liquidity Management

What level of financial assets does your

organization strive to maintain for daily

requirements?

What resources are available for unanticipated

needs?

What is the policy for how cash in excess of daily

requirements is handled?

How does your organization manage

liquidity?



Cost Allocation

Methodologies

How is your organization‘s allocation policy aligned

with the clarified definition of Management

and General?

How are salaries of supporting staff

allocated?

Understand how costs are currently allocated among

program and support functions

Which expenses are based on direct costs and

which are allocated?

Develop a memo of your allocation

process. This will be helpful in developing your policy footnote.



New Footnote

Disclosures

Prepare qualitative and quantitative

information on liquidity and cash availability

Prepare composition of net assets with donor

restrictions disclosures

Prepare expense analysis with disclosure

of cost allocation methods

Prepare board-designated assets

disclosures

Prepare underwater endowment funds

disclosures

Prepare operating measures disclosures


Resources


Resources• BDO’s Institute for Nonprofit Excellence Resource Center for our FASB Financial

Reporting Guidance page for information on ASU 2016-14 that includes:

podcasts and videos articles and blog posts Links to FASB Resourceshttps://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/fasb-financial-reporting

https://www.bdo.com/resource-centers/institute-for-nonprofit-excellencehttps://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/fasb-financial-reportinghttps://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/fasb-financial-reporting


Resources

• BDO’s Publication:

How to Read Nonprofit Financial Statements: A Practical Guide

https://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/book-promo

https://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/book-promohttps://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/book-promohttps://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/book-promohttps://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/book-promohttps://www.bdo.com/resource-centers/institute-for-nonprofit-excellence/book-promo


Questions?

FINANCIAL STATEMENTS PRESENTATION �FOR NONPROFITS – IMPLEMENTATION PERSPECTIVE With you today Presentation of Financial Statements of NFP Entities (ASU 2016-14)Key Provisions of ASU 2016-14Objectives and Effective DateNFP Financial Statements Project—Key Objectives (recommended by FASB’s NFP Advisory Committee (NAC))Effective DateNet AssetsNet AssetsExample Effect on Statement of Financial PositionExample Effect on Statement of Financial PositionExample of Effect on Statement of Activities - Columnar Format�Example of Effect on Statement of Activities - Columnar Format�Disclosures Related to Net AssetsDisclosures Related to Net AssetsNet Asset Disclosure Example“Underwater” EndowmentsOperating Measure: Improved DisclosuresExample of Operating Measure PresentationExample of Operating Measure PresentationImplementation Issues – Net AssetsExpiration of Capital RestrictionsImplementation Issues – Capital RestrictionsLiquidityLiquidity and Availability of ResourcesLiquidity and Availability of ResourcesLiquidity and Availability of ResourcesQuantitative and Qualitative Liquidity and Availability of Resources Disclosure ExampleQuantitative and Qualitative Liquidity and Availability of Resources Disclosure ExampleQuantitative Disclosure of Financial Asset AvailabilityImplementation Issues –Liquidity and AvailabilityExpensesExpense ReportingExpense ReportingExpenses By Both Nature and Function�Management and General Expenses (958-720-45-7)Management and General Expenses (958-720-45-7)Management and General Expenses Direct Conduct or Direct SupervisionDirect Conduct or Direct SupervisionDirect Conduct or Direct SupervisionExample Disclosure for Expense Allocation DisclosureImplementation Issues – Reporting of ExpensesInvestment Return�Reporting of Investment ReturnInvestment ReturnImplementation Issues – Reporting of Investment ReturnCash Flow StatementCash Flow StatementImplementation Issues – Cash Flow StatementImplementation RemindersEarly Adoption and TransitionImportant NotesImplementation Issues - GeneralHow to Get Ready – Items to ConsiderHow to Get Ready – Items to Consider! � Item #1How to Get Ready – Items to Consider! � Item #2How to Get Ready – Items to Consider! � Item #3How to Get Ready – Items to Consider! � Item #4How to Get Ready – Items to Consider! � Item #5How to Get Ready – Items to Consider! � Item #6ResourcesResourcesResourcesQuestions?

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