Article written by:
Michael Purcell, CPA
Assurance Manager

On August 29th, GBQ hosted the second part of its 12th Annual Nonprofit Perspectives series, the Financial Reporting Update. The session focused on changes in the NPO Financial Statement Standard (ASU 2016-14), the new guidance issued on accounting for contributions (ASU 2018-08), and results of an industry benchmarking survey on trends experienced by NFP organizations. Below is a recap of topics addressed:

  • Changes to NFP financial statements effective for fiscal years beginning after December 15, 2017, including changes to net asset classifications, presentation of investment returns, disclosure of expenses, qualitative and quantitative disclosures of the organization’s liquidity, and clarification to cash flow presentation. The three classes of net assets (unrestricted, temporarily restricted, and permanently restricted) are being decreased to two classes (net assets with donor restrictions and net assets without donor restrictions). Additionally, NFPs will be required to present expenses by nature and function and provide qualitative disclosures of methods used to allocate costs among functions. Organizations will also have new required disclosures on how the organization manages its liquid assets to meet cash needs within one year of the financial statement date.
  • Recently, guidance was published to clarify how contributions received and contributions given are accounted for. ASU 2018-08 addresses how organizations identify reciprocal (exchange) transactions from nonreciprocal (nonexchange/contribution) transactions. Reciprocal transactions are subject to other guidance (including Topic 606) and outside the scope of ASU 2018-08. The recently issued guidance provided further clarification on determining whether contributions were conditional or nonconditional, and when the transactions should be recognized.
  • An industry benchmarking study was reviewed, which gave NFPs a barometer to measure performance across a variety of areas, including strategic planning, human resources, operations, scope and impact, and governance matters.

If you have any questions, or would like more detail on any of these summarized topics, do not hesitate to contact your GBQ representative at (614) 221-1120 or The third and final installment of the Perspectives series is scheduled for November 7th at GBQ. We hope to see you there!

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