Nonprofit Financial Statement Framework
ASU 2016-14, Not-for-Profit Entities (Topic 958), Presentation of Financial Statements of Not-for-Profit Entities, affects substantially all nonprofits as well as creditors, donors, grantors, and others that use their financial statements. This standard is effective for fiscal years beginning after December 15, 2017.
Understanding and implementing accounting standards can be complex, time-consuming, and often requires skills and expertise not found on your internal finance team. AAFCPAs provides financial management assistance on this complex technical accounting issue, allowing clients to confidently apply the standards with greater efficiency and ease.
AAFCPAs advises nonprofits in assessing the impact of the new standards, and provides guidance throughout the transition process. Contact us today for an estimate and to discuss the challenges you face.
AAFCPAs ASU Implementation Services Include:
- Assessment of the impact of the new standard, and development of an implementation schedule to appropriately allocate your resources and achieve compliance.
- Guidance in reviewing and updating accounting policies and procedures to reflect any changes, including efficiencies in processing information and producing financial reporting in line with the new reporting standard.
- Guidance on choosing a method of reporting expenses as required by this new guidance, based on the structure of your current information system, and how it captures data; and development & documentation of a cost allocation policy;
- Guidance in developing a policy for managing the organization’s liquidity needs to be disclosed in the footnotes to the financial statements (qualitative requirement), including an assessment of entity-wide risk that may affect liquidity, and a strategy that addresses those risks;
- Development of a nonprofit’s required policies related to their placed-in-service approach;
- Guidance on implementation of the net assets classification requirement, including the organization’s need to adjust/update the tracking mechanism currently utilized to accommodate the requirements of the change in reporting; recommendations regarding the level of detail and disaggregation needed to report net assets on the face of the statement of financial position versus reporting in the notes to the financial statements;
- Guidance on enhancing endowment disclosures, including: developing and implementing a policy regarding appropriating funds from an endowment that is underwater, and development of appropriate disclosures in the footnotes to the financial statements.
- Investment advice on endowments to ensure they meet the organization’s liquidity needs; Evaluation of your investment mix to ensure maximum investment return, while respecting the appropriate level of risk.
- Business Process Performance Analysis, and Information Systems Gap Analysis to ensure efficiencies in capturing and processing information, and producing financial reporting in line with the new reporting standard.
- Re-formatting of internal financial statements relating to endowment reporting to ensure consistency with audited financial statements.
Consistent delivery of the highest levels of quality assurance, tax and other professional services demands discipline and a commitment to continuous learning. Our people combine technical competence with their commitment to obtaining the requisite knowledge and skills to continue to anticipate the ongoing and evolving needs of our clients.
At the end of the day, it is our expertise that clients value the most. We understand the nuances of the Nonprofit Financial Statement Framework, and encourage you to take action now on this important issue. We anticipate fees will increase over time as the need for implementation services increases. The sooner you take action the lower the costs may be.
Contact AAFCPAs through the form on the right side of the page or at firstname.lastname@example.org and we will call you back within 24 hours. If you'd like to call in today, please contact us at 508.366.9100.