HR Workforce Solutions
By Nonprofits, For Nonprofits
Are you familiar with the Accounting Standards Update (ASU) 2016-14 issued by FASB? It’s a standard created to offer solutions to simplify and improve how a nonprofit organization is able to classify its net assets, financial statements, liquidity, financial performance, and cash flows. Now, that organizations have begun to apply this new standard, they are encountering implementation issues that were not anticipated.
When organizations are gathering and preparing their financial information, they’re being faced with making difficult decisions on how to best present this information. For example, an analysis of expenses by function and natural classifications can be presented in multiple ways however, what is the most efficient and most beneficial method to do so?
Tammy Ricciardello states “Our advice on the presentation? Keep it simple. Yes, the analysis of expenses by function and nature should show the natural expenses of the entity by program and supporting activities, but this doesn’t mean that every type of expense should be presented on its own line. A straightforward approach will prevent the presentation from becoming overly complex and unwieldy.”
It’s important to remain focused on the information that is most useful and make sure that the one reading your financial statements can clearly understand the costs of each activity and where that activity is being allocated to. Remember, keep it simple.
To learn more about the best practices for implementing ASU 2016-14 functional expenses be sure to read the full article here.
Article provided by Tammy Ricciardella, CPA, Technical Director at BDO.
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UST maintains a secure site. This means that information we obtain from you in the process of enrolling is protected and cannot be viewed by others. Information about your agency is provided to our various service providers once you enroll in UST for the purpose of providing you with the best possible service. Your information will never be sold or rented to other entities that are not affiliated with UST. Agencies that are actively enrolled in UST are listed for review by other agencies, UST’s sponsors and potential participants, but no information specific to your agency can be reviewed by anyone not affiliated with UST and not otherwise engaged in providing services to you except as required by law or valid legal process.
Your use of this site and the provision of basic information constitute your consent for UST to use the information supplied.
UST may collect generic information about overall website traffic, and use other analytical information and tools to help us improve our website and provide the best possible information and service. As you browse UST’s website, cookies may also be placed on your computer so that we can better understand what information our visitors are most interested in, and to help direct you to other relevant information. These cookies do not collect personal information such as your name, email, postal address or phone number. To opt out of some of these cookies, click here. If you are a Twitter user, and prefer not to have Twitter ad content tailored to you, learn more here.
Further, our website may contain links to other sites. Anytime you connect to another website, their respective privacy policy will apply and UST is not responsible for the privacy practices of others.
This Privacy Policy and the Terms of Use for our site is subject to change.
