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Nonprofit Management
May 19, 2023
As a nonprofit organization, it is essential to have a cohesive and productive team in order to efficiently achieve your mission and goals.
Read MoreAboutThe Benefits of Team Building Exercises for Nonprofit Employers
Nonprofit Management
March 28, 2023
America's charitable nonprofits serve and nurture people of every age, gender, race, and socioeconomic status—supporting at-risk communities nationwide.
Read MoreAbout[Webinar Recording] UST Live: Cybersecurity Risk Management
Nonprofit Management
March 16, 2023
Creating a positive culture in the workplace should be a priority for every nonprofit employer. A positive work environment can help increase employee engagement, morale, an...
Read MoreAbout5 Tips for Creating a Positive Workplace Culture
Nonprofit Management
March 02, 2023
While many foundations are well on their way with going mobile, start-ups and smaller organizations may still be trying to figure out how to establish a mobile presence in a...
Read MoreAboutThe Pros and Cons of Going Mobile
Nonprofit Management
December 20, 2022
No matter where society struggles or how much change comes to your nonprofit, everything always comes down to the people who form your team and support your community.
Read MoreAboutThe Changing Landscape of the Nonprofit Workforce
Nonprofit Management
December 16, 2022
From recruiting and training to engagement and retention, your organization has likely invested a great deal of time and effort into ensuring your volunteer program is succe...
Read MoreAbout[Webinar Recording] UST Live: Volunteer Management
Nonprofit Management
November 18, 2022
Some argue that they couldn’t prepare for the pandemic, because it was a black swan event—defined as unforeseeable.
Read MoreAboutImplementing Change to Build Resiliency
Nonprofit Management
September 30, 2022
In the latest rendition of UST Live, we were joined by thought leaders from across the U.S. with expertise in succession planning.
Read MoreAbout[Webinar Recording] UST Live: Succession Planning and Preparedness
Nonprofit Management
September 21, 2022
Working on a team requires more than just hard work, morale amongst co-workers, and willingness to work with others. The most important yet often ignored that attributes to ...
Read MoreAboutHow to Improve Communication Strategies with Your Team

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HR Knowledge
March 18, 2024
As a nonprofit leader, you know the importance of every dollar spent.
Read MoreAboutA Guide to Reducing Recruitment Costs as a Nonprofit
HR Knowledge
March 08, 2024
Question: Can I limit the number of times an employee makes changes to their W-4?
Read MoreAboutHR Question: Managing W-4 Changes
HR Knowledge
February 23, 2024
Creating an employee handbook provides a cornerstone reference guide for an organization.
Read MoreAboutCreating An Employee Handbook for Nonprofits  
HR Management
January 22, 2024
Professionals in the nonprofit sector are often more motivated by the mission over a high salary and interested in pursuing leadership roles that enable them to make a bigge...
Read MoreAboutHow To Improve Leadership Skills in Your Nonprofit  
HR Knowledge
January 12, 2024
When it comes to running a nonprofit organization, one of the most important aspects is creating a productive and safe workplace for your employees.
Read MoreAboutThe Top 5 Benefits of Building a Human Resources Department in a Nonprofit Setting
HR Knowledge
January 05, 2024
Question: Are there any questions we should avoid when interviewing job candidates?
Read MoreAboutHR Question: Questions to Avoid When Hiring Job Candidates
HR Knowledge
December 21, 2023
Nonprofit organizations improve communities by providing impactful services, including everything from educating, sheltering, healing, nurturing and so much more.
Read MoreAbout How To Recruit and Hire for Nonprofit Internships
HR Knowledge
December 18, 2023
Our world continues to progress and it has become increasingly important for organizations to prioritize Diversity, Equity, and Inclusion (DEI) awareness.
Read MoreAbout5 Practical Ways for Nonprofits to Develop a Culture of DEI Awareness

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​​​​​​​Lessons Learned from Implementing ASU 2016-14 – Functional Expenses

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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