Case Studies in Not-for-Profit Accounting and Auditing

Chapter 1 FINANCIAL STATEMENT REQUIREMENTS

LEARNING OBJECTIVES

After completing this chapter, you should be able to do the following:

• Identify the basic financial statements.
• Determine the basic requirements of the financial statements.

TECHNICAL BACKGROUND INFORMATION

In the list below, the FASB Accounting Standards Codification (ASC) 958, Not-for-Profit Entities, requires not-for-profit entities (NFPs) to present financial statements showing aggregate information about the entity. The general-purpose financial statements required by FASB ASC 958 also include the accompanying notes to the financial statements.

The general-purpose financial statements required by FASB ASC 958 for not-for-profit entities are:

1.     The Statement of Financial Position [May also properly be referred to as a Balance Sheet]

2.     The Statement of Activities

3.     The Statement of Cash Flows

4.     Voluntary health and welfare organizations are also required to present a Statement of Functional Expenses

The Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Not-for-Proft Entities, was released on August 18, 2016. The newly released ASU will change the way all NFPs classify net assets and prepare financial statements. The standard is effective for annual financial statements issued for fiscal years beginning after December 15, 2017 and for interim periods within fiscal years beginning after December 15, 2018. Early ...