Perspective and Issues

Concepts, Rules, and Examples

Current Assets

Noncurrent Assets

Current Liabilities

Noncurrent Liabilities

Other Liabilities

Offsetting Assets and Liabilities

Callable Obligations

Short-Term Obligations Expected to Be Refinanced

Vacation and sick leave

Disclosure Requirements


Chapter 3 describes the requirement for not-for-profit organizations to present liquidity information in the statement of financial position. The requirement can be satisfied by reporting a classified statement of financial position which classifies assets and liabilities as current and noncurrent. If an organization does so, classified statements of financial position should present current assets and current liabilities separately from noncurrent assets and liabilities.

With some exceptions relating to donor-imposed restrictions or restrictions on the use of cash (explained later in this chapter), not-for-profit organizations would classify assets and liabilities similarly to commercial organizations. Current assets are defined for commercial enterprises as those assets which are, or will become, cash, or will be consumed in normal business operations within a year or within one operating cycle if more than one year. Current liabilities are those obligations which will require the use of current assets or the incurrence of another current liability to liquidate them. Current liabilities also include the following:

  • Noncurrent ...

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