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The FASB issued Proposed Account-
ing Standards Update--Not-for-Profit
Entities (Topic 958) and Health Care
Entities (Topic 954): Presentation of
Financial Statements of Not-for-Profit
Entities in April 2015 with comments
due in August. Based on the com-
ments received, the project was split
into two phases for re-deliberation by
the board. The first phase concen-
trates on issues that are independent
of other projects and can possibly be
finishedintheshortterm.
On December 11, the board's re-delib-
erations focused on methods of pre-
sentingoperatingcashflows,netasset
classifications (including underwater
endowments), and quantitative and
qualitative information to help users
assessanot-for-profitentity'sliquidity.
The tentative decisions were split three
ways: affirm net asset classifications,
changetheproposedcashflowstate-
ment presentation requirements, and
send liquidity back to the FASB staff
for additional research.
The Cash Flow Statement
Pulling back from the proposal in the
accounting standards update (ASU),
the board tentatively decided to allow
not-for-profitentitiestouseeitherthe
direct or indirect method in present-
ingoperatingcashflows.Ifthedirect
method of presenting operating cash
flowsisused,anindirectreconciliation
would not be required.
Net Asset Classifications and
Underwater Endowments
Affirming the proposed revisions in
theASUfornetassetclassifications,
the board proposal would require two
classes of net assets. Gone would be
temporarily restricted and permanent-
ly restricted net asset classifications
dating from FAS 117, replaced with a
single class net assets with donor
restrictions.
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paid advertisement
FASB's Not-for-Profit Financial Statements Project
TheFinancialAccountingStandardsBoard(FASB)not-for-profitfinancialstatementpresentationproj-
ectisrevisingtheFAS117reportingstandardsissuedinJune1993.Specificallyenvisionedwere
improvements to the net asset categories and better information about the organization's liquidity,
financialperformance,andcashflows.