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9
Connecticut CPA
g
January/February 2016
The nature and amounts of donor re-
strictions would continue to be dis-
closed either in the notes or on the
faceofthestatementoffinancialposi-
tion. The current unrestricted net asset
classification would be renamed net
assets without donor restrictions.
AlsoaffirmedfromtheASU,thenature
and amounts of board-designated
restrictions within the net assets with-
out donor restrictions classification
would be disclosed either in the notes
or on the face of the statement of
financialposition.
Underwater endowments are currently
presented within the unrestricted net
asset classification. Affirming the ap-
proach taking in the proposed ASU,
underwater endowments would be
combined and shifted to the net assets
withdonorrestrictionsclassification.
Proposed disclosures for underwater
endowments from the ASU were also
affirmed.Thesedisclosuresinclude:
·
The entity's policy whether or not
to spend from underwater en-
dowment funds.
·
In aggregate, the fair value of the
underwater endowment, the original
gift(s) or amount(s) to be retained
per donor intent or law, and the
amountofthedeficiencies.
Thefinalnetassetclassificationcon-
sideration re-deliberated at the De-
cember 11 meeting was how to deal
with the expiration of restrictions on
net assets used to acquire or construct
long-lived assets. When there are no
explicit donor instructions, the board
affirmed using the placed-in-service
approach.
Work continues on the note disclosure
concerning an entity's liquidity and
financial availability. The board has
asked staff to identify an approach to
report qualitative liquidity and liquid-
ity risk information, and alternative
methods to report such quantitative
information.
Other items to be re-deliberated in
phase one include:
·
Presentation of expenses ­ both by
nature and an analysis of an entity's
expenses by function and nature.
·
The netting of external and direct in-
ternal investment expenses against
investment returns including disclo-
sure of netted investment expenses.
·
Enhanced disclosures about cost
allocations.
·
Improvement to disclosures by those
not-for-profitentitiesthatchooseto
present an operating measure.
The FASB's goal is to wrap up phase
one by mid-2016. Phase two will then
begin with no end date set at this time.
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Presented by: FASB Assistant Director Jeffrey Mechanick, CPA
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Thursday, January 14 · 8:30 - 10:30 a.m.
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CPE Credit: 2