FASB Update: Presentation of Financial Statements

CPAs & Advisors

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The FASB recently released the first of two phases of its project to improve the financial reporting for Non-Profit (NFP) entities. Read the Accounting Standards Update.

Who will be affected?

The amendments in this update affect all NFPs and the users of their general purpose financial statements.

What are the main provisions?

The main provisions of this update, which amend the requirements for financial statements and notes in Topic 958, Non-Profit Entities, require an NFP to:

  • Present on the face of the statement of financial position amounts for two classes of net assets at the end of the period, rather than for the currently required three classes.
  • Provide enhanced disclosures, including the following about:

1. The effects, if any, of the limits on the use of resources imposed by an NFP’s governing board, donors, grantors, laws, and contracts on an NFP’s liquidity, financial flexibility, and allocation of resources

2. How an NFP manages its liquidity to meet short-term demands for cash

3. The types of resources used and how they are allocated in carrying out an NFP’s activities

4. The effects, if any, of methods used for allocating costs among an NFP’s program and supporting activities

5. The effects, if any, of underwater endowments

  • Eliminate the current option to release donor imposed restrictions on long-lived assets over the useful life of the acquired asset.

When are the amendments effective?

The amendments in this update are effective for annual financial statements issued for fiscal years beginning after December 15, 2017, or in other words for December 31, 2018 year-ends. Early application of the amendments is permitted. The amendments should be applied on a retroactive basis in the year the update is first applied.

If you have questions about how the FASB update will impact your entity, reach out to your Yeo & Yeo professional.


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