Financial Accounting & Reporting

Not-for-Profit Financial Accounting & Reporting Resources 

NFP Causes

Nongovernmental not-for-profit entities (NFPs) exist for many purposes and in many forms, including charities, museums, performing arts organizations, civic leagues, colleges and universities, religious groups, social clubs, fraternal societies, foundations, and professional associations. The financial statements are often used to tell the story of how the NFP utilizes the resources it has in addition to reporting the financial outcomes of its efforts. 

Due to the unique issues faced by health care entities, they are not included in the scope of the Not-for-Profit Section. Resources and projects of the Health Care Entities Expert Panel can be found in the AICPA Financial Reporting Center

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Highlighted Resources

Financial Reporting Resources

FASB's Not-for-Profit Financial Statement Standard
On August 18, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. The newly released ASU will change the way all NFPs classify net assets and prepare financial statements. It 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. To view the standard in its entirety, visit the FASB's website here

Financial Reporting Brief: Roadmap to Understanding the New Revenue Recognition Standards (PDF)
FASB's new revenue recognition standard replaces virtually all existing revenue recognition guidance. The guidance affects all entities—public, private, and not-for-profit—that enter into contracts with customers to transfer goods or services or enter into contracts to transfer nonfinancial assets.

Navigating the New Lease Accounting Standards - An Overview for NFPs (PDF)
This compliance brief summarizes the key requirements and implementation considerations on implementing the new leases standard. Spanning nearly 500 pages, ASU 2016-02 has far-reaching implications for all businesses, including not-for-profit entities.

Common Financial Statement Errors (PDF)  
Accounting standards for NFPs are complex and can be difficult to apply to specific circumstances, sometimes resulting in errors or omissions in financial reporting elements. The following document contains a series of lists developed to serve as a non-authoritative illustration of some financial statement errors commonly found in small and mid-sized NFPs.

Illustrative Financial Statements 
These illustrative financial statements provide a non-authoritative example of a possible presentation of a complete set of financial statements for a nongovernmental NFP that is not a health care provider under current GAAP. The example is fictitious. Download these linked documents in Excel and Word to understand how the elements interrelate.

Illustrative Disclosures
Tell Your Story Through the New Liquidity Disclosures (Word)  
Download these illustrative liquidity disclosures for non-authoritative examples of possible footnote disclosures that comply with the requirements of FASB ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. These fictitious examples are intended to help organizations consider how they want to craft their liquidity disclosures to enhance transparency and best tell their stories.

Accounting Resources

NFP Audit and Accounting FAQs
As with most any industry, there are certain aspects of not-for-profit accounting that tend to draw frequent questions. This article addresses questions commonly asked by NFP management or industry accounting personnel.

Fair Value White Paper (PDF)  
Fair value is a market-based approach to valuing assets (and some liabilities) and is used widely in accounting and financial reporting for all entities, including NFPs. The following white paper reflects the non-authoritative views of the Financial Reporting Executive Committee (FinREC) on applying the provisions of FASB ASC 820 on certain issues common to NFPs.

Distinguishing Contributions from Exchange Transactions (PDF)
The table contains lists indicators that may be helpful in determining whether individual asset transfers are contributions, exchange transactions, or a combination of both.

Tips for Designing Functional Expense Allocation
A well-designed expense allocation system is an absolute necessity for high-performing not-for-profits. Yet, it presents a challenge for many organizations. This article summarizes important considerations for NFP cost allocation.

Functional Expense Allocation - Getting It Right (PDF) 
This background paper provides an overview of the financial reporting requirements and offers some tips for designing and optimizing your NFP's expense allocation system.

Payments in Lieu of Taxes
Payments in Lieu of Taxes (PILOT) can arise in several different ways. In some cases, the NFP may be asked to make a direct payment to the local government to help the local government offset the costs of providing services to the institution. Read this background paper to learn more.

Auditing Alternative Investments (PDF)
This resource provides considerations for auditing alternative investments. Valuation of alternative investments can be a challenge for many not-for-profits and their auditors. The more complex or illiquid the investment, the greater the risk of misstatement and the more persuasive audit evidence needs to be obtained by the auditor.


Recommended CPE

Get the targeted learning you need to produce accurate, decision-useful financial reporting. The AICPA offers CPE-eligible courses developed by leading experts in coordination with the NFP Section's technical staff. Section members receive an exclusive 20% discount on continuing education and other not-for-profit products offered by AICPA. Learn more about the exclusive discounts available for our member community.

 The AICPA's Accounting and Auditing Technical Hotline provides members with free, high-quality technical assistance by phone concerning issues related to accounting and financial reporting, auditing and attestation, compilation, and review standards.

The AICPA Financial Reporting Center publishes
Not-for-Profit Industry Insights and provides updates on projects of the Not-for-Profit Entities Expert Panel

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