Functional expenses: A revised focus for not-for-profit auditors
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Functional expenses: A revised focus for not-for-profit auditors

14 days ago · 3 min read

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EXCLUSIVE

FASB Accounting Standards Codification (ASC) Topic 958, Not-for-Profit Entities, requires all not-for-profit entities to present the relationship between functional expenses (such as major classes of program services and supporting activities) and natural expenses (such as salaries, rent, electricity, supplies, interest, and depreciation). For financial statement users, this analysis provides an in-depth look at how nonprofits spend toward their missions. For auditors and preparers, it necessitates consideration of the approach to the allocation and reporting of functional expenses.

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