Not-for-Profit Financial Statements Part 2 1.5 CPE

December 31, 2018 will see significant changes to not-for-profit (NFP) financial reporting as ASU 2016-14, Presentation of Financial Statements of Not-for-Profit entities becomes effective.  It is essential to understand the various aspects of the Accounting Standards Update (ASU).  

The previous reporting requirements for Not-for-Profit entities fell under the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (FAS) No. 116 and 117, issued in 1993.  In November 2011, the FASB announced two projects intended to improve the financial reporting of not-for-profit entities.   This was the first change to reporting in over 20 years.

The FASB views ASU 2016-14 as Phase 1—the beginning of guidance to result from its multiyear review of the not-for-profit financial reporting model. There are critical enhancements to the reporting process which all not-for-profit entities should be aware of including:

• Changes in net asset classification
• Changes in investment returns
• Changes in reporting of expenditures
• Changes in reporting and disclosing liquidity and cash flow
• Changes to the physical financial statements of the not-for-profit entity

This course reviews the new requirements and provides examples on how they will impact not-for-profit financials. This particular course focuses on the changes relevant to the statement of activities, statement of cash flows, disclosures for expenses, and investment expenses.  

Prerequisites

No advanced preparation or prerequisites are required for this course. However, it is recommended to take the other courses in the series prior to completing this one.

Learning Objective

• Explore the composition and purpose of the statement of activities for not-for-profits.
• Explore presentation alternatives through the use of examples.
• Explore the composition and purpose of the statement of cash flow for not-for-profits.
• Explore requirements related to liquidity information.
• Identify concepts surrounding how reporting of expense information will change.

Last updated/reviewed: July 24, 2025