FASB Committee Considers Nonprofit Financial Reporting Changes

Nonprofit organizations are neither public nor private businesses creating a unique situation in regards to accounting standards. Because nonprofits are accountable to the public, the Financial Accounting Standards Board’s (FASB) Not-for-Profit Advisory Committee (NAC) is studying ways to improve financial reporting for nonprofit entities. The NAC has identified several potential projects for the FASB’s standard-setting agenda, three of which are:

1. Net Asset Classes – Redefine or relabel classifications to better convey nonprofit liquidity. 
2. Form of Financial Statements – Improve statements to better communicate the financial landscape. 
3. Management Discussion & Analysis – Include commentary from nonprofit directors to further explain the financial story. 

For more information, read the full article: FASB Not-for-Profit Advisory Committee Recommends Improvements to Financial Reporting.