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CPA Now
Apr 06, 2018

Consider the Major Changes to Not-for-Profit Financial Reporting

William HayesBy William J. Hayes, Pennsylvania CPA Journal managing editor


In advance of his presentation at the May 14-15 PICPA Not-for-Profit Conference, I spoke with Jimmy Mo, a partner with EisnerAmper LLP in Philadelphia, about the new financial reporting model and what Pennsylvania CPAs need to do to make sure they are ready for its implementation. We discussed how the new standard improves upon previous iterations and the degree of difficulty financial statement preparers might face when embarking upon implementation.

Jimmy MoPICPA: What would you say is one change to the not-for-profit financial statement reporting model that improves upon what was already there?

Mo: The new standard renames the net asset categories from unrestricted, temporarily restricted, and permanently restricted net assets to net assets without donor restrictions and net assets with donor restrictions. The new net asset categories provide readers of the financial statements with a better understanding of who restricts the net assets under U.S. GAAP.

What is one or two things financial statement preparers are going to have to do right away to begin shifting their mindset to deal with the new model?

Financial statement preparers should begin reviewing the policies and procedures that will be required to be disclosed under the new standard. This will help ensure that these policies and procedures exist and are suitable for disclosure.

Is there any implementation guidance out there for financial statement preparers, and is this change big enough that the implementation could be a bit complicated?

The AICPA has resources for financial statement preparers to assist them with the implementation of the new standard. In addition, CPA firms have begun providing financial statement preparers with guidance through trainings and literature. While the implementation of the new standard may provide challenges for the financial statement preparer, those challenges may be mitigated through education and training beforehand.


For more information on the new financial reporting model, make sure to check out Mo’s presentation at the May 14-15 PICPA Not-for-Profit Conference in King of Prussia.



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