The latest view on not-for-profit accounting issues

Liquidity and availability

As you are probably aware by now, Accounting Standards Update (ASU) 2016-14, Not-for-Profit Entities – Presentation of Financial Statements of Not-for-Profit Entities is in full effect as it was effective for fiscal years beginning after December 15, 2017. Many of you should have implemented this new accounting standard by now and should have already seen …

Keep Reading

The Fraud Triangle

What exactly is the fraud triangle and a better question is how does it apply to you? One thing to know about the fraud triangle is that it is designed to help explain why internal fraud occurs. Like most triangles, it has three points that make it what it is. These three components are Opportunity, …

Keep Reading

Is it a related party transaction if no amounts were paid?

Related party transactions are required to be disclosed in the footnotes of your financial statements. Once you identify who the related parties are, then you need to disclose any transactions between the Organization and those parties. A common example is when the attorney on the board provides services to the Organization for a fee. But …

Keep Reading

What to know about 457 plans

Taxes relating to 457 plans can be confusing for tax exempt entities. Here are some key points to know: 457b and 457f plans are deferred compensation retirement plans that are offered to a select group of higher compensated or key management employees in a tax exempt entity. Both employees and employers can make contributions to …

Keep Reading

Excel and data management: making information usable

Let’s be honest, data management in your organization is probably not the most important step in your nonprofit’s hierarchy of needs. And love it, or hate it, there’s a good chance your organization relies on Excel for many tasks, including data management. Here are three useful tips that may make life inside the spreadsheet a …

Keep Reading

Upcoming standard delays ahead!

The votes are in. The Financial Accounting Standards Board (FASB) has unanimously decided to delay the accounting standard ASC 842. In a nutshell, ASC 842 is the lease accounting standard that requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. …

Keep Reading

Distinguishing direct donor benefits from fundraising expenses

Many not-for-profit organizations hold special fundraising events with the intent to raise contributions to support their mission, such as galas, balls, dinners, theater parties and auctions. Donor participants purchase tickets to attend the event in exchange for goods or services provided as a benefit to the participant. The direct benefits to the donor participant are …

Keep Reading

Nonprofit accounting: what’s the definition of a collection?

What is a “collection” in accounting terms? The FASB recognized that there were some conflicting definitions out there and issued a new ASU to get it straightened out. The new definition of collection is: Works of art, historical treasures or similar assets that meet all of the following criteria: (a) they are held for public …

Keep Reading

Net asset classifications: change is here!

Let’s face it, not many people like change – especially when it comes to their daily routines and their jobs. Change can cause confusion and frustration. I want to take a little time to discuss one of the changes that has affected nonprofit organizations recently. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update …

Keep Reading

Functional expense allocation: what to include

As many of you may know, the Financial Accounting Standards Board (FASB) issued a new standard ASU 2016-14, Presentation of Financial Statements. One effect this standard has is that it creates consistency on how expenses are presented in the financial statements for all nonprofit organizations. Functional expenses can be disclosed in three different ways: 1. …

Keep Reading