FASB Announces Tentative New Decisions on Not-for-Profit Financial Reporting

Over the past year or so, we have kept a close eye on developments at the Financial Accounting Standards Board (FASB). In tandem with the Board’s ongoing discussions related to its Not-for-Profit Financial Statement Reporting Project, we have relayed its tentative decisions around not-for-profit (NFP) financial reporting, expense report requirements and cash flow statements.

At its latest meeting on May 14, the Financial Accounting Standards Board (FASB) continued to deliberate on financial reporting standards for nonprofits, specifically around the presentation and disclosure of investment expenses, as well as an intermediate measure of operations for nonprofit healthcare organizations based on results of staff outreach to stakeholders in foundations and healthcare entities. The Board made the following tentative decisions:
  • All nonprofits would be required to disclose identifiable direct external investment expenses and the amount of direct investment expenses incurred during the reporting period.
  • Nonprofit business-oriented healthcare entities would be required to present an intermediate measure of operations as previously defined by the Board in this project. Those entities would have the option of also presenting the currently-required performance indicator. As a result of this decision, all nonprofit entities, including healthcare organizations, would be required to present the same intermediate measure of operations.
As discussed above, these decisions are still tentative, and the Board will be revisiting them alongside all other tentative decisions that were previously made throughout the duration of this project prior to the release of an exposure draft for public comment later this year.

For more on the FASB’s deliberations process, see our previous posts on the topic, and stay tuned to the blog for further updates.

FASB Continues Deliberations on Nonprofit Financial Reporting
FASB Outlook – How Recent Decisions by the FASB Board to Reset its Agenda Might Impact Nonprofits
FASB Board Discusses Potential Updates to NFP Expense Report Requirements
FASB Board Proposes Changes to Nonprofit Cash Flow Statement
FASB to Prioritize Disclosure Framework, Financial Instruments Aim for Simplification of Codification