Current financial reporting standards for not-for-profit organizations have been in place for nearly 25 years. The Financial Accounting Standards Board (FASB), the board responsible for setting the standards for not-for-profit organizations, recognized that while existing guidance held up well, some improvements were necessary. The updated standard reflects the desire for not-for-profit organizations to be able to tell their unique story while simultaneously improving relevance, transparency, and comparability for the ease of the intended users. It’s no surprise that over time the needs of intended users of financial statements have changed, thus changing the way information needs to be presented.
The standard's updates are being executed in two phases. Phase I was issued in August 2016 and is effective for periods beginning on or after December 15, 2017. Read the article for key changes included in the updates, what this means for your organization, and how to tackle implementation.