Industry Insights

FASB Not-for-Profit Advisory Committee

February 2012
Author:  Richard Wittgren

Richard Wittgren



Not-for-Profit & Government

201 N. Illinois Street, Suite 700
P.O. Box 44998
Indianapolis, IN 46244-0998 (46204)


Recently, the Financial Accounting Standards Board (FASB) Not-for-Profit Advisory Committee met to discuss goals for improving the financial reporting model for not-for-profit organizations. The committee is exploring changes that would enable exempt organizations to better report and explain their finances to donors and other interested parties. In particular, the committee is looking at four topics:

  1. Net asset classifications and how liquidity is portrayed within the financial statements
  2. Improving statement of activities and cash flow reporting to better communicate financial performance, including:
    • Requiring organizations to report operating measures in the statement of activities
    • Encouraging organizations to further separate the statement of activities into sections that emphasize current operating results versus other changes in net assets
    • Encouraging or requiring more complex organizations to report on a business segment basis
    • Improving the statement of cash flows to more closely link operating cash flows to the results of operations reported in the statement of activities
  3. Providing a framework for management and the board to provide commentary and analysis on organization operating results and related fiscal health, not unlike a management’s discussion and analysis section
  4. Reviewing current disclosure requirements in an effort to streamline or enhance current reporting requirements

The committee also discussed potential educational efforts to help organizations improve their current reporting in accordance with accounting principles generally accepted in the U.S.

If you have any questions about committee activities, contact your BKD advisor.

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