A new lease accounting standard has been issued which will change how leases are accounted for on balance sheets and financial documents. These changes affect all entities—including nonprofit organizations—that lease office space, vehicles and equipment such as copiers and phone systems.
Without a succession plan, board transitions can put nonprofits in a vise. They’re pushed to manage each change as it happens, whether by a known retirement date or by a sudden withdrawal.
On Dec. 22, 2017, President Trump signed a new tax bill into effect that may significantly impact the number and size of individual financial contributions to nonprofits.
The FASB’s update requires “enhanced” information about your organization’s liquidity and timely access to resources. Two kinds of information are required; together, they can indicate the nonprofit’s ability to meet its cash needs for all the next year’s general expenditures.
Corporate philanthropy is changing. Companies are deciding to incorporate philanthropy as a business priority.
If you understand that your nonprofit will face conflicts of interest, you can better plan for them.
New rules will change the way nonprofits report and describe their net assets. These changes will reduce the number of net asset classes from three to two and require separate subtotals for activities with and without donor restrictions.
Before you can perform functional expense reporting, you should have a written policy in place addressing cost allocation. The policy should be reviewed at least annually and revisions made as necessary.
The new accounting guidance on nonprofit financial reporting applies to fiscal years beginning after Dec. 15, 2017 (calendar 2018 for calendar-year organizations); however, early adoption is permitted. So now is a good time to think through the impact the new accounting standards will have on your financial statements.