P&N is now EisnerAmper

Effective May 21, 2023, P&N has joined EisnerAmper. Read the full announcement here.

Assurance Services • Published 1/07/2019 New Year, New Financial Reporting Model


For most not-for-profits, 2019 will bring with it the first financial statements issued under the new not-for-profit reporting model, FASB Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Not-for-Profit Entities.

The most significant changes with this ASU include:

  • Changes in net asset classification – increases and decreases in net assets will now be categorized as “with donor restriction” and “without donor restriction.” Disclosures will need to include description of the nature of donor-restricted net assets and a new requirement for a more fulsome discussion of net assets that have been designated by the board or management of the organization.
  • The requirement to present a reconciliation of functional to natural classification of expenses for all NFP entities. This can be done on the face of the statement of activities, in the footnotes, or as a separate statement of functional expenses. The footnotes should also include greater discussion of allocation methods.
  • A new requirement to include disclosures related to the organization’s liquidity and availability of financial assets – both qualitative and quantitative disclosures. Organizations will need to describe how they manage their liquid resources to meet cash needs for general expenditures within one year of the balance sheet date and include presentation of what financial assets are available as of the year end for this purpose. 

If your organization has a December year-end, your December 31, 2018 financial statements will be required to be presented under this new model. If your organization presents comparative financial information, most of this information would need to be conformed to the new requirements. If your organization has a June year-end, your June 30, 2019 financial statements are subject to this ASU.

For non-complex financial statements, these changes may not require significant time and resources – the preparation of the reconciliation of function and natural expenses, the liquidity and availability disclosures, and the recasting of comparatives may be the most significant areas. For more complex financial statements and organizations with more restricted and designated net assets, in addition to the items highlighted above, more time may be required to ensure current classifications are appropriate and that there is clear documentation and understanding of board/management-designated net assets. 

At this time, no significant changes to the Form 990 are anticipated.

Not-for-Profit Reporting Support

Did this new standard sneak up on you? Are you concerned about the resources you have to work through these changes? P&N can help you through the process. Contact us to let us know how we can help you in the New Year with the New Reporting Model!


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