For those nonprofit organizations who are required to have (or elect to have) an audit, review, or compilation of their financial statements – the Financial Accounting Standards Board has issued an update to the presentation which will become effective for calendar years ending December 31, 2018/fiscal years ending June 30, 2019.
Their goal is to improve how nonprofit organizations communicate their financial performance by providing more relevant information about available resources and changes in those resources. It revises the current net asset classification from unrestricted, temporarily restricted, and permanently restricted into two classes – net assets with donor restrictions and net assets without donor restrictions. Other significant changes include: enhancing the disclosures related to self-imposed Board restrictions on resources, requiring that organizations present a statement of functional expenses, and quantitative footnotes regarding the availability of financial assets to meet needs for general expenditures.
For additional information on these upcoming changes, you may wish to read the attached PDF or visit the FASB website at: