On February 5, the FASB provided an update on the Not-for-Profit Organizations Project. The board has substantially completed its deliberations on this project, which is focused on refreshing the now 20-year-old not-for-profit financial statement model. The board’s decisions have included ones in the areas of net asset classification, liquidity information, operating measures, the statement of cash flows and its format in relation to the statement of activities, underwater endowment issues, investment expense and other expense reporting, as well as improvements in the not-for-profit-specific footnotes to the financial statements. The staff is in process of finalizing a draft that will go out as an exposure draft.
The board is expected to meet in late February to review any sweep issues that the staff identifies while drafting the standard, as well as any issues that external reviewers of this draft also identify before the exposure draft goes out. In addition to reviewing any sweep issues at that meeting, the board is expected to conclude its discussion of cost/benefit aspects of this proposal. FASB staff expects to issue the exposure draft sometime in either the last week of March or beginning of April. There will then be a three-to-four-month comment period to the exposure draft, which will end sometime in mid-to-late July.
FASB staff acknowledged that over the course of the FASB NFP project, the Not-for-Profit Advisory Committee and many external stakeholders have provided valuable input to the board in this project. The exposure draft is intended to set the stage at which many others can contribute.
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