News highlights for April/May 2015


A proposal FASB expects to issue for public comment in mid-April is aimed at enhancing the usefulness of the financial statements of not-for-profit organizations.

FASB voted 5–2 to issue a proposed Accounting Standards Update, which would propose changes to:

  • The current net asset classification scheme.
  • The required information about an organization’s liquidity, financial performance, and cash flows.

The board will propose reducing the number of net asset classes presented from three to two. The new classification would convey net assets with donor-imposed restrictions and without donor-imposed restrictions.

Under the proposal, all not-for-profits also would be required to report expenses both by their nature and by function.

“I think the benefits justify the costs,” FASB member Tom Linsmeier said during the meeting. “I think that we’re providing an opportunity for the not-for- profit community to tell their story far better.”

FASB Chairman Russell Golden, who cast one of the dissenting votes, said some aspects of the proposal will reduce costs, promote simplification, and provide additional benefits to the not-for-profit community. But he is concerned that the project may increase complexity in the system overall because some of the tentative decisions address conditions only for not-for-profits on issues that also apply outside the not-for-profit sector.

“We should have thought holistically about the cash flow statement, holistically about the operating performance measure, and holistically about the classifications within the cash flow statement,” Golden said.

SPONSORED REPORT

Tax reform complicates year-end tax planning

Get your clients ready for tax season with these year-end tax planning strategies, which address how to make the most of recent tax law changes, such as the new deduction for qualified business income and the cap on the deductibility of state and local taxes.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.