Course Name: It is Here! Navigating the Key Changes in the ......The following reflects Not-for-Profit Entity A’s financial assets, as of the balance sheet date, reduced by amounts

Course Name: It is Here! Navigating the Key Changes in the Accounting Standards for Nonprofits

Speaker: Neely D. Duncan, BKD LLP Course Description: In this session, you will learn tips and tricks as the largest changes to nonprofits in over 20 years hit the industry starting in 2018. We will also discuss the impact of the reporting and disclosure standards for management and for external auditors. The session will also include an overview of the upcoming revenue recognition impact for grants, contributions, exchange and non-exchange transactions affecting nonprofits. Learning Objectives: Participants will receive an overview of the changes in and impacts of the recently revised accounting standards for nonprofit organizations. Category: Basic/Technical Prerequisites: None

FASB Update for Not-for-ProfitsP R E S E N T E D B Y: N E E LY D . D U N C A N , C PA , C F E A P R I L 3 0 , 2 0 1 9 PA R T N E R , N D D U N C A N @ B K D . C O M

ASU 2019-03 – Not-for-Profit Entities (topic 958): Updating the Definition of Collections• Modification of the definition of the term collections.

• Disclosure of policy for the use of proceeds from when collection items are deaccessioned (that is, removed from a collection).

• Direct care.

• Effective for fiscal years beginning after December 15, 2019 on a prospective basis. Early adoption is permitted.

Upcoming Effective Dates Summary

3

4

Not-for-Profit Reporting Model

NOT-FOR-PROFIT REPORTING MODEL –BACKGROUND

ASU 2016-14 issued in August 2016

FASB went into deliberations

Comments submitted by August 20, 2015

Exposure draft issued April 22, 2015

FASB NFP Advisory Committee formed in 2010

Current guidance (FAS 117) issued 20 years ago

PERCEIVED WEAKNESS IN NFP REPORTING Difficulty in

assessing an entity’s liquidity

No clear operating measure defined

Inconsistent reporting of expenses

Confusion regarding

statement of cash flows

Complexity with three net asset classes

Donors, creditors & other users

NFP REPORTING CHANGES –OBJECTIVES

• Refresh & update, not overhaul, financial reporting model

• Simplify & improve net asset classification presentation

• Enhance information in the financial statements & notes about• Financial performance• Cash flow• Liquidity

• Allow NFPs to “tell their financial story”

FASB PROJECT PLAN

ASU redeliberations divided into two phasesPhase 1

(completed) ASU 2016-14 Issued in August 2016

• Net assets classification scheme• Statement of cash flows – direct vs.

indirect• Presentation of expenses• Improved disclosures around

operating measures (board appropriations, designations & transfers)

• Improved disclosures around liquidity

• Reporting investment income net of direct expenses

Phase 2(began after 6/30/16)

• Operating measure – Whether to require, & if so, items to be included

• Cash flows – Consideration of improvements to the indirect method reconciliation, such as starting with an operating measure (if defined), vs. the change in total net assets & realignment of certain items

• Timing TBD

ADOPTION EFFECTIVE DATE

Effective for financial statements for fiscal years beginning after December 15, 2017, & for interim financial statements for periods after that date (early adoption is allowed)

If comparative financial statements are issued, NFP may omit the following information in comparative financial statements for any years presented before the adoption year

• Analysis of expense by functional & natural classification

• Disclosures around liquidity & availability of resources

TRANSITION

The amendments in the final standard of phase one issues would be applied on a retrospective basis

If presenting comparative financial statements, NFPs would have the option to omit the following information for any years presented before the year of adoption

• Analysis of expenses by both functional & natural classification

• Disclosures around liquidity & availability of resources

Statement of Financial Position

NET ASSET CLASSIFICATION Current GAAP Updated GAAP

Unrestricted Without donor restrictions

Temporarily restrictedWith donor restrictions

Permanently restricted

REQUIRED DISCLOSURES FOR NET ASSET CLASSIFICATION SCHEME

Without Donor Restrictions

Without Donor Restrictions With Donor Restrictions

Amounts & purpose of governing board designations

Composition of net assets at period’s end

Can be disclosed on face or in notes

How the restrictions affect resource use

Can be disclosed on face or in notes

NET ASSET DISCLOSURES


Endowment Extent to which endowment fund is “underwater” will now be shown as reduction in donor-restricted net assets, rather than charged against net assets without restriction

NOTE: May need to restate for net assets for the effect of any underwater endowments upon adoption

ENDOWMENT FUND–ADDITIONAL DISCLOSURES Without Donor Restrictions

Aggregate amount by which funds are underwater (currently required)

Aggregate of the original gift amounts (or level required by donor or law) for such funds

Any governing board policies or decisions to spend or not spend from underwater funds

BOARD-DESIGNATED NET ASSETS


New FASB ASC master glossary definition

• Net assets without donor restrictions subject to self-imposed limits by action of the governing board

• Board-designated net assets may be earmarked for future programs, investment, contingencies, purchase or construction of fixed assets or other uses

• Some governing boards may delegate designation decisions to internal management. Such designations are considered to be included in board-designated net assets

BOARD-DESIGNATED NET ASSETS


EXPIRATION OF RESTRICTIONS ON GIFTS OF LONG-TERM ASSETS


• Use the placed-in-service approach for reporting expirations of restrictions on gifts of cash or other assets to be used to acquire or construct a long-lived asset

• Eliminates the option to release the donor-imposed restriction over the estimated useful life of the acquired asset

Statement of Activities

STATEMENT OF ACTIVITIES


Two net asset requirement is

minimum disaggregation

• Standard requires total for each of two net asset classes

• New standard permits flexibility in presentation as long as requirements are satisfied

May choose to further

disaggregate, but …

EXAMPLE STATEMENT OF ACTIVITIES


Format A

Information presented in a single column

Format B

Information presented in a multicolumn

format

Format C

Information presented in

two statements

FORMAT A EXAMPLE


FORMAT B EXAMPLE


Without Donor With DonorRestrictions Restriction Total

Revenue, Gains (Losses) & Other SupportTuition & fees 35,822,876$ $ - 35,822,876$ Institutional scholarships (13,379,424) - (13,379,424)

Net tuition & fees 22,443,452 - 22,443,452 Contributions 1,619,299 3,908,621 5,527,920 Auxiliary enterprises 6,262,771 - 6,262,771 Investment return designated for operations 1,040,784 2,189,230 3,230,014 Other 998,197 - 998,197 Net assets released from restrictions 6,525,716 (6,525,716) - Change in value of split-interest agreements (20,830) (43,151) (63,981)

Total revenue, gains (losses) & other support 38,869,389 (471,016) 38,398,373

ExpensesInstruction 16,005,190 - 16,005,190 Academic support 2,630,618 - 2,630,618 Student service 7,193,702 - 7,193,702 Operation & maintenance 3,611,834 - 3,611,834 Institutional support 7,560,839 - 7,560,839 Fundraising 1,285,385 - 1,285,385 Auxiliary enterprises 2,059,752 - 2,059,752 Other 16,456 - 16,456

Total expenses 40,363,776 - 40,363,776

Change in Net Assets Before Other Activities (1,494,387) (471,016) (1,965,403)

Other ActivitiesInvestment return less amounts designated for operations (1,556,893) (3,710,409) (5,267,302) Depreciation & amortization (2,872,810) - (2,872,810)

Change in Net Assets (5,924,090) (4,181,425) (10,105,515)

Net Assets, Beginning of Period 31,394,325 12,838,571 44,232,896

Net Assets, End of Period 25,470,235$ 8,657,146$ 34,127,381$

2016

FORMAT C EXAMPLE, PART 1


FORMAT C EXAMPLE, PART 2


PRESENTATION OF EXPENSES


• Expenses have to be presented by natural classification & functional classification in one location – No prescribed format

• Can be shown on face statements or notes

• Expenses on SOA can be shown by natural classification or functional

REPORTING OF EXPENSES–EXAMPLE


EXPENSES BY NATURE & FUNCTION


Program Activities Supporting ActivitiesProgram Fund- Support Total

A B C Subtotal MG&A raising Subtotal Expenses

Salaries/benefits $ - $ - $ - $ - $ - $ - $ - $ -Rent/utilitiesProfessional feesSuppliesDepreciationInterest

Total expenses $ - $ - $ - $ - $ - $ - $ - $ -

Program Activities Supporting Activities

Academic Student Auxiliary Educational Fund- Support TotalInstruction Support Services Enterprises Programs MG&A raising Subtotal Expenses

Salaries/benefits $ - $ - $ - $ - $ - $ - $ - $ -Rent/utilitiesProfessional feesSuppliesDepreciationInterest

Total expenses $ - $ - $ - $ - $ - $ - $ - $ -

NET INVESTMENT INCOME


Presented net of external & direct internal investment expenses (other than those from programmatic investing)

No longer required to disclose expenses netted against investment return

No longer required to display the investment return components in the endowment net assets rollforward

INFORMATION ABOUT AVAILABLE RESOURCES & LIQUIDITY

Qualitative Disclosures Quantitative Information

Strategy for addressing risks that may affect liquidity

Include information that communicates the availability of an NFP’s financial assets at the balance sheet date to meet cash needs within

one year of the balance sheet date

Policy for establishing liquidity reserves Can be on the face of the statement of financial position or in the notes

Information that communicates how NFP manages its liquid resources available to meet cash needs for general expenditures within one

year of the balance sheet date

EXAMPLE LIQUIDITY DISCLOSURE

Note GThe following reflects Not-for-Profit Entity A’s financial assets, as of the balance sheet date, reduced by amounts not available for general use because of contractual or donor-imposed restrictions within one year of the balance sheet date. Amounts not available include amounts set aside for long-term investing in the quasi-endowment that could be drawn upon if the governing board approves that action. However, amounts already appropriated from either the donor-restricted endowment or quasi-endowment for general expenditure within one year of the balance sheet date have not been subtracted as unavailable.


Financial assets, at year-end XXX,XXX

Less those unavailable for general expenditures within one year, due to

Contractual or donor-imposed restrictions

Restricted by donor with time or purpose restrictions (XX,XXX)

Subject to appropriation & satisfaction of donor restrictions (XXX,XXX)

Investments held in annuity trust (X,XXX)

Board designations

Quasi-endowment fund, primarily for long-term investing (XX,XXX)

Amounts set aside for liquidity reserve (X,XXX)

Financial assets available to meet cash needs for general XX,XXX

expenditures within one year


Financial assets available for general expenditure, that is, without donor or other restrictions limiting their

use, within one year of the balance sheet date, comprise the following

Cash & cash equivalents XX,XXX

Accounts receivable X,XXX

Operating investments X,XXX

Promises to give X,XXX

Distributions from assets held under split-interest agreements X,XXX

Distributions from beneficial interests in assets held by others X,XXX

Endowment spending-rate distributions & appropriations XX,XXX

XX,XXX


Our endowment funds consist of donor-restricted endowments & funds designated by the board as endowments. Income from donor-restricted endowments is restricted for specific purposes, with the exception of amounts available for general use. Donor-restricted endowment funds are not available for general expenditure.

Our board-designated endowment of $XX,XXX is subject to an annual spending rate of 4.5 percent as described in Note X. Although we do not intend to spend from this board-designated endowment (other than amounts appropriated for general expenditure as part of our Board’s annual budget approval & appropriation), these amounts could be made available if necessary.

As part of our liquidity management plan, we invest cash in excess of daily requirements in short-term investments, CDs & money market funds. Occasionally, the Board designates a portion of any operating surplus to its operating reserve, which was $XX,XXX as of June 30, 2016.

DISCLOSURES ABOUT OPERATING MEASURES

For NFPs that present a self-defined operating measure that also present internal designations on the face of the financial statements

Required to report types of internal transfers disaggregated & described by type

METHOD OF PRESENTING STATEMENT OF CASH FLOWS FOR OPERATING ACTIVITIES

If direct is presented, the presentation of the indirect reconciliation is no longer required

Can present as indirect or direct

IMPLEMENTATION ISSUES

Some organizations may elect to do single-year statements

Expense by function is not currently prepared by many not-for-profits

Liquidity disclosures provide new clarity

Bondholders do not understand the two net asset classes

ASU 2018-08 – Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Made

Background

Long-standing diversity in practice in classifying grants & contracts, particularly from governmental entities

Issue 1: reciprocal vs. nonreciprocal

Issue 2: conditional vs. unconditional

ASU 2014-09, Revenue from Contracts with Customers, including related disclosures, heightened the issue

Raised question as to whether grants & contracts are in scope of that guidance (reciprocal or nonreciprocal)

Project added to FASB’s Technical Agenda to improve & clarify existing guidance

Funding Potentially Impacted

Federal agency awards

State & local

awards

Public charities & foundations

Individual contributions

Private foundations

Corporate giving

Scope

Applies to all entities (NFPs & business entities) that receive or make contributions

Excludes transfers of assets from the government to business entities

The term used in arrangements or in the presentation of financial statements is not a factor, e.g., contribution, grant, donation, service

Applies to both contributions received by a recipient & contributions made by a resource provider

› Step 1: exchange vs. nonexchange• Exchange transaction when resource provider is receiving

commensurate value in return for the resources transferred

› Step 2: conditional vs. unconditional• Conditional contributions when there is a barrier to overcome

& right of return/release

Overview

Step 1: Exchange vs. Nonexchange

Exchange

Direct Commensurate Value to Resource Provider Specified Third Parties General Public

Exchange

Direct Commensurate Value to Resource Provider Specified Third Parties

Nonexchange

General Public

Cur

rent

Pr

actic

eC

larif

ied

Rul

es

› Direct commensurate value received by the resource provider in exchange for the resources provided

› The resource provider, e.g., government, is not synonymous with the general public

› Furthering a resource provider’s mission, a “feel good” sentiment, or receiving name recognition does not constitute commensurate value

› Type of resource provider or name of award should not override the substance of the transaction

› If the beneficiary of a grant or contract is a third party, judgment is required

Step 1: Exchange vs. Nonexchange

• Judgment required to determine whether a transaction is a third-party payment on behalf of an identified customer or a contribution restricted for groups of beneficiaries with eligibility criteria

• Examples• A social service NFP provides drug rehabilitation service to individuals who sign up for

the service but payment for the service is made under local government contract• An affordable housing NFP receives two forms of government payments to support the

housing of individuals at a specific building• Rent voucher payments associated with individual residents• An operating subsidy for housing individuals that meet income criteria

Transactions on Behalf of Specified Third Parties

Step 2: Conditional vs. Unconditional Contributions

Right of return/release

Barrier that must be

overcome

Donor-imposed condition

› Indicators of barriers include, but are not limited to• Inclusion of a measurable performance-related barrier or other measurable

barrier

• Extent to which a stipulation limits discretion by the recipient on the conduct of an activity

• Extent to which a stipulation is related to the purpose of the agreement

› Administrative requirements, e.g., reporting or obtaining an audit, is not an example of a condition under the clarified guidance

› In cases of ambiguous donor stipulations – presume conditional

Indicators to Determine a Barrier

› The agreement need not have exact wording of right of return/release & could be communicated in another document referenced by the agreement

› Must be a legal right of return

› If not apparent from the agreement whether there is a right of return/release, it is presumed the agreement does not include a right or return/release

Right of Return/Release

NFP Revenue Recognition Decision ProcessTransaction in which each party directly receives commensurate

value?

Conditions present, i.e., right of return/release & barrier?

Restrictions present, i.e., limited purpose or timing?

Nonreciprocal transactions. Apply contribution (nonexchange)

guidance

Conditional – recognize revenue when condition is met

Reciprocal transaction. Apply rev rec (ASC 606) or other guidance

Unconditional & without restrictions (unrestricted) Unconditional & restricted

YES

YES YES

NO

NO

NO

› Allows for the NFP to recognize a restricted contribution directly into UR net assets/net assets without donor restriction if restriction is met in same period that the revenue is recognized

› ASU allows for a second & separate election to be made relating to restricted & conditional contributions

› Could have different elections for• Restricted/conditional• Restricted/other

Simultaneous Release Option

Effective Date

RecipientsAnnual periods beginning after June 15, 2018, including interim periods1. PBEs2. NFP with conduit

debt (not private placement)

Annual periods beginning after December 15, 2018, & interim periods beginning after December 15, 2019, for all other entities

Resource ProvidersAnnual periods beginning after December 15, 2018, including interim periods1. PBEs2. NFP with conduit

debt (not private placement)

Annual periods beginning after December 15, 2019, & interim periods beginning after December 15, 2020, for all other entities

Transition Approach› Modified prospective

• Apply to all agreements› Existing at the effective date (only apply to

the portion of existing agreements not previously recognized)

› Entered into after the effective date• No restatement of prior amounts recognized

› Retrospective application permitted

› NFP implements ASU 2018-08 in calendar year 2019

› Three-year grant awarded on 1/1/18; payments are $50K/year from 2018 through 2020

› Accounting prior to ASU 2018-08• Exchange transaction – revenue recognized as billed

($50K through end of 2018)

› Accounting in year of implementation & future• Not a completed contract (still more revenue to recognize)

• NFP determines it to be conditional contribution

• 2019 & 2020 – recognize revenue as conditions are met

• Add to conditional contribution footnote

Modified Prospective Transition Example

54

Topic 606: Revenue from Contracts with Customers

TOPIC 606: REVENUE FROM CONTRACTS WITH CUSTOMERS

• Objectives of the new guidance• Removes inconsistencies & weaknesses in existing revenue requirements• Provides a more robust framework for addressing revenue issues• Improves comparability of revenue recognition practices• Provides more useful information to users of financial statements• Simplifies the preparation of financial statements by reducing the number of

requirements to which an organization must refer

SCOPE • All revenue from contracts with customers

• Included: Tuition & fees, exchange grants, membership dues, sponsorship revenue, royalty revenue

• Not included: Contributions, nonexchange grants, rental income, insurance reimbursements, guarantee remuneration, nonmonetary exchanges

KEY TERMS

RevenueThe result of delivering/producing goods or rendering services that constitute the entity’s ongoing major or central activities

ContractAn agreement between two or more parties that creates enforceable rights & obligations

CustomerA party who contracted with an entity to obtain goods or services in exchange for consideration

Key PrincipleCurrent: Recognize revenue when it is earned & realizable

Future: Recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services

NEW KEY CONCEPTS

Portfolio ApproachApplication to multiple contracts (or performance obligations) with similar characteristicsCannot differ materially from an individual basis

Performance ObligationA promise in a contract with a customer to transfer goods or services to a customer

Variable ConsiderationUncertain transaction price

New Financial Statement AccountsContract AssetAn entity’s right to consideration that is conditioned on something other than the passage of time

Contract LiabilityAn entity’s obligation to transfer goods or services for which an entity has received consideration, i.e., deferred revenue

Refund LiabilityConsideration received that the entity does not expect to be entitled

ANTICIPATED IMPLEMENTATION EFFECT

Preponderance Expected Accounting Change Disclosures

Tuition & fees High High High

Membership dues High Moderate High

Exchange grants High Low High

Sponsorship revenue High Low High

Royalty revenue High Low High

ADOPTION METHODS

Full retrospective• Retrospective application to all prior

periods presented

Modified retrospective• Cumulative effect recognized upon

adoption, i.e., January 1, 2019, for nonpublic entities

• Certain disclosures required to bridge incomparability b/t reporting periods

PRACTICAL ADOPTION CONSIDERATIONS

• “Dual” accounting of comparative period

• Changes to financial ratios/metrics (bank, boards, other)

• Emphasis-of-matter paragraph to opinion

• Change in accounting principle footnote

THE FIVE-STEP MODEL

Identify the contract with a customer

Identify the performance obligations (promises)

in the contract

Determine the

transaction price

Allocate the transaction price to the

performance obligations

in the contract

Recognize revenue

when (or as) the reporting organization satisfies a

performance obligation

STEP 1Identify

Contract with a Customer

• A contract must meet ALL of the following• Parties have approved the contract & are

committed• Can identify each party’s rights• Can identify the payment terms• Contract has commercial substance• Probable that the entity will collect

substantially all of the consideration to which it will be entitled in exchange for goods or services that will be transferred to the customer

STEP 2Identify

Performance Obligations

• Performance obligation = unit of account

• When should performance obligations be identified?• At contract inception

• Materiality considerations (606-10-25-16A)

• Administrative tasks (606-10-25-17)

EXAMPLES OF PERFORMANCE OBLIGATIONS

• Sale of goods produced by an entity

• Resale of goods purchased by an entity

• Performing a contractually agreed-upon task(s) for a customer

• Providing a service of standing ready to provide goods or services or of making goods or services available for a customer to use as & when the customer decides

• Granting rights to goods or services to be provided in the future that a customer can resell or provide to its customer

• Granting licenses

STEP 3Determine the Transaction

Price

• Transaction price• Consideration an entity expects to be entitled

• Excludes amounts collected on behalf of third parties, e.g., sales taxes

• May include fixed amounts, variable amounts or both

• Considerations in determining transaction price• Variable consideration

• Constraining estimates of variable consideration

• Significant financing

• Noncash consideration

• Consideration payable to a customer

STEP 4• Allocate the Transaction Price

• Step only applicable if two plus performance obligations

• Allocate in proportion to standalone selling price • Price at which an entity would sell a promised good or

service separately to a customer

• Determine at contract inception

• Best evidence—observable price of a good or service when the entity sells that good or service separately

Allocate the Transaction

Price

STEP 5 Recognize Revenue

Recognize at a Point in Time Recognize Over Time

Based on when (or as) the customer obtains control

Determine at contract inception

CONTROL• Ability to direct the use of & obtain substantially

all of the remaining benefits from the asset

• Ability to prevent other entities from directing the use of & obtaining benefits from an asset

• Benefits of an asset• Using the asset to produce goods or provide

services

• Using the asset to settle liabilities or reduce expenses

• Selling or exchanging the asset

• Holding the asset

REVENUE RECOGNIZED OVER TIME CRITERIA

• Performance obligations are satisfied & revenue recognized over time if one of the following criteria is met• The customer simultaneously receives & consumes the

benefits as the entity performs

• The entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced

• The entity’s performance does not create an asset with an alternative use to the entity, & the entity has an enforceable right to payment for performance completed to date

REVENUE RECOGNIZED AT A

POINT IN TIME

The fallback option:At what point in time?

• Consider the definition of what control means

• Other indicators (not a complete list)• Entity has present right to payment for

the asset• Customer has legal title to the asset• The entity has transferred physical

possession of the asset• Customer has significant risks &

rewards of ownership• The customer has accepted the asset

Intellectual Property – Licenses & Royalties• License of intellectual property – Follow guidance 606-10-55-3-65B• Functional IP

• Satisfied at a point in time• Substantial portion of its utility from its standalone functionality• Examples – software, biological compounds or drug formulas, media content (films,

television shows, music)• Symbolic IP

• Satisfied over time• Substantially all of its utility derived from its association with the licensor’s past or

ongoing activities• Examples – brands, team names, logos, franchise rights

• WARNING – EXCEPTION TO THE EXCEPTION: Sales or usage-based royalties –Recognize revenue at the later of when sales or usage occurs or the satisfaction of the performance obligation

75

ASU 2016-02 – Leases

ASU 2016-02 –LEASES (AT A GLANCE)

• Effective dates

• Public entities – Annual periods beginning after 12/15/18 (12/31/19)

• All others – Annual periods beginning after 12/15/19 (12/31/20)

• Early adoption permitted

• Generally putting operating leases on the balance sheets of lessees

• Leaving lessor accounting substantially unchanged

• Updated definition of a lease

• Exchange of right to use underlying asset for consideration

• Involves an identified asset

• Lessee has right to control the use of the asset

For more information, please visit BKD’s dedicated resource page:

http://www.bkd.com/hot-topics/lease-accounting.htm

SUMMARY

http://www.bkd.com/hot-topics/lease-accounting.htm


• Short-term lease exception

• Leases of intangible assets

• Leases to explore minerals, oil, natural gas & similar nonregenerative resources

• Lease of biological assets

• Leases of inventory

• Leases of assets under construction

• Service concession arrangements

SCOPE EXCEPTIONS


Core Principle of the New Standard

ALL leases create an asset & a liability

ASU 2016-02–LEASES (AT A GLANCE)

• Classification as finance & operating leases• Essentially same criteria as existing but without bright-line

percentages• Capital finance

• Both types recognize asset & liability

• Difference in expense recognition• Finance – Interest expense on liability & amortization

expense on asset• Operating – Straight-line rent expense

• Short-term exception

KEY CONCEPTS

ASU 2016-02–LEASES (AT A GLANCE)

• Plan early for adoption

• Evaluate current & new leases

• Consider the impact on debt covenants

• Educate your users

• Modify internal controls, as necessary, to identify new & amended leases for proper inclusion in the FS

IMPLEMENTING THE NEW STANDARD

81

ASU 2016-01 –Financial Instruments

ASU 2016-01 FINANCIAL INSTRUMENTS DISCLOSURE Effective December

31, 2019

Some NFPs have to disclose fair value of financial instruments not measured at fair value if they have either•$100 million in assets, or•Any derivatives (including interest rate swaps)

ASU eliminates this disclosure

requirement for all NFPs

Reminder – can be early adopted

Questions?

Sign up to receive BKD Thoughtware® at bkd.com/signupFollow us on Twitter @BKDNFP

Thank You!

Neely D. Duncan Partner BKD LLP As a member of BKD’s National Not-for-Profit group, Neely Duncan has more than 18 years of audit and advisory experience in public accounting. Her expertise includes financial statement audits, single audits, grants management and compliance, outsourced accounting functions, standards implementation, internal audit procedures, strategic planning and tax-exempt matters for a wide range of not-for-profit entities. Ms. Duncan also performs forensic work related to various cases, internal controls consulting, and data analytics. In addition to handling the accounting and audit needs of her clients, she advises them on operational efficiencies, internal control and governance issues. She is a popular national speaker on technical matters in the accounting community and is involved with many professional associations including the American Institute of CPAs, the Dallas Society of CPAs, Texas Society of CPAs, the Association of Certified Fraud Examiners, Dallas Social Venture Partners, SPARK!, The Dallas Foundation Advisory Committee, Partnership for Philanthropic Planning (North Texas Chapter), and Relationships First.

Documents

Course Name: It is Here! Navigating the Key Changes in the ......The following reflects Not-for-Profit Entity A’s financial assets, as of the balance sheet date, reduced by amounts