The Members of the Financial Accounting Standards Board (FASB) met on October 30, 2015 to discuss the feedback received on the proposed Accounting Standards Update, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities. The timing of a final release for the ASU has not yet been determined. However, the FASB has divided aspects of the proposed update into two workstreams: one to issue an update that addresses near-term issues and another to focus on long-term issues that require further research.
The first workstream would consider issues that are likely to be resolved in the near-term such as 1) the presentation of net asset classification, 2) the presentation of expenses, 3) improving disclosures related to operating measures, 4) improving disclosures related to the assessment of liquidity and 5) methods of presenting operating cash flows in the statement of cash flows. Topics associated with the net asset classification issue include the disclosure of board-designated funds, underwater endowments and a placed-in-service option for expiration of capital restrictions. Items discussed related to expense presentation issues included requirements for presentation and analysis of expenses by nature and function, disclosures related to netting investment expenses and enhanced disclosures of cost allocations.
The second workstream discussed by the Board related to issues that will likely require more time to resolve as a result of alternatives suggested that had not been previously considered or issues that are also being addressed in other FASB projects. Items in this workstream include the realignment of certain line items in the statement of cash flows and disclosures related to operating measures, such as the requirement for intermediate measures, how to define such measures and alternative disaggregation approaches suggested by stakeholders.
Please note that the conclusions reached at the board meetings are final only after an Accounting Standards Update or a Statement of Financial Accounting Concepts is issued. Please contact Jeff Ford or Steve Heere at 412-338-9300 if you have further questions.
