Group 3

GROUP 3 FINANCIAL STATEMENTS GROUP 3 MEETING AGENDA Meeting Agenda 1 ASU 2016-18 5 ______ OF ACTIVITIES 2 OBJECTIVES OF FINANCIAL REPORTING 6 EXPENSES & STATEMENT OF FUNCTIONAL EXPENSES 3 USERS AND THEIR INFO. & QUALITATIVE CHARACTERISTICS OF FINANCIAL STATEMENTS 7 STATEMENT OF CASH FLOWS 4 STATEMENT OF FINANCIAL POSITION GROUP 3 ASU 2016-14 ACCOUNTING STANDARDS UPDATE is issued by the Financial Accounting Standards Board (FASB) to communicate changes to the Accounting Standards Codification (FASB Codification) ASU 2016-14 CAYANAN, CAMILLE C. ASU 2016-14 Why Is the FASB Issuing This Accounting Standards Update (Update). ASU is intended to improve financial statement presentation by not-for-profit (NFP) organizations—a model that has existed for more than 20 years. Who Is Affected by the Amendments in This Update. FASB Accounting Standard Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Notfor-Profit Entities The amendments in this Update affect NFPs and the users of their general-purpose financial statements. What Are the Main Provisions. The main provisions of this Update, which amend the requirements for financial statements and notes in Topic 958, Not-for-Profit Entities, require an NFP to: ASU 2016-14 CAYANAN, CAMILLE C.

ASU 2016-14 CAYANAN, CAMILLE C. ASU 2016-14 Why Is the FASB Issuing This Accounting Standards Update (Update). ASU is intended to improve financial ______ presentation by not-for-profit (NFP) organizations—a model that has existed for more than 20 years. Who Is Affected by the Amendments in This Update. FASB Accounting Standard Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Notfor-Profit Entities The amendments in this Update affect NFPs and the users of their general-purpose financial statements. What Are the Main Provisions. The main provisions of this Update, which amend the requirements for financial statements and notes in Topic 958, Not-for-Profit Entities, require an NFP to: ASU 2016-14 CAYANAN, CAMILLE C.

The amendments in this Update affect NFPs and the users of their general-purpose financial ______.

The main provisions of this Update, which amend the requirements for financial ______ and notes in Topic 958, Not-for-Profit Entities, require an NFP to:

FASB Accounting Standard Update (ASU) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial ______ of Notfor-Profit Entities

ASU 2016-14 amends the requirements for financial statements and notes in Topic 958, Not-for-Profit Entities, and requires an NFP to report amounts for net assets with donor restrictions and net assets without donor restrictions, as well as the currently required amount for total net assets. This includes continuing to report the currently required amount of the change in total net assets for the period and presenting on the face of the statement of cash flows the net amount for operating cash flows using either the direct or indirect method of reporting but no longer require the presentation or disclosure of the indirect method (reconciliation) if using the direct method. ASU 2016-14 also requires an NFP to provide enhanced disclosures, including amounts and purposes of governing board designations, and appropriations result in self-imposed limits, composition of net assets with donor restrictions at the end of the period, qualitative information on how an NFP manages its liquid resources available to meet cash needs, quantitative information on the availability of an NFP’s financial assets at the balance sheet date to meet cash needs for general expenditures, amounts of expenses by both their natural classification and their functional classification, method(s) used to allocate costs among program and support functions, and underwater endowment funds. ASU 2016-14 also requires reporting investment return net of external and direct internal investment expenses and no longer require disclosure of those netted expenses. Additionally, it uses 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 and reclassify any amounts from net assets with donor restrictions to net assets without donor restrictions for such long-lived assets that have been placed in service.

ASU 2016-14 amends the requirements for ______ statements and notes in Topic 958, Not-for-Profit Entities, and requires an NFP to report amounts for net assets with donor restrictions and net assets without donor restrictions, as well as the currently required amount for total net assets. This includes continuing to report the currently required amount of the change in total net assets for the period and presenting on the face of the statement of cash flows the net amount for operating cash flows using either the direct or indirect method of reporting but no longer require the presentation or disclosure of the indirect method (reconciliation) if using the direct method. ASU 2016-14 also requires an NFP to provide enhanced disclosures, including amounts and purposes of governing board designations, and appropriations result in self-imposed limits, composition of net assets with donor restrictions at the end of the period, qualitative information on how an NFP manages its liquid resources available to meet cash needs, quantitative information on the availability of an NFP’s ______ assets at the balance sheet date to meet cash needs for general expenditures, amounts of expenses by both their natural classification and their functional classification, method(s) used to allocate costs among program and support functions, and underwater endowment funds. ASU 2016-14 also requires reporting investment return net of external and direct internal investment expenses and no longer require disclosure of those netted expenses. Additionally, it uses 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 and reclassify any amounts from net assets with donor restrictions to net assets without donor restrictions for such long-lived assets that have been placed in service.

ASU 2016-14 amends the requirements for financial ______ and notes in Topic 958, Not-for-Profit Entities, and requires an NFP to report amounts for net assets with donor restrictions and net assets without donor restrictions, as well as the currently required amount for total net assets. This includes continuing to report the currently required amount of the change in total net assets for the period and presenting on the face of the statement of cash flows the net amount for operating cash flows using either the direct or indirect method of reporting but no longer require the presentation or disclosure of the indirect method (reconciliation) if using the direct method. ASU 2016-14 also requires an NFP to provide enhanced disclosures, including amounts and purposes of governing board designations, and appropriations result in self-imposed limits, composition of net assets with donor restrictions at the end of the period, qualitative information on how an NFP manages its liquid resources available to meet cash needs, quantitative information on the availability of an NFP’s financial assets at the balance sheet date to meet cash needs for general expenditures, amounts of expenses by both their natural classification and their functional classification, method(s) used to allocate costs among program and support functions, and underwater endowment funds. ASU 2016-14 also requires reporting investment return net of external and direct internal investment expenses and no longer require disclosure of those netted expenses. Additionally, it uses 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 and reclassify any amounts from net assets with donor restrictions to net assets without donor restrictions for such long-lived assets that have been placed in service.

ASU 2016-14 amends the requirements for financial statements and notes in Topic 958, Not-for-Profit Entities, and requires an NFP to report amounts for net assets with donor restrictions and net assets without donor restrictions, as well as the currently required amount for total net assets. This includes continuing to report the currently required amount of the change in total net assets for the period and presenting on the face of the statement of cash flows the net amount for operating cash flows using either the direct or indirect method of reporting but no longer require the presentation or disclosure of the indirect method (reconciliation) if using the direct method. ASU 2016-14 also requires an NFP to provide enhanced ______, including amounts and purposes of governing board designations, and appropriations result in self-imposed limits, composition of net assets with donor restrictions at the end of the period, qualitative information on how an NFP manages its liquid resources available to meet cash needs, quantitative information on the availability of an NFP’s financial assets at the balance sheet date to meet cash needs for general expenditures, amounts of expenses by both their natural classification and their functional classification, method(s) used to allocate costs among program and support functions, and underwater endowment funds. ASU 2016-14 also requires reporting investment return net of external and direct internal investment expenses and no longer require disclosure of those netted expenses. Additionally, it uses 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 and reclassify any amounts from net assets with donor restrictions to net assets without donor restrictions for such long-lived assets that have been placed in service.

ASU 2016-14 amends the requirements for financial statements and notes in Topic 958, Not-for-Profit Entities, and requires an NFP to report amounts for net assets with donor restrictions and net assets without donor restrictions, as well as the currently required amount for total net assets. This includes continuing to report the currently required amount of the change in total net assets for the period and presenting on the face of the statement of cash flows the net amount for operating cash flows using either the direct or indirect ______ of reporting but no longer require the presentation or disclosure of the indirect ______ (reconciliation) if using the direct ______. ASU 2016-14 also requires an NFP to provide enhanced disclosures, including amounts and purposes of governing board designations, and appropriations result in self-imposed limits, composition of net assets with donor restrictions at the end of the period, qualitative information on how an NFP manages its liquid resources available to meet cash needs, quantitative information on the availability of an NFP’s financial assets at the balance sheet date to meet cash needs for general expenditures, amounts of expenses by both their natural classification and their functional classification, ______(s) used to allocate costs among program and support functions, and underwater endowment funds. ASU 2016-14 also requires reporting investment return net of external and direct internal investment expenses and no longer require disclosure of those netted expenses. Additionally, it uses 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 and reclassify any amounts from net assets with donor restrictions to net assets without donor restrictions for such long-lived assets that have been placed in service.