Question

Q: Describe the changes made by ASU No. 2016-14

Answer 1

ASU 2016-14 and its impact on Not-for-Profit entities

Topic	prior guidance	updated guidance
Categories of net assets	Classified into three categories: • Unrestricted • Temporary • Permanent	Classified into two categories: • Without donor restriction • With donor restriction
Reporting of expenses	• Present expenses by function	• Present expenses by function • Present expenses by nature
Enhanced disclosures	• N/A	• Effects of restrictions on resources • Types of resources used and how they’re utilized for activities • Methodology for allocating costs among program/support activities • How entity manages its liquidity to meet short-term demands for cash • Effects over spending policies as a result of underwater funds
Restrictions on long lived assets	• Released from restriction over the useful life of the asset	• Released from restriction when placed in service
Equity transfers (i.e. service received from personnel of an affiliate, but not charged to the NFP)	• Recorded as a change in net assets at fair value	• Recorded as a change in net assets at fair value • Presented as a separate line item on the statement of activities