Spring 2014 issue of Horizons

∙ Providing framework for commentary and analysis on an organization’s operations/ financial health

These objectives are being addressed in modules as follows:

∙ Financial performance (especially operating measure)

∙ Net asset classifications

∙ Liquidity information

∙ Cash flow statement

defined based on two dimensions: a mission dimension based on whether resources are from or directed at carrying out an NFP’s purpose for existence and an availability dimension based on whether resources are available for current period activities. However, the board is still considering presentation alternatives for the statement of activities. One possible single-page format has columns for “current operations” and “non-operating,” with the latter further broken out into two columns: “without donor restrictions” and “with donor restrictions” and a “total” column. Another format under consideration spans two pages with current operations on the first page and non-operating items and changes in net assets with donor restrictions on the second page. An advantage of the single all-inclusive page is that all types of contributions are displayed on the same page; similarly, both contributions and fundraising expenses can be seen. However, the multiple columns will make multi-year comparisons more difficult and the focus on operations is less evident. Ron Bossio, the featured speaker at RubinBrown’s Not-For-Profit Update, is a senior project manager on the technical staff of the FASB. He serves as a member of FASB’s nonpublic entity team, works closely with and supports the activities of the NAC and currently is leading the board’s project on NFP Financial Statement Presentation.

∙ Other potential statements or required schedules

∙ Improvements to NFP note disclosures

At the time of Ron’s presentation, tentative decisions had been reached in certain areas addressing specific challenges; for other areas, challenges persist and decisions remain to be made.

A summary of these challenges and the tentative decisions reached follows.

Financial Performance Challenges

One of the challenges relates to the difficulty of determining the results of “operations” within the financial statements; specifically, within the statement of activities. The current statement of activities does not distinguish between operating and non-operating activities; thus, multi-year gifts, investment activities, etc. can result in significant swings in an NFP’s bottom line from year to year and make it difficult for financial statement users to understand the statements and the organization’s financial performance. Tentative Decisions & Remaining Deliberations The board is recommending the inclusion of an intermediate operating measure on the statement of activities, which has been

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