The AICPA has summarized the FASB’s Preliminary Analysis of the Comment Letters on the Not-for-Profit Financial Statement Exposure Draft .
I realize I’m going at this backward, what with commenting on the feedback before I’ve described the content of the exposure draft, but here goes….
I’m surprised there was overall support for requiring presentation of expenses in a matrix, similar to what VWH organizations must do now.
Strong support for combining the temporarily and permanently restricted net asset classes.
Here are a few places where there was some pushback:
- Liquidity disclosures – mixed feedback with more support for qualitative disclosures than quantitative.
- Net investment income – overall disagreement with not requiring disclosure of all netted expenses. Not sure on what the comment means with a double negative, but I think there is also disagreement with required disclosure of the salaries and benefits that are netted.
- Required intermediate measures of operations – mixed feedback on requiring operating measures. Seems to be general agreement on the concept of intermediate measures but disagreement with what is proposed.
- Interest expense – disagreement with defining interest expense as nonoperating on the statement of activities.
- Cash flow – mixed feedback on requiring direct method of reporting operating cash flow.
- Overall disagreement to align how items are reported on the statements of cash flow and statement of activities.
In general, the comments seem to be rather supportive of the exposure draft overall. Granted this is an AICPA summary of the FASB summary, but I was expecting stronger pushback and on more items.
NACUBO’s comments on the feedback and general observations can be found at: FASB Told to Rethink Proposed NFP Reporting Standards. I think their headline is a bit of an overstatement. Their interpretation suggests there was a strong pushback against a standardized measure of operations.
I see an irony of opposing the direct method of operating cash flows while simultaneously pointing out that few people understand the indirect method.