As mentioned in the previous post, I’ve reread my notes from several continuing education classes this year. Thought I would share a variety of stray ideas.
For what it is worth here are some tidbits you might enjoy:
Presentation of not-for-profit financials – ASU 2016-14
Presenter said that if an organization wanted to break out the with restriction column into more detail there is nothing to resented been broken into two or three columns. Perhaps it could be columns for:
- donor endowment
- other with restriction contributions
- time restrictions
- total with donor restriction
- without donor restriction
- total (total column is not required, but total change in net assets is)
Another possibility to present more detail would be to present multiple lines within the with donor restriction column, such as contributions to donor endowment, various purpose restrictions, time restriction, and a subtotal.
Several presenters indicated that items that were pushed into phase 2 of the not-for-profit financial statement presentation project are not being addressed with any staff time. Those issues have been moved backwards onto the research agenda from the agenda. It will probably be a few years before they get any attention.
A presenter thinks the liquidity requirements will be the most difficult thing to implement. I agree. That is going to be tough for a lot of organizations.
A presenter thinks most organizations will choose the option of presenting the functional matrix in the notes.
How many lines of detail will be used for the functional expense allocation matrix presentation? Good questions. One presenter thinks 20 will likely be too many and three may be too few. Perhaps 8 lines might be a good target for providing readers sufficient detail.
A presenter indicated the IRS will not be changing the 990 to reflect changes made by ASU 16-14. They have said they don’t have the budget to change the database. After pondering that for a moment it makes sense. Moving fields around on the 990 would require changing the electronically stored information for every 990 that has been received electronically or converted to electronic format. That would be a massive project.
Risks in spreadsheets
One presenter said a survey (I didn’t jot down the location or citation) called attention to the high error rate in Excel files. The survey claimed that in a spreadsheet with over 40 lines of detail, there’s a 90% chance of an error of some sort somewhere in the spreadsheet.
That should be a warning to us all.
One possible way to reduce the risk is to make sure your spreadsheets have lots of edit checks built into them.
Next: Part 3 with wondering whether FRF-SME will get more attention and the closer attention auditors need to pay to audit quality.