How to Read Nonprofit Financial Statements: A Practical Guide

EXPERT GUIDANCE ON HOW TO READ, INTERPRET, AND USE NONPROFIT FINANCIAL STATEMENTS UPDATED FOR THE NEW FASB STANDARD RELATED TO NONPROFIT FINANCIAL REPORTING (ASU 2016–14)

If you′re an executive or volunteer leader at a nonprofit who is unfamiliar with the formats and language of financial statements, this book fills you in on how to read and correctly interpret those critical documents. If you′re a seasoned pro who wants to brush up on your skills while familiarizing yourself with the latest FASB nonprofit reporting standards, this is the only guide you need.

The intent behind creating the ASU 2016–14 was to improve the clarity and usefulness of nonprofit financial statements, but making sense of those statements can still be tough going for the uninitiated. Accountants and non–accountants alike who use and prepare nonprofit financial statements need guidance on how to interpret and implement the new FASB standard. Written for both audiences, this book:

Clearly defines accounting terminology and concepts, while offering numerous examples of financial statements reflecting both the old and new FASB standards Steers you, line–by–line, through financial reports, providing explanations of differences between the old and new standards Provides numerous illustrations that help you quickly feel at home with the format of nonprofit financial statements Offers exercises that help you gain insight into the concepts surrounding nonprofit financial statements and reinforce your command of those concepts

How to Read Nonprofit Financial Statements, Third Edition is an invaluable resource for everyone who reads, interprets, or prepares those all–important documents.

About the Authors

Preface

Learning Objectives

Introduction

Chapter 1 Why You Need to Understand the Update to the Nonprofit Reporting Model

Chapter 2 Why Update the Nonprofit Reporting Model?

Chapter 3 Highlights of the Major Changes to the Nonprofit Reporting Model

Chapter 4 What Is the Purpose of Financial Statements?

Chapter 5 Types of Financial Statements

Chapter 6 How to Read a Nonprofit Financial Statement

Chapter 7 Statement of Financial Position

Chapter 8 Statement of Activities

Chapter 9 Statement of Cash Flows

Chapter 10 Statement of Functional Expenses

Chapter 11 Footnotes to Financial Statements

Chapter 12 Internal Versus External (Audited) Financial Statements

Chapter 13 The Independent Auditor s Report

Chapter 14 Other Types of Auditor Opinions

Chapter 15 Supplemental Information

Chapter 16 Reserves

Chapter 17 Financial Statement Exercises

Chapter 18 Example Set 1

Chapter 19 Example Set 2

Chapter 20 Example Set 3

Chapter 21 Financial Analysis

Chapter 22 Benchmarking

Chapter 23 Increasing Complexity in Nonprofit Financial Reporting

Chapter 24 Nonprofits Subject to a Single Audit under the Uniform Guidance

Glossary Prior to Effective Date of ASU 2016 14

Glossary Amendments Made Upon Adoption of ASU 2016 14

Index

ANDREW S. LANG, CPA, Potomac, MD, is President of LangCPA Consulting.

WILLIAM D. EISIG, CPA, McLean, VA, is Atlantic Managing Partner BDO USA, LLP and Executive Director of the BDO Institute for Nonprofit ExcellenceSM.

LEE KLUMPP, CPA, CGMA, McLean, VA, is the National Nonprofit & Education Industry Group Audit and Accounting Technical Director at BDO USA, LLP.

TAMMY RICCIARDELLA, CPA, McLean, VA, is a Director at BDO Institute for Nonprofit ExcellenceSM.