Preparing Nonprofit Financial Statements: Avoiding Common Errors

This webinar will discuss preparing financial statements for nonprofit organizations. This discussion will cover the unique aspects of these reports, identify common reporting missteps, and provide advice for efficiently assimilating these statements for auditors and accountants of these organizations.

Nonprofit organizations have distinctive reporting requirements. The titles, disclosures, and financial statements are unique to these organizations. The Statement of Financial Position reports not only net assets but must disclose whether the assets are with or without donor restriction, and to the extent with donor restriction, whether these restrictions are permanent or temporary. Most often, these determinations are not readily apparent. Further, the Statement of Activities, similar to an Income Statement, reports revenues, expenses, and changes in assets. However, nonprofit organizations must report this information separately for each activity and report revenue as with or without donor restriction.

On top of increased financial statement reporting requirements, these nonprofit organizations must include additional disclosures in their financial statements. Accounting Standards Update (“ASU”) 2020-07 requires disclosure of nonfinancial contributions, better known as in-kind contributions, and the nonprofit's accounting policies for contributions. These additional reporting requirements can burden organizations operating for charitable purposes and auditors and accountants required to comply with these voluminous guidelines. Accountants working with nonprofit organizations must understand reporting requirements and the role and responsibilities of the auditors, management, and the board of directors in accumulating and divulging this information.

Listen as our panel of nonprofit experts reviews the unique components of nonprofit financial reporting for auditors, accountants, and managing members of these organizations.