FASB's Not-for-Profit Financial Reporting Project: Analysis of Letters to ASU 2016-14 Exposure Draft

What is it about?

For the first time in nearly 25 years, FASB proposed changes to financial reporting by NFP entities. The NFP sector has a significant socio-economic impact on the U.S. economy. Prior research has shown that managers of NFP organizations have a variety of incentives related to performance evaluation, compensation, career advancement, and reputation. We analyze the level of agreement/disagreement for 20 proposals in the ED affecting the three financial statements. Our results show that proposals with which there was a wide-spread agreement were incorporated into ASU 2016-14. Proposals in which there was disagreement, primarily by respondents in business-oriented NFPs, were deferred to the second phase of FASB's NFP project.

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