Article Link: http://exchangepress.com/article/new-accounting-requirements-for-non-profits-the-time-for-implementation-is-now!/5011135/
Over the past 20 years, there has been an increasing public focus on the rapidly growing not-for-profit sector. For profit businesses have complained that they are at a competitive disadvantage where not-for-profit organizations operate similar businesses but avoid the burden of paying income taxes. Several public scandals have focused attention on how effectively not-for-profit organizations utilize public funds.As an outgrowth of such attention, and to determine whether any reporting improvements were necessary, the accounting profession performed in-depth studies of the not-for-profit sector. They discovered that there were numerous differences in the ways different organizations presented their financial information so that it was often difficult to learn about the nature of activities or to compare one organization with another.
The rule-making body of the accounting profession (FASB - the Financial Accounting Standards Board) issued several pronouncements in the 1970s and 1980s in their attempt to set standards for not-for-profit financial reporting. These efforts culminated in the issuance of two major Statements of Financial Accounting Standards (SFAS), which dramatically change the way all not-for-profit organizations must now keep their accounting records and report their activities.
It is important to understand the new requirements because implementation will require changing accounts in ...