By now you’ve probably heard about the changes coming with FASB ASU 2016-14. The changes are significant and we’ve assembled a collection of resources to get you up to speed.
We have some concerns about what we’ve been hearing in the field: responses to the question, "How will you accomplish the new FASB ASU 2016-14 requirements?"
There are four typical responses: two of which are practical approaches, there’s one risky approach, and one troubling response.
Q: How will you accomplish the new FASB ASU 2016-14 requirements?
Answer #1: Use Excel Spreadsheets to Report
This is a risky course of action. And, sadly this is a widespread reaction to any nonprofit reporting need. One bad formula, a transposed number here, a missed entry there and you are sharing inaccurate data. Managing your organization by spreadsheet is a bad idea from every angle. Spreadsheets do not provide an audit trail and hence are a potential source for fraud.
Spreadsheets are evidence of inadequate accounting systems. Your reports should be coming directly from your accounting system. If your system cannot provide the report you need, see Answer #4 below.
Answer #2: Create New Reports with Existing Software
This is a practical response. Let’s rephrase that: this is a practical response IF you use a fund accounting system that has FASB ASU 2016-14 reporting capabilities.
If you are part of the AccuFund family and use the AccuFund Accounting Suite in your organization, you are set!
If you haven’t heard anything from your solution provider about FASB ASU 2016-14 reporting capabilities – ask. You’ll want to ask soon, because you’ll need to start making provisions if there isn’t an easily generated report. Will you have to pay for new report formats to be created for you? Do you have a VAR/consultant or a publisher resource that understands the changes and can create the report for you? Will you have to define your requirements – in other words become an expert on FASB ASU 2016-14 and educate the consultant creating the report?
We have a white paper (and many other resources) that can help you (and your consultant) understand the new requirements and report format. We’re happy to provide this information, but sad to hear that you might be scrambling, it might be a good idea to see Answer #4 below.
Answer #3: Delegate this to the Auditors
Wait…what?! This is a troubling response! Auditors aren’t really supposed to be creating your financial statements, they’re supposed to be auditing the financial statements of your organization. It’s a conflict to do both. Maybe what people mean to say is this: delegating this duty to a CPA. That’s an expensive route to take, but if this is your best option, look for a CPA who specializes in nonprofit organizations. They will be familiar with FASB ASU 2016-14 and will know what’s necessary to be compliant.
Answer #4: Find a New Fund Accounting System with a Publisher Who is on Top of these Pending Updates
This is a practical response. We urge you to take a look at AccuFund Accounting Suite.
AccuFund generates and distributes hundreds of reports directly from the system, including new FASB ASU 2016-14 requirements.
AccuFund does not dabble in nonprofit. We have a solution specifically designed for fund accounting and the unique reporting requirements needed by nonprofits and government entities. Your investment in AccuFund will benefit you in numerous ways. Our solution is scalable, offers robust core function capabilities and reporting, and comes with friendly, accessible support.
Be sure to take advantage of the free, educational nonprofit FASB ASU 2016-14 resources we have:
• Understanding. Preparing. Implementing. FASB ASU 2016-14 Reporting Requirements White Paper, Part 1
• Understanding. Preparing. Implementing. FASB ASU 2016-14 Reporting Requirements White Paper, Part 2
• Understanding. Preparing. Implementing. FASB ASU 2016-14 Reporting Requirements White Paper, Part 3
• Blog: FASB ASU 2016-14 Deadlines are looming - It's time for urgent attention
• Nonprofit Reporting White Paper
• Functional Expense Reporting (FER) White Paper
AccuFund, Inc. is a nonprofit financial improvement systems specialist. AccuFund uses award-winning financial software, consulting services and industry best practices to help organizations streamline processes, improve efficiency and lower costs. Their nonprofit financial solutions are available on-premise or cloud-based.