The FASB Not-for-Profit Advisory Committee met to discuss emerging financial reporting issues, prioritizing topics like enhancing disclosures and rethinking cash equivalents. Key updates on standard-setting projects were also highlighted.
Key Points
•📅 Date: October 7, 2025
•💡 Focus: Emerging financial reporting issues in the NFP sector
•📊 Top Issues: Grant collection risks, cash flow classification, stablecoin classification
•📝 Priority Topics: Enhancing and streamlining disclosures, redefining cash equivalents
•📚 New Standards: Updates on recently issued and forthcoming accounting standards
📝 Emerging Financial Reporting Issues
The Committee kicked off with a deep dive into the latest challenges in financial reporting for NFPs. They tackled:
Risks and uncertainties related to grant collection
Diversity in cash flow classification
The classification of stablecoins as cash equivalents
"The diversity in practice on these issues is mind-boggling," one member noted.
📋 Agenda Consultation
FASB staff shared feedback from their latest consultation, sparking lively discussion among Committee members. High-priority topics included:
Enhancing disclosures about risks, net assets, and liquidity
Streamlining disclosures where possible
Rethinking the definition of cash equivalents
Members emphasized the need for clarity and consistency in financial reporting.
📚 Select FASB Projects
The Committee reviewed several ongoing projects, including:
Market-Return Cash Balance Plans: Seen in practice but uncommon
Subjective Acceleration Clauses: Common in NFP debt arrangements, but unlikely to trigger debt repayment on their own
These discussions highlighted the unique challenges faced by NFPs in applying general accounting principles.
🔍 Recently Issued Standards
FASB staff also highlighted new and upcoming standards relevant to NFPs, such as:
Accounting Standards Update No. 2025-05 on credit losses
Updates on interim reporting and codification improvements
These updates are crucial for NFPs to stay compliant and transparent in their financial reporting.
