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April 24, 2015

Accounting Board Eyes Major Changes in Nonprofit Bookkeeping

The Financial Accounting Standards Board, the federally designated private body that sets out practices for bookkeeping and financial reporting, is proposing a new principles for nonprofits that could significantly affect how they present their fiscal health, reports Accounting Today. The update marks the first major change in the reporting model for nonprofits in more than 20 years and will make their financial statements "even more useful to donors, lenders, and other users," board member Lawrence W. Smith said.

The blueprint, in the works since 2011, includes changes in how organizations report mission activities, cash flow, liquidity, and other measures to better reflect overall fiscal performance. The standards board will accept comments through August 20 on the proposed update, which can be reviewed at the board's website.