Opinion: Accounting Standards Reforms Don't Go Far Enough
Nonprofit accounting is hardly donor-friendly. Annual required disclosures on IRS Form 990 are murky and outdated, and nonprofits use all kinds of tricks to conceal how they’re spending contributions. So relief seemed at hand when the Financial Accounting Standards Board, or FASB, the rule-setting body for the accounting profession, recently announced the first major changes in nonprofit financial-reporting requirements since 1993.
Don’t get too excited. With one exception, the FASB’s rule changes, which begin taking effect in December 2017, will not substantially improve nonprofit financial disclosure. Is this the best the FASB could accomplish after two decades? It’s anticlimactic after FASB Chairman Russell G. Golden announced that the rule changes addressed “concerns about the complexity, insufficient transparency, and limited usefulness of certain aspects of the [not-for-profit financial reporting] model.”
