Section 1: 30–40%1B1
Statement of Financial Position (NFP)
Not-for-profit accounting is a significant FAR topic (15-25% of the Section 1 content). The NFP balance sheet has a unique structure with net assets instead of stockholders' equity, and the two-class net asset system (with/without donor restrictions) is heavily tested.
What AICPA Wants You to Know
- 1Describe the two classes of net assets under ASU 2016-14 and what goes in each
- 2Identify how NFP assets, liabilities, and net assets are classified on the balance sheet
- 3Distinguish between donor restrictions and board designations
- 4Apply the NFP investment reporting standards (pooled investments, fair value)
- 5Recognize what triggers a reclassification between net asset classes