Section 1: 30–40%1B1
Statement of Financial Position (NFP)
Exam insight
NFP accounting feels foreign because there is no equity section - net assets take its place. The AICPA's favorite trap: does a board designation turn unrestricted net assets into restricted ones? No. Only outside donors can create restrictions. Once the net asset model clicks, the rest of NFP falls into place.
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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