A naukri.com initiative
Npengage
4d
337
Image Credit: Npengage
How ASC 958-205 and UPMIFA Enhance Endowment Transparency
- FASB ASC 958-205 and UPMIFA play key roles in enhancing endowment transparency and financial reporting for nonprofit organizations.
- ASC 958-205 simplifies financial statement presentation by categorizing net assets into two groups: with donor restrictions and without donor restrictions.
- It mandates a detailed presentation of financial statements for organizations with endowments, including Statements of Financial Position, Activities, Cash Flows, and Functional Expenses.
- ASC 958-205 promotes transparency by requiring disclosure of liquidity and resource availability, instilling donor and stakeholder confidence.
- UPMIFA guides nonprofits in managing endowment funds responsibly, emphasizing careful fund management, diversification, and long-term sustainability.
- UPMIFA allows prudent spending from endowment principal as long as it aligns with donor intent and doesn't jeopardize future support.
- Organizations must regularly review and align their investment strategies and spending policies with UPMIFA guidelines for financial health and sustainability.
- Comprehensive understanding and compliance with legal obligations and GAAP are essential for effective endowment management and financial reporting.
- Utilizing specialized software like Blackbaud Financial Edge NXT can aid nonprofits in compliance, effective reporting, and transparent endowment management.
- Financial Edge NXT offers features like Transaction Codes to track liquidity and simplify reporting, assisting organizations in meeting modern endowment management demands.
- By prioritizing compliance, understanding management responsibilities, and leveraging appropriate systems, organizations can uphold financial health, transparency, and mission-driven goals.
Read Full Article
20 Likes
For uninterrupted reading, download the app