Liquidity & Uncertainty Disclosures for Nonprofits

Learning Objectives

• Describe the importance of liquidity and other uncertainty disclosures in the fair presentation of financial statements.
• Explain the proper evaluation of the need for transparent disclosures about uncertainty, including liquidity and going concern uncertainty.

Course Description

Nonprofits are required to include a liquidity disclosure in their financial statements. This liquidity disclosure overviews qualitative and quantitative information about how the nonprofit manages its liquid resources.

In this CPE Course, we will delve into the intricacies of liquidity disclosures and ongoing concern assessments for not-for-profit organizations. We will explore how management's responsibility lies at the core of these evaluations, emphasizing the importance of accurate accounting and financial reporting.

From identifying potential risk indicators to evaluating management's plans for mitigating substantial doubt, we've navigated through the steps necessary for a comprehensive assessment. By examining various scenarios, including challenging plans and subsequent events, we will gain insights into the complexities of ensuring transparency and reliability in financial reporting.

Lastly, we will touch upon impairment testing for long-lived and intangible assets, including goodwill. Understanding the order of impairment testing and the significance of these assessments enhances our ability to provide accurate and insightful financial reporting. 

Join this CPE Course, by staying informed and diligent in our evaluations, we can contribute to maintaining the financial health and sustainability of not-for-profit organizations.

Key topics discussed:

• Liquidity Disclosures
• Going Concern Assessment
• Management Responsibility
• Auditor's Role
• Impairment Testing

View more CPA CPE Courses for your continuing professional education.

Overview

• Accounting Standards Codification (ASC) 275, Risks and Uncertainties

  3 mins
• Type II event required disclosure

  16 mins
• Meeting restrictions in same reporting period

  32 mins
• Financial Accounting Standards Board (FASB) codification requirements

  47 mins
• Substantial doubt does not exist after evaluation

  65 mins
• Subsequent realization of assets

  79 mins
• General order of impairment testing

  99 mins