COVID-19’s Lasting Effects on Nonprofits – Financial Reporting
This article is the second in a series that will look at the pandemic’s lasting impact on nonprofit organizations. View the full series here. Read on to learn about some of the accounting and financial reporting issues nonprofits are facing because of the pandemic.
Many nonprofits took advantage of various government pandemic relief programs, which gives rise to questions about how to account for and report grants and loans under these programs. Each of these programs have unique provisions, but because so many organizations have taken advantage of these programs, the AICPA, SBA, and IRS have published a wealth of authoritative accounting and tax guidance to help you understand the impact of these programs on your financial statements and Form 990.
The pandemic also led accounting standards makers to delay effective dates for several significant new accounting standards. For example, the FASB delayed the effective dates for revenue recognition and leasing ASUs for organizations that had not yet adopted them. Additionally, organizations that fall under GASB saw delays in leasing, asset retirement obligation, and pension standards changes, among others.
Nonprofits should also consider the impact of COVID-19 on the organization’s accounting and reporting for the following areas:
Subsequent events
Risks and uncertainties
Asset impairment
Fair value measurements
Modifications of liabilities
Insurance recoveries
Going concern evaluations
Schreiber Accounting and Advisory has experience working with nonprofit organizations of all sizes on financial statement services, Form 990 preparation and management advisory services. If your organization needs the assistance of a qualified CPA firm, contact the firm for more information.
Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.