FASB released ASU 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit entities in August 2016. The amendments in this ASU are intended to improve financial statement presentation by not-for-profit (NFP) organizations with FASB’s intent to improve net asset classification and liquidity information, while providing flexibility. You can read NACUBO’s Advisory Guidance for this ASU here.
Balance ASU 2016-14 Reports: Including Pledge Balances
In our May 2022 product enhancement deployment, Fundriver released a suite of revised ASU reports within Balance to comply with guidance on this standard. The revisions are related to recommendations on how pledges are to be handled within the ASU reports. A brief description of how pledges factor into each of our standard ASU reports can be found below in the Balance ASU 2016-14 Standard Reports section. These revised ASU 2016-14 reports included both pledge activity and pledge balances, based upon NACUBO guidance. You can find their Accounting Tutorial, What Activity Should be Included in the Endowment Roll-forward, here. For clients that do not use Fundriver Balance to track pledges, these new reports have no impact to you.
If pledges are tracked outside of Fundriver Balance and it is preferred to include them within a footnote, we encourage the reports be exported to Excel and the pledges added manually, outside of the Balance system.
Disclaimer: Please note that Fundriver provides reports and tools in our software that are intended to aid organizations with financial statement preparation. We do not provide advice on how to prepare your financial statements. Please consult with your auditors regarding how to properly report your endowments within your audited financial statements.
Balance ASU 2016-14 Standard Reports
The following report descriptions only apply when funds have pledges recorded in Fundriver Balance. If pledges are not recorded in your Fundriver Balance database or are not recorded for certain types of funds (i.e., net assets without donor restriction), pledge amounts will not be pulled into the report as noted below.
ASU Underwater Endowment Report, including Pledges - The current pledge balance is included in the End Historical Gift and Total Market Value on this report. The Underwater Amount is not impacted by the pledge balance.
Endowment Net Asset Rollforward by GLID, including pledges – Current year pledges are included in the Contributions amount on the report. Also, the Beginning and Ending Balance includes pledge balances.
Restriction Summary Including Pledges (ASU 2016-14) – The following columns on this report include pledge amounts: Historical Gift, Market Value, Gift – With Donor Restrictions and Gifts and Accumulated Earnings – Without Donor Restrictions.
Restriction Balances Report Including Pledges for ASU 2016-14 – With Donor Restriction and Without Donor Restriction balances include pledges.
Endowment Net Asset Composition by Type of Fund Including Pledges – Pledges are included in the totals for With and Without Donor Restriction.
Change in Endowment Net Assets Including Pledges (ASU 2016-14) – Contributions include pledges and Endowment net assets include pledges.
Below are the original reports, relabeled to be clear they exclude pledges:
- Change in Endowment Net Assets Excluding Pledges (ASU 2016-14)
- Endowment Net Asset Composition by Type of Fund Excluding Pledges
- Restriction Balances Report Excluding Pledges for ASU 2016-14
- Restriction Summary Excluding Pledges(ASU 2016-14)
Frequently Asked Questions
The following Question and Answer section Is intended to address common questions. Please reach out to client support if you have additional questions.
Should our organization include pledges in Fundriver Balance?
Tracking pledges in Fundriver Balance is an organizational decision. Less than 10% of Fundriver Balance clients track pledge balances in Fundriver Balance as the software only tracks pledges at the GLID level, not at the donor level. The majority of our Fundriver clients prefer to track pledges in their general ledger and donor system and then manually add this to their endowment footnote at year-end.
Pledges are not broken out on the ASU 2016-14 reports. How do I know what portion of the values within the reports are pledges?
The best way to determine the pledge amounts included in your ASU 2016-14 (including pledges) reports would be to run the Pledge Balances Report. The Pledge Balances Report can be found in the Summary report grouping per the screen shot below. If you run the report to pull in activity for the whole fiscal year, you will obtain the amounts included in the ASU reports.
What pledge amounts should be included in our financial statement reporting?
The ASU 2016-14 reports, including pledges will only pull balances that are in Fundriver Balance. Your organization should consult with your auditors to determine if discounts and allowances should be factored into the balances. Manual adjustments outside of Fundriver Balance may be necessary.