On May 28, FASB continued its discussions on changes to the financial statements of not-for-profit organizations, focusing on the presentation and disclosure of information useful in assessing liquidity. The Board decided that an entity should define the time horizon it uses to manage its liquidity (for example, 30, 60, or 90 days) and disclose the following information:
- Quantitative information about:
- The total amount of financial assets
- Amounts that are not available to meet cash needs within the time horizon because of restrictions (limits) imposed by contract (or law), donors, or actions of its governing board
- The total amount of financial liabilities that are due within that time horizon.
- Qualitative information about how the entity manages its liquidity. For example, an entity might disclose:
- Its strategy for addressing entity-wide risks that may affect liquidity, including its use of lines of credit
- Its policy for establishing liquidity reserves
- Its basis for determining the time horizon used for managing liquidity.
The decisions are tentative and may be changed at future Board Meetings.