Section 1: 30–40%1B4

Notes to the Financial Statements (NFP)

Exam insight

NFP disclosures under ASU 2016-14 get tested hard, especially liquidity, availability of resources, and functional expense allocation. Watch the word 'availability.' It isn't the same as total assets; it's financial assets minus amounts not available within one year. An NFP question about a 60-day liquidity window is testing exactly that.

What AICPA wants you to know

1Describe the unique NFP disclosures required by ASU 2016-14
2Explain the liquidity and availability of resources disclosure
3Identify the required content of the functional expense matrix note
4Apply the underwater endowment disclosure requirements

Patterns in this topic

The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.

The NFP Reporting RulesASU 2016-14 sets the mechanics: a functional expense analysis for every NFP, the liquidity disclosure, and netted investment return.The Restriction GateOnly a donor can restrict: two net asset classes, board designations stay without restrictions, and spending releases the restriction.

Exam tip

Study smarter: before you expand each card, cover the screen and try to recall what the concept means from its title alone. Retrieving it from memory builds the recall the exam actually tests, and it beats re-reading.