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Future Of Financial Reporting For Higher Education Mark Thomas KPMG LLP Year-End GAAP Training April 18, 2014.

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Presentation on theme: "Future Of Financial Reporting For Higher Education Mark Thomas KPMG LLP Year-End GAAP Training April 18, 2014."— Presentation transcript:

1 Future Of Financial Reporting For Higher Education Mark Thomas KPMG LLP Year-End GAAP Training April 18, 2014

2 GASB Standards: Expect New Standards for Other Post-Employment Benefits (OPEB) similar to the new Pension Standards April 2014Year-End GAAP Training2

3 GASB Project: Re-examination of the Financial Reporting Model 15 years old Just getting started 11 Focus Groups (incl. Business Type Activities) Reviewing financial statements and MD&A from entities across the country Surveys – separate surveys for Preparers (May/June 2014) Auditors (July/August 2014) Users (September/October 2014) April 2014Year-End GAAP Training3

4 Re-examination of the Financial Reporting Model (con’t) Expect to issue a Research report by June 2015 One objective is to gain more alignment between GASB and FASB reporting models April 2014Year-End GAAP Training4 GASB Project:

5 FASB Standards: Refresh the NFP Reporting Model (20 years old) Moving from 3 Net Asset classes to 2: With and Without Donor-Imposed Restrictions Further discussion in Notes on nature of restrictions Disclosure of the nature of Board designations Cash Flow Statement: Require the Direct Method of preparation Interest and dividend income is now investing activities Interest paid is now financing activities April 2014Year-End GAAP Training5

6 FASB Standards: Requiring Expenses reported by nature and by function: Retain flexibility on which is reported on the face of the financial statements Require a Statement of Functional Expenses (matrix) Disclosure of the method of expense allocation to function Remove requirement to functionalize non-operating expenses Format of Operating Statement: One Statement or Two? (incl. Statement of Changes in Net Assets) April 2014Year-End GAAP Training6

7 FASB Standards: Liquidity and Financial Flexibility: Require a classified balance sheet? Define an intermediate operating measure (operating income) Other Disclosures? Research Project on MD&A Various Note Enhancements April 2014Year-End GAAP Training7

8 NACUBO “Blank Slate Project” “Reporting Reimagined” January 2014 Business Officer Magazine Project that sets out to start from scratch and completely re- think the financial reporting model – for both private and public Effort to provide meaningful enhancements to the current reporting models Approached the project from the User Perspective – what would best tell Higher Education’s Story April 2014Year-End GAAP Training8

9 NACUBO “Blank Slate Project” Initial Results: Four newly reimagined financial statements: Nonclassified Balance Sheet – expanded Resources (equity) section Income statement – focused on current operations only, expenses reflected by natural classification Statement of Changes in Resources – replaces the non-operating section of the current statement of activities, and reconciles changes in resources (equity) Statement of Cash Flows – change to two sections: Operating and Non-Operating Focused disclosures on Liquidity, Endowments, and Student Income. April 2014Year-End GAAP Training9

10 Q&A

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