Net Asset Disclosure

Not-for-earnings corporations also are required to undertake a standardized reporting format. FASB’s Accounting Standards Update (ASU) NO. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities captures this need (RKL CPA 1). The explanation become supposed to make certain standardized facts that may function destiny references and likely reassets of facts for comparative purposes. The resulting dialogue is a deliberation at the internet asset disclosures of the American Red Cross Company as captured withinside the 2016 Statements of Financial Reporting.

The business enterprise discloses its belongings in 3 important classes:

contemporary belongings, non-contemporary belongings, and internet belongings. The 2015 overall contemporary belongings account for $873, 160,000 become a drop from 2014 parent of $968, 596. Permanent assets are split into Investments ($1,385, 927,000), Land, Buildings, And Other Property ($845, 053, 000), Assets Held for Sale ($117, 078), Other Assets ($256, 165, 000), And Contributions Receivable ($8, 751, 000) (KPMG 4). Some of the assets held as net assets are presented as part of liabilities because of their restricted status. These assets are split into Unrestricted Net Assets ($49, 766,000), Temporary Restricted Assets ($751, 529,000), and Permanently Restricted Net Assets ($1, 593, 810, 000).

Overall, the asset position in 2014 was superior to the position seen in 2015, which means that either the total amount of asset additions was less than the total amount of asset losses or the size of donation commitments decreased in 2015. The matter should make the management concerned as it might signal a deterioration of performance. Nonetheless, despite the decrease, some classes of assets showed remarkable improvement. For instance, the amount of Assets Held for Sale increased sharply from a nil position to $117, 078, 000.

Apparently, the disclosures show well-structured classes of assets that make it easier to track performance. Nonetheless, the reporting shows a decreased asset outlay position for 2015. American Red Cross Management ought to be worried enough to investigate the reasons behind the decrease to convince their stakeholders that everything is right.

Works Cited

KPMG. Consolidated Financial Statements. The American National Red Cross,

http://www.redcross.org/images/MEDIA_CustomProductCatalog/m56240343_2015_TheAmericanNationalRedCross_CFS.PDF (Accessed 12/10/2017)

RKL CPA. Simplified Net Asset Classification and Reporting Ahead for Nonprofits. Working

Capital Blog. 2017, http://www.rklcpa.com/simplified-net-asset-classification-and-reporting-ahead-for-nonprofits/ (Accessed 11/10/2017)