Churches, faith communities, and other small non-profit organizations can benefit from the simple clarity of recently adopted accounting standards for non-profit organizations.
These excellent guidelines enable the organization to report its unrestricted and restricted funds clearly and accurately, providing an essential report to the membership, as well as a valuable archive for future generations.
These non-profit financial reporting formats are not identical to those used in business; in fact, using common business practices in your financial reporting can lead to incomplete information, erroneous interpretations, and unfortunate decisions.
Faithful stewardship is more than fundraising; it requires keeping accurate records of how your resources are used for your mission and outreach.
Financial Accounting Standards Board Statement No. 116 describes how to classify funds in one of three ways: Unrestricted, Temporarily Restricted, and Permanently Restricted.
Financial Accounting Standards No. 117 specifies the following reports for all non-profit organizations:
- Statement of Financial Position (Assets & Liabilities) including Net Assets: Unrestricted Funds, Temporarily Restricted Funds, and Permanently Restricted Funds
- Statement of Activities (Revenues & Expenditures)
Although not legally required of congregations or small non-profit organizations, these reports provide essential and valuable information for the faithful stewardship of funds.