Glossary / FASB ASU 2016-14

What is FASB ASU 2016-14?

An accounting standards update that simplified nonprofit financial reporting by reducing net asset classifications from three to two (with donor restrictions and without donor restrictions) and requiring enhanced disclosures.

Why it matters for your nonprofit

When leaders share one clear story about money and mission, donors trust you and audits go smoother. Understanding FASB ASU 2016-14 helps your board make decisions without guessing what your numbers mean.

How it shows up in daily work

You will see FASB ASU 2016-14 in board packets, grant reports, and donor conversations. The goal is to record activity once and report it consistently—without rebuilding spreadsheets every month.

Common mistakes

• Treating restricted resources like general cash because the chart of accounts is not set up for funds.
• Letting finance and development use different definitions for the same dollars.
• Waiting until year-end to fix coding errors that should be caught monthly.

How Alignmint helps

Alignmint ties fund accounting, donor records, and reporting in one place so terms like FASB ASU 2016-14 show up correctly in your books—not only in a policy memo.