This is the last in a series of posts we have prepared regarding ASU 2016-14 and its impact on endowment related reporting. To view the other parts, click here: ASU 2016-14 Series
Now that we have covered the significant changes to endowment reporting under ASU 2016-14 in our previous blog posts, let’s look at how Fundriver is helping our clients tackle these changes.
Presentation of Net Assets
First, we have the Changes in Endowment Net Assets reporting. Fundriver has added several roll forward reports including “Change in Endowment Net Assets Report” and “Detail-Change in Endowment Net Assets Report”. These reports shows beginning market value, investment returns, contributions, expenditures and transfers grouped into the two new net assets classifications. Prior to ASU 2016-14, we broke our endowments into three classes: Permanently Restricted, Temporarily Restricted and Unrestricted. The new standard now streamlines the net asset classes into two: With Donor Restriction and Without Donor Restriction. Fundriver also offers a detail report showing each individual named funds’ roll forward with both the old and the new net asset classifications.
Expenses
Investment expenses are now shown netted on the financial statements with investment returns. To be considered related to investment activity, investment expenses must contribute to generating investment returns. Fundriver has a “Fees & Expense Report” made available to all clients. This report breaks apart expenses into Pooled Investment Fees and Administrative Fees. Not only does the report show totals for the year, but the report also has a drill down capability. This feature allows users to click a dollar amount in the report to see the detail transactions that make up that total on the surface of the report!
Liquidity
The new standard requires organizations to disclose its available resources and how the organization can meet its cash needs for general expenditures within one year. Fundriver is offering a new “Liquidity Report” for those that subscribe to the Investment Portfolio Module. Investment managers have a new attribute available in Fundriver to assign their liquidity availability (i.e. daily, monthly, semi-annual, annual). The “Liquidity Report” then pulls in this attribute to help users with their year-end liquidity disclosure.
Underwater Funds
The accumulated losses of donor-restricted funds are no longer re-classified as unrestricted. Rather, the accumulated losses are to be reported along with the principal portion of the fund under net assets with donor restrictions. Fundriver developed an “Underwater Funds Report” that details which funds are underwater. The report lists the fund’s historical gift value, market value and underwater amount. The report is broken out into with donor restriction and without donor restriction and includes a fund count per restriction. In addition, Fundriver has a report showing spending that occurred during a specific time on only underwater funds.
Still love your perm, temp and unrestricted net asset classification? Fear not, Fundriver will continue to support the old net asset classification and report suite. We refer to these old net asset class reports as the “FAS 117-1” reports.
Are you currently tracking your endowments on massive excel spreadsheets? If you are ready to move past the headaches of your current endowment accounting system, schedule a demo today!