Phil Marciano, partner at Citrin Cooperman, outlines the most frequent financial statement pitfalls he encounters while reviewing not-for-profit organizations. He highlights improper classification of assets and lease items, mishandling of conditional versus unconditional contributions, board-designated versus donor-restricted net assets, errors in functional expense and cash-flow presentations, and overlooked non-cash gifts. Marciano stresses robust internal controls, staff training, and vigilant board oversight to avoid these GAAP violations.
Learning Objectives
• Identify the relevant FASB Codification topics (e.g., 958, 606, 842) that govern not
• for
• profit reporting and the situations in which industry
• specific guidance overrides general GAAP.
• Distinguish conditional from unconditional contributions and indicate the correct balance
• sheet and revenue
• recognition treatment for each funding type.
• Recall the required presentation formats for the statement of activities, cash
• flow statement, and statement of functional expenses, and recognize the misclassifications that most often appear in practice.
• Select the proper classifications for cash equivalents, leases, board
• designated versus donor
• restricted net assets, and non
• cash gifts, and estimate the internal
• control actions needed to prevent related reporting deficiencies.
Major Topics
• financial analysis
• revenue recognition standards
• GAAP compliance
• financial reporting
