Key point 7-19. The Financial Accounting Standards Board (FASB) requires nonprofit organizations to recognize the depreciation of property and assets in their financial statements. As a result, churches that do not report depreciation will not be eligible for an unqualified opinion from a CPA at the conclusion of an audit.
In 1987, the "Financial Accounting Standards Board" (FASB) issued "Statement of Financial Accounting Standards No. 93," which required all nonprofit organizations (including churches) to recognize depreciation in their financial statements. FASB based the new rule on its conclusion that a nonprofit organization has assets that are used up in providing services, and that this "using up" of assets is a real "cost" that should be recognized (as depreciation) in the organization's financial statements in order to fairly present its financial condition. To illustrate, FASB noted ...
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