by Richard R. Hammar, J.D., LL.M., CPA

Accounting for Depreciation

§ 7.19
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 ...

Log In For Full Access

Interested in becoming a member? Learn more.

Table of contents

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."

Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.