Accounting Standards Update
Accounting Standards Update
What churches producing external financial statements need to know about GAAP changes.

Even though the generally accepted accounting principles (GAAP) framework is formally and officially recognized by the accounting profession, use of the GAAP framework for external financial reporting is not generally a requirement of the law outside the context of regulated and publicly traded companies. However, the use of GAAP for external financial reporting purposes may be required as a contractual or legal condition for churches and other nonprofit organizations in certain circumstances. For example, a bank or other lender may require a church to apply the GAAP framework to financial statements submitted to the lender on an annual basis. Similarly, a government agency or other grant-funding organization may require a church to submit GAAP-basis financial statements as a condition of receiving a grant. Regardless of whether such a contractual or legal condition applies, a church may still voluntarily choose to use the GAAP framework for its external financial reporting.

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Posted: November 28, 2018
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