Understanding GAAP for Churches

Financial Accounting Standards Board (FASB) provides guidance on how Churches and Ministries should report information in their financial statements. FASB is the authoritative entity providing direction on how things should be accounted for and reported in accordance with generally accepted accounting principles (GAAP).

Over the last 10-15 years, the FASB has written and re-written several standards that specifically address non-profit (ie., which include Churches/Ministries) entities.

FASB Statement 116 Accounting for Contributions Received and Contributions Made
FASB Statement 117 Financial Statements of Not-for-Profit Organizations
FASB Statement 124 Accounting for Certain Investments Held by Not-for-Profit Organizations
FASB Statement 133 Accounting for Derivative Instruments and Hedging Activities
FASB Statement 136 Transfers of Assets to a Not-for-Profit Organization or Charitable Trust That Raises or Holds Contributions for Others
FASB Statement 144 Accounting for the Impairment or Disposal of Long-Lived Assets

Over the next several posts, I am going to discuss the financial statement requirements and certain accounting issues for churches and ministries. The FASB standards should be followed, if the Church or Ministry wishes to report information in accordance with GAAP.

My next post will address the first statement included in the financials - a statement of financial position.

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