In November of 2011, the FASB announced two new projects related to financial reporting of not-for profit organizations. One of the projects was a research project that was subsequently dropped from the agenda; as a result, the standard-setting project was renamed "Financial Statements of Not-For-Profit Entities." As this textbook goes to press, the FASB has tentatively scheduled the release of an exposure draft in the second half of 2014. The board has reached tentative conclusions about several NFP issues, including reporting of net assets. The board proposes that net assets be reported in two net asset categories-net assets with donor-imposed restrictions and net assets without donor-imposed restrictions - instead of the currently required three net asset categories of unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
Required
a. Research the current status of the FASB project. Write a summary of the current reporting requirement for net assets and compare that with the proposed reporting requirement for net assets.
b. Why is the FASB proposing this change in net asset reporting? In other words, how will the proposed changes improve financial reporting for NFP organizations?
c. In addition to the net asset classification component of the project, there was one other overall objective. Identify the objective and discuss what, if any, proposals are being considered as part of this objective.