Your audited financial statements are governed by Generally Accepted Accounting Standards established by the Financial Accounting Standards Board. The framework for the statements is designed so that users can compare entities to each other. Along those lines there are some limitations as to what you can do to communicate to financial statement users. There are some things you want to make sure you do and some options you have to “personalize” your statements.
- Make sure that donations that are donor restricted have been properly reported as temporarily restricted
- Consider if you have projects that the Board has committed to in the coming year. If funds for the projects are not already donor restricted, they should be reported as Board Designated
- Make sure the description of your organization in the footnotes clearly conveys your organization’s mission
- Consider the use of supplemental schedules to break out revenues and expenses by program
You should also consider preparing a one or two page financial summary that would be more user friendly than your audited financial statements. This summary could be posted to your website or sent to donors. The summary should easily agree to your audited statements, but since the summary does not need to follow accounting guidelines, you can modify the format to highlight the financial information you want people to know.
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