Under FASB ASC 960 accounting and reporting, which basis is used and which statements are included?

• A. Cash basis, including a statement of revenues
• B. Modified accrual basis, with no asset statements
• C. Accrual basis, including the statement of net assets available at the end of the year and a statement of a change in assets
• D. Accrual basis, with no change in assets statements

Answer: (C)

Not-for-profit entities reporting under ASC 960 use accrual accounting, recognizing revenues when earned and expenses when incurred, regardless of cash timing. Their financials focus on net assets rather than owners’ equity, and they present both how much net assets exist at year-end and how those net assets changed during the period. So the required pair is the statement of net assets available at the end of the year and a statement showing changes in net assets. This combination captures the organization’s financial position and performance over the period. Options using cash or modified accrual, or omitting asset statements or the change in net assets, don’t align with ASC 960 reporting requirements.