Accounting
Nonprofit Accounting
Nonprofit Management
Statement of Financial Position for Nonprofits: Layout, Net Asset Classes and Template
Last updated: October 8, 2026 · Independent guide · We do not sell rankings or coverage.
A statement of financial position for a nonprofit is the organization’s balance sheet: it lists assets, liabilities and net assets at the last day of the fiscal year. Under FASB ASU 2016-14, net assets appear in two classes, without donor restrictions and with donor restrictions, and the notes must explain how much of your financial assets are available for general spending in the next 12 months. This page gives you a copyable template, a matching liquidity disclosure, and line-by-line guidance for year-end.
Several of the pages that rank for this topic still describe the three net asset classes (unrestricted, temporarily restricted and permanently restricted) that FASB replaced for fiscal years beginning after December 15, 2017. If your trial balance or report writer still uses those labels, the template below shows how they map to the current presentation.
How to use this template
Copy the table into your spreadsheet or report writer and replace the illustrative figures with your own year-end balances. Keep two columns of amounts so readers can compare the current and prior year. Assets and liabilities are listed in order of liquidity, which is the approach FASB uses in its own illustration (FASB ASU 2016-14, August 2016). Delete rows you do not need, but keep the two net asset subtotals, because ASU 2016-14 requires the amounts for each of the two classes of net assets on the face of the statement. Prepare the liquidity table that follows from the same balances so the two agree.
Statement of financial position template
Illustration only. The organization and every figure below are invented to show the layout and to make the totals balance.
Example Community Services, Inc.
Statement of Financial Position
June 30, 2026 and 2025
| Line item | 2026 | 2025 | What goes here |
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | $412,000 | $365,000 | Operating cash only. Cash a donor restricted to a long-term purpose goes lower down. |
| Accounts receivable, net | $38,000 | $31,000 | Program fees and other exchange revenue, less an allowance. |
| Grants receivable | $145,000 | $120,000 | Amounts billed or earned on cost-reimbursement awards. |
| Contributions receivable, net | $210,000 | $180,000 | Unconditional pledges, less any discount and allowance. |
| Prepaid expenses | $22,000 | $19,000 | Insurance, software and rent paid in advance. |
| Investments | $640,000 | $590,000 | Includes $250,000 the board designated as an operating reserve. |
| Assets restricted to investment in property | $50,000 | $75,000 | Capital campaign cash not yet spent on the building. |
| Endowment investments | $500,000 | $480,000 | Donor-restricted endowment funds, including cash held inside them. |
| Property and equipment, net | $1,150,000 | $1,190,000 | Cost less accumulated depreciation. |
| Operating lease right-of-use asset | $96,000 | $120,000 | Office or program space leases. |
| Total assets | $3,263,000 | $3,170,000 | Sum of the rows above. |
| LIABILITIES | |||
| Accounts payable and accrued expenses | $96,000 | $88,000 | Vendor invoices and accruals at year-end. |
| Accrued payroll and benefits | $74,000 | $69,000 | Wages, payroll taxes and paid leave owed. |
| Refundable advances | $60,000 | $45,000 | Conditional grant cash received before the conditions are met. |
| Deferred revenue | $18,000 | $15,000 | Program fees or event tickets paid in advance. |
| Operating lease liability | $101,000 | $124,000 | Present value of remaining lease payments. |
| Note payable | $420,000 | $455,000 | Building mortgage or other long-term debt. |
| Total liabilities | $769,000 | $796,000 | Sum of liabilities. |
| NET ASSETS | |||
| Without donor restrictions: undesignated | $1,364,000 | $1,329,000 | Includes net investment in property and equipment. |
| Without donor restrictions: board-designated operating reserve | $250,000 | $240,000 | Board actions only. The board can reverse these. |
| Total net assets without donor restrictions | $1,614,000 | $1,569,000 | Required subtotal. |
| With donor restrictions: purpose restricted | $260,000 | $215,000 | Includes the $50,000 held for the building. |
| With donor restrictions: time restricted | $120,000 | $110,000 | Pledges for future periods and gifts for use in a later year. |
| With donor restrictions: perpetual in nature | $450,000 | $450,000 | Original endowment gifts the donor requires you to keep. |
| With donor restrictions: endowment earnings not yet appropriated | $50,000 | $30,000 | Accumulated returns on donor-restricted endowments. |
| Total net assets with donor restrictions | $880,000 | $805,000 | Required subtotal. |
| Total net assets | $2,494,000 | $2,374,000 | Must equal ending net assets on the statement of activities. |
| Total liabilities and net assets | $3,263,000 | $3,170,000 | Must equal total assets. |
You can show the four with-donor-restrictions rows on the face, as above, or show one total and break it down in a note. ASU 2016-14 requires disclosure of the composition of net assets with donor restrictions either way.
Liquidity and availability disclosure template
ASU 2016-14 added two liquidity requirements. The qualitative part explains how you manage liquid resources to meet cash needs for general expenditures within one year of the balance sheet date. The quantitative part shows the availability of your financial assets at the balance sheet date, “either on the face of the balance sheet or in the notes” (FASB ASU 2016-14, August 2016). The standard does not prescribe a format (PKF O’Connor Davies, March 26, 2018), so a reconciling table like this one is a practical way to present it.
Illustration only, using the same invented organization at June 30, 2026.
| Line | Amount | Source in the template |
|---|---|---|
| Cash and cash equivalents | $412,000 | Asset row 1 |
| Accounts and grants receivable | $183,000 | Asset rows 2 and 3 |
| Contributions receivable, net | $210,000 | Asset row 4 |
| Investments, restricted property cash and endowment | $1,190,000 | Asset rows 6, 7 and 8 |
| Total financial assets | $1,995,000 | Excludes prepaids, property and lease assets |
| Less: contributions receivable due after one year | ($95,000) | Pledge schedule |
| Less: purpose-restricted amounts | ($260,000) | Net assets with donor restrictions, purpose |
| Less: donor-restricted endowment | ($500,000) | Asset row 8 |
| Plus: endowment payout approved for next year | $22,000 | Board spending policy resolution |
| Less: board-designated operating reserve | ($250,000) | Net assets row 2 |
| Financial assets available for general expenditures within one year | $912,000 | Disclose this total |
Follow the table with two or three sentences of narrative. Typical content includes your target level of cash on hand, how often you review cash flow, whether the board can release its designated reserve if needed, and any unused line of credit. An unused line of credit is not a financial asset, so describe it in the narrative instead of adding it to the total.
Walking through each part of the template
Assets: order by liquidity, or classify
ASC 958-205-45-2(a), carried into ASU 2016-14, asks you to “sequence or classify” assets and liabilities in ways that show their liquidity (FASB ASU 2016-14, August 2016). You can list items from most to least liquid, as the template does, or split them into current and noncurrent sections. Baker Tilly notes that organizations already using a classified format may find the liquidity disclosure easier, but current assets are not the same thing as assets available for general spending, because a purpose-restricted pledge due within a year is current yet unavailable (Baker Tilly, March 16, 2017). Baker Tilly sells audit and advisory services to nonprofits, as do the other firms cited here.
Keep cash that donors restricted to long-term purposes, such as a building fund or an endowment, out of the top cash line. FASB’s own illustration classifies cash held inside a donor-restricted endowment as part of long-term investments until it is invested. If you track pledges in a donor system, reconcile the contributions receivable balance to the ledger before you close. Our guide to pledge management software covers how that reconciliation works.
Liabilities: put refundable advances in the right place
List liabilities in order of when they come due. The most common nonprofit-specific line is the refundable advance, which holds conditional grant cash you received before meeting the conditions. ASC 958-605-25-5F says a conditional contribution received in cash “shall be accounted for as a refundable advance until the conditions have been substantially met or explicitly waived by the donor” (FASB ASU 2018-08, June 2018). That cash does not belong in net assets with donor restrictions. If you receive federal awards, the same grant balances feed your schedule of expenditures of federal awards, so tie the two together during close.
Net assets without donor restrictions
This class holds everything the donor did not restrict, including amounts your board has set aside. ASU 2016-14 requires you to disclose the “amounts and purposes of governing board designations, appropriations, and similar actions” that limit these resources, and it permits a voluntary reserve to appear as a separate component of board-designated net assets on the face of the statement (FASB ASU 2016-14, August 2016). Board designations never move a balance into the donor-restricted class, because the board can reverse its own decisions.
Net assets with donor restrictions
This class combines what used to be temporarily and permanently restricted net assets. It covers purpose restrictions, time restrictions, endowment gifts the donor requires you to keep in perpetuity, and accumulated endowment earnings not yet appropriated. Underwater endowment deficiencies are classified as part of net assets with donor restrictions, and you disclose the aggregate amount by which funds are underwater (FASB ASU 2016-14, August 2016). For gifts of long-lived assets, or cash to buy them, the restriction expires when the asset is placed in service unless the donor says otherwise.
Ties to the other statements and to Form 990
Total net assets for each class must equal the ending balances on your statement of activities. On Form 990, Part X (Balance Sheet) uses the same labels: line 27 is net assets without donor restrictions and line 28 is net assets with donor restrictions, while lines 29 to 31 are for organizations that do not follow ASC 958 (IRS, Instructions for Form 990 (2025), no date shown). Map your net asset accounts to those lines once, and the return will agree with your audited statements each year.
Common mistakes at year-end
- Using the old three-class labels. “Temporarily restricted” and “permanently restricted” no longer appear on the face of a GAAP statement. Rename the report rows even if your chart of accounts keeps older account names.
- Treating board-designated funds as restricted. They stay in net assets without donor restrictions and are disclosed, not reclassified.
- Booking conditional grants as restricted revenue. Cash received before conditions are met is a refundable advance, which is a liability.
- Counting all current assets as available. The liquidity table starts from financial assets and removes amounts that are unavailable for general expenditure within one year, such as donor-restricted gifts, board designations and receivables due later than that (Armanino, September 24, 2024, modified October 11, 2024).
- Forgetting the release entry. If you do not record releases from restriction when you spend restricted funds, the with-donor-restrictions balance stays too high and the without-donor-restrictions balance too low.
- Not tying the net asset rollforward. Beginning net assets plus the change in each class on the statement of activities should equal the ending balances on this statement.
When to move from a spreadsheet to software
A spreadsheet works if you have a handful of restricted gifts and one person closes the books. It becomes risky once you track dozens of grants, multi-year pledges or endowment funds, because the restriction class depends on manual tagging and manual release entries. At that point, you want the restriction stored on every transaction and the statement built from it.
Sage Intacct offers a QuickStart library with a “Statement of financial position: 958 format” report and tracks donor restrictions with a Restriction dimension, though most reports need dimension filters configured after installation (Sage Intacct help, last modified October 1, 2026). CLA, an accounting firm that provides Sage Intacct setup services, describes releasing restrictions with a manual journal entry after reviewing grant expenses, ideally monthly (CLA, February 19, 2025).
Blackbaud Financial Edge NXT includes a statement of financial position template, according to Blackbaud, which sells the product (Blackbaud, no date shown).
QuickBooks Online adds the Statement of Activity and Statement of Financial Position to the standard reports when you set the company type to a nonprofit organization. It does not offer true fund accounting, so restrictions depend on classes, projects and chart of accounts design, and class tracking requires the Plus or Advanced plan (Lutz, September 25, 2026). For a wider comparison, see our guide to nonprofit accounting software, and for faith-based organizations, our review of church fund accounting software.
How we researched this
We read the text of FASB ASU 2016-14 and the IRS Form 990 instructions, then checked vendor help documentation for how each system stores net asset restrictions. We reviewed the top-ranking pages for this search term from Jitasa, Blackbaud and Aplos to see what they leave out, which was mainly the current two-class terminology and a worked liquidity disclosure. Audit firm articles were used for practical interpretation and are labeled because those firms sell services. The template figures are invented for illustration.
Related guides
- Statement of Activities: Nonprofit Template and How-To
- General Ledger Reconciliation: Steps, Frequency and Review
- Form 990 Schedule A: The Public Support Test Explained
Frequently asked questions
Is a statement of financial position the same as a balance sheet?
Yes. It shows the same thing as a business balance sheet: assets, liabilities and the residual at a single date. The difference is that a nonprofit reports net assets in two donor-restriction classes instead of owners’ equity.
What are the two classes of net assets for nonprofits?
Net assets without donor restrictions and net assets with donor restrictions. ASU 2016-14 replaced the earlier unrestricted, temporarily restricted and permanently restricted classes for fiscal years beginning after December 15, 2017.
Where do board-designated funds go on a nonprofit balance sheet?
They stay in net assets without donor restrictions. You can show them as a separate line within that class or disclose the amounts and purposes in the notes.
Does the liquidity disclosure have to be on the face of the statement?
No. FASB allows the quantitative availability information on the face of the statement or in the notes. The qualitative description of how you manage liquidity goes in the notes.
Do small nonprofits need a statement of financial position?
Any nonprofit that issues GAAP financial statements must include one, because ASC 958 lists it as part of a complete set. Organizations that file Form 990 also complete a balance sheet in Part X, regardless of whether they are audited.
Should the statement be classified into current and noncurrent?
It is your choice. FASB allows you to sequence items by liquidity or to classify them into current and noncurrent groups, as long as the presentation shows liquidity clearly.
Sources
- FASB, Accounting Standards Update 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, August 2016. storage.fasb.org
- FASB, Accounting Standards Update 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, June 2018. storage.fasb.org
- IRS, Instructions for Form 990 (2025), Part X Balance Sheet, no date shown. irs.gov
- Baker Tilly, Not-for-profit liquidity disclosure requirements, March 16, 2017. Sells audit and advisory services. bakertilly.com
- PKF O’Connor Davies, Planning for the New NFP Liquidity Disclosures, March 26, 2018. Sells audit and advisory services. pkfod.com
- Armanino, Understanding the ASU 2016-14 Nonprofit Liquidity Disclosures, September 24, 2024 (modified October 11, 2024). Sells audit and advisory services. armanino.com
- Sage Intacct, Financial reports and graphs for nonprofit organizations, last modified October 1, 2026. Vendor documentation. intacct.com
- CLA, Using Sage Intacct to Track Restricted Net Assets: Part 1, February 19, 2025. Provides Sage Intacct services. claconnect.com
- Blackbaud, Statement of Financial Position: A Look at the “Balance Sheet” for Nonprofits, no date shown. Vendor of Financial Edge NXT. blackbaud.com
- Lutz, Tailoring QuickBooks Online to Fit Your Nonprofit’s Needs, September 25, 2026. Provides outsourced accounting services. lutz.us
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
