Based on discussions we have had with CDP participants, we have compiled a list of suggestions to build more detail into your audits or reviews, and provide a clearer financial picture of your organization. Including this information from the beginning will make your Data Profile easier and more seamless to complete. We encourage you to discuss these items with your auditor.
Part 1: The Balance Sheet
Add a disaggregated Balance Sheet (also called a Statement of Financial Position)
A balance sheet that is disaggregated shows all assets, liabilities, and net assets in separate columns, broken down by restriction class (unrestricted, or without donor restrictions, and restricted, or with donor restrictions). This breakdown provides useful information such as whether your organization has enough available cash/assets to cover your restrictions, and how your investments and receivables are split by restriction. A disaggregated balance sheet is an acceptable format under Generally Accepted Accounting Principles (GAAP).
Include footnotes about restricted net assets
If your balance sheet is presented in a single-column format instead of being disaggregated, and you have restricted net assets, make sure your audit contains footnotes describing the use of these assets, and which assets contain a restricted amount.
Include details about property and equipment
The balance sheet in the Data Profile asks you to break out fixed assets by type and to list accumulated depreciation. If your audit does not currently provide these breakdowns, requesting that your auditor include them will save time later. The types of fixed assets available in the Data Profile are land; buildings; leasehold improvements; and furniture, fixtures, and equipment. Please note that accumulated depreciation may appear in a footnote or in the Statement of Financial Position.
Provide details about endowments and investments
Useful details about investments include a breakdown by endowment type: Board-designated, donor-restricted, and non-endowment investments. It can also be useful to show total investment activity by these types and by restriction class, with beginning balances, earnings, funds added, distributions/subtractions, and ending balances, all based on fair market value.
Specify mortgages, loans, and lines of credit
In the liabilities section of your Statement of Financial Position, it is useful to list separate liabilities by the type of loan: lines of credit, mortgages, and other loans, broken down into current and non-current portions. The current portion is the amount due in the following year, and the non-current portion is the remaining balance.
For more suggestions on improving your audit’s readability, see the related articles:
