Stanford University: Implementing FASB Statements 116 and 117

In 1993, the Financial Accounting Standards Board issued two Statements, Number 116: Accounting for Contributions Received and Contributions Made, and Number 117: Financial Statements of Not-for-Profit Organizations. These required significant changes to the financial statements issued by nonprofit organizations. These are discussed in the context of Stanford University, a private, not-for-profit educational institution. Financial reporting prior to FAS 116 and 117, the objectives of FAS 116 and 117, and their implementation by Stanford are discussed. The case prepares students for a discussion of nonprofit financial reporting, fund accounting, donor-imposed restrictions, the various stakeholders, and the advantages or disadvantages of financial statements prepared under the provisions of FAS 116 and 117.