Net Assets in Nonprofit Accounting: What You Need to Report and Why

Net assets in nonprofit accounting are total assets minus total liabilities, the nonprofit equivalent of owner’s equity, reported on the Statement of Financial Position. Under FASB ASU 2016-14, every US nonprofit reporting under GAAP presents net assets in two classes, without donor restrictions and with donor restrictions. That two-class model replaced unrestricted, temporarily restricted, and permanently restricted for fiscal years beginning after December 15, 2017.