Date of Award
Ph.D. in Accountancy
University of Mississippi
This study examines whether mandated disclosure under Accounting Standards Update (ASU) 2016-14 affects not-for-profit (NFP) liquidity. ASU 2016-14 requires NFPs to disclose information that enhances financial statement users’ ability to assess an organization’s liquidity. Using panel data from fiscal years 2014 through 2019, I compare liquidity before and after the mandated disclosure for the top 100 revenue generating NFPs in 2019. I find that NFPs manage operating reserves, i.e., unrestricted liquid net assets, more closely to NFP sector guidelines after the disclosure mandate. Specifically, I find that NFPs with operating reserves above the recommended range prior to the disclosure mandate significantly decrease reserves after the disclosure change when considering fiscal years 2014 to 2019. In contrast, NFPs with operating reserves below the recommended range prior to the disclosure mandate significantly increase reserves after the disclosure change when considering a shorter sample period, fiscal years ended in December 31, 2016, to November 30, 2019. The results of this study add to the NFP literature on operating reserves and liquidity management and expand our understanding of the economic consequences of accounting standards.
Johnson, Erin, "The Effect of Mandated Disclosure on Liquidity Among Not-for-Profit Organizations" (2023). Electronic Theses and Dissertations. 2524.