What footnote format is the most useful to lenders and other financial statement readers for disclosing information about a not-for-profit organization’s special transactions?
Special transactions do not occur routinely but can be large enough to raise questions from financial statement readers. Examples of special transactions that are occasionally encountered by affordable housing developers include:
- Business combination upon acquiring control of a business
- Deconsolidation caused by loss of control of a busines
- Consolidation of an existing real estate partnership by obtaining control
- Transfer of property and related accounts between affiliates
This paper covers GAAP requirements, analysis/input from the Strength Matters Note Disclosures Committee and sample disclosures.