Form 990 overview and the tie-out to audited statements: Parts VIII to XI and Schedule D

• Identify which Form 990 series return an organization files
• Describe how Form 990 Parts I, VIII, IX, X and XI relate to each other
• Prepare the Schedule D Part XI and Part XII reconciliations
• Explain the usual reconciling items between GAAP and the return

Which return

The IRS sets the filing tiers. Form 990-N (the e-Postcard) is for organizations with gross receipts normally $50,000 or less. Form 990-EZ is available when gross receipts are under $200,000 and total assets are under $500,000. Form 990 is required when gross receipts are $200,000 or more or total assets are $500,000 or more. Private foundations file Form 990-PF regardless of size. Use the filing requirement calculator to check a client.

How Form 990 is built

The 2025 Form 990 has twelve parts plus schedules. For the auditor the financial core is:

• Part I, Summary. Line 12 is total revenue and must equal Part VIII, column (A), line 12. Line 18 is total expenses and must equal Part IX, column (A), line 25.
• Part VIII, Statement of Revenue. Contributions on lines 1a to 1h, program service revenue on line 2, investment income on line 3, gains on asset sales on line 7, fundraising events on line 8, total on line 12.
• Part IX, Statement of Functional Expenses. Columns (B) program, (C) management and general and (D) fundraising, total on line 25. Section 501(c)(3) and 501(c)(4) organizations complete all columns.
• Part X, Balance Sheet. Beginning and end of year. Organizations that follow ASC 958 complete lines 27 (without donor restrictions) and 28 (with donor restrictions).
• Part XI, Reconciliation of Net Assets. Revenue less expenses, plus beginning net assets, plus net unrealized gains (line 5), donated services and use of facilities (line 6), investment expenses (line 7), prior period adjustments (line 8) and other changes (line 9), must equal end of year net assets on Part X.
• Part XII, Financial Statements and Reporting. Accounting method, and whether the statements were compiled, reviewed or audited.

Why the return differs from GAAP

The return excludes some items GAAP includes. Unrealized gains and losses on investments are not revenue on Part VIII; they reconcile through Part XI, line 5. The instructions also say donated services and the donated use of materials, equipment or facilities are not reported as contributions on Part VIII, line 1, even though GAAP recognizes some of them. Netting differs too: special event revenue on the return is shown gross with direct expenses deducted on line 8b.

Schedule D, Parts XI and XII

Form 990, Part IV, line 12a asks whether the organization obtained separate, independent audited financial statements. If Yes, Schedule D Parts XI and XII are required. If the organization was only included in consolidated audited statements (line 12b Yes, 12a No), completing them is optional.

Part XI reconciles revenue:

1. Total revenue, gains and other support per audited statements
2. Less amounts on line 1 but not on Part VIII, line 12: net unrealized gains (2a), donated services and use of facilities (2b), recoveries of prior year grants (2c), other (2d)
3. Plus amounts on Part VIII, line 12 but not on line 1: investment expenses not included on Part VIII, line 7b (4a), other (4b)
4. Line 5, the sum of line 3 and line 4c, must equal Form 990, Part I, line 12

Part XII does the same for expenses: total expenses and losses per audited statements, less donated services and use of facilities, prior year adjustments, other losses and other items, plus investment expenses not included on Part VIII, line 7b and other items. Line 5 must equal Part I, line 18.

Items on lines 2d and 4b of each part need an explanation in Part XIII.

Other Schedule D parts that touch the audit

Part V reports endowment activity, Part VI land, buildings and equipment (totals tie to Part X), and Part X other liabilities. Part X, line 2 requires the text of the footnote on the liability for uncertain tax positions under ASC 740 in Part XIII. The instructions say to provide the full text even if no liability was reported.

Auditor procedures

Read the draft return before releasing your report when it is available, or as other information afterward. Recompute both reconciliations from the audited statements and trace each reconciling item to a source. The Form 990 reconciliation guide walks through common layouts.

Schedule D, Part XI for Oakmont Senior Services