02.03 Statement of Activities Flashcards
What is reported on the statement of activities?
The statement of activities is similar to an income statement and reports revenues, net assets released from restriction, and expenses. The principal requirement of the statement is to provide the change in net assets for the organization as a whole. The changes in net assets are separated into two columns on the statement: one for amounts without donor-restrictions and one for those with donor-restrictions.
What are the four sections of the statement of activities?
The four sections of the statement of activities are revenues, gains, and other support; net assets released from restrictions; expenses and losses; and change in net assets, which includes a reconciliation of beginning and ending net assets.
Revenues, gains, and other support income typically include what?
Contributions from donors and investment income. They are reported in the appropriate column depending on whether the revenues have donor restrictions.
Within the statement of activities, what are the two categories contributions are disclosed in?
- Contributions of cash and other financial assets
- Contributions of nonfinancial assets (sometimes referred to as “in-kind contributions”)
What does net assets released from restrictions report?
Net assets released from restrictions report only formerly donor-restricted net assets that became free of donor restrictions during the year, generally due to the expiration of time restrictions or the performance of purpose restrictions. Such amounts are reclassified from the “with donor restrictions” column to the “without donor restrictions” column.
How are expenses reported?
Expenses are reported only in the “without donor restrictions” column. They are reported by nature, by function, or both. If they are not reported by both nature and function on the face of the statement of activities, this information should be presented in the notes or in a separate financial statement.
True or false: change in net assets is similar to net income for for-profit entities.
True. Change in net assets is similar to net income for for-profit entities and is the bottom line of the statement of activities.
True or false: a statement of functional expenses is required.
False. In addition to the three F/S required of all NPOs, an analysis of functional expenses is required. The analysis is not an additional financial statement. Instead, it is a detailed schedule of expenses by function (i.e. program expenses, support services) broken down into “natural expense” categories (e.g. rent, utilities, salaries). It may be presented on the face of the statement of activities, as a separate statement, or as a note to the NPO’s FS.
What are the two categories of functional expenses?
Program activities and supporting activities.
What are program activities?
A category of functional expenses. Program activities further the mission of the organization and are directly related to the program.
What are supporting activities?
A category of functional expenses. Supporting activities are secondary to the mission. They include management & general (marketing, tax prep, etc.) and fundraising.
