02.05 Notes to the Financial Statements

Question 1

What disclosures are required for not-for-profit organizations?

Answer 1

If not presented on the face of the FS, the following are required to be disclosed:
1. statement of functional expenses
2. donated works of art not recognized on the FS
3. relevant information about the nature and amount of limitations on the use of cash and cash equivalents
4. contractual limitations on the use of particular assets (e.g. restricted cash, assets set aside under debt agreements)
5. quantitative information about the availability of an NPO’s financial assets to meet cash needs for general expenditures within one year of the date of the statement of financial position.

Question 2

What information about endowment funds should be disclosed?

Answer 2

The net asset classification, composition, and changes, as well as the related investment policies.