302079 NFP Donor Restrictions 1B1 Flashcards
In 20X4, Raptor Rehabilitation, a not-for-profit entity that seeks to rehabilitate injured wild birds, received donations of $12,500 for supplies. In 20X5, $3,100 was spent for this purpose. During 20X6, the expenditures for supplies was $6,400. At the end of 20X6, all supplies that had been purchased had been used. In its statement of financial position at the end of 20X6, what should Raptor Rehabilitation report regarding the donation?
Net assets without donor restrictions $0; net assets with donor restrictions $3,000
Net assets without donor restrictions $3,100; net assets with donor restrictions $6,400
Net assets without donor restrictions $9,500; net assets with donor restrictions $3,000
Net assets without donor restrictions $0; net assets with donor restrictions $0
Net assets without donor restrictions $0; net assets with donor restrictions $3,000
The donation was earmarked for a specific purpose. As of the date of the statement of financial position for 20X6, the unspent donation amounted to $3,000 ($12,500 – $3,100 – $6,400) that would be reflected in net assets with donor restrictions. The 20X6 supplies purchase and use of supplies would be reported in the statement of activities as both an increase at the time of purchase (reclassification from net assets with donor restrictions to net assets without donor restrictions) and a decrease (expense) at the time of use with a zero net effect on net assets without donor restrictions by the end of 20X6.
Net Assets with Donor Restrictions
Net assets with donor restrictions are the part of net assets of a not-for-profit entity that is subject to donor-imposed restrictions. (Donors include other types of contributors, including makers of certain grants.)
FASB ASC Glossary
Net Assets Without Donor Restrictions
Net assets without donor restrictions are the part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions. (Donors include other types of contributors, including makers of certain grants.)
FASB ASC Glossary
Not-for-Profit Entity
According to the FASB ASC Glossary, a not-for-profit entity is distinguished from a business entity by three characteristics: contribution of significant resources from providers who do not expect proportionate return, operating purposes other than to provide goods or services for profit, and absence of ownership interests like business enterprises. In addition, the IRS stipulates that no part of the organization’s net earnings can inure for the benefit of any specific person or persons.
FASB ASC Glossary
IRS Form 1023
AICPA Audit and Accounting Guide Not-for-Profit Entities, Section 15.09
Statement of Activities
The complete set of financial statements for a not-for-profit entity includes a statement of activities, which is analogous to the income statement of a business entity. In governmental accounting, a statement of activities is required for government-wide financial reporting. The formats of the not-for-profit and the governmental statement of activities differ.
FASB ASC 958-205-45-4
GASB 2200.126
2121.01
2121.01
2121.01
2121.01
