ASNPO

Question 1

Which method of accounting to use

Answer 1

Deferral method – usually used when there are not many restrictions on programs or projects.

Restricted fund method – usually used when there are restricted funds for programs/projects because it provides more information to users about the assets, liabilities, revenues and expenses of the projects/programs.

Question 2

Deferral method

Answer 2

ASNPO4410.02(d) restricted contributions related to expenses of future periods are deferred and recognized as revenue in the period in which the related expenses are incurred.

use when not many restrictions.

Question 3

Restricted fund method

Answer 3

ASNPO4410.02(e). detials reported by fund. (gernal, restrictied, endowment).

Question 4

When to recognize restricted/unrestricted contributions

Answer 4

Refer to decision trees 1 and 2 in section 4410. : contributions - revenue recognition

Overall principal is matching of revenue to corresponding expenses

Question 5

Unrestricted contributions

Answer 5

donor has not placed any restrictions on the funds

Question 6

endowment contribution

Answer 6

type of restricted contribution subject to externally imposed stipulations specifying that the resources contributed be maintained permanently

Question 7

restricted contribution

Answer 7

donor has placed any restrictions on the funds

Question 8

Non‐cash contributions (investments, PP&E, etc.)

Answer 8

Apply section 4410 par .19‐.20, which states that all contributions should be recognized at their fair
value at the date of contribution using the information that best assesses that value.

Question 9

Contribution of materials or services

Answer 9

Apply 4410 par .16, which states that an NPO can choose to recognize contributions of materials and
services but should do so only when a fair value can be reasonably estimated and when used in the
normal course of operations and would otherwise have been purchased.

Question 10

Cost of contributed capital assets - ANOTHER STANDARD

Answer 10

1) need to assess whether exemption applies. NFPs with less than 500k in revenues can choose to capitalize and amortize, capital and not amorize, 100% expense. If MORE, then need to capitalize.

2) identify Tangible capital assets –> walk through defintion

3) determine how to measure:

.07 For a contributed tangible capital asset, cost is deemed to be fair value at the date of contribution plus all costs directly attributable to the acquisition of the tangible capital asset. Fair value may be estimated using market or appraisal values. In unusual circumstances when fair value cannot be reasonably determined, the tangible capital asset and the related contribution shall be recorded at nominal value.

4) consider if WD required

Question 11

Controlled or significantly influenced entities

Answer 11

Apply the decision tree in section 4450 to determine the treatment (may need to apply case facts in
assessing whether there is evidence of control or joint control).

Question 12

Contributions receiveable

Answer 12

ASNPO4410