F-8 Simulations Flashcards
How to tell the difference between financing activities and investing activities for not for profit
“Contributions” for construction are finance activities while just while just normal construction is investing
How to record a gift no matter if its something like office space
Represents revenue without donor restriction at the FV
How to value & classify pledges for not for profit
They aren’t restricted or unrestricted and aren’t classified as an asset
Conditional promises vs unconditional promises
Conditional promises don’t represent receivable revenue or assets until the condition is met but unconditional promises can be either restricted or nonrestricted
Required financial statements for not for profit
Statement if Financial Position
Statement of Activities
Statement of Cash Flows
Statement of Financial position for not for profit
- assets, liabilities, and net assets
- assets & liabilities classified as current or noncurrent
Statement of Activities for not for profit
- changes in total net assets
- changes in net assets without restriction
- changes in net assets with restriction
Not for profit investing activities - CASH FLOW
Investments in PP&E
Proceeds from sale of art or disbursements to purchase art
Proceeds from sale of assets
Not for profit financing activities - CASH FLOW
Proceeds from issuing bonds and shit
Repayment on borrowed shit
Receipts for contribution restricted
Proceeds from issuing bonds and shit
Repayment on borrowed shit
Receipts for contribution restricted
S.O.M.E
Specialized skills from donor
Otherwise needed by organization
Measurable
Easily at FV
Dr. Expense or Asset
Cr. Contributions - without restriction
Contribution without restriction but there is time restriction
Dr. Pledge Receivable - restricted
Cr. Allowance
Cr. Contributions - restricted
When collected Dr. Cash - restricted Cr. Pledge receivable - restricted Dr. Satisfaction of time restriction Cr. Cash - without restriction
Contribution with restriction
Dr. Pledge receivable - restricted
Cr. Allowance
Cr. Donor restricted support
When receivable is collected and money is spent on purpose
Dr. Reclassification
Cr. Cash - restricted
Net assets without restriction increase at the same time Dr. Cash - unrestricted Cr. Reclassification Dr. Operating expense Cr. Cash - unrestricted
Not for profit healthcare - patient revenue
Gross patient revenue (Charity care) (contractual adjustments) (policy discounts) (admin adjustments)
Not for Profit operating activities - CASH FLOW
Same as normal accounting
Program services vs support
Program relates to the mission of the organization while support relates to activities everything else
Investment income for debt securities
Net gain or loss on FV of debt security against the interest earned NOT Interest Received
Variance Power NFP- Unaffiliated
- If recipient has variance power he recognizes a contribution & beneficiary recognizes nothing
- If recipient has no variance power it recognizes refundable liability & beneficiary recognizes contribution
Variance Power NFP - Financial interrated
- If recipient has variance power he recognizes a contribution and beneficiary recognizes nothing
- If recipient has no variance power then it recognizes a contribution & beneficiary recognizes change in net assets
What does variance power mean
If they have variance then they can fund who ever they want but if they don’t they need to fund a specific entity
NFP Variance power and increase in net worth or value questions
Recipient has no variance power
Classification of governmental expenditures
- Function: groups expenditures into major services like safety, highways, education and health
- Program: groups expenditures into activities or operations that attain to a specific purpose or objective like programs for elderly, drug addictions, or education
- Activity: expenditure per unit of work and activity can be an event, task, or unit of work with specific purpose
- Character: determining basis of fiscal period like current expenditures, capital outlays, debt service, and intergovernmental
- Object: groups expenditures into type of items purchased or service provided like supplies or principal & interest payments for debt service expenditures
What to include for wages for a nonprofit
Include your staff and any nonspecialized volunteer work and do not include volunteer work that is specialized
Functional and Natural expenses for health & welfare organization that is not for profit
- Functional: categorizes costs by major classes or program & support services
- Natural: include descriptions like salaries, rent, utilities, etc.
Other operating revenue & Nonoperating revenue for hospitals
Other operating revenue from hospitals comes from things like cafeteria revenue, parking fees, donated supplies(not services), specific purpose grants, etc.
While nonoperating comes from dumb shit that has nothing to do with what happens inside a hospital
Rule for NFP when you receive a donor restricted contribution and the restriction is met in the same period
May be recorded as Support (contribution revenue)
