F6 Flashcards
Not-for-Profit Accounting: Intro
Not-for-Profit Accounting: Financial Reporting Standards
Not-for-Profit Accounting: Statement of Financial Position
Not-for-Profit Accounting: Statement of Activities
The primary purpose and focus of the statement of activities (the approximate equivalent of an income statement in commercial settings) for a nongovernmental, not-for-profit organization is to demonstrate how the organization’s resources are used in providing various programs and services.
A not-for-profit organization needs to report its expenses in the statement of activities by their functional classification (program classification, supporting activities, fund-raising, etc.) and disclose the expenses in a natural classification by function in the notes to the financial statements.
Not-for-Profit Accounting: Statement of Activities - Reclassification of restrictions
When donor restrictions are either satisfied or withdrawn, the funds will be reclassified from out of net assets with donor restrictions into net assets without donor restrictions.
The donor withdraws previously imposed restrictions on a gift of cash. This withdrawal will move the net assets from with to without donor restrictions because the not-for-profit entity can now use the funds as they wish.
True Endowment:
A true endowment consists of funds donated by a donor, with a signed endowment agreement directing the use of the income. Again, the principal is held in perpetuity.
Quasi Endowment:
This is when the University, rather than a donor, determines to retain, invest, and use earnings for a specific purpose.
Not-for-Profit Accounting: Statement of Activities - Expense classification in statement of activities
Not-for-Profit Accounting: Statement of Cash Flows
Not-for-Profit Accounting: Revenue Recognition - Contributions Received Part 1
Rule: Generally, the difference between the fair value of purchases and the amount transferred is classified as a contribution.
Not-for-Profit Accounting: Revenue Recognition - Contributions Received Part 2 (Split-interest agreements & Donated services, collection items, materials)
Not-for-Profit Accounting: Revenue Recognition - Contributions Received Part 3 (Gifts-in-kind)
Contribution revenue recognition for not-for-profit organizations is based on the standard of satisfying conditions. Unconditional contributions are recognized as revenue and then classified as either without donor restrictions or with donor restrictions. Conditional contributions are accounted for as a refundable advance, and conditional promises or pledges receive no accounting treatment.
Not-for-Profit Accounting: Revenue Recognition - Accounting for promises to contribute and other support transactions
Not-for-Profit Accounting: Revenue Recognition - Fundraising
Not-for-Profit Accounting: Revenue Recognition - Industry-specific revenue recognition
Not-for-Profit Accounting: Transfer of Assets and Other Accounting Issues
Not-for-Profit Accounting: Other Accounting Issues - Financial instruments
Not-for-Profit Accounting: Other Accounting Issues - Endowment Funds & Basis of Assets
