F6 M1 Flashcards
NFP Reporting
what F/S are NFPs required to produce?
1) statement of financial position
2) statement of activities
3) statement of cash flows
net assets without donor restrictions
assets received from donors that do not have restrictions imposed on them
ex. board designated and quasi-endowment, no donor stipulations on assets
net assets with donor restrictions
assets that are restricted in perpetuity or restrictions that will be satisfied over time, purpose, or certain acquisition requirements
when are restrictions donations released from restriction?
when eligibility requirements are met, such as making necessary expenditures on programs
what are fundraising expenses?
incurred to encourage (induce) contributions
what are included in support services?
1) fundraising
2) management and general (administrative expenses)
3) membership development
what are included in program services?
1) universities: education and research
2) hospitals: patient care and education
3) union: labor negotiations and training
4) day care: child care
what does NFP reporting guidance FASB ASC 958 primarily focus on?
basic information for the organization as a whole
what is the primary focus of the statement of activities?
1) how resources are used
2) changes in net assets with and without donor restrictions
what is the primary focus of the statement of financial position?
to demonstrate the amt of assets, liabilities, and net assets and their relationships to one another at a moment in time
what is the primary focus of the statement of cash flows?
provides relevant information about cash receipts and cash payments during a period of time
how should a not for profit report its expenses in the statement of activities?
by functional classification in the statement of activities and natural classification analyzed by function in notes to the F/S
what is composed in total net assets?
net assets with and without donor restrictions
the statement of financial position is composed of?
1) assets
2) liabilities
3) net assets (equity)
the statement of activities is composed of?
1) change in total net assets
2) change in net assets without donor restrictions
3) change in net assets with donor restrictions
what are reclassifications?
items that increase one net asset class and decrease another at the same time
examples of reclassifications
1) donor-imposed restrictions satisfied in same period as received as long as consistent policy in place
2) support perpetually restricted net assets ordinarily not reclassified because restrictions never expire
3) revenues, gains, and other support result in an increase to net assets without donor restrictions ordinarily do not become restricted
what are program services?
activities for which an organization is chartered (established) to perform
what are support services?
activities other than program services
how should functional classification be reported?
either on face of F/S or in notes to F/S
donor imposed restrictions met in the same period as received rule?
may be recorded as support (contribution revenue) without donor restrictions, provided the org. discloses and consistently applies this accounting policy
in the statement of activities, how are expenses reported?
as decreases in net assets without donor restrictions
what is a quasi-endowment?
functions like an endowment but is not restricted in perpetuity by donors
what is an endowment?
a permanent fund that provides long-term financial support to nonprofit org.
