F6 M4 Flashcards
NFP Asset Transfers and Other Accounting Issues
what are financially interrelated organizations?
1) org has ability to influence the operating and financial decisions of the other
2) org has an economic interest in net assets of the other
not financially interrelated: without variance power
an org that receives assets and agrees to use on behalf of beneficiary with no variance power or relationship, then assets recorded at fair value and records liability to beneficiary
when assets being transferred are not contributions?
1) resource provider can change beneficiary
2) asset transfer conditional or revocable
3) control’s recipient org. and specifies an unrelated beneficiary
4) specifies itself or its affiliate as beneficiary and not qualify for equity accounting
not financially interrelated: with variance power
assets are measured at fair value and assets recognized as a contribution when received and expensed when distributed to beneficiary
financially interrelated: with or without variance power
assets valued at fair value and assets recognized as a contribution when received and expensed when distributed to beneficiary
receivable and contribution for beneficiary
-when there is no financial interrelationship or beneficial interests
Dr. Receivable
Cr. Contribution
not financially interrelated: beneficial interest for beneficiary
-beneficiaries have right to receive benefits
Dr. Beneficial interest
Cr. Contribution
how are all debt securities valued at?
at fair value when they are readily determinable
how are marketable equity securities valued and where are they recorded?
at fair value and gains and losses on investments posted on statement of activities as increases or decreases in net assets without donor restrictions unless use restricted by explicit donor stipulations or law
how are donations valued
at fair value at the date of the donation
underwater endowment funds
-report accumulated losses together with endowment fund in net assets with donor restrictions
underwater endowment fund disclosures
1) fair value of underwater endowment
2) original endowment gift amt
3) deficiency
required disclosures for all endowment funds
1) board’s understanding of net asset classification of endowment and spending from underwater endowment funds
2) policies for appropriation of endowment assets
3) investment policies
4) composition of NFP endowment by net asset classes
5) reconciliation of beg. and ending balance of NFP’s endowments by net asset class
