F6-NFP Transfer of Assets and Other Accounting Issues

Question 1

A non-profit organization is financially interrelated with its beneficiary organization and receipts of the non-profit organization should be displayed/disclosed in the financial statements of the beneficiary as:

Answer 1

a change in the beneficiary’s interest of the recipient organization on their statement of activities (similar to equity method used for investments with significant influence).

Question 2

Donated items are valued at…

Answer 2

fair value upon receipt.

Question 3

Recipient of the monies (asset) pledged by the donor to another not-for-profit organization (beneficiary) should be recorded as…

Answer 3

a liability to the beneficiary by the recipient organization .

Increase in asset and increase in liability

Question 4

Donated shares of stock are measured at…

Answer 4

their fair value on the date of donation.

Question 5

How do you define not-for-profit organizations to be financially interrelated?

Answer 5

Their relationship must share both characteristics: one organization must be able to influence the operating and financial decisions of the other and have an ongoing economic interest in the net assets of the other (FASB ASC 958-605).

Question 6

How do you depreciate construction in progress and land?

Answer 6

Construction in progress and Land are not depreciated, regardless of the type of organization.