F9 Flashcards
Governmental and Not-for-Profit Organizations
4
What are the required statements for Not-for-Profits?
Statement of Financial Position
Statement of Activities (Income Statement)
Statement of Cash Flows
Statement of Functional Expenses
Unrestricted Net Assets: Internal Board-designate funds are?
Considered unrestricted or not restricted
PUT
What are the Net Asset Categories?
PUT
- *Permanently** Restricted
- *Unrestricted**
- *Temporarily** Restricted
Statement of Activities:
When a donor restriction is satisfied, what happens?
A resclasification is reported on the statement of activities. Resclassifications are items that simultaneously increase on net asset class and decrease another.
3
Required sections of Comprehensive Annual Financial Report (CAFR)?
- Introductory Section (unaduited)
- Basic Financial Statements and Required Supplementary Information (audited)
- Statistical Section
Reports by ItSELF
Criteria for Primary Government entity?
State governments
General purpose local governments
Special purpsoe local governments (hospital authority, school district) MEET ALL CRITERIA
- Separately-Elected governing body
- Legally separate
- Fiscially independent of other state and local governments
3
Component Unit: When to use Blended Presentation?
- Board of the component unit is substantively the same as primary government.
- Component unit serves primary government (almost) exclusively.
- Component unit is NOT a separate legal entity.
Needs to meet at least 1 requirement.
Component Unit: When to use Discrete (Separate) Presentation?
When criteria for blended are not met.
- Displays component units in separate columns
- Most component units use discrete.
- F/S of reporting entity should provide overview of entity based on financial accountability.
How should fund be allocated between combined fund raising efforts and educational programs?
Should allocated the costs between functions.
PET
What are the net assets from restriction classifications?
PET
Satisfaction of…
- Program restrictions
- Equipment acquisition restrictions
- Time restrictions
Statement of Cash flows: Operating Activities
How should operating activities be reported?
By major class of gross receipts.
Contributions, Program Income, and interest income or dividend income
Statement of Cash Flows: Operating Activities
Are unrestricted resources receipts reported?
Yes.
Those intended for long-lived assets.
Statement of Cash Flows: Financing activities
What are proceeds from restricted contributions?
Cash received with donor imposed restrictions limiting its use to long term purposes.
Statement of Cash flows
Disbursement of Restricted contributions are classified as?
Investment Activities
Statement of Cash flows: Investing Activities
What items are included in investing activities?
Investment in equipment.
Includes proceeds from the sale of assets that were received in prior periods and whose sale proceeds were restricted to investment in equipment.
A Statement of Functional Expenses is required for?
Voluntary Health and Welfare Organizations.
It is optional by encouraged for Not-for-Profits.
Accounting for contributions received and made:
When should cash contributions be recognized?
Recognized as revenues or gains in the period they are received. There are to be measured at the Fair Value at the date of the gift.
Accounting for contributions received and Made
Unconditional Promises are recognized?
Recorded at Fair Value with the promise is made.
Accounting for contributions received and made:
How to account for a conditional promise?
Recognition does not occur until the conditions are substantially met.
How to account for a Multi-year pledge?
Future collections are considered temporarily restricted revenues and net assets (time restricted)
The Difference between the previous recorded present value and the current amount collected is considered contribution revenue, net interest income. J/E
-
DR: Pledges Rec.: 475
- CR: Contributions 475
When Received
-
DR: Cash 500
- CR: Pledges Rec. 475
- CR: Contribution 25
SOME of the time
Donations of services are recognized?
SOME of the time
Specialized skills are required and possessed by the donor (Doctor Skills)
Otherwise needed by the organization (Helping the sick)
Measurable (Doctor service Fees)
Easily (At fair value)
Specialized transactions: Donated Collection are not required to be record if?
The item is part of a public collection that is viewable in gallery. The collection is cared for or preserved by the organization.
The organization has a policy that requires any proceeds form the sale to be reinvested in other collection items.
Recording Gifts in-kind?
Valued at FV. The difference between the fair value at the time of the donation and the value of the sale are booked as an additional contribution.
Exchanged Transactions: The costs of premiums (coffee mugs, tote bags) given to donors as a fund raising appeal are classified as?
A fund raising expense!
Generally, the difference between the fair value of dues and other purchases and the amount transferred is classified as?
An Additional contribution
Other Accounting Issues: Gains and Losses go?
Straight to the income statement
Other accounting issues: Market Losses on permanently restricted net assets typically go where?
Classified as temporarily restricted?
Other accounting issues: Market Losses on permanently restricted net assets typically go where?
Classified as temporarily restricted
Student tuition and fees are always presented in their?
Gross amounts
Health care organizations
True ore False: Charity care is recorded as revenue.
False.
Charity Care is not recorded as revenue or a receivable.
Health Care Organizations
Deductions included?
Contractual adjustments for third party payments.
What are some examples of Other operating revenue for health care organizations?
- Tuition from schools
- Revenues from education programs
- Donated supplies and equipment
- Specific purpose grants
- Revenues from auxiliary activities
- Cafeteria revenue
- Parking fees
- Gift shop revenue
- Medical transcription fees
What are some examples of Non operating revenue and support gains and losses for health care organizations?
Unrestricted interest and dividend income form investment activities
- Unrestricted gifts and bequests
- Unrestricted grants.
What is the statement of functional expenses?
It is simply a detailed schedule of expenses of the voluntary health and welfare organization.
It is divided into functional areas, such as program services and support services.
7 Differences of Fund Financial Statement of Cash Flows
- Direct method is required
- Reconciliation of operating income (NOT NI) to net cash provided by operations is required.
- 4 categories of Cash Flow
- Order of financing and investing categories are reversed.
- Interest income/cash receipts are reported as “investing”.
- Interest expense/cash payments are (Capital & related financing OR Noncapital financing)
- Capital asset purchased are “financing”.
Fund F/S Proprietary Funds
4 Categories of Cash Flow
- Operating activities
- Capital and related financing activities
- Noncapital financing activities
- Investing activities
Fund F/S Proprietary Funds
Examples of Operating activities
- Cash inflows from sale of goods, services
- Cash outflows to suppliers, employers
- Cash inflows from interfund reimbursements, exchanges including payments in lieu of taxes
Fund F/S Proprietary Funds
Examples of Investing activities
- Cash inflows, outflows associated with loans to others
- Cash inflows and outflows associated with equity transactions
Fund F/S Proprietary Funds
Examples of Capital and related financing activities
- Issuing debt associated with capital assets
- Capital grants
- Contribution activity associated with capital assets
- Special assessments associated with capital assets
Fund F/S Proprietary Funds
Examples of Noncapital financing activities
- Cash receipts from grants or subsidies
- Property taxes (not restricted for capital use)
- Operating transfers
