F9: Not-For-Profit Organizations Flashcards
NFP uses ____, not GASB
FASB
NFP are divided into 4 separate categories:
1- Health care organizations
2- Educational institutions
3- Voluntary Health and Welfare organizations
4- Other Private (not governmental) NFP organizations
Who are some users of NFP statements?
-donors, members, creditors
GAAP requires that NFP organizations report using what basis of accounting?
Full accrual basis of accounting
What is the overall emphasis for NFP statements?
Basic info for the organization as a whole
4 required financial statements for NFP
1- Statement of Financial Position
2- Statement of Activities
3- Statement of Cash Flows
4- Statement of Functional Expenses
What 3 components make up the Statement of Financial Position?
(Think B/S)
1- assets
2- liabilities
3- net assets (equity)
Assets & liabilities for NFP are classified as:
Current or noncurrent in order of maturity
3 components of Net Assets (equity) are:
“PUT”
1- Unrestricted net assets
2- Temporarily restricted net assets
3- Permanently restricted net assets
Internal board-designated funds are considered what?
Unrestricted net assets
Unrestricted net assets definition
Assets that aren’t permanently or temporarily restricted
Temporarily restricted net assets definition
Donor-imposed stipulations that expire either through passage of time or can be fulfilled
Permanently restricted net assets definition
Use is limited by donor-imposed stipulations that neither expire nor can be fulfilled
What four elements are presented in the Statement of Activities?
(Think I/S)
- change in total net assets
- change in PUT net assets
When are donor-imposed contributions recorded as restricted revenue?
Period in which received
When a donor restriction is satisfied, what happens?
A reclassification is reported
How are expenses reported in the Statement of Activities?
As decreases in unrestricted net assets
Where are expenses shown?
Either in the face of the statement or in the notes
3 Classifications of Expenses
1- Program Services
2- Support Services
3- Combined Costs
Program Services definition
Activities of the organization
Support Services definition
Everything not classified as a program service
Combined Costs definition
NFPs that combine fund raising efforts with educational services
Is a Statement of Cash Flows required for all NFP organizations?
YES
What format is allowed for the Statement of Cash Flows
Either the direct method or the indirect method can be used
What 4 sections are shown in the Statement of Cash Flows?
1- Operating Activities
2- Financing Activities
3- Investing Activities
4- Cash & Cash Equivalents
Agency transactions are reported under what section of the Statement of Cash Flows?
Operating Activities
Cash transactions related to borrowing are reported under what section of the Statement of Cash Flows?
Financing Activities
Cash transactions related to certain restricted contributions are reported under what section of the Statement of Cash Flows?
Financing Activities
Donor-imposed restrictions limiting use to long-term purposes are reported under what section of the Statement of Cash Flows?
Financing Activities
Board designated revenues are reported under what section of the Statement of Cash Flows?
Operating Activities
Proceeds from the sale of works of art or purchases of works of art are reported under what section of the Statement of Cash Flows?
Investing Activities
Investment in equipment are reported under what section of the Statement of Cash Flows?
Investing Activities
Proceeds from the sale of assets that were restricted are reported under what section of the Statement of Cash Flows?
Investing Activities
Who is required to present a Statement of Functional Expenses?
Voluntary health and welfare organizations
Who is NOT required to present a Statement of Functional Expenses?
All other NFP organizations other than voluntary health and welfare
4 Classifications of Expenses on the Statement of Functional Expenses
1- Program Support Expenses
2- Fund-raising Expenses
3- Management and General Costs
4- Multiple Cost Items
