FAR - NFP - Financial Reporting

Question 1

Purpose of NFP Financial Reporting

Answer 1

Allow external users to access:

Stewardship/performance: how mgt fulfill stewardship responsibilities & aspects of performance

Services & sustainability: services provided

Question 2

Financial Reporting Model - Net Assets model based on 3 types of restrictions?

Answer 2

1) unrestricted
2) temp restricted
3) permanently restricted

Question 3

Fund Accounting external reporting?

Answer 3

not used for external reporting

Question 4

Required Financials? ( 4 types)

Answer 4

1) Statement of Financial Position
2) Statement of activities
3) Statement of Cash Flows
4) Statement of Functional Expenses
* ALL required by VHWO & ONPOs EXCEPT for ONPOs for statement of functional expenses (optional)

Question 5

Statement of Financial Position

Balance Sheet

Answer 5

Aggregated Totals for:

1) Assets
2) Liabilities
3) Net Assets:
- Unrestricted
- Temp restricted
- Perm restricted

Question 6

Statement of Activities

Income Statement

Answer 6

1) Revenue/gains reported by source in each net asset

2) Expenses:
- ONLY in unrestricted net assets
- reported by function
- classified as either 1) program services 2) supporting services

3) changes in classes of net assets reported separately

Question 7

Revenues

Answer 7

• Reported @ gross
• result from ongoing major OR central activities
• revenues reported in appropriate net asset category: 1) unrestricted, 2) temp restricted, 3) perm restricted

Question 8

Expenses

Answer 8

• ALWAYS reported as decrease in UNRESTRICTED N/A

Categories:
1) Program expenses: related to primary mission

2) Supporting expenses: DON’T relate to primary mission ( mgmt, admin, fundraising )

Question 9

Reporting Gains/Losses

Answer 9

• reported @ net/gross
• result from peripheral/incidental transactions
• reported in appropriate N/A category

Question 10

Statement of Cash Flows

Answer 10

1) Operating:
- reconciliation of total changes in net assets from Statement of activities to net cash flows from operating activities

2) Investing:
- reporting changes in cash restricted for long-term purposes

3) Financing:
- reporting contributions & investment earnings that are restricted for capital asset-related endowment, or other long-term purposes

Question 11

Statement of Functional Expenses

listed expenses

Answer 11

VHWOs required to present statement; (optional) for ONPOs

• provides detail of expenses section of statement of Activities for each program/support service by functional classification and by object class

Question 12

Functional Expense Classification

Answer 12

1) Program Expenses:
- relate to primary mission of org
- activities that results in goods/services provided by org

2) Supporting expenses (all other expenses not in program)
- MGT/general admin
- Fund raising
- Membership development

Question 13

two types of temporary restrictions for private not-for-profit organizations

Answer 13

1) Time restrictions, donor stipulates that resources must be spent in a certain time period
2) Purpose restrictions, donor stipulates that resources must be spent on a specific manner

Question 14

accounting entry for a not-for-profit organization that has a temporary restriction of $5,000 satisfied

Answer 14

entry is a reclassification “Net assets released from restrictions” is reported as:

• $5,000 decrease in the revenue section of temporarily restricted net assets
• $5,000 increase in the revenue section of unrestricted net assets