FAR-Non Profit Flashcards
How many groups are covered by Nonprofit accounting and what are they?
Health care
Colleges and Universities
Voluntary Health and Welfare
All others not above (Fraternities, labor unions, libraries, museums, etc)
What are the three basic financial statements in nonprofit accounting?
Statement of Financial Position
Statement of activities
Statement of cash Flows
What is the formula for the nonprofit Statement of Financial Position?
Assets = Liabilities and Net Assets
What three groups make up NPO net assets?
Unrestricted Net Assets?
Temprarily Restricted Net Assets
Permanently Restricted Net Assets
What three categories are shown in NPO Statement of Activities?
Revenues/Gains
Net assets released from restriction
Expenses/Losses
In Non-Profit, what kind of cash flow activity are restricted and temporarily restricted assets?
An operating activity
In Non-Profit, what kind of cash flow activity is a permanently restricted asset?
A financing activity
In NPO, what goes into the financing portion of the Statement of Cash Flows?
Proceeds from restricted contributions Other Fianancing Activities Permanently restricted revenue Money restricted for a LT purpose *PMT of Bonds, etc * Money restricted for acquisition of PP&E
What is the fourth financial statement in nonprofit accounting?
VHWO Statement of Functional Expense
What is a VHWO?
Voluntary health and welfare organization
What is reported in the VHWO Statement of Activities?
Public Support \+Revenues -Program Expenses -Support Servics =Excess of revenue over expenses
When are donations of services accounted for?
When they are a service that are a professional service that would normally require compensation. Entry as an expense and revenue which offsets.
With NPOs, which financial statements show equity and debt instruments per ASC 320?
Trading - FMV Gains/Losses on Statement of Activities
AFS - FMV Gains/Losses on Statement of Activities
HTM: Bonds
What are the statements used by non-for-profit Hospitals?
Statement of Financial Position
Statement of Operations
Statement of Change in Net Assets
Statement of Cash Flows
On the statement of financial position, how should the net assets of each type of endowment be reported?
Term Endowments: Temporarily restricted
Regular Endowments: Permanently restricted
Do public and private not-for-profits have to recognize depreciation expense?
Yes to both
Where should the amount of charity care from a hospital appear in the financial statements?
It should appear as a note in the financial statements.
What kind of asset are artworks to be maintained, and land that must be held permanently?
Restricted Assets
Under what basis are revenues, gains, expenses, and losses reported?
Under the full accrual basis
How are multi-year contributions recorded?
They are recorded at present value, with the money to be collected recorded as a temporarily restricted asset.
What kind of asset is created from an exchange revenue? Example: Tuition
An unrestricted net asset is recognized in accordance with GAAP as applied to business enterprises
How are expenses to be reported in the financial statements?
Expenses are to be reported by function in either the financial statements or the notes.
*Functions are either program or supporting
One of two things have to happen to recognized conditional promises are revenue. What are they?
- The conditions on which the promise depends have been substantially met
- There is only a remote likelihood that the conditions on which the promise depends will not be met
What is the restricted Net Position?
Restricted Assets - liabilities and deferred inflows of resources that are related to restricted assets.
What are program services?
Expenses that are directly related to the program. For example: emergency releif, community education, training, research, etc
What are supporting services?
Secondary to the mission. Fund raising and general and administrative expenses. Ex: Management and General; Fund raising; membership development
Are donations of services recorded?
No, but donations of professional services are recorded as contribution revenue
