General-Purpose Financial Reporting: Nongovernmental Not-for-Profit Entities

Question 1

Whats the difference between Conditional pledge vs unconditional.

Answer 1

Unconditional: No strings attached; recorded as revenue right away.

Conditional: Strings attached; not recorded until conditions are met.

Question 2

Statement of activities is equivalent to

Answer 2

Income statement.

Question 3

What is the statement of financial position for
a NPO similar to?

Answer 3

Balance Sheet

Question 4

What’s the difference between Statement of Financial Position and Statement of Activities

Answer 4

Statement of Fin Pos has Net assets with/without donor restrictions as the equity section

Statement of Activities shows the changes in Net assets both with/without donor restrictions during a period.

Question 5

Contribution revenue equation

Answer 5

Question 6

Simplified rules for non profit hospital revenue

Answer 6

Question 7

NFP Statements and their equivalents

Answer 7

Question 8

What are the Bases and financial reporting frameworks

Answer 8

Question 9

What are the NFP Functional expense catagories

Answer 9

Program services are NPOS mission, Supporting services are secondary expenses.

Question 10

When do you recognize revenue for conditional pledges?

Answer 10

When the pledge is satisfied.

Question 11

What are examples of Natural vs Functional Classificaions

Answer 11

Voluntary health and welfare NPOs are required to present both.

Question 12

Whats in the NOP Statement of Cash flows operating section and briefly in the other sections

Answer 12

Question 13

Net assets with donor restrictions equation

Answer 13

Question 14

Ongoing central operations must be reported at their ________ amounts. Secondary or peripheral activities may be reported at their ____ amounts on the statement

Answer 14

Gross

Net of revenue and expenses

Question 15

For NPO hospitals, ______charges related to ______ care must be deducted from gross revenue

Answer 15

For NPO hospitals, service charges related to charity care must be deducted from gross revenue

Question 16

What is a split interest arrangement

Answer 16

A split-interest arrangement is when a gift is shared between the donor (or someone they choose) and a charity. The donor gets payments for a set time (lead interest), and the charity gets what’s left after (remainder interest).

Question 17

Why are future pledges/contributions considered restricted even without specific donor restrictions, and how are they classified

Answer 17

Future pledges are restricted because of time restrictions. If the payment is due in more than a year, it’s classified as revenue with donor restrictions until the time restriction is met.

Question 18

Donations of services are recognized on the statement of activities if either of the 2 conditions are met. What are the 2 conditions

Answer 18

1) Services create or enhance a nonfinancial asset
(e.g., building repairs).

2) Services require specialized skills. (e.g., services from accountants, doctors, or lawyers)

Question 19

Income from an endowment goes into _________

Answer 19

Net assets without donor restriction. It is not added back to the endowment balance

Question 20

Watch out for contributed collectibles like antiques or artifacts, these do not go on the financial statements but are __________

Answer 20

Disclosed in the footnotes.

Question 21

Do quasi-endowments go into assets with donor restrictions?

Answer 21

No. Quasi-endowments are board-designated funds, not donor-restricted. The board controls their use, so they are classified as assets without donor restrictions.

Question 22

On the Statement of financial position, where does Net assets go?

Answer 22

After Total Liabilities.
Net assets is in the equity position, showing net assets with/without donor restrictions.

Question 23

What is the starting point for the cash flows from operating activities for a private, not-for-profit entity using the indirect method

Answer 23