Governmental Accounting 2 / Non-Profits Flashcards
GOES
for change in net position on govt - wide financial statements
Changes in GOV Fund balance
+ Other Financing Sources
+ Expenditure Capital Outlays, net of depreciation
+ Internal Svc. Fund Net Income
GASB 34 requirements:
Presentation of basic financial statements and req. supplementary information
-gov’t-wide financial statements,
fund financial statements,
notes to financial statements
gov’ts Comprehensive Annual Financial Report (CAFR) is three sections…
MD&A, Basic Financial Statements, RSI
What are criteria for major funds?
revs, expenditures, assets, liabilities that are at least 10% of the associated total for ALL governmental OR enterprise (as appropriate)
AND at least 5% of associated totals for ALL government AND enterprise funds
In preparing govt-wide financial statements for a governmental entity, interfund receivables and payables bETWEEN government and enterprise funds should be reported as:
Internal Balances
this way they are not eliminated, but they balance to Zero
What is unassigned fund balance?
Unassigned fund balance represents the amount of current resources carried forward into the following year, that will be available for appropriations
Governmental: Cash Flows Non-capital Financing
Includes:
- proceeds not attributable to acquisition construction or improvement of capital assets
- property taxes
- cash paid to other funds (Other than interfund)
Interest expense and interest payable calculations for government bonds?
Interest expense =
$1Mil * .06 * 10 of the 12 months in the year happened (doesn’t matter about semi-annual) = $50,000
Interest payable =
$1mil * .06 * 4 (4months that have passed since semi-annual interest date of Sept. 1) = $20,000
GOES BARE for changes in gov’t Net Position…
G- GRaSPP changes (EG opening bal)
O- Other financing source (uses: eg less proceeds from LT debt)
E- Expenditures / capital outlay (net of depreciation), principal on debt service payments (EG Capital outlay - depreciation expense + Payments of principal)
S- Service (internal), related to internal service funds
B- Basis of accounting issues? (eg modified to full accrual)
A- Accrual of additional
R- Revenue (Eg add sales tax revenue)
E- Expenses (Less the interest payable)
Reporting status of a government: can it stand alone by it “SELF?”
S- Separate
E- Elected governing body
L- Legally separate entity
F- Financially independent status
*Govs that meet all THREE criteria are primary governments
For Gov: what’s mandatory in RSI?
Final amended budget, actual financial performance on basis of budget, originally adopted budget
noncap financing activities
cap. and related financing activities
investing activities
operating activities
non-cap: borrowing money for non-capital purposes as well as cash receipts from grants/subsidiaries (EG operating grants), property taxes (EG you can net transfers out and property tax receipts)
cap: acquiring and disposing of capital assets (EG a sewer system), borrowing money from cap. acquisitions, repaying amounts borrowed (incl. interest) and capital grants, special assessment levied for capital acquisition
Operating activities: providing services, producing goods, all “leftover”, payment for services to other funds (esp. in lieu of taxes)
investing activities: making and collecting loans, acquiring and disposing of equity instruments including interest and dividend income.
Not for Profit requires which THREE statements?
1) Statement of Financial Position (A, L, Net Assets)
2) Statement of Activities (in place of an income statement - shows revenues, expenses which are DECREASES IN UNRESTRICTED NET ASSETS / categorized as either program expenses, and supporting services.)
3) Statement of Cash Flows (Standard operating activities, investing activities, financing activities – similar to regular)
poss. 4th -
Statement of functional expenses, only required of voluntary health and welfare organizations, shows expenses for each major program and support service.
Endowments
Regular: External party comes in, donates money with stipulation that endowment stay Permanently Restricted forever
(if they want earnings only for specific purpose, they are Temporarily restricted, if not they are unrestircted)
Term Endowment
Invested for a specific period of time, and then it can be spent.
Temp restricted net asset
Quasi Endowment
Amount set aside by GOVERNING BODY of the NONPROFIT.. btu could also be spent by them
Unrestricted net assets
Money that mgmt of the non-profit sets aside
Split Interest Agreement
Non-prof shares benefits in a trust, with a donor or some other third party
Revocable or irrevocable
NON PROF G?L recognition
Gains/Losses - changes in restrictions to net assets
Carry all at FAIR VALUE
Conditional contribution received before condition is met?
Liability until condition is met
Fair Val of donated services in non-profits that require specialized skills that would have had to be purchased otherwise, and the value can be measured?
“Specialized Service Revenue/expense” - recognize as donated service revenue, as well as expense for exact amount
Non-prof: Pledges… conditional and non-conditional
Conditional: Wait until condition has been met to record the revenue
UNConditional: recongize pledge in period pledge is made
Caveat: IF amount of revenue recorded on a pledge, has to be expected to be collected within ONE year. If NOT (more than a year away)… then JUST portion to be collected within a year is recognized…. the REST is recognized at present val, as temporarily restricted support.
Revenue made from fundraising events?
Record at gross amount
Non-proft membership fees?
Membership can include contribution and service element.
If a service is returned, membership revs. recognized over period in which services is provided.
Contributions are recognized as Contribution Revenue in period they are received.
Health Care Non-Profits…
Private or Non-Prof is FASB
Governmental is GASB!!
Gov’t hospital funds: General Unrestricted funds, Donor Restricted funds (special purpose funds, dif. endowment funds,)
Govt hospital statement of cash flows: Direct Method
Calc. Net Patient Revenues
Gross Patient Service Rev (LESS) Charity Services (patient unable to pay, they were never expecetd to pay in the first place) (LESS) Contractual Adjustments (insurance companies, have rates in their index.. reduce A/R arrive at amoutn 3rd party payer will actually pay hospital.. DR contractual adjustments CR A/R) - Uncollectable Accounts
Expenses in Hospital rep. by function
Nursing, other professional, general (Food), fiscal, admin, “Other” by function
Colleges / Universities:
Non-profit universities follow FASB standards
Governmental universities follow GASB standards
Tuition Revenues: Recorded at Gross less Tuition Refunds, reported NET Of uncoll. accounts and scholarship allowances
Tuition scholarship: Shown as REDUCTION of gross revenue, not a bad debt
Tuition recognized PROPORTIONALLY
Public U’s are “Special-purpose gov’t” - appropriations from state, non-operating revenue.
Non-Profits: Program Services and Support Services
Program: Functional Expenses Directly Related to the Organization
Support: Summarize the financial expenses related to G&A, costs of membership development, fundraising
Fundraising: Contemplates enticing potential donors to contribute to the entity. (EG a membership list)
Non-prof: Investing activities in the statement of cash flows?
Include proceeds from the sale of long-lived assets
Classifying “Restricted Cash” on the bal. sheet?
Non-current asset
How to report marketable equity securities that are donated midway through the fiscal year?
By Market Val. at balance sheet date
Which of the following fund types of a government reports a statement of net position?
A: Enterprise funds
The statement of net position reports the financial position of proprietary funds. Enterprise funds are a type of proprietary fund. Capital projects funds, special revenue funds, and permanent funds are all types of governmental funds that report financial position on a balance sheet. The net assets of proprietary funds are called net position. The net assets of a governmental fund are represented by Fund Balance.
Which of the following statements is correct concerning financial reporting for a governmental entity?
A.
A combined statement of cash flows should be presented for proprietary and fiduciary funds.
B.
No statement of cash flows is required.
C.
A statement of cash flows should be presented for proprietary funds only.
D.
Either the direct or indirect method of presenting cash flows from operating activities may be used.
C.
A statement of cash flows should be presented for proprietary funds only.
