NFP Flashcards
Pledge receivable in NFP is to be recorded at which value?
At Present Value
Investment in Debt securities is recorded at
Quoted Market Prices
True or False: Endowment is permanent which means principal cannot be spent. (Donor restricted)
True
True or False: ASC 958-650-30-2 requires donated securities to be initially recorded at FV on the date of the gift and to be reported at their market value at the financial reporting date (At the end of the year)
True
Example of refundable advance or LIABILITY = Matching funds
The donation to Gridiron is conditional upon the university raising MATCHING funds within 12 months.
Example of a split interest arrangement
Charitable remainder trust
What are Functional expense categories or supporting services?
- Program services
- Management and General
- Fundraising
Cash flow from operating activity section of the cash flow statement using the indirect method begins with _______________
Total changes in net assets
Credit loss expense is ______________from calculation of hospital revenue on statement of operations of the hospital.
EXCLUDED
Quasi-endowment means restriction by internal board or trustee. Does that count as restricted by donor in statement of activities?
No
Operating Activity - Non restricted, Financing Activity - _______________
Restricted
If prepaid taxes have been debited to estimated tax payments, they should NOT be included in the calc of
Current Assets
Contributions receivable is conditional
True
When Category is not provided - Expenses (e.g. Depreciation) are deducted from
Assets or Revenues WITHOUT donor’s restrictions (Decrease in net assets) (Expenses are always classified as without donor restriction for NFP)
What does contingent mean in terms of donation?
It means after occurrence of a certain condition.
Contributed legal or donated services which NFP would have otherwise purchased should be reported as ______________
Contribution WITHOUT donor restriction
Promise to contribute $500,000 in Year 3 from a supporter who has made similar contributions in prior periods is an example of _____________
Pledges that aren’t due to be paid until a future period are recorded as time-restricted donations. REVENUES WITH DONOR RESTRICTIONS
Appropriate characterization of the net assets of a nongovernmental NFP org is ______
Residual Interest
Supporting services
Management and general, Fundraising and membership development
NFP - Using the indirect method, the cash flow statement would begin with _______
total changes in net assets
Quasi-endowment funds are established by the governing board of an organization using net assets without donor restrictions. The governing board decides to set funds aside as permanent investments, never to be spent. Therefore, the assets in the quasi endowment would be included in the net assets without donor restriction category.
Quasi endowments do not create real restrictions.
GAAP requires the current expected credit loss (CECL) model to be used when accounting for credit loss (i.e., bad debts). Rather than reducing the AR directly, expected credit losses accumulate in the allowance of credit losses, a contra (ie valuation) account. The allowance is adjusted on each reporting date, so the net carrying value of the AR equals what management expects to collect due to credit risk.
The CECL model requires accounts receivable to be written off (partially or fully) during the period in which the accounts are determined to be uncollectible (matching principle). The entry to write off a specific uncollectible account.
The entry to write off a specific uncollectible account:
1. is recorded with a debit (decrease) to the allowance for credit losses and a credit (decrease) to AR
- Has no effect on net income because only balance sheet accounts are used
- has no effect on total assets because the debit and credit to the asset and contra-asset accounts are offsetting.
Net Asset Reclassifications of a NFP would be reported on _______________
Statement of Activities
NFP Financial Statements
Statement of FInancial Position
Statement of Activities
Statement of Cash Flows
Statement of Functional Expenses (this may be presented as a separate statement, on the statement of Activities or within the notes to the F/S)
When museum intends to sell the artwork and the proceeds are not going to be reinvested in collectible items or used for the care of existing collections:
Asset - Art for resale Dr.
Contribution revenue without
restrictions Cr.
