NFP - 22 Flashcards
What is the FASB ASC for Private NFP?
ASC 958
Items on Balance Sheet or Statement of Financial Position for a NFP are listed how?
By liquidity - do not have to separate between current and noncurrent
Do not have to show comparative BS
What is the accounting formula for the BS?
Assets - Liabilities = Net Assets
What three main headings must be listed under the Net Assets section of the BS (if they exist)?
- Unrestricted
- Temporarily Restricted - restricted by DONOR basd on time or purpose
- Permanent Restricted - principal restricted by DONOR but earnings can be used for whatever
Are contributions & exchange revenues subject to Restricted & Unrestricted status?
Contributions - Yes
Exchange Revenues - No
Temporary Revenue is closed to what at the end of the year?
Temporarily Restricted Net Assets (similar to closing to a R/E)
What are the JEs for restricted donation?
2011
Cash 100,000
TR Revenue 100,000
2012
Exp 100,000
Cash,AP… 100,000
TR Assets 100,000
UR Assets 100,000
Expenses are always unrestricted?
Yes
What are the three generic expense categories?
- Program (may be many programs)
- Management & General
- Fund Raising
A NFP that is considered a voluntary health and welfare organization must in addition to it’s existing FS, issue what?
Another FS called a Statement of Functional Expenses (must be a separate FS - Footnote is not good enough)
How is the Statement of Functional Expenses set up?
Functional Category would be column headings
Specific Expense types would be rows
Expenses from temporarily restricted contributions would need what?
A reclassification adjustment that reclassifies assets from temporarily restricted to unrestricted
How are Term & Regular endowments classified?
Term - Temporarily Restricted
Regular - Permanently Restricted
What is the difference between condition & restriction?
Restricted says HOW
Condition says WHEN
When should contributed services be recognized? And what are the JEs?
When Services:
1 Create or enhance nonfinancial assets
2. Require specialized skills that would typically be purchased
Exp DR
Revenue CR
When an entity is an intermediary or agent, how are the donations recorded?
Cash DR
Liability CR
What is variance power? And how is a contribution recorded with variance power?
When an individal donates money to an Intermediary/Agent and let the Intermediary/Agent decide who to remit the money to
Cash DR
Contribution Revenue CR
Are revenues recognized on restricted contributions when a condition is not met?
No - no revenue is recognize until the condition is substantially met
What is an agency transaction?
When a NFP organization receives an asset for which they have little or no discretion over the use of the asset
What are the JEs for an asset that is bought for a NFP entity that is restricted for a specific purpose?
- Easy Way
Equip DR
UR Rev CR
Depr Exp DR
Accum Depr CR
- Better Tracking
Equip DR
TR Rev CR
Depr Exp DR
Accum Depr CR
TR DR
UR CR
For debt & equity securities (except for equity method securities), how are they accounted for?
Fair Value with both Unrealized & Realized Gain/Losses reconized on the Statement of Activities
What three criteria must be met to allocate a fundraising expense to a program or other natural category?
- Purpose - The expense has more than one purpose
- Audience - must not be based on likelihood to contribute
- Content - Must have a call to action other than raising money
How many sections does the Cash Flow Statement have?
- Operating
- Most Contributions - Investing
- Acquiring/Selling PPE/Investments - Financing
- Donor restricted contributions
- Interest/Dividends restricted for reinvestment
For Private NFP Universities, Revenue is reported net of what?
Scholarships & Fellowships that are provided not in return for compensation
Ex:
Cash DR
Revenue Deduction DR
Revenue CR
Note: Revenue reduces total revenue
Student graduate assistantships and other amounts given as tuition remissions (tuition for full time employees) that are given in return for services are recorded how?
As expenses to the department and function where the service was provided
Ex:
Cash DR
Expense DR
Revenue CR
Note: Expense does not affect net revenue
What are the FS required for a Private Health Care Organization?
- Balance Sheet
- Statement of Operations (Unrestricted)
- Statement of Changes in Net Assets
- Cash Flow Statement
The Statement of Operations for a Private Health Care Organization should include a performance indicator?
Yes
What must be included in Other Income which is located below the performance indicator on the Statement of Operations?
- Equity transfers involving control
- Receipt of restricted contributions
- Contributions of long-lived assets
- Unrealized gains/losses except for on trading securities
- Investment returns restricted by law
- Other items required by GAAP to be reported separately
The policies adopted by the entity that determines what the performance indicator is should be located where?
Disclosure
How is net patient revenue figured?
Gross patient revenue
- Contractual Adjustments
- Allowance for Discounts to Hospital Employees
= Net patient revenue
Patient Revenue should not include what?
Charity Care
Patient Revenue should include what other items?
- Investment Income
- Fees from educational programs
- Proceeds from sale of cafeteria meals
- Proceeds from gift shop, parking lot revenue, etc
