NFPS and GoVTs Flashcards
What are the financial Stmts required for Not For Profits?
Stmt of Financial Position
Stmt of Activities
Stmt of Cash Flows
Stmt of Functional Expense*
(Volunteer Health Orgs only)
What are the Stmts for Non-Govt Hospitals?
Balance Sheet
Stmt of Operations
Stmt of Changes in Net Assets
Stmt of Cash Flows
Financial Stmt Notes
When is Revenue on Contributions recognized for NFPs?
Revenues are recognized in the year RECEIVED and not the year the contribution is spent.
Record at Fair Value on the date received
When are Unconditional Pledges classified as Revenue?
Current year only–unrestricted net assets
Multi year future contributions fall under Temprorarily Restricted
How are Unrestricted Contributions Promised but not yet received classified?
As Temporarily Restricted Assets
They are restricted by time
How are endowments classified?
Principal is permanently restricted, however earnings could be unrestricted or restricted
Quasi Endowments are unrestricted net assets because they are under control of the board
How are Art Collections treated in regards to Revenue?
Not recognzied as assets or contribution revenue if they are held on display for a museum or education
or their sale results in the purchase of similiar items
When both Temporarily Restricted Assets and Unrestricted Assets are available for use, TRA are used first
How are refundable advances treated?
Refundable advances are liabilities.
They are promises to contribute assets pending on certainc onditions being met
Becomes unconditional once the possibility that it wont happen is remote
How are investments treated for NFPs?
Most fair value.
Equity method can be used when Significant influence exists
How do Scholarships and Grants affect College Tuition Revenue?
Scholarships are a reduction of revenue and are netted directly against the college’s tuition inflow
How do NFP’s allocate Depreciation?
They allocate Depreciation expense proportionately to various functions
In reconciling between Fund Financials and GOvernt Wide Financials, what is added or subtracted to Governmental Fund balances to the total change to Govt Wide Net Position?
Modified Cash to Accrual
Capital asset purchases and pmts of long term debt principal would be expenditure reductions of Govt Funds.
They would need to be added back to the Fund Balance, basically going from Cash (Govt funds) to Accrual basis Govt Wide
The Book Value of Capital Assets sold would have increased Government Fund balances. These need to be subtracted. Any gains would be added.
Internal Service Fund Activities are reported where on the Governt Wide Stmt of Activities?
Governmental Activities…
even though they are technically Proprietary Funds
Under GASB, public colleges or university that chooses to report only business type activites should prepare which of the following statments?
- stmt of net position
- stmt of revenueues expenses and changes in net position
- statement of cash flows
These are the funds for Proprietary Funds
Net Realizable Value of Health Care Receivables is determined by subtracting….
Gross Patient Revenue
MINUS Contractual Adjustments
MINUS Discounts
MINUS Charity Care
MINUS Allowance for Uncollectible Accounts***
= Net Patient Revenue
***Bad Debt Expense is not netted
What are the categories used for a NFP Stmt of Financial Position?
Assets
Liabilities
Net Assets
Brocton City Water Utitily, an enterprise fund, submits a bill for $9,000 to the General Fund for water service supplied to city departments.
THis results in…
Revenue by thee Water Utility Fund
and Expenditure by the General Fund
Board of Berry College designates 4,000,000 of unrestricted net assets for a new building…
Which asset classifications are effected?
Neither temporary nor Unrestricted
Since they were already unrestricted, there is no change in Unrestricted.
When general fixed assets are acquired through governmental funds, what happens?
Expenditure.
However, the Governmental Funds do not record Fixed Assets
Reported in the Government Activites of the GOVT Wide Stmts
When the state is obligated to fund the pension plans of certain school districts int he state, which of the following is true about the acct?
The obligations are accounted for as pension expense for the state of Illinois
The Stmt of Operations for a Non private NFP Hospital should include a performance indicator…
What are items for Performance Indicator?
lists proceeds from sales of cafeteria meals and guest trays to employees, medical staff, and visitors as one of the items reported as other revenue on the statement of operations. Other revenue is included in the performance indicator on the statement of operations. Net assets released from restrictions is also reported in the performance indicator if the net assets are used for operating expenses
What are the items listed below and NOT in the performance indicator separately?
(1) Equity transfers involving other entities that control the reporting entity, are controlled by the reporting entity, or are under the common control of the reporting entity.
(2) Receipt of restricted contributions.
(3) Contributions of (and assets released from donor restrictions related to) long-lived assets.
(4) Unrealized gains and losses on investments not restricted by donors or by law, except for those investments classified as trading securities.
(5) Investment returns restricted by donors or by law.
(6) Other items that are required by GAAP to be reported separately (such as extraordinary items, the effect of discontinued operations, accounting changes).
GASB requires Depreciation for which types of Colleges?
Both Private and Public
Net Tuitition for Colleges and Universities
Brook University assessed $4,000,000 in tuition
Only realized 3,700,000 beacuse:
80,000 was given to the Teacher’s Kids
220,000 in scholarships with no service req.
Total Net Tuititon: 3,780,000
Tutition for Teacher’s Kids is a compensation expense not a scholarship
Nord Association donates 100,000 to fund scholarships.
Only the 15,000 interest of the investments can be used for Scholarships in year 2
100,000 in permanently restricted
15,000 temp restricted
Budgetary Comparison Schedule would include which funds?
General Fund and Special revenue funds
because they are the only funds that are budgeted
Cash recipts from grants and subsidies to decrease operating deficits should be classified in which of the following sections of STMT of Cash Flows For Not For Profits?
NON Capital Financing
Cash flows from Grants and Subsidies to decrease operating deficits are classified as non capital financing activties
Debt principal matured….
Is an expenditure for Debt Service Funds
Impairment exists….
If the Carrying Amount EXCEEDS the recoverable amount…
For GAAP, this is the Undiscounted Future Expected Cash Flows
Under IFRs, what method is used when Preferred Shares are converted into ORdinary Shares?
Book Value Method
Disclosures for Transfers and Servicing of Pledged Assets
The policy for requiring collateral
amounts of servicing assets and liability recognized and amortized
accounting policies for measuring the retained interest
disclosure only of pledged assets NOT separately reported
When a Town is not potentially liable for a special assessment…
The debt service transactions of a special assessment issue for which the government is not obligated in any manner should be reported in an agency fund rather than Debt Service Fund.
Which items are NOT expenditures of a General Fund?
Payments to a debt service fund
Special Items
Proceeds from the sale of capital assets
State appropriations to a state university choosing to report as engaged only in business type activites should report such Appropriations as…
Non Operating Revenues
Government Wide Stmt of Net Position
What are the categories of Net Position?
Assets + Deferred Outflow of Resources
- Liabilities - Defrred Inflows of Resources=
Net Position broken down into 3 Categories
1) Net Investment In capital Assets
2) Restricted
and
3) Unrestricted
City of Walton, issued 500,000 7% General Obligation Bonds on Jan 1…
Interest is payable annually beginning January 2 of the next year
What about amount of Bond Interest is required to be reported in the Current Year?
General Obligation bonds are accounted for in debt service funds which use Modified Accrual Basis…
This means that only interest cost ACTUALLY PAID in the period is in cluded in interest expense.
Since no interest was paid this year.
interest expense is 0
Gold County received goods that had been approved for purchase but for which payment had not yet been made…
- Reverse Encumbrances
Dr. Reserved for Encumbrances
CR. Encumbrances Control
2.
Dr. Expenditures Control
Cr. Vouchers Payable or (AP)
GASB Concepts….the primary users of Government include
Citzenry
Legislative and Oversight Bodies
Investors and Creditors
INTERNAL USERS ARE NOT PRIMARY USERS
Which Government Budgetary Accounts are Closed Out?
Dr. Appropriations
Cr. Budgetary Fund Balance
Cr. Estimated Revenues
What would be reported as program revenues on a local government’s GOVT wide stmt activities?
Program Revenues includes:
- charges for services
- operating grants and contributions
- capital grants and contributions
Special Assessment Debt…
If the Government is liable for the debt due to default and must assume the payments ….
All transactions related to capital improvements financed by special assessments should be reported.
They should be reported on the same basis of accounting as any other capital improvement and financing transaction.
This debt is considered General Obligation Debt, which is reported in the Government Wide Stmts only
When a Non For Profit receives funds during its annual campaign, that were specifically pledged by the donor to another nongovernmental NFP,
How the funds recorded?
Increase in Assets
and
Increase in Liabilities
Transfers to the debt service fund
Other Financing Uses
What are the 4 Sections of a Proprietary Fund
Stmt of Cashflows?
Operating Activities
Non Capital Financing Activities
- issues debt to finance operations
Capital and related activities financing
-issues debt to acquire capital assets
Investing Activities
What are the 4 Types of Itnerfund Transactions?
Quasi External- business type between funds, revenues and expenditures
Reimbursements- one fund reimburses another fund. These are recorded as an expenditure or expense in the fund giving the money….and reduction in expenditure or expense. NOT REVENUE
Transfers- transfers with no repayment required
Loans- amouts from funds that expected to be repaid. A recievable and payable is record. Due adn due from short term, advance to advance from long term
Unrealized gains and interest on trading securities for NON Profits should be included on which Stmt?
Unrestricted….Statement of Operations
Restricted on Stmt of Revenues
Governments should close which type of accounts at year end?
All temporary accounts and NOT balance sheet accounts
This includes Expenditures, Encumbrances, Estimated Revenues, Appropriations
DO NOT CLOSE REAL Balance Sheet Accounts including
Cash Investments, Payables Fund Balances and Fund Balances Reserved for Encumbrances,
Hospital Statements
The stmt of changes in net assets reportes the changes in the hospital’s unrestricted, tmp restr, and perm retri net assets for a time period.
the statement of operations dislcoses only the changes in unrestricted net assets for a time period.
Balance sheet disclose the amounts of Un, Temp and Perm Net assets
5 categories of RSI for GASB
- Management’s Discussion and Analysis;
- Schedule of Funding Progress and Schedule of Employer Contributions (these schedules relate to pension disclosures);
- Budgetary Comparison Schedules (this disclosure is for governmental funds)
- Information about Infrastructure Assets Reported Using the Modified Approach; and
- Certain information about Risk Financing Activities.
Where is General Obligation Debt reported?
The Government WIDE stmts only!!!!
This includes special assessment debts
