Non for profit accounting Flashcards
What are financial statements of NFP org?
- Statement of financial position (BS) which includes assets, liabilities, and net assets ( with donor restrictions (decision only from donors) and without donor restrictions.)
- Statement of activities (IS). For expenses, it includes functional and natural classifications. Functional expenses (program cost) align with the org’s purpose. Natural expenses (support services) are general expenses such as G&A cost, cost of membership development, and fundraising…
- Statement of cash flows
what accounting standard used for NFP org?
- GAAP requires NFP orgs to use full ACCRUAL accounting
- Primary users are recourse providers
What are the 3 categories of revenue recognition?
- Patient service revenue
- Other operating revenue (including donated supplies)
- Nonoperating revenue (including donated services)
How are multiyear pledges recognized?
Multiyear pledges are recognized at their present value at the date the pledge is made. Pledges to be collected in the future are classified as “with donor restrictions” and reclassified as “without donor restrictions” as terms and condition of the bequests are satisfied.
How are multiyear pledges recognized?
Multiyear pledges are recognized at their present value at the date the pledge is made. Pledges to be collected in the future are classified as “with donor restrictions” and reclassified as “without donor restrictions” as terms and condition of the bequests are satisfied.
what is refundable advance?
Refundable advance is good faith deposits/contributions with conditional promises. No revenue is recognized. It is refundable advance until the conditions are met
How are property donations (building,..) recorded?
Recorded as below:
- an increase in assets on the statement of financial position
- a support on statement of activities
- measure property at fair value
what is a “split-interest arrangement”
It represents donor contributions of trusts or under other arrangements under which the NFP orgs receives benefits that are shared with other beneficiaries. Ex: a charitable remainder trust
what contributed services are recognized as contribution revenue and expenses at FV?
Services that meet SOME: they create/enhance nonfinancial asset and required specialized skills and if otherwise have been purchased by NFP orgs
- Specialized
- Otherwise needed
- Measured Easily
Contributed services are recognized both expense and revenue
what is considered interrelated organizations?
It is one of the organizations is both have the follow characteristics:
- Able to influence the operating and financial positions of the others
- Has an on going economic interest in the net assets of the other
what contribution considered as a liability?
It is when an organization receives a contribution but has no variance power (discretion) relative to the use of the contribution.
How to record a donation of stock?
Donation of stock are recorded at fair value on the date of donation on BS
Where to record gain or loss from donated security investments?
Gain/loss are reported in the statement of activities as an increase or decrease in net assets without restrictions unless otherwise stipulated by donor or law. In the event restrictions, losses are absorbed by the endowment
How to record marketable equity securities?
Report at market value as of the balance sheet date
