Non profit accounting Flashcards
Conditional promise to give
If condition becomes probable -
report revenue as TRA
Financial statements required for NPO
Statement of Financial Position
Statement of Activities
Statement of Cash Flows
Statement of Functional expenses - for voluntary health and welfare organizations
- shows expenses by function and natural
classification
Supporting activities
management and general expenses
fund raising
membership development
Contributions by NPO’s to other NPO’s are reported as
EXPENSES by the donating NPO
Tuition remission for faculty/employee’s dependents - how to account?
Tuition costs are included in the tuition revenues and reported as expenses.
-compensation expenses - benefits to faculty
Scholarship tuition costs for students not required to perform services
Deducted from tuition revenues
Donations with donor imposed conditions
NO ENTRY WHEN DONATION IS MADE if no asset is received
are not recognized until the condition becomes probable.
The condition has to be fulfilled or very probable to be fulfilled before revenue is recognized
Computation of net patient revenue
Gross patient revenue
less: charity care
contractual adjustments
allow. for discounts to employees
= Net patient revenueA promise to contribute this year- where donor contributed in the previous year
is a time restricted donation -
recognize as TR revenues
Investments in stocks by non profit organizations are reported at year end
at FMV
For hospitals, the Statement of changes in net assets reports
the CHANGES in the hospital’s unrestricted, temporarily restricted, and permanently restricted net assets FOR A TIME PERIOD
For hospitals, the Statement of Operations discloses
ONLY the CHANGES in UNRESTRICTED net assets FOR A TIME PERIOD,
For hospitals the Balance Sheet discloses
discloses the AMOUNTS of unrestricted, temporarily restricted, and permanently restricted net assets as of a SPECIFIC DATE.
For hospitals, charity care are reported
ONLY IN THE NOTES TO FS
Statement of Financial Position format
Assets
Liabilities
Net assets
Unrestricted
Temporarily restricted
Permanently restrictedNPO Statement of Activities format
Column headings:
UNA TRNA PRNA Total
Revenues, gains and other support
Net assets released from restrictions
= Total revenues, gains and other support
Expenses and losses
= Total expenses and losses
Changes in net assets - TOTAL CASH FLOW
net assets at beginning of the year
= Net assets at the end of the year
Components of revenues, gains and other support
Contributions
Fees
Income on long term investments
Other investment income
Net unrealized and realized gains on LT
investmentsComponents of net assets released from restrictions
Satisfaction of program restrictions
Satisfaction of equipment acquisition restrictions
Expiration of time restrictions
Components of expenses and losses
Program A
Program B
Program C
Management and general expenses - includes
depreciation
Fund raising
Total expenses
Fire loss
Actuarial loss on annuity obligations
=Total expenses and losses
Statement of Functional Expenses
Public support \+ Revenues - Program expenses - Support services =Excess of revenue over expenses
Statement of Functional Expenses
Public support components
donations from the public contributions grants bequests pledges special event revenues
Statement of Functional expenses
Revenues - components
membership dues
investment income
client service revenue
fees
