Not-for-Profit Flashcards
What is a split-interest agreement?
An arrangement where a donor makes an initial gift to a trust or directly to The not for profit organization in which the not for profit organization has a beneficial interest, but is not the sole beneficiary
Where are unrealized gains and losses from other than trading securities, which are not restricted by donors reported?
Reported after the performance indicator on the statement of operations is not included in the amount reported for revenue and gains over expenses and losses the performance indicator
Non-governmental, not for profit entities should prepare the following financial statements:
1 statement of financial position
2 statement of activities
3 statement of cash flows
* NPO must report expenses by nature and function in one place— on the face of the statement of activities as schedule in the notes to the financial statements, or as a separate financial statement
Purpose of an NPO, financial statements
Provide useful information to members, creditors, and donors
Reports, assets, liabilities and net assets, as well as their relationship to one another at a point in time
What is the statement of functional expenses?
A detailed schedule showing program expenses versus supporting expenses.
It may be presented on the face of the statement of activities as a separate statement, or as a note to the NPO‘s financial statements
NPO accounting equation
Assets - Liabilities = Residual interest
Residual interest = net assets
Objective of the statement of financial position
Report financial statements with an economic resources measurement focus.
the flow of economic resource resources
Resource providers
Examples are donors members creditors
What is the primary purpose of a not for profit organization, statement of activities?
To provide relevant information to its resource providers.
NPO focus is to provide services funded with public or private resources that generally come from contributors or fees that are not taxable.
The focus on reporting is to disclose the sources of resources and how they are expended
What are supporting expenses?
They are secondary to the mission and include management & general, fundraising, and membership development
What are program expenses?
Program expenses are primary and supporting the MPO’s mission
Charity care provided by a non-governmental nonprofit hospital
Charity care represents healthcare services that are provided, but are not expected to result in cash flow. it does not qualify for revenue recognition as receivables or revenue
What are the financial categories on a non-governmental not for profit financial position?
Changes in net assets
With or without donor restrictions
When dealing with a non-governmental, not for profit hospital, what items should be included in patient service revenue?
Gross patient revenue * excludes, charity care
- Discounts
- Contractual adjustments
- Implicit price concessions
= net patient service revenue**
* exclude, charity care
** provision, for credit losses reported separately as an operating expense
$100,000 from a donor who stipulated that the money be spent according to the wishes of the board of trustees - what section of the cash flow statement with this item be shown?
Cash flow statement as cash from operating activities
