Review Flashcards
When we prepare interim FS what tax rate do we use?
The expected/estimated tax rate.
FASB 958
Sets the standards of NFP organizations
How do NFP report expenses
Functional classification in statement of activity AKA IS
How do NFP disclose expenses
Natural classification by function in the notes to the FS
What are functional activities
Main operations only
What are supporting activities
Everything else that does not have to do with the main mission.
What is measurement focus
It determines what goes in the BS
What re the gov funds and what do they do
GRaSPP
General (G&A)
Special Rev
Debt Service Fund
Capital category fund (Construct major capital asset)
Permanent funds (Only interest income is useable)
(Use the modified accrual basis and report only current assets and liabilities)
What are proprietary funds and what do they do
SE
(Use the accrual basis and is economic measurement focus)
These funds account for business-type activities.
Internal service fund (Goods and services provided by designated departments/ the customers are internal)
Enterprise Funds (GOV facility acquisition and operation of GOV facilities)
Fiduciary funds
CIPPOE
(Assets a company has control over but on behalf of a beneficiary)
Custodial Funds
Investment trust fund
Private purpose trust fund
Pension trust fund
Other Employee trust fund
When is income and expenses recognized in GOV Accounting
Income when recognized so in the period deemed collectible or within 60 days after year-end.
Expenses when related liabilities are incurred (except for principal and interest which is when it is paid or owed)
Which FV method uses discount approach
IS
If a patent was not defended correctly
Expense the entire things
ARO
ARC decreases with depreciation
dr depreciation
cr accumulated depreciation ARC
ARO increases with accretion (Interest expense calculated using beginning balance for the period)
dr accretion expense
cr ARO
Expense for the year = aro depreciation + accretion expense
Statement of activities
statement of financial position
IS
BS
When issuing stock dividends
If it is a small stock use FV on the date of declaration
if it is large use par
Remember RE gets debited by the value of the stock
Vacation pay is
Accrued if Vested or accumulated
Consolidated NI
Net income is the main
-Equity in earning of sub
+%of sub income owned
Consolidated RE
Use parent only
Cost of premium are
not part of contribution they are expensed
Do not recognize assets in NFP if
They have major uncertainties with recognizing FV and have no alternate use.
Premiums on life insurance are
Taxed (Proceeds are the once that are not taxed)
Endowment in perpetuity increase
Net assets with donor restrictions
In NFP entities that are holding assets of one another
If they are related then it is an equity interest
if they are not it is a beneficial interest
Donations received and classified as quinsy endowments are
Not donor restricted
Functional expenses include
Program and support services
Most important thing in financial reporting is
Accountability
