CAFR Briefing and For-profit vs Government Accounting
Carrie Noderer
ACC/548
September 1, 2014
Douglas Traster
CAFR Briefing and For-profit vs Government Accounting
There are many differences between accounting for for-profit businesses and accounting for non-profit organizations and government entities. Some of these include the different parts of the financial statements that are important for both, and how different goals require emphasis of different reports.
There are quite a few differences between government and for-profit business accounting. One of these is the main goal for accounting for each. A typical business’s main goal is to earn a profit. Financial statements expand on net income because net income is a measure of …show more content…
Government entities and non-profit organizations have management discussion and analysis (MD&A), which more or less take the place of the notes to financial statements. The MD&A includes information regarding whether or not the organization is reaching its goals and staying within its budget. It also includes financial information, but more of that is regarding how much of its money is going towards the various areas of the entity, such as services and necessities that are required in order for the agency to meet its goals. It also includes descriptions of where its income is coming from, such as donations, taxes, fees, etc. and whether or not it is successful in meeting the requirements that is was expected to meet.
The differences between for-profit accounting and not-for-profit or government accounting are vast due to the different goals of different entities. Businesses’ main concern is net worth and growth, while non-profit and government’s main concern is budget and accountability. The different requirements and focuses come from these different …show more content…
The MD&A for the Paradise Valley Unified School District is an introduction to the CAFR, and goes over what the CAFR includes, particularly three general components: government-wide financial statements, fund financial statements, and notes to the financial statements. It also gives a brief overview and summary of what will be included in the CAFR and goes over some of the highlights (“Paradise Valley Unified School District”, 2012).
Comparing the CAFR and MD&A to for-profit financial statements brings a greater understanding of the different requirements, expectations, and objectives of for-profit organizations and non-profit or government agencies. The goals are very different, which makes the financial statement focuses different and requires the focuses in the financial statements to differ greatly. Overall though, financial statements for all organizations need to clearly show money coming in and going out, and where this money is coming from and going
Carrie Noderer
ACC/548
September 1, 2014
Douglas Traster
CAFR Briefing and For-profit vs Government Accounting
There are many differences between accounting for for-profit businesses and accounting for non-profit organizations and government entities. Some of these include the different parts of the financial statements that are important for both, and how different goals require emphasis of different reports.
There are quite a few differences between government and for-profit business accounting. One of these is the main goal for accounting for each. A typical business’s main goal is to earn a profit. Financial statements expand on net income because net income is a measure of …show more content…
Government entities and non-profit organizations have management discussion and analysis (MD&A), which more or less take the place of the notes to financial statements. The MD&A includes information regarding whether or not the organization is reaching its goals and staying within its budget. It also includes financial information, but more of that is regarding how much of its money is going towards the various areas of the entity, such as services and necessities that are required in order for the agency to meet its goals. It also includes descriptions of where its income is coming from, such as donations, taxes, fees, etc. and whether or not it is successful in meeting the requirements that is was expected to meet.
The differences between for-profit accounting and not-for-profit or government accounting are vast due to the different goals of different entities. Businesses’ main concern is net worth and growth, while non-profit and government’s main concern is budget and accountability. The different requirements and focuses come from these different …show more content…
The MD&A for the Paradise Valley Unified School District is an introduction to the CAFR, and goes over what the CAFR includes, particularly three general components: government-wide financial statements, fund financial statements, and notes to the financial statements. It also gives a brief overview and summary of what will be included in the CAFR and goes over some of the highlights (“Paradise Valley Unified School District”, 2012).
Comparing the CAFR and MD&A to for-profit financial statements brings a greater understanding of the different requirements, expectations, and objectives of for-profit organizations and non-profit or government agencies. The goals are very different, which makes the financial statement focuses different and requires the focuses in the financial statements to differ greatly. Overall though, financial statements for all organizations need to clearly show money coming in and going out, and where this money is coming from and going