Assignment 3
One important aspect of the nonprofit world is the undeniable need for accounting and transparency of organizations. Prior to 1994, nonprofit organizations used fund accounting to represent balanced sheets. Fund accounting offered an overall picture of the organization’s finances in a complicated fragmented way, in other words it made reporting difficult and therefore seeing a clear picture of the organizations finances became very challenging (McLaughlin, 2010). On the other hand, according to McLaughlin (2010), the Financial Accounting Standards Board (FASB) created the Statement of Financial Accounting Standards (SFAS) 117, whose main purpose was to make financial statements from nonprofit organizations readable and usable by stakeholders. Furthermore, …show more content…
Looking at the organization’s annual report it does not seem that they meet all of the requirement set forth by the SFAS 117. That being said, the annual report is not intended to be a whole financial statement, rather it is an overview of the organization’s finances for its board members, as well as for potential members. When looking at the organization’s consolidated financial statements, they do comply with the SFAS 117 ruling. According to the Boys and Girls Clubs of Miami-Dade, Inc. (2016), the organization’s financial statement includes a balance sheet, a statement of activities, cash flows, functional expenses, and accompanying notes, amongst other things, all which show compliance with the SFAS 117 ruling. Moreover, the organization’s net assets are broken down by unrestricted and temporarily restricted funds. Looking at the report, the organization does not have any permanently restricted accounts. According to Nonprofits Assistance Fund (2014), focusing on the organization’s net assets gives an accurate picture of the assets available for
One important aspect of the nonprofit world is the undeniable need for accounting and transparency of organizations. Prior to 1994, nonprofit organizations used fund accounting to represent balanced sheets. Fund accounting offered an overall picture of the organization’s finances in a complicated fragmented way, in other words it made reporting difficult and therefore seeing a clear picture of the organizations finances became very challenging (McLaughlin, 2010). On the other hand, according to McLaughlin (2010), the Financial Accounting Standards Board (FASB) created the Statement of Financial Accounting Standards (SFAS) 117, whose main purpose was to make financial statements from nonprofit organizations readable and usable by stakeholders. Furthermore, …show more content…
Looking at the organization’s annual report it does not seem that they meet all of the requirement set forth by the SFAS 117. That being said, the annual report is not intended to be a whole financial statement, rather it is an overview of the organization’s finances for its board members, as well as for potential members. When looking at the organization’s consolidated financial statements, they do comply with the SFAS 117 ruling. According to the Boys and Girls Clubs of Miami-Dade, Inc. (2016), the organization’s financial statement includes a balance sheet, a statement of activities, cash flows, functional expenses, and accompanying notes, amongst other things, all which show compliance with the SFAS 117 ruling. Moreover, the organization’s net assets are broken down by unrestricted and temporarily restricted funds. Looking at the report, the organization does not have any permanently restricted accounts. According to Nonprofits Assistance Fund (2014), focusing on the organization’s net assets gives an accurate picture of the assets available for