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18 Cards in this Set

  • Front
  • Back

How are NFP's different from commercial orgs?

1. Resources come from donations


2. Donors often impose restrictions

What authoritative body oversees not-for-profit hospitals and universities?


Why?


GASB


If they are governmental-related (probably either they service a purpose in the public interest and/or they accept governmental grants )

Why are private non-profit hospitals and colleges like governmental units?

No owners of net assets (no equity)


Definitely not owned or controlled by a govt

FASB Statement 116

Accounting for Contributions Rec'd/Made


Unconditional promises: recognize revenue when promise is made


Conditional promises recognized when conditions are met

FASB Statement 117

FS's of NFP's

Voluntary health and welfare org

Promote public wellbeing


Funded by voluntary contributions and some user charges


Owner-benefit, commercial B-type NFP's


(excluded from chapter)

Employee benefit plans


Mutual insurance companies


Mutual banks/trusts


Farm Co-ops

Three classes of NFP Net Assets

Unrestricted


Temporarily restricted


Permanently restricted

Permanently restricted net assets

Permanent endowments


Certain assets that must be used in certain ways


Land, art

Temporarily restricted net assets

Come from contributions with donor-imposed restrictions


Specific purpose


Temporary ("Term") endowment


Socked away to buy a fixed asset

Unrestricted net assets

Unrestricted contributions


Service revenues


Unrestricted income from investments


Donor-restricted cont's satisfied in same reporting period may also be classified as unrstct

Financial reporting for Private NFP's

No fund accounting


A/L, Rev/X's are recognized on accrual basis


Excess of A>L called "Net Assets," not "Fund Balance"


Encumbrances, expenditures, budgetary accounts are not used


Depreciation recorded on fixed assets

Required Statements for Private NFP's

(very similar to profit corporations)


Statement of Financial Position


Statement of Activities


Statement of Cash Flows


Welfare organizations: +Functional Expenses

Private NFP's: Statement of Financial Position

A,L, Net Assets


Assets and Lia's: In order of liquidity/Classified (not necessary to identify restrictions)


Net assets: Un, temp, perm


Private NFP's: Statement of Activities

Rev/X


G/L


Reclassifications of net assets


Need Org-wide totals


Also need broken down by classification of net assets


(ALL Expenses are reported as decrease in unrestricted net assets)

Private NFP's: Statement of Cash Flows

Operating, Investing, Financing.


Direct or indirect


Cash from operating activities: includes contributions (restricted/long-term purpose are classified as financing activities)

Health and Welfare Orgs: Statement of Functional Expenses

Expenses classified by


1. function (programs, fund-raising, etc)


2. nature (salaries, supplies, etc)

Private NFP's: Note Disclosures

1. detail of reclassifications


2. detail of investments


3. breakdown of expenses by function and nature


Also: groupings and schedules of conditional and unconditional promises, and allowance for uncollectible pledges receivable