Week THREE Discussion: The Balance Sheet for the Colon Cancer Alliance
The Statement of Financial Accounting Standards (SFAS) 117 exists to “enhance the relevance, understandability, comparability of financial statements issued by nonprofit organizations”, making nonprofit financial statements as readable and usable for stakeholders as those of for-profit businesses (Financial Accounting Standards Board as cited in McLaughlin, 2009). It also offers a concise presentation of the accounts as opposed to the fund accounting way of doing things which preceded it. Some main requirements for the financial statement of all nonprofits is that the statement contains a statement of position, a statement of activities, and a statement of cash flows …show more content…
This is basically a “snapshot” in time of the balances and should account for both current and non-current assets and liabilities (Miller, 2009). Current assets can include but not limited to cash and bonds/CDs with original maturities of less than a year, whereas, current liabilities can include accounts payable, accrued salaries, accrued vacation, or deferred revenue that can be earned in a year (Miller, 2009). Net assets also should be divided according to whether or not donor-imposed restrictions have been placed. Therefore, any changes in the net assets in either of the three categories, unrestricted, temporarily restricted, or permanently restricted, should be represented in the statement of activities. The statement of activities is also known as the profit and loss statement (Miller, 2009). One thing to note is that all net revenue received with donor-imposed restrictions should be reported as temporarily or permanently restricted, but all expenses should be reported as unrestricted and a separate line named “amounts released from restriction” should be used to indicate the expenses used to meet those restriction guidelines (Miller,
The Statement of Financial Accounting Standards (SFAS) 117 exists to “enhance the relevance, understandability, comparability of financial statements issued by nonprofit organizations”, making nonprofit financial statements as readable and usable for stakeholders as those of for-profit businesses (Financial Accounting Standards Board as cited in McLaughlin, 2009). It also offers a concise presentation of the accounts as opposed to the fund accounting way of doing things which preceded it. Some main requirements for the financial statement of all nonprofits is that the statement contains a statement of position, a statement of activities, and a statement of cash flows …show more content…
This is basically a “snapshot” in time of the balances and should account for both current and non-current assets and liabilities (Miller, 2009). Current assets can include but not limited to cash and bonds/CDs with original maturities of less than a year, whereas, current liabilities can include accounts payable, accrued salaries, accrued vacation, or deferred revenue that can be earned in a year (Miller, 2009). Net assets also should be divided according to whether or not donor-imposed restrictions have been placed. Therefore, any changes in the net assets in either of the three categories, unrestricted, temporarily restricted, or permanently restricted, should be represented in the statement of activities. The statement of activities is also known as the profit and loss statement (Miller, 2009). One thing to note is that all net revenue received with donor-imposed restrictions should be reported as temporarily or permanently restricted, but all expenses should be reported as unrestricted and a separate line named “amounts released from restriction” should be used to indicate the expenses used to meet those restriction guidelines (Miller,