Nonprofit Organization: Statement of Cash Flows
Introduction In budgeting for nonprofit organizations, the Financial Statement of Not-for-Profit Organizations (FASB 117) guides institutions in their mandated functional reporting of expenses (Greater Washington Society of CPAs, 2015). The FASB 117 provides financial statements with insight on actual cost of programs and services, identifying evolving trends, and positioning the organization to generate future revenue. In addition, the FASB 117 requires nonprofit organizations to prepare a statement of cash flows, which examines the organization's sources and uses of cash (Finkler, Purtell, Calabrese, & Smith, 2013).
Analysis
Definition …show more content…
In essence, the statement of cash flows concerns the flow of cash in and cash out of the nonprofit organization and captures the current operating results as well as the accompanying changes in the balance sheet (Matan & Hartnett, 2012). In the statement of cash flows, the three sections of the statement—investing activities, financing activities, and operating activities—presents the changes in the balance sheet accounts and income affecting the cash and cash equivalents (Matan & Hartnett, 2013).
• Investing activities: the section addresses the amount of cash used to acquire assets to receive through sale or disposition of assets, such as purchases and sales of property as well as investments (Greater Washington Society of CPAs, 2015).
• Financing activities: the section reports the amount of cash used to settle liabilities or received by incurring liabilities, such as principal repayments of notes payable or capital leases (Greater Washington Society of CPAs, 2015).
• Operating activities: the section comprises all items not included in investing or financing activities along with non-cash items, such as depreciation, donated property, net appreciation of investments, as reconciling items (Greater Washington Society of CPAs, 2015). …show more content…
The General Accepted Accounting Principles (GAAP) requires cash flow activity from blended component units to be presented in the statement of cash flows, however, the statement does not display the cash flow activity of discretely presented component units (Washington State Auditor's Office, 2015). Essentially, the government presents a statement of cash flows for proprietary funds using direct methods, reconciliation of operating cash flows to operating income required (Washington State Auditor's Office, 2015). The government version of the statement of cash flows reports on the following
Introduction In budgeting for nonprofit organizations, the Financial Statement of Not-for-Profit Organizations (FASB 117) guides institutions in their mandated functional reporting of expenses (Greater Washington Society of CPAs, 2015). The FASB 117 provides financial statements with insight on actual cost of programs and services, identifying evolving trends, and positioning the organization to generate future revenue. In addition, the FASB 117 requires nonprofit organizations to prepare a statement of cash flows, which examines the organization's sources and uses of cash (Finkler, Purtell, Calabrese, & Smith, 2013).
Analysis
Definition …show more content…
In essence, the statement of cash flows concerns the flow of cash in and cash out of the nonprofit organization and captures the current operating results as well as the accompanying changes in the balance sheet (Matan & Hartnett, 2012). In the statement of cash flows, the three sections of the statement—investing activities, financing activities, and operating activities—presents the changes in the balance sheet accounts and income affecting the cash and cash equivalents (Matan & Hartnett, 2013).
• Investing activities: the section addresses the amount of cash used to acquire assets to receive through sale or disposition of assets, such as purchases and sales of property as well as investments (Greater Washington Society of CPAs, 2015).
• Financing activities: the section reports the amount of cash used to settle liabilities or received by incurring liabilities, such as principal repayments of notes payable or capital leases (Greater Washington Society of CPAs, 2015).
• Operating activities: the section comprises all items not included in investing or financing activities along with non-cash items, such as depreciation, donated property, net appreciation of investments, as reconciling items (Greater Washington Society of CPAs, 2015). …show more content…
The General Accepted Accounting Principles (GAAP) requires cash flow activity from blended component units to be presented in the statement of cash flows, however, the statement does not display the cash flow activity of discretely presented component units (Washington State Auditor's Office, 2015). Essentially, the government presents a statement of cash flows for proprietary funds using direct methods, reconciliation of operating cash flows to operating income required (Washington State Auditor's Office, 2015). The government version of the statement of cash flows reports on the following