CPA FAR - Not-for-Profit Accounting & Reporting
Terms in this set (22)
List the four broad categories of not-for-profit organizations.
1. Hospitals and other health care entities;
2. Colleges and Universities;
3. Voluntary Health and Welfare Organizations;
4. Other not-for-profit organizations.
What authoritative body has jurisdiction over private not-for-profit organizations?
Financial Accounting Standards Board (FASB).
What type of not-for-profits consist predominantly of publicly funded hospitals and universities, although museums, parks, and landmarks can fall into this category as well?
"Public" (governmental affiliated) not-for-profits.
List the two broad classifications for expenditures within a not-for-profit organization
1. Program Services;
2. Supporting Services.
Describe the reporting requirement when expenses are paid out of temporarily restricted net assets.
"Net assets released from restrictions" is reported as a decrease in the revenue section of temporarily restricted net assets and as an increase in the revenue section of unrestricted net assets.
List the three financial statements that are required for all private not-for-profit organizations.
1. Statement of Financial Position;
2. Statement of Activity;
3. Statement of Cash Flows.
List the three categories of a not-for-profit organization's Net Assets.
2. Temporarily Restricted;
3. Permanently Restricted.
List two types of temporary restrictions.
1. Time restrictions;
2. Purpose restrictions.
What financial statement is required for Voluntary Health and Welfare organizations only?
Statement of Functional Expenses.
List the two sub-classifications of expenditures for supporting services within a not-for-profit organization.
1. Management and General;
2. Fund Raising.
What is the net asset category where expenses are recognized?
Unrestricted net assets.
Contributions to the organization from third parties for which the principal (corpus) must "remain intact in perpetuity."
When are contribution of services recognized?
Recognized if the services require special skills, the person providing the services possess those skills, and the services would have been purchased if not obtained by donation.
List the three conditions that must be met in order for assets to be classified as a "collectible."
1. Held for public exhibition, education, or research rather than financial gain;
2. Protected, kept unencumbered, cared for, and preserved;
3. Subject to a policy that requires proceeds from sales of collection items to be used to acquire other items for collections.
When is an implied time restriction recognized?
An implied time restriction can be recognized on donated long-lived depreciable assets.
Define "term endowments".
Gifts and bequests from third parties which are to be retained and invested for a period of time or until a specific event occurs, but after the criterion has been met, the full amount can be spent.
When are conditional promises to give recognized?
Recognized when the conditions are substantially met or the likelihood of the conditions not being met is remote.
Describe the general revenue recognition rule for contributions.
In general, contributions are recognized as revenue in the period when the contribution is made, regardless of whether they are received in cash or not.
What is the journal entry to record receipt of $100,000 in pledges when it is estimated that 20% of the pledges will be uncollectible?
DR: Pledges Receivable $100,000
CR: Est. Uncollectible Pledges $20,000
CR: Contribution (Revenue) $80,000
What value is used to record donated capital assets?
Fair market value at the date of donation.
How are special event revenue and direct costs reported?
Reported at their gross amounts. Costs to promote the event are reported as part of fund-raising.
List the characteristics of a contributions.
2. Voluntarily made;
4. Not made by an owner.
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