Study sets, textbooks, questions
Upgrade to remove ads
Ch. 11-13 Acct 403
Terms in this set (48)
Authority over governmental not for profits (enterprise fund accounting)
Authority over private not for profits (AICPA are still applicable)
Voluntary Health and Welfare Organizations
For the wellbeing of the public
Operates mainly from grants and gifts
What are the required financial statements
Statement of Financial Position
Statement of Activities
Statement of Cash Flows
Emphasis is disclosing sources of resources and how expended, not net income
What additional statement do Voluntary Healthy and Welfare Organizations use?
Statement of Functional Expenses
Statements of Financial Position
-Assets and liabilities are not required to be classified as current and non-current, but may be
-Long-term assets and debt
-Accrual Basis of Accounting
Statement of Activities must report
Change in total net assets
Change in net assets without donor restrictions
Change in net assets with donor restrictions
Statement of Cash Flows
1. Operating - Interest expense, interest revenue, and gains and losses are classified as operating
2. Investing - Purchases or sales of fixed assets as well as purchases or sales of long-term investments
3. Financing - Issuance of debt; repayments of principal of debt, cash restrictions related to certain restricted contributions
indirect or direct + rec
Net Asset with Donor Restriction
Resources must by donors or grantors
Net Asset without Donor Restriction
Internally designated and considered unrestricted
Permanently Restricted Net Assets
permanent endowments, and certain assets such as land or artwork that must be maintained or used in a certain way. Restricted as long as the organization has custody.
Temporarily Restricted Net Assets
Include unexpended resources that are to be used for a particular purpose or at a time in the future and resources that are invested for a period of time. Come from Donor Restricted and are at some point released.
Unrestricted Net Assets
Unrestricted contributions, revenues from providing services, and unrestricted income from investments. Donor-restricted contributions whose restrictions are satisfied in the same accounting period that the contribution is received may also be reported as unrestricted.
Revenue vs. support
Support is a class of revenues limited to gifts such as contributions while revenue is an exchange contribution, such as sale of service.
Always classified as
Expenses are classified as programs or supporting services
All NFP organizations must report information about the relationship between _______________ classifications and ________________ classifications of expenses in one location
^ Can be reported on
Face of Statement of Activities
Schedule in the notes to the financial statements
Separate financial statement (no specific title provided by the FASB)
Statement of Expenses Classification
a matrix (spreadsheet) of expenses where the columns are the program or supporting activities and the rows are the type of expense (salaries, supplies, depreciation, etc. (detail of statement of activities)
spending on direct programs instead of supporting services.
Unconditional transfers of cash or assets to a new owner
considered voluntary and non reciprocal
contributions, including unconditional promises of support are recognized as CR in the period received at FMV.
When does a promise become conditional?
Conditional promises to give are recorded as revenue when the condition is substantially met
Accounting for Pledges
-unconditional pledges are recorded even before the cash is received.
-Record the receivable at the fair (present) value, net of an allowance for estimated uncollectible
How do you record the pledge if there is a significant amount of time before the pledge is received?
RECORD AT PV. The present value will increase as the expected date of receipt approaches. The change in present value is recorded as additional contribution revenue rather than interest.
recorded at net present value at the date the pledge is made
donor-restricted revenues/net assets (time restricted)
Do you record contributed services?
only if they create or enhance a non-financial asset or require specialized skill and would have been purchased had it not been donated.
How to record a contributed service?
If non-financial asset is enhanced:
Dr. Property, Plant, or Equipment
Cr. Contributions Revenues
Dr. Expense (value of service)
Cr. Contribution Revenue
Exchange vs. Contribution
Contributions = revenues as soon as received even if use is restricted.
When is a contribution considered deferred revenue?
If money is received in advance of providing the service in an exchange-like transaction.
Pledges are only recorded if
Intentions to give (oral promises) are not
How can you record fixed assets?
Unrestricted assets or donor restricted
If initially recorded as donor restricted, an amount equal to depreciation must be released each year to assets without restrictions
How do you account for N4P investments?
FASB requires investments with readily determinable market values to be recorded at fair market values and gains and losses be recognized
What sort of profits would not-for-profits have?
-Replace and expand equipment / facilities
-provide working capital
-continue programs beyond time frame when seed money grants are available
Solit Interest Agreements
Represent donor contributions of trusts or other arrangements under which NFP organizations receives benefits shared with other beneficiaries.
Measured at FV, displayed as Donor Restricted.
Public vs. Private
Public colleges - receive substantial funding from state government in the form of state appropriations
Private - do not receive state subsidies and must support themselves through tuition, donations, and their income.
both use accrual basis
Private non profit
Public government owned
Investor Owned Commercial
National Association of College and University Business Officers provides additional guidance for both public and private
How do most public colleges and universities report?
As special purpose governments engaged in business type activities.
Reporting of tuition Revenue
NACUBO advises that scholarships that do not require service to the college university are to be treated as reductions in revenue (contra revenue account)
How to account for work study/service?
Expenses and tuition/fees are reported in the gross amount
Reductions in Revenue
uncollectible revenue and academic scholarships with no service to the college
Third party payers commonly receive discount for services
discounts recorded at the time of service as "contra revenue"
Hospital financial statements
Balance Sheet, Most use classified balance sheet
Statement of Operations
Statement of Changes in Net Assets (or "Changes in Equity" if investor owned) Statement of Cash Flows and Notes
Private not for profits and government owned entities must provide a
patient service revenues are shown net of
contractual adjustments and the provision for bad debts
Sets with similar terms
ACC 407 Chapter 10 Quiz
SPEA-V 246 Exam 2
CPA 2013 FAR-8.2: Nonprofit Accounting
Other sets by this creator
Man Fin Test 2 Ch.3
Test Ch. 7-8 403
Non Prof Test 2
Accounting 401 Ch 4
Other Quizlet sets
Nationalism & Sectionalism
Sept. 17 - PHAR 303
Bio study #2