F8 - M6 - Not-for-Profit Transfers of Assets and Other Accounting Issues

Question 1

An important issue in not-for-profit accounting is the accounting for asset transfers to other not-for- profit organizations, such as foundations, and the circumstances under which those transfers should be accounted for, as (30

Answer 1

(1) a contribution, (2) a liability, or (3) a change in interest in net assets.

Question 2

Financially interrelated organizations are defined as organizations related by both of the following characteristics:

Answer 2

1) ability to influence the operating and financial decisions of the other, 2) ongoing economic interest in the net assets of the other.

Question 3

A not-for-profit is a ________ (such as a foundation) when it accepts assets from a resource provider (such as a donor or other benefactor) and agrees to use the assets on behalf of, or transfer the assets (and/or the return on the assets) to, a specified beneficiary (such as a university).

Answer 3

recipient entity

Question 4

The accounting by the recipient entity depends on whether the recipient has ________ and whether the recipient and the beneficiary are ________________

Answer 4

variance power; financially interrelated.

Question 5

Specified beneficiaries recognize their rights to assets held by the recipient unless the recipient is explicitly granted ___________.

Answer 5

variance power.

Question 6

Rights, when recognized, will be recorded as a _________ and ________, a beneficial interest, or a change in interest in the net assets of the recipient.

Answer 6

receivable and contribution

Question 7

All debt securities and those equity securities that have readily determinable __________ are
measured at ________ in the statement of financial position.

Answer 7

fair values; fair value

Question 8

__________ on investments are reported in the statement of activities as ___________ in unrestricted net assets unless the use of the investment is restricted, either temporarily or permanently, by explicit donor stipulations or by law.

Answer 8

Realized and unrealized gains and losses; increases or decreases

Question 9

__________ that are limited to specific uses by donor stipulations may be reported as __________ in unrestricted net assets if the stipulations are met in the same reporting period in which the gains and income are recognized.

Answer 9

Gains and losses; increases in unrestricted net assets

Question 10

Investment returns are reported ______________ for Non for profits.

Answer 10

net of any related investment expense.

Question 11

An _______________ is a donor-restricted endowment fund for which the _______ of the fund at the reporting date is less than either the original gift amount or the amount required to be maintained by the donor or by a law that extends donor restrictions.

Answer 11

underwater endowment; fair value

Question 12

An underwater endowment is a donor-restricted endowment fund for which the _______ of the fund at the reporting date is less than either the____________________ or by a law that extends donor restrictions.

Answer 12

fair value; original gift amount or the amount required to be maintained by the donor

Question 13

Underwater endowment funds will report accumulated losses together with the endowment fund in _______________________, and will be accompanied with specific disclosures.

Answer 13

net assets with donor restrictions