chapter 14 Flashcards
(26 cards)
Who provides guidance on generally accepted accounting principles for NFP:
FASB
Stakeholders that use NFP’s financial statements
donors, grantors, members, lenders, consumers and others who provide resources to NFPs.
NFP’s are required to
- have a statement of financial position
- statement of activities
- statement of cash flows
what are the two classes of nets assets for NFP’s ?
- Net assets w/o donor restriction
2. Net assets w/ donor restrictons
Net assets w/o donor restrictions
contributions from which no donor restriction exists or the restrictions have expired, revenues from services provided, and investment income.
Board designated net assets
are net assets w/o donor restrictions appropriated or set aside for specific purposes by the governing board rather than an external donor.
Net assets w/donor restrictions
donor imposes restrictions that may be either temporary or permanent.
endowments
net assets with donor restrictions that are permanent in nature and nonexpendable
board designated endowment
funds set aside by the board, however since they can reverse the decision it is classified as net assets w/o donor restriction.
Underwater endowment
is a donor restricted endowment whose fair value has fallen below the amount required to be maintained for a fixed term or in perpetuity.
Contribution
a voluntary, unconditional and nonreciprocal transfer of cash or other assets to an NFP by an entity external to the NFP.
Promise to give
pledges can be conditional or nonconditional.
acquisition
a transaction or other event in which a nfp acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer’s financial statements.
Collections
works of art, historical treasures
conditional promise to give
a promise to make a contribution to an organization that depends on the occurrence of a specified future and uncertain event to bind the promisor, such as obtaining matching gifts by the receipt
federated fund raising organization
an organization composed of independent charitable organizations that have voluntarily joined together to raise and distribute money among themselves.
gains
increase in net position from peripheral or incidental transactions of an entity.
merger
a transaction or event in which the governing boards of two or more NFP entities cede control of those entities to create a new NFP entitiy
revenue
inflow of economic resources resulting from the delivery of services or activities that constitute the organizations major or central operations rather than from the interfund transfers
support
increase in net assets arising from contributions or resources or nonexchange transactions and includes only amounts for which the donor receives no direct tangible benefits from the recipient agency.
variance power
redirecting donated assets to a beneficiary different from the third party initially indicated by the donor.
intermediary
a recipient entity that acts as a facilitator for the transfer of assets between a potential donor and a potential beneficiary but is neither an agent or trustee nor a donee and donor.
Functional expenses
are those that relate to either the program or mission of the organization (program expenses) or the management and general and fund raising expenses required to support the programs (support expenses)
Examples of NFP Disclosures
- those relating to financial instruments
- Commitments
- Contingencies
- Prior Period adjustments
- Changes in accounting principles
- Employee Benefits
