F8-F10 Topics Flashcards
Not-For-Profit Accounting - FASB
- Full Accrual
- FASB ASC: 958-280
Statement of Financial Position
Statement of Activities
Statement of Cash Flows
NFP Statement of Financial Position
- A, L, Net A
- Current v. Noncurrent
- Assets sequences by nearness to cash, Liabilities sequences by nearness to maturity
Net Assets W/O Donor Restrictions vs. Net Assets W/ Donor Restrictions
NFP Statement of Activities
- Revs/Exps (Gross), G/L (Net), and Reclassifications
- Change in Total NA, Change in NA W/O DR and Change in NA W/ DR
- Typical OCI for commercial presented here
When Restriction is satisfied:
Debit Satisfaction of Program Restriction - DR
Credit Satisfaction of Program Restriction - W/O DR
*Met in same period as received = recorded as increase to NA W/O DR
*All Expenses reported as Dec. in NA W/O DR (except investment exp.)
Program Services = Activities for which org is charted
Support Services = Everything else
-Fundraising
-Management and General
-Membership Development
NFP Statement of Cash Flows
*Direct OR Indirect
Operating Activities: (A LOT)
Investing Activities:
- Investments in PPE
- Proceeds from sale of works of art/disbursements for purchases of art
- Proceeds from sale of assets whose sale proceeds were restricted to investment in equipment
Financing Activities:
- Proceeds from bonds/mortgages/notes
- Repayment of amounts borrowed
- Receipts from contributions restricted for PPE
- Receipts from contributions restricted for DR endowment funds
*Transfers of cash that are restricted are NOT CF activities
Noncash Activites:
- Contributed Securities
- Construction in Progress/FA purchases
- Unconditional Promises
- Noncash Debt Refinancing Transactions (Rate changes)
*Direct Method = Not required to provide operating activity reconciliation
NFP Revenue Recognition
*Full accrual
*When Realized and Earned
Rev = Increases to NA W/O DR
Rev = Central Activities
Gain = Incidental
Conditional Contributions = NOT Recognized
-Existence of measurable performance related barrier (Specified level of service, outcomes)
-Right of Return
Contributions
Cash Contributions = @FV
Promises to Give
-Unconditional = Recorded @FV when made
-Conditional = Recognition does not occur until conditions substantially met
-Debit Cash, Credit Refundable Advance (Liability)
Placed In Service Approach = In absence of DR, Report expiration of restrictions with Long-lived Assets
Allowance of Uncollectible Pledges = Reduces Pledge/Contribution Rev @NRV
Split Interest Agreement = NFP receives benefits shared with beneficiaries (Disclosed Separately)
-Displayed under DR @FV
Donated Services = “SOME” @FV
-Contribution & Expense if creates/enhances asset & requires specialized skills
Volunteer Recruitment = FUNDRAISING
Donated Collection Items: Art/Historical Treasures
-Not required to be reported if held for public viewing, protected, and proceeds towards more
Donated Materials
-Debit Asset, Credit Contribution - Support (@FV)
-Merely Pass through (Used clothes) = NOT reported
Gifts in Kind
-Noncash Contributions - Donated as part of fundraising appeal
-Valued @FV when received and revalued upon sale - Difference = Additional Contribution
Promises to Contribute
Contributions W/O Donor Restrictions = Unconditional promise to contribute in future
-DR Support @PV, expected to be collected < 1year = @NRV
Debit Pledge Rec. - with Donor Restriction
Credit Allowance
Credit Contributions - with Donor Restriction
*Adjusted when collected
Debit Cash
Credit Pledge Rec. - with Donor Restriction
Debit Satisfaction of time Restriction
Credit Cash
Fundraising
*NFP offers premiums/items to donors -> Cost = Fundraising Expense
Total Contribution Received - FV of Premiums = Contributed Rev
Display GROSS
Hospitals = Patient Service Rev
*Gross Basis, but deductions are made
*Charity Care = Services not expected to result in CF
Gross Patient Service Rev - Charitable Services = Patient Service Rev
Hospitals = Other Operating Rev
- Tuition from schools
- Rev from educational programs
- Donated supplies and equipment \
- Specific purpose grants
- Rev from aux activities
- Cafetiera rev
- Parking fees
- Gift shop rev
- Medical transcription fees
Hospitals = Nonoperating Rev and Support G/L
- W/O DR
- Interest and div income from investments
- Gifts and bequests
- Grants
- Income from endowment funds
- Income from board-designed funds
- Donated services
Transfers of assets to a NFP that holds contributions for others
Recipient:
- Not Interrelated and has Variance Power
Debit Asset
Credit Contribution - Not Interrelated and has NO Variance Power
Debit Asset
Credit Refundable Advance Liability - Interrelated
Debit Asset
Credit Contribution
Beneficiary:
1. Not Interrelated
Debit Beneficial Interest
Credit Contribution
2. Interrelated
Debit Beneficial Interest
Credit Change in NA
Endowment Funds
- Provide income for maintenance of NFP entity
- @FV Date of F/S
- Board-Designed or Donor Restricted
Underwater Endowment = FV at reporting date less than either original amount or amount required to maintain
Disclose: FV amount, Original amount, Amount of deficiencies
