FAR - NFP - Donations, Pledges, Contributions, Net Assets Flashcards Preview

CPA > FAR - NFP - Donations, Pledges, Contributions, Net Assets > Flashcards

Flashcards in FAR - NFP - Donations, Pledges, Contributions, Net Assets Deck (17)
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1
Q

Contribution Revenue Characteristics

A

1) Unconditional:
- if there is a condition, MUST wait for it to be met

2) Nonreciprocal:
- if reciprocal = exchange transaction

3) Voluntary
4) Not an ownership investment

2
Q

Types of Contributions

A

1) Donated Assets (cash, art, equip)
2) Donated Services (architect, auditor)
3) Pledges to give:
- Conditional: require matching by NPO
- Restriction: used within a certain amount of time/purpose

3
Q

3 classes of net assets

A

1) unrestricted (used only for expenses & used mostly)
2) temporarily restricted (time/purpose)
3) permanently restricted (endowments)

*restrictions affect WHERE contribution revenue is reported, NOT WHEN

4
Q

Conditions & Restrictions

A
  • If condition exists, cannot recognize revenue until condition is met. (condition = recognized liability) if condition is impossible to satisfy, ignore condition.
  • If no condition exists, then restriction rules apply
5
Q

Perm. Restriction Earnings (income)

A

either unrestricted or temp restricted support

6
Q

Temp. Restriction Exception

A

IF temp restriction met in same period as donation…..CAN be treated as NOT having a temporary restriction, therefore, treating the donation as unrestricted support

7
Q

Donated Assets other than cash

A

Recorded @ FV

8
Q

Implied Time Restriction

A

if depreciable property is donated, entity can adopt a policy to recognize implied time restriction

9
Q

Variance Power

A

NPO receives donations as an “intermediary” and must use or transfer to other beneficiaries

Recognize contribution revenue if org has a “unilateral right to redirect use of assets to parties other than specified beneficiary” (variance power)

If variance power NOT granted, liab recognized instead of contribution revenue

NPO = middle man to specified beneficiaries Variance power -> no specified beneficiaries

10
Q

Collections

A

Works of art, artifacts, similar assets.

NPOs can elect NOT to capitalize collections if al 3 conditions are met:

1) held for public exhibition, education, research,
2) protected/preserved
3) subject to policy that requires proceeds of collection items to be used to acquire other items for collection

11
Q

Donated Services

A

Report FV of services as both EXPENSE/REVENUE if:

1) service = special skills AND
2) person possesses skills AND
3) measurable services AND
4) entity employees service donor

12
Q

Pledges & Time

A

unrestricted revenue = recognized for net amount expected to be collected within 1 yr

revenue for collections to be made in more than 1 yr are recognized @ PV and as temp restricted supported

13
Q

Fundraising events

A

Revenues reported @ gross unless event is incidental/peripheral

Options for reporting expense direct costs:

  • expense deduction from related revenue
  • separate line in expense section
  • Gain reported if event = incidental/peripheral
14
Q

Memberships

A

Both a contribution/service element

Exchange revenues for which benefits/services are made available - revenue recovered over period that benefits are provided

  • contributions recognized as revenues when received
15
Q

general revenue recognition rule for contributions.

A

contributions are recognized as revenue in the period when the contribution is made, regardless of whether they are received in cash or not

16
Q

True/False

Conditional contribution made recognized as a liability known as “refundable advance” because it is uncertain of being matched/satisfied

A

true

17
Q

true/false

unconditional promises to give (“pledges”) be recognized on the accrual basis net of the estimate of uncollectible pledges

A

true

Therefore, recognize whatever is accrued and NOT collected.

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