Escolar Documentos
Profissional Documentos
Cultura Documentos
Chapter 16
Learning Objectives
Understand the sources of GAAP for
organizations (VHWOs)
Other not-for-profit organizations
(ONPOs)which exclude
Colleges
accounting standards
AICPA started playing role in mid-1960s
FASB assumes responsibility in 1979FASB
#32 adopted AICPA Statements of Position
(SOPs), audit guides, and accounting guides
FASB NFP Advisory Committee began
advisory activities in 2010
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government
GASB standards apply to all NFP
entities that meet definition
FASB standards apply to all NFP
entities that do not meet definition
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Examples of VHWOs
United Way
Boy Scouts and Girl Scouts
American Heart Association
YMCA and YWCA
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physical handicaps
Protection of children from abuse
Halfway houses for criminal or drug offenders
Sheltered workshops for citizens who are impaired
physically or mentally
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Examples of ONPOs
Cemetery organizations
Civic organizations
Fraternal organizations
Libraries
Museums
Other cultural
institutions
Performing arts
organizations
Political parties
foundations
Private elementary and
secondary schools
Professional
associations
Religious organizations
Research and scientific
organizations
Zoological and botanical
societies
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Form 990
Donors and grantors may require
special reports to ensure funding is
properly spent
Fund accounting may be used for
tracking large grants or because it has
been used successfully in the past
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MFBA
Measurement focus in on economic
resources
Basis of accounting is accrual
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(Balance Sheet)
Statement of Activities
Statement of Cash Flows
VHWOs must also present Statement
of Functional Expenses
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Investments
Investments initially recorded at cost (if
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Fixed Assets
Recognized at cost (or fair value if donated)
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Collections
Defined as works of art, historical treasures,
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Collections (continued)
Accounting options for collections
Not capitalizing any collections
Capitalize collections after adopting
FASB #116 but not those acquired prior
to that date
Capitalize all collections regardless of
when acquired
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Collections (continued)
Capitalized collections
Assets reported at fair value and as
contributions
Increase appropriate net asset
classification
Collections not capitalized are
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source
Expenses
Reported
by function
Classified as either
Program services
Support services
reported separately
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activities
Revenues reported in appropriate net
asset category
All expenses reported in unrestricted
net asset category
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Contributions
Significant source of revenue for most
NPOs
Defined as: an unconditional transfer of
cash or other assets to an entity or a
settlement or cancellation of its
liabilities in a voluntary nonreciprocal
transfer by another entity acting other
than as owner
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promised
Must analyze grants, memberships
dues, and sponsorships
Part
may be contributions
Part may be exchange transaction
category
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assetssatisfaction of restrictions
reported as decrease to temporarily
restricted net assets and increase to
unrestricted net assets
Report satisfied portions as changes in
unrestricted net assets
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Pledges
Revenues recognized when unconditional
pledge is received
Conditional pledges and transfers recognized
as revenues when conditions are met
Unconditional pledges due in future years
reported as restricted support unless donor
specifies it is for current operations
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incidental or peripheral
Options for reporting expense direct costs
Expense deduction from related revenue
Separate line in expense section
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medicine, plumbing),
Provided by individuals with those skills,
and
Would typically have been purchased if
they are not donated
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Expense Classifications
Program Servicesrelate directly to the
function
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Fund-Raising CostsExamples
Mailing lists
Printing
Mailing
Personnel
Occupancy
Newspaper and
other media
advertising
Costs of unsolicited
merchandise sent to
encourage
contributions
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earnings that are restricted for capital assetrelated, endowment, or other long-term
purposes as financing activities
Reporting changes in cash restricted for longterm purposes as investing activities
Reconciliation of the total changes in net
assets from the statement of activities to the
net cash flows from operating activities
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22,000
22,000
Entry is made because the implied (or expressed) time restriction has been
met. Reclassification is reported as Net assets released from restrictions.
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15,000
5,000
10,000
5,000 was for current year; 10,000 for next year. Restricted support
account is used to record temporarily restricted contributions. This example
is of a time restriction.
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250,000
25,000
180,000
45,000
50,000 restricted for next year; 200,000 designated to support current year
operations; 10% of pledges expected to be uncollectible.
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205,000
18,000
223,000
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150,000
150,000
150,000
150,000
Land and building donated in current year and held for resale. No
restrictions on donated property or its sale proceeds.
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36,000
2,000
34,000
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(Page 652)
75,000
75,000
25,000
25,000
Ticket sales for banquet totaled $75,000. Related direct costs of $25,000
for meals and gratuities were paid.
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4,000
6,000
ExpensesResearch
ExpensesManagement and
General
Unrestricted SupportDonated
Services
4,800
3,200
10,000
8,000
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7,000
3,000
10,000
65
17,300
17,300
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30,000
15,000
27,000
16,000
85,000
3,000
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17,000
800
98,000
67,000
85,000
50,000
303,800
14,000
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50,000
50,000
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70
30,000
100,000
10,000
120,000
Pledges are collectible over the next year. Both gifts and pledges restricted
for certain education efforts. 10% of pledges estimated to be uncollectible.
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80,000
7,000
87,000
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20,500
20,500
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70,000
18,000
88,000
88,000
88,000
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55,000
55,000
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10,500
10,500
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14,400
13,000
1,400
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100,000
100,000
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140,000
140,000
140,000
140,000
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13,000
12,000
2,000
3,000
14,000
16,000
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12,000
3,000
15,000
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40,000
20,000
60,000
60,000
60,000
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200,000
100,000
100,000
100,000
100,000
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40,000
45,000
75,000
10,000
Equipment had been used in operations. Proceeds from sale are not
restricted.
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65,000
35,000
35,000
100,000
35,000
Endowment was for 100,000, but 65,000 still restricted for plant purposes.
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