Purpose of NFP Financial Statements
Provide info to donors/creditors about services, stewardship, and ability to continue operations.
Required NFP Financial Statements
1) Statement of Financial Position, 2) Statement of Activities, 3) Statement of Cash Flows
Net Asset Categories
Without Donor Restrictions; With Donor Restrictions
Contribution Recognition
Recognize when received or unconditionally promised, not when spent.
Conditional Contributions
Recognize only when barrier is met AND right of return exists.
Unconditional Pledge JE
Dr Pledges Receivable; Cr Contribution Revenue (restricted/unrestricted)
Donated Services Rule
Record if specialized skills OR enhance nonfinancial asset.
Donated Goods Rule
Record at fair value as revenue + expense/asset.
Release of Restrictions JE
Dr Net Assets With Restrictions; Cr Net Assets Without Restrictions
NFP Functional Expenses
Program services; Management & General; Fundraising.
NFP Agency Transactions
Record liability, not revenue/expense.
Gov’t Fund Basis
Modified accrual + current financial resources.
Gov-wide Basis
Full accrual + economic resources.
Modified Accrual Revenue Rule
Recognize when measurable AND available (usually within 60 days).
Exchange vs Nonexchange
Exchange = equal value; Nonexchange = taxes/grants.
Derived Tax Revenue
Recognize when underlying event occurs (income earned or sales occur).
Imposed Tax Revenue
Recognize when enforceable claim exists (e.g., property taxes).
Government-Mandated Grants
Recognize when eligibility requirements are met.
Voluntary Grants
Recognize when restrictions/eligibility are satisfied.
Advance Grant Receipt
Record as Deferred Inflow of Resources.
Gov-wide vs Fund Reporting
Gov-wide = full accrual; Fund = modified accrual.
Name each governmental fundtype.
F6-M6
Governmental Fund Structure and Fund Accounting
G General Fund
R Special Revenue Funds
S Debt Service Funds
P Capital Projects Funds
P Permanent Funds
