Session 9-NPO F/S
Required Financial Statements
Accounting for Investments
Governmental & NPO Accounting-2008 9-1
Required F/S
Statement of Financial Position: B/S
Net assets classified by donor restriction
Statement of Activities: Operations
Distinguish operating from non-operating
Statement of Cash Flows
Follows FAS 95
Governmental & NPO Accounting-2008 9-2
Statement of Financial
Position
Assets, liabilities and net assets
Classified
No equity
Actual G/L
Net assets accounts
Unrestricted
Temporarily restricted
Permanently restricted
Footnotes
Must give details of net asset restrictions
Governmental & NPO Accounting-2008 9-3
Statement of Activities
Revenues
Classified by restriction
Restriction expiration indicated
Expenses
All unrestricted
Functional classification
Natural classification is optional
Format
Columnar
Restrictions apply to private HCOs
Governmental & NPO Accounting-2008 9-4
Statement of Cash Flows
Either direct or indirect method for operating
cash
Direct method preferred
Indirect method reconciles to change in net
assets
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Other Statements
VHWOs
Statement of Functional Expenses
Aligns natural classification spending with functions
Addition to other financial statements
HCOs
Statement of Operations versus Statement of Activities
Shows operating income, and
Other income
Includes only unrestricted flows
Release of restrictions
Above the line: operations
Below the line: capital assets
Governmental & NPO Accounting-2008 9-6
Investments
FAS 124 applies
Equity and debt securities
Valued at fair value
Gains and losses, realized and unrealized
Reported in Statement of Activities
Aligned with restrictions
Governmental & NPO Accounting-2008 9-7
Other Signigicant
Pronouncements
AICPA SOP 98-2: Fund Raising Costs
Provides visibility into the cost of fund raising
AICPA SOP 93-7: Advertising Costs
Provides visibility into advertising costs
Governmental & NPO Accounting-2008 9-8