ch14 - Chapter 14 - Accounting for Not-for-Profit...

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Chapter 14 - Accounting for Not-for-Profit Organizations 14-1 CHAPTER 14: ACCOUNTING FOR NOT-FOR-PROFIT ORGANIZATIONS OUTLINE Number Type/Task Status (re: 14/e) Questions: 14-1 Characteristics of the nonprofit sector Identify Revised 14-2 Standards-setting jurisdiction Identify New 14-3 Required financial statements; reporting issues Explain New 14-4 Classification of net assets; board designated and temporarily restricted net assets Explain and distinguish 14-4 expanded 14-5 Statement of functional expenses Explain 14-6 revised 14-6 Support compared with exchange revenues Distinguish 14-2 revised 14-7 Program services and supporting services Distinguish 14-5 revised 14-8 Donated services Explain 14-3 revised 14-9 Special events Explain New 14-10 Fund-raising foundations and variance power Explain Same Cases: 14-1 Temporarily restricted net assets Analyze and report New 14-2 Terms of gifts – restricted vs. unrestricted Recommend Same 14-3 Institutionally related foundation Evaluate 14-1 Exercises/Problems: 14-1 Various Multiple choice New 14-2 Classification of revenue/support and expenses Matching New 14-3 Donated services Evaluate, compute New 14-4 Joint costs with a fund-raising appeal Explain 14-2 14-5 Identify departures from GAAP Evaluate and discuss New 14-6 Statement of activities Evaluate 14-5 14-7 Notes on net assets Explain 14-6 14-8 Prepare all four financial statements Prepare statements 14-4
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Chapter 14 - Accounting for Not-for-Profit Organizations 14-2 CHAPTER 14: ACCOUNTING FOR NOT-FOR-PROFIT ORGANIZATIONS Answers to Questions 14-1. As discussed in the opening pages of Chapter 1, nongovernmental not-for-profit organizations differ from those in the public (governmental) sector because they do not have the power to tax citizens or issue tax-exempt debt, are not controlled by or financially accountable to a government, and do not have popular election of members of their governing board or appointment of board members by a government. Both types of organizations may depend on contributions and charges for services for financing their operations. This is particularly true for nongovernmental not-for-profit organizations. A not-for-profit organization (NPO) is different than a business in the for-profit sector because it has no owners who expect a return on their investment. In addition, an NPO operates for purposes other than providing goods and services at a profit. Examples: Not-for-profit sector – Girl Scouts of America Public sector – Missoula Mining Museum (in the city of Missoula, Montana) Private, business sector – Microsoft, Inc. 14-2. The authority to issue accounting and financial reporting standards for nongovernmental not-for-profit organizations is assigned to the Financial Accounting Standards Board (FASB). Issues will vary depending on when the FASB technical agenda is viewed. Currently, the FASB has had two exposure drafts outstanding that deal with combinations
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ch14 - Chapter 14 - Accounting for Not-for-Profit...

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