Chat7 NPO Ch 14 summary

Chat7 NPO Ch 14 summary - Learning Objectives After...

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Unformatted text preview: Learning Objectives After studying Chapter 14, you should be able to: h Distinguish not-for-profit organizations (NPOs) from entities in the governmental and commercial sectors of the U.S. economy h Identify the authoritative standards-setting body for establishing GAAP for nongovernmental NPOs Learning Objectives (Cont’d) Explain financial reporting and accounting for NPOs: l Required financial statements l Classification of net assets l Accounting for revenues, gains, and support l Accounting for expenses l Accounting for assets Learning Objectives (Cont’d) h Describe optional fund accounting h Prepare financial statements using SFAS No. 117 v Contributions of resources from providers who do not expect a proportionate return (i.e., nonexchange transactions). v Operating purposes other than to earn a profit. v Absence of ownership interests (i.e., no one expects a return on their investment). How Does a Nongovernmental NPO Differ from a Business Entity? v It was not created by a government, but rather by individuals v It does not have the power to levy taxes v It may not have the power to levy tax-exempt debt How Does a Nongovernmental NPO Differ from a Governmental Entity? The FASB, not the GASB, sets accounting and financial reporting standards for nongovernmental not-for-profit organizations. All FASB standards apply to NPOs, but several were released specifically to address NPO issues: v FASB Statement SFAS No. 93 — depreciation v FASB Statement SFAS No. 116 — contributions v FASB Statement SFAS No. 117 — financial statement display v FASB Statement SFAS No. 124 — investments v FASB Statement SFAS No. 136—transfers of assets GAAP for Nongovernmental NPOs v AICPA Audit and Accounting Guide Not-for-Profit Organizations (AAG-NPO), with conforming changes each May 1 v AICPA Audit Risk Alerts, also issued each year v AICPA Checklists and Technical Practice Aids Other GAAP Guidance for NPOs v Statement of financial position (Ill. 14-2) v Statement of activities (Ill. 14-3)Statement of activities (Ill....
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Chat7 NPO Ch 14 summary - Learning Objectives After...

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