Chapter 16D

Chapter 16D - Non-SLG Not-for-Profit Organizations: SFAS...

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Non-SLG Not-for-Profit Organizations: SFAS 116 and 117 Approach Chapter 16
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Learning Objectives Understand the sources of GAAP for nongovernment not-for-profit organizations Explain basis of accounting and the financial statements required for nongovernment not- for-profit organizations Distinguish between and among the three net asset classes Understand the timing of recognition and the classification of revenues and expenses of nongovernment not-for-profit organizations
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Learning Objectives (continued) Understand the reporting of restricted contributions and restricted investment income Account for and report the satisfaction of donor-imposed temporary restrictions on the use of resources Prepare journal entries for common transactions of nongovernmental not-for-profit organizations Prepare nongovernment not-for-profit organization financial statements
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The Nonprofit GAAP Problem Private sector (nongovernmental) nonprofit organizations (NPOs) look to the FASB for GAAP Public sector (governmental) NPOs look to the GASB for GAAP Focus of this chapter is on nongovernmental NPOs
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Interested in two groups Voluntary health and welfare organizations (VHWOs) Other not-for-profit organizations (ONPOs) – which exclude Health care organizations (Chapter 18) VHWOs
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Evolution of NPO GAAP AICPA started playing role in mid-1960s FASB assumes responsibility in 1979 – FASB #32 adopted AICPA Statements of Position (SOPs), audit guides, and accounting guides
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Primary Authoritative Guidance FASB #116 – Accounting for Contributions Received and Contributions Made FASB #117 – Financial Statements for Not- for-Profit Organizations FASB #124 – Accounting for Certain Investments Held by Not-for-Profit Organizations AICPA Audit and Accounting Guide, Not-for- Profit Organizations , adopts all this guidance
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Distinguishing Features of VHWOs Purpose – to meet a community health, welfare, or other social service need Voluntary nature – no fee is charged, or only a very small fee in proportion to the service provided is charged Relationship to resource providers not the primary recipients of services or benefits
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Examples of VHWOs United Way Boy Scouts and Girl Scouts American Heart Association YMCA and YWCA
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Examples of ONPOs Cemetery organizations Civic organizations Fraternal organizations Libraries Museums Other cultural institutions Performing arts organizations Political parties Private and community foundations Private elementary and secondary schools Professional associations Religious organizations Research and scientific organizations Zoological and botanical societies
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Classes of Net Assets Unrestricted Net Assets Temporarily Restricted Net Assets Permanently Restricted Net Assets Examine in reverse order
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Permanently Restricted Net Assets Donor-imposed restrictions are
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This note was uploaded on 01/04/2012 for the course ACCT 4331 taught by Professor Smith during the Spring '11 term at UNL.

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Chapter 16D - Non-SLG Not-for-Profit Organizations: SFAS...

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