Financial statements required for private not for

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as a whole and meets the needs of external users. Financial statements required for private not-for-profit organizations, such as the private not-for-profit nursing home discussed in this memo, are the Statement of Financial Position, the Statement of Activities, the Statement of Cash Flows, and a Statement of Functional Expenses. In addition, certain note disclosures are required, some are recommended, and for voluntary health and welfare organizations, the required Statement of Functional Expenses must show expenses by both function and natural classification (Copley & Engstrom, 2011, p. 303). The Statement of Financial Position reports required amounts for the organization’s total assets, liabilities, and net assets. Assets and liabilities shall be reported in order of
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liquidity, or a classified statement may be developed. Net assets shall be divided among unrestricted assets, temporarily restricted assets, or permanently restricted assets. The Statement of Activities reports required amounts for the organizations net assets via revenues, expenses, gains, losses, or reclassifications between classes of net assets. The report should contain organization-wide totals, and separate revenues, expenses, gains, losses, and reclassifications shall be provided for each class of net assets (Copley & Engstrom, 2011, p. 303). The Statement of Cash Flows reports the organization’s change in cash and cash equivalents, and the statement uses the standard BASB cash flow categories of operating activities, investing activities, and financing activities. Either the direct or indirect method may be used for this statement. The Statement of Functional Expenses is a required report for voluntary health and wellness organizations such as our nursing home. This report exhibits a chart of expenses classified by function and by classification. Note disclosures are required for all FASB items that are relevant to the non-profit organization. References
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