Chapter 11 - Solution Manual

Is self insuring this risk should be disclosed by

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is self-insuring this risk should be disclosed by means of a footnote to alert the financial statement reader to the exposure created by the lack of insurance. FASB ASC 11-1 Disclosure of Liabilities by Not-For-Profit Entities
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224 The disclosure of liabilities for not-for-profit entities as found at FASB ASC 958-405. It is found by searching “liabilities and not-for-profit entities.” The students’ answers should be based on the following: 958 Not-for-Profit Entities 405 Liabilities 958-405-05 Overview and Background General 958-405-05-1 This Subtopic provides guidance about promises to give made by not-for-profit entities (NFPs). NFPs also shall comply with the applicable standards in Subtopic 720-25. This Subtopic also identifies the Sections within the Not-For-Profit Entities Topic that provide guidance on accounting for liabilities. 958-405-15 Scope and Scope Exceptions General Note for Financial Instruments : Some of the items subject to the guidance in this Subtopic are financial instruments . For guidance on matters related broadly to all financial instruments, (including the fair value option, accounting for registration payment arrangements, and broad financial instrument disclosure requirements), see Topic 825. See Section 825-10-15 for guidance on the scope of the Financial Instruments Topic. General > Overall Guidance 958-405-15-1 This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15. 958-405-20 Glossary Agent An entity that acts for and on behalf of another. Although the term agency has a legal definition, the term is used broadly to encompass not only legal agency, but also the relationships described in Topic 958. A recipient entity acts as an agent for and on behalf of a donor if it receives assets from the donor and agrees to use those assets on behalf of or transfer those assets, the return on investment of those assets, or both to a specified beneficiary. A recipient entity acts as an agent for and on behalf of a beneficiary if it agrees to solicit assets from potential donors specifically for the beneficiary’s use and to distribute those assets to the beneficiary. A recipient entity also acts as an agent if a beneficiary can compel the recipient entity to make distributions to it or on its behalf. Fair Value The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Functional Classification A method of grouping expenses according to the purpose for which costs are incurred. The primary functional classifications are program services and supporting activities.
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225 Intermediary Although in general usage the term intermediary encompasses a broad range of situations in which an entity acts between two or more other parties, in this usage, it refers to situations in which a recipient entity acts as a facilitator for the transfer of assets between a potential donor and a potential beneficiary (donee) but is neither an agent or trustee nor a donee and donor.
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