Beruflich Dokumente
Kultur Dokumente
to accompany
Advanced Accounting, 11th edition
by Beams, Anthony, Bettinghaus, and Smith
Copyright 2012 Pearson Education,
Inc. Publishing as Prentice Hall
22-1
Not-for-Profits: Objectives
1. Learn about the four main categories of
not-for-profit organizations.
2. Differentiate between governmental and
nongovernmental not-for-profit
organizations.
3. Introduce FASB not-for-profit accounting
principles.
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1: CATEGORIES OF NOT-FORPROFITS
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Characteristics
Not-for-profit characteristics
Contributions without expected commensurate
returns
Purpose is other than providing goods or services
Lacks ownership interests
Accounting for not-for-profits
Governmental: follow GASB
Nongovernmental: follow FASB
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Categories of NFPs
1.
2.
3.
4.
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2: GOVERNMENTAL AND
NONGOVERNMENTAL NOTFOR-PROFITS
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Governmental NFPs
Governmental not-for-profits are NFPs with
Officers elected or appointed by government
Government that can unilaterally dissolve and
assets revert to government
Power to enact/enforce taxes
Follow GASB
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Nongovernmental NFPs
NFPs that lack the governmental element
Follow FASB
FASB ASC 958 incorporates the two previous
FASB Statements which provided guidance for
Nongovernmental Not-for-Profits:
FASB Statement No. 116
Contributions
FASB Statement No. 117
Financial statements
Copyright 2012 Pearson Education,
Inc. Publishing as Prentice Hall
22-9
3: ACCOUNTING PRINCIPLES
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Financial Statements
Statement of financial position
Statement of activities
Replace with "Statement of operations"
and "Statement of changes in net
assets" for hospitals and health care
Statement of cash flows
Statement of functional expenses
Required only for voluntary health and
welfare organizations
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22-11
Net Assets
Three categories
1. Permanently restricted net assets
Asset use is limited
Donor imposed stipulations that do not
expire/ cannot be removed by entity
2. Temporarily restricted net assets
Donor imposed restrictions that expire (time
restrictions)
Can be removed by entity fulfilling
stipulations (purpose restrictions)
3. Unrestricted net assets
Copyright 2012 Pearson Education,
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22-12
Statement of Activities
Changes in net assets shown separately for
Unrestricted net assets
Temporarily restricted net assets
Permanently restricted net assets
Revenues and contributions are shown in all
three categories, but expenses are shown
only in unrestricted net assets.
Reclassifications
Move amounts from temporarily restricted to
unrestricted net assets
Expiration of time restrictions
FulfillmentCopyright
of purpose
restrictions
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22-13
Expenses
Expenses are classified into one of two
major categories.
Program services
These are the activities the NFP provides
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Contributions
Contributions of cash
Contribution revenue
Conditional promise to give
Will be contribution revenue and
receivable when conditions are
substantially met
Unconditional promise to give
Contribution revenue and receivable
when pledged, but is temporarily
restricted (time)
Copyright 2012 Pearson Education,
Inc. Publishing as Prentice Hall
22-15
Contributions (cont.)
Contributions (cash, pledge, other assets)
with donor-imposed restrictions
Contribution revenue as temporarily
restricted (time or purpose) or
permanently restricted
When temporary restriction is met,
reclassify temporarily restricted net assets
as unrestricted net assets
Contributions of fixed assets
Temporarily restricted net assets if donor
imposed or board designated as such
Copyright 2012 Pearson Education,
Inc. Publishing as Prentice Hall
22-16
Transfers (Non-contribution)
Exchange transactions: Revenues
Sales of products or services
"Donations" with gift of same approximate value
Exchange is unrestricted
Agency transactions
No revenue or contribution
Increase (decrease) both assets and liabilities
Gifts in kind
Contribution revenue (restricted or unrestricted)
Create or enhance nonfinancial assets
Specialized skills that would otherwise have been
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22-17
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Fund Raising
Expenses - supporting services - fund raising
Cash
Cash
Unrestricted gains special event
Unrestricted gains special event
Cash
145
145
1,950
1,950
250
250
Pay general fund-raising expenses.
Special event fund raisers (two entries)
Receive $1,950 in contributions: gains
Pay fund raising costs of special event $250
Special events are disclosed net of costs
Therefore, the term "gain," not revenue
Copyright 2012 Pearson Education,
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22-20
4,000
6,000
600
7,600
1,800
Receive cash and pledge (no purpose restrictions)
Cash is unrestricted
$1,800 of $6,000 pledges are to be collected next
year: creates a time restriction
Support contributions (restricted or not) is revenue
Revenue accounts are closed to net assets (temporarily,
permanently, orCopyright
unrestricted)
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22-21
1,800
1,800
Two entries
Cash collection
Reclassification for expiration of time
restriction
Reclassification accounts are temporary
accounts closed to their respective net asset
Copyright 2012 Pearson Education,
accounts
Inc. Publishing as Prentice Hall
22-22
1,500
1,500
500
500
500
500
1,000
1,000
900
900
900
900
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500
500
1,200
1,200
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Statement of Activities
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Hospital Expenses
Classify by function
Nursing services expense
Other professional expense
General services
Fiscal services
Administrative services
Medical malpractice costs
Provision for bad debts
Depreciation expense
22-34
Patient Revenue
Patient accounts receivable
1,300
Patient service revenues unrestricted
1,300
Courtesy discounts
9
Contractual adjustments
300
Patient accounts receivable
309
Bad debt expense
26
Allowance
for uncollectibles
The full
amount
is charged to the patient bill 26
22-35
Cash Contributions
Cash
275
Unrestricted support - nonoperating gains
Temporarily restricted support
Nursing services expense
250
Cash
Temporarily restricted net asset reclassification out
250
Unrestricted
net assets -can
reclassification
in
Cash
contributions
be unrestricted,
25
250
250
250
130
130
70
70
Hospital Statements
Statement of net assets
Statement of operations
Statement of changes in net assets
Statement of cash flows
The NFP "Statement of activities" includes
changes to unrestricted, temporarily and
permanently restricted net assets.
The Hospital's "Statement of Operations"
and "Statement of changes in net assets"
together, provide that information.
Copyright 2012 Pearson Education,
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6: COLLEGES AND
UNIVERSITIES
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College Expenses
Expenses are only in the unrestricted net
assets. Classify by function:
Instruction expense
Research expense
Public service expense
Academic support
Student services
Institutional support
Operation and maintenance of plant
Student aid
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22-44
Tuition Revenues
Accounts receivable
Unrestricted revenues - tuition and fees
Tuition reduction: unrestricted - student aid
Accounts receivable
Expenses - educational and general institutional support
Allowance for uncollectibles
1,000
1,000
50
50
30
30
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Receive Appropriations
Cash
Unrestricted support - state appropriation
700
700
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150
150
150
150
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Endowments
Cash
Permanently restricted revenues - endowment
contribution
Cash
Temporarily restricted revenues - endowment income
Expenses - unrestricted - student aid
Cash
Temporarily restricted net assets - reclassifications out
Unrestricted
net assets
reclassifications endowment,
in
Receive
cash
for -permanent
50
50
4
4
3
3
3
with
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Auxiliary Services
Cash
Revenues - auxiliary enterprises
Expenses - auxiliary enterprises
Cash
61
61
28
28
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