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Non-SLG Not-for-Profit Organizations: SFAS 116 and 117 Approach. Chapter 16. 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
Focus of this chapter is on nongovernmental NPOs
Other cultural institutions
Performing arts organizations
Private and community foundations
Private elementary and secondary schools
Research and scientific organizations
Zoological and botanical societiesExamples of ONPOs
Accounting options for collections
#136 – Transfers of Assets to a Not-for- Profit Organization or Charitable Trust that Raises or Holds Contributions for Others
Determined partly by the investment valuation method used
Costs of joint activities must be reported as fund-raising expenses unless
Entry is made because the implied (or expressed) time restriction has been met. Reclassification is reported as “Net assets released from restrictions”.
5,000 was for current year; 10,000 for next year. Restricted support account is used to record temporarily restricted contributions. This example is of a time restriction.
50,000 restricted for next year; 200,000 designated to support current year operations; 10% of pledges expected to be uncollectible.
205,000 in pledges were collected; 18,000 were written off.
Land and building donated in current year and held for resale. No restrictions on donated property or its sale proceeds.
Investment income of 20,000 on unrestricted investments and 14,000 of unrestricted income from endowments was received. Interest accrued at the end of the previous year was also received.
Ticket sales for banquet totaled 75,000. Related direct costs of $25,000 for meals and gratuities were paid.
Materials, 10,000 – 40% unused at year-end; 60% used for fund-raising
Facilities, 8,000 – 60% for research offices; 40% for recordkeeping
Recordable because they meet the 3 conditions.
Dues were billed and collected – considered an exchange transaction for this organization.
Endowment earnings will be used to finance research. Since this is only a Board designation, it does not change the classification from unrestricted to restricted.
No entry – time restriction has been met but there is another restriction: that resources be used to for certain research programs. Resources will not be reclassified until use restriction is also fulfilled.
Pledges are collectible over the next year. Both gifts and pledges restricted for certain education efforts. 10% of pledges estimated to be uncollectible.
Income on investments of restricted contributions. Income is also restricted by donors.
Gift is permanently restricted for education programs.
Restricted by donor stipulation to increasing permanent endowment base.
Cost of investments was 13,000. By donor stipulation, realized gains (losses) on endowment must be added (deducted) from permanent endowment principal.
Income restricted by donors for fixed asset purchases.
Equipment had been used in operations. Proceeds from sale are not restricted.
Endowment was for 100,000, but 65,000 still restricted for plant purposes.