Accounting paper.
need-help101
NonProfitSectors.pptx
The Non Profit Sector
Issues
Overview
ASU 2016-14
Changes the presentation of Net Assets
Changes the underlying preparation of financial statements
Why?
The number of exempt organizations continues to grow
Donors need better information
990's Filed 2011 2012 2013 2014 2015 2016 1212500 1218000 1242100 1264200 1284300 1303600
ASU 2016-14
Requires net assets with donor restrictions be presented together
Requires additional disclosures of donor restrictions
This allows donors to evaluate the amount of net assets without restrictions.
Amounts of Underwater endowment funds will be considered restricted
Requires functional expense statement
Effective for fiscal years beginning after December 31, 2017
NonProfit Financial Statements
Statement of Financial Positions (Balance Sheet)
Three asset classes:
Unrestricted
Temporarily Restricted (for a purpose or time)
Permanently Restricted (like an endowment fund)
This statement is important because it indicates whether the unrestricted fund balance is sufficient to fund the organization as well as the nature and trend in the temporarily restricted and/or permanently restricted net assets.
Statement of Activities (Income Statement)
Presents revenues and gains
Followed by expenses and losses
The difference between revenue and expenses represent the change in net assets.
This statement is important because it identifies the key sources of revenue and the trend in the sources.
It also presents expenses and the comparative prior year amounts.
The statement of functional expenses, which is based on the statement of activities, will show you what % of the donor funds are being used for administration versus financing versus program expenses. Most donors look for a very high percentage of donated dollars to be used on program expenses.
Statement of Cash Flows
Presents revenues and gains
Followed by expenses and losses
The difference between revenue and expenses represent the change in net assets
This statement is important because it identifies the key sources of revenue and the trend in the sources.
It also presents expenses and the comparative prior year amounts.
Statement of Functional Expenses
Presents revenues and gains
Followed by expenses and losses
The difference between revenue and expenses represent the change in net assets
This statement is important because it identifies the key sources of revenue and the trend in the sources.
It also presents expenses and the comparative prior year amounts.
An example
Let’s look at United Way San Diego, audited by BDO:
Website Link for Audited Financial Statements
They are a Charity Navigator 3-star charity
