Professional Documents
Culture Documents
Notes On Non-Profit Organizations
Notes On Non-Profit Organizations
Cemetery organizations
Civic and community organizations
Colleges and universities
Elementary and secondary schools
Federated fund-raising organizations
Fraternal organizations
Labor unions
Libraries
Museums
Other cultural organizations
Performing arts organizations
Political parties
Political action committees
Private and community foundations
Professional associations
Public broadcasting stations
Religious organizations
Research and scientific organizations
Social and country clubs
Trade associations
Voluntary health and welfare organizations
Zoological and botanical societies
Salvation Army
Red Cross
CARE
Goodwill Industries
United Way
Boy Scouts
Girl Scouts
Boys Clubs
Girls Inc.
Nonprofit organizations whose purpose is to find a cure for
or help people who have diseases such as cancer,
diabetes, heart disease, or muscular dystrophy.
Statement of Activities
Although the use of fund accounting is still permitted, SAS No. 117
(ASC 958) compliance requires net assets to be classified based on
and donor-imposed restrictions in these categories:
Unrestricted
Temporarily restricted
Permanently restricted
The use of temporarily restricted net assets has been limited by
donor-imposed time or purpose restrictions. Permanently restricted
net assets are created by donor restriction (usually trust or
endowment agreements) or by law to be maintained by the
organization in perpetuity. The use of unrestricted net assets is not
limited in any way, except possibly by an entitys board of directors.
STATEMENT OF ACTIVITIESREVENUES
Contributions
General:
Service Fees/Dues
Service fees are usually exchange transactions that are recorded
when services are provided. Fees for ticket sales that relate to
events in future periods should be deferred until the period in which
the event occurs.
Membership dues may include a contribution as well as an exchange
transaction. The portion considered a contribution should be
recorded as such. The exchange transaction would be recognized
over the period of benefit. An example of the exchange portion of
dues would be when a member receives a magazine or a monthly
service throughout the period covered by the dues.
Agency Transactions:
Special events
Program service fees
Sales of merchandise and publications
Third-party reimbursements
Investment income and gains and losses
Special Events
Fundraising events most commonly include dinners, benefit concerts
and appearances by artists, or athletic events. Funds received by
the nonprofit organization normally include an exchange transaction
and a contribution. The portion of the funds that represents the fair
value of the tangible benefits received by the donor is the exchange
transaction. Any amount in excess of the tangible benefits would be
the donors deductible contribution.
Nonprofit accounting principles require that the gross amounts of
revenues and expenses from special events be reported in the
statement of activities if they are major activities in the organizations
fundraising plan. If the special events are only held occasionally,
expenses may be netted against revenues. Income tax regulations,
however, prohibit netting revenues and expenses from special events
in an organizations Form 990. To avoid possible penalty
assessments in the event of an IRS audit, a good practical rule is to
always present the gross amounts of special events revenues and
expenses in both financial statements and information returns.
Third-Party Reimbursements
Health and welfare organizations are often reimbursed by third
parties for the costs of providing the services to the public. These
reimbursements should be recognized in the same period
reimbursable costs are incurred.
NONPROFIT GAAP FOR EXPENSES
Types of ExpensesAccounting and Presentation
Nonprofit organizations expenses are classified as follows:
Functional expenses
Naturally classified expenses
Classification of particular costs
Program services
Supporting activities:
o Management and general activities
o Fundraising activities
o Membership development activities
Oversight
Business management
General recordkeeping
Budgeting
Financing
Soliciting funds other than contributions (exchange
transactions, government contracts, etc.)
Distributing information to the public regarding stewardship
Announcements concerning appointments
Preparation and distribution of annual reports