Statement of Financial Position

• This is a quick review of the Statement of

Financial Position (in for profit companies –
this is called the Balance Sheet.
• This Statement lets you know what the
association owns and what it owes.
• There is an example of a Statement of
Financial Position, and questions that should
be asked when looking at this Statement.
Non Profit Financial Statements
• Statement of Financial Position
• Statement of Activities
• Statement of Changes in Net Assets
• Statement of Cash Flows
• Notes and Supplemental Information
 Three Major Sections

Assets (A) – What the nonprofit owns

Liabilities (L) – What the nonprofit owes

Net Assets (NA) – Variance between Assets and Liabilities

Also known as the Fund Balance

A = L + NA or A – L = NA
 How to Read the Statement
Assets
Assets 12/31/2011 12/31/2012 • Assets are normally listed first
• Look at the Dates - this is comparing Year End to
Cash 1,600,076 693,905 Year End. Sometimes you will see Month End to
Month End.
A/R 46,593 54,300
• Questions that should be asked
Accrued I/R 14,648 11,200 – Cash – Why did it decrease?
• Did Prepaid Expense increase?
Investments 4,511,660 4,632,220 • Did Accounts Payable decrease?
• Did Deferred Income decrease?
Prepaid Exp 193,050 3,000
• Did the association have more
disbursements than revenue?
Current 6,366,027 5,394,625 – Accounts Receivable – Why is it increasing?
Assets • Is it taking longer for invoices to be paid?
• Are there more outstanding invoices or are
there fewer invoices with larger balances?
Furniture & 123,307 105,055
– If Investments increased, why did the
Equipment
Accrued Interest Receivable decrease?
– Why did Prepaid Expense decrease?
Restricted 47,200 47,200 • What was paid last year that was not paid
Funds this year?

Total Assets 6,536,534 5,546,880

 How to Read the Statement
Liabilities and Net Assets
Liabilities 12/31/2011 12/31/2012 • Liabilities and Net Assets are normally listed
together
Accounts Payable 323,730 135,780 • Questions that should be asked:
– Accounts Payable - Why did it decrease?
Accrued Expense 270,000 265,000
• Are venders being paid earlier then
before?
Deferred Income 766,300 215,000
– Deferred Income - Why did it decrease?
• Did invoices go out on time?
Total Liabilities 1,360,030 615,780 • The decrease in Net Assets will be the
disbursements over revenue from your Statement
of Activities
Net Assets • Net Assets and Fund Balance are interchangeable
terms.
Unrestricted 5,055,504 4,803,775 • The restriction on Net Assets (Temporarily or
Permanently) is a donor restriction not a Board
Temporarily 73,800 80,125 restriction. If there is a Board restriction on Net
Restricted Assets, that money would be included in
Unrestricted and there would be a note in the
Permanently 47,200 47,200 appropriate section.
Restricted • Total Assets should equal Total Liabilities and Net
Assets
Total Net Assets 5,176,504 4,931,100

Total Liabilities and 6,536,534 5,546,880

Net Assets
 How to Read the Statement
Liabilities and Net Assets
Liabilities 12/31/2011 12/31/2012 • Liabilities and Net Assets are normally listed
together
Accounts Payable 323,730 135,780 • Questions that should be asked:
– Accounts Payable - Why did it decrease?
Accrued Expense 270,000 265,000
• Are venders being paid earlier then
before?
Deferred Income 766,300 215,000
– Deferred Income - Why did it decrease?
• Did invoices go out on time?
Total Liabilities 1,360,030 615,780 • The decrease in Net Assets will be the
disbursements over revenue from your Statement
of Activities
Net Assets • Net Assets and Fund Balance are interchangeable
terms.
Unrestricted 5,055,504 4,803,775 • The restriction on Net Assets (Temporarily or
Permanently) is a donor restriction not a Board
Temporarily 73,800 80,125 restriction. If there is a Board restriction on Net
Restricted Assets, that money would be included in
Unrestricted and there would be a note in the
Permanently 47,200 47,200 appropriate section.
Restricted • Total Assets should equal Total Liabilities and Net
Assets
Total Net Assets 5,176,504 4,931,100

Total Liabilities and 6,536,534 5,546,880

Net Assets