Download - NPO Financial Statements
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 1/13
ACCOUNTING FOR NOT-FOR-PROFITORGANIZATIONS (NPOs)
JUNE 21, 2014
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 2/13
What is a non-profit organization?
an entity that is operated for thebenefit of society as a whole ratherthan for the benefit of an individualproprietor or a group of partners or
shareholders.• A not-for-profit organization strives
only to obtain revenue sufficient to
cover its expenses.• Thus, the concept of income is
not meaningful.
What is a not-for-profit organization
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 3/13
Some examples are:
• 1. Voluntary health and welfare organizations:
• 2. Schools, colleges and universities
• 3. Hospitals
• 4. Cooperatives
•
5. Labor unions• 6. Performing arts organizations
• 7. Foundations
• 8. Religious organizations
• 9. Country clubs
• 10. Professional associations
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 4/13
FINANCIAL REPORTS FOR NOT –FOR-
PROFIT ORGANIZATIONS
• The primary purpose of financial statements
is to provide relevant information to meet the
common interests of donors, members, creditors and
others who provide resources to not-for-profit
organizations. Those external users of financial
statements have common interests in assessing:
A.The services an organization provides and its ability to
continue to provide those services and
B. How managers discharge their stewardshipresponsibilities and other aspects of their performance.
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 5/13
More specifically, the purpose of financial statements, including
accompanying notes, is to provide information about:
•
The amount and nature of an organization’s assets,liabilities and net assets
• The effects of transactions and other events and
circumstances that change the amount and nature
of net assets• The amount and kinds of inflows and outflows of
economic resources during a period and the relation
between inflow and outflow
•
How an organization obtains and spends cash, itsborrowing and repayment of borrowing and other
factors that may affects its liquidity
• The service efforts of an organization
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 6/13
STATEMENT OF FINANCIAL POSITION
• This statement provides relevant
information about the liquidity, financial
flexibility and interrelationship of an
organization’s asset and liabilities in order
to let the external users of such be able to
assess the organization’s ability to continue
providing the services, the organization’s
liquidity, financial flexibility, ability to meet
obligations, and needs for externalfinancing.
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 7/13
ACCOUNTING FOR NOT-FOR-PROFITORGANIZATIONS (NPOs)
SELECTED FINANCIALSTATEMENTS
JUNE 22, 2014
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 8/13
What is a non-profit organization?
• Some examples are:
• 1. Voluntary health and welfare organizations:
• 2. Schools, colleges and universities
• 3. Hospitals• 4. Cooperatives
• 5. Labor unions
• 6. Performing arts organizations
• 7. Foundations
• 8. Religious organizations
• 9. Country Clubs
•
10. Professional associations
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 9/13
Statement of Financial Position
SCHOOLS/ UNIVERSITIES
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 10/13
Statement of Activities
SCHOOLS/ UNIVERSITIES
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 11/13
Statement of Activities
SCHOOLS/ UNIVERSITIES
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 12/13
S
t a t e m e n t o f F i n a n c i a l P o s i t i o n
SCHOOLS/ UNIVERSITIES
n
w
m
e
n
F
u
8/12/2019 NPO Financial Statements
http://slidepdf.com/reader/full/npo-financial-statements 13/13
Statement of Financial Position
SCHOOLS/ UNIVERSITIES