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  • 1. Financial Reporting 2007 National Leadership Conference
  • 2. Association Financial Reports
    • Statement of Financial Position (or Balance Sheet)
    • – Shows what the assets, liabilities and net assets of association were at a given point in time.
  • 3. Association Financial Reports
    • Statement of Activities (Statement of Revenue and Expenses)
    • – Shows what comprised the income and expenses of the operation for a given period of time, and whether there was a gain or loss in net assets.
  • 4. Association Financial Reports
    • Statement of Cash Flows
      • – Tells where the organization got the funds it used and what it spent them on. Old format had its analysis based on the chapters in assets and liabilities; the new format focuses mainly on where cash came from and how it was used.
  • 5. How to Read a Statement
    • Always check the heading first. They will tell you.
      • What unit, organization or group or organizations is reported on.
      • What type of statement is being provided.
      • What is the relevant period of time (Statement of Activities, Statement of Cash Flows) or date (Statement of Financial Position).
  • 6. How to Read a Statement
    • d. What comparable information is being provided:
      • For a Statement of Financial Position, usually the org’s position at the same time in the prior year.
      • For a Statement of Activities or Cash Flows, usually the same period in the prior years
      • Budgeted figures or percentages may be provided on Statements of Activities
  • 7. How to Read a Statement
    • 2. Scan the page as a whole – most statements are shown complete on one page. Once you understand major Divisions of the statement, you can work more confidently on the detail in each section.
  • 8. Statement of Financial Position
    • Almost always broken into two major categories – assets on top and liabilities and net assets on bottom.
      • Assets are broken down into subcategories:
        • Current assets
        • Fixed assets
        • Other assets
      • It is called a balance sheet because assets must equal (balance with) liabilities plus net assets.
  • 9. Statement of Financial Position
    • What kinds of things to look for:
      • Have the current assets increased or decreased?
      • Any major fixed assets purchased or sold?
      • Any new debt taken on or old debt paid off?
      • Any new unusual liabilities show up?
      • If statement has more than one time period, how has the org changed during that time?
  • 10. Statement of Activities
    • Almost always broken into two major categories – income (on top) and expenses underneath.
      • Income will be shown by type, and then totaled.
      • Expenses will be shown by type, and then totaled.
      • Sometimes the Change in New Assets will be shown as the “bottom line”/
  • 11. Statement of Activities
    • What kinds of things to look for:
      • Has the gross income gone up or down?
      • How have the key sources of income changed?
      • Are total expenses up or down? Which individual expenses have changed significantly?
      • How does the change in expenses relate to the change in income?
      • How does this period’s Change in Net Assets compare to that of prior periods?
  • 12. Statement of Cash Flows
    • Divided into Three Parts:
      • Cash Flows from Operating Activities
      • Cash Flows from Investing Activities
      • Cash Flows from Financing Activities
  • 13. Notes to Financial Statements
    • Notes are important in helping a reader understand an organization’s financial situation.
    • Notes will highlight significant accounting policies to start with and then go to detailed reports on matters of significance.
    • Major acquisitions or changes in operations are highlighted as are pension funding requirements, pending law suits and other significant information.
  • 14. Supplemental Schedules
    • Organizations will provide more detailed information than what is required.
    • Auditors will attach a separate opinion followed by additional statements following notes in the audited report.
    • This opinion will indicate the level of assurance the auditor is providing on these statements.