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  • 1. Nonprofit Management Certificate Course Financial analysis and reporting
  • 2. Overall Objectives
    • Differences between commercial and nonprofit
    • Accounting and reporting concepts for nonprofits
    • Unique accounting matters
    • Basic reporting requirements
    • Basic tax considerations
  • 3. Fiduciary Responsibility
    • Recipients of service
    • Contributors
    • Revenue sources (i.e. Grantors)
  • 4. Fiduciary Responsibility Effectiveness Efficiency
  • 5. Benefits to Nonprofits
    • Federal income tax exemption
    • Other tax benefits
    • Ability to attract contributions
    • Employment and excise tax benefits
    • Preferred postal rates
    • Special annuity provisions
  • 6. Business Vs. Nonprofit
    • Profit motive
    • Cost or traditional accounting
    • Sales of goods and services
    • Financial statement users
    • Managerial responsibility
    • Fund accounting
    • Donated assets
    • Financial statement users
  • 7. Types of Nonprofits
    • Voluntary health and welfare
    • Nongovernmental
    • Colleges and universities
  • 8. Financial Statement Users
    • Funding sources
    • Regulatory agencies
    • Beneficiaries
    • Trustees/ directors
    • Governmental units
    • Creditors
    • Constituent organizations
    • Employees
  • 9. Service Efforts and Accomplishments
    • What is the organization’s purpose?
    • Who does the organization serve?
    • What services are offered?
    • How are the services provided?
    • How well are the services delivered?
  • 10. Financial Statement Purpose
    • Report nature and amount of available resources
    • Identify principal programs and costs
    • Disclose degree of control by donors over resource use
  • 11. Accrual Basis Reporting
    • Goods/services purchased are recorded when title passes or services are received
    • Revenues reported when earned
    • Support recognized upon legal enforceable right to assets
  • 12. Basic Financial Statements
    • Statement of financial position
    • Statement of activities
    • Statement of cash flows
    • Notes to financial statements
    • Statement of functional expenses(vhw)
  • 13. Philosophy of Reporting
    • Where business enterprises and not-for-profits are alike, the financial statements should be similar because certain information is useful to resource providers regardless of the type of entity. However, when transactions and objectives are different, financial reporting should be different.
  • 14. Key Differences
    • Contributions, where resources are received without return of value in exchange
    • Donor-imposed restrictions
    • Multiple performance indicators necessary
  • 15. Basic Resources
    • Unrestricted net assets
    • Designated net assets
    • Temporarily restricted net assets
    • Permanently restricted net assets
  • 16. Combined Financial Statements
    • Look for elements of control:
      • Solicitation
      • Resource use
      • Assigned functions
  • 17. Contributions - FASB No. 116
    • Transfers that are
      • Nonreciprocal
      • Made or received voluntarily
      • To or from entities acting other than as owners
      • Unconditional
  • 18. Rules for Recognizing Contributions
    • Revenue recognition upon the occurrence of the underlying event
    • Donor-imposed restrictions do not change timing of recognition
  • 19. Rules for Recognizing Contributions
    • Donor-imposed conditions affect the timing of the recognition
    • Contributions are measured at fair value of the assets received
  • 20. Footnotes to Statements
    • Basis of accounting
    • Key definitions
    • Use of estimates
    • Additional analysis of financial statement numbers
  • 21. Statement of Financial Position
    • Total assets
    • Total liabilities
    • Total net assets
    • Unrestricted net assets
    • Temporarily restricted net assets
    • Permanently restricted net assets
  • 22. Donor Imposed Restrictions
    • Support of particular programs
    • Investment for a specified term
    • Use in a specified future period
    • Acquisition of long-lived assets
  • 23. Format of Statement Flexibility Liquidity
  • 24. Statement of Activities - Purpose
    • Effects of transactions changing net assets
    • Relationship of those changes to each other
    • How resources are used in providing various programs and services
  • 25. Statement of Activities - Purpose
    • Evaluate performance
    • Assess service efforts and ability to provide service
    • Assess how managers have discharged their stewardship
  • 26. Statement of Activities
    • Change in net assets
    • Change in permanently restricted net assets
    • Change in temporarily restricted net assets
    • Change in unrestricted net assets
  • 27. Statement of Activities
    • Revenues - inflows of resources that result from an organization’s ongoing major and central activities
    • Gains
    • Contributed services
  • 28. Contributed Services
    • Must create or enhance nonfinancial assets
    • Require specialized skills, are provided by individuals possessing those skills and would typically need to be purchased if not donated
  • 29. Expenses
    • Always reported as decreases in unrestricted net assets
    • Functional classification
      • Programs
      • Fund raising
      • Management and general
    • Natural classification
      • Salaries, utilities, etc.
  • 30. Program Services
    • Activities that result in goods and services being distributed to beneficiaries, customers or members that fulfill the purposes or mission for which the organization exists.
  • 31. Management and General
    • Business management
    • General recordkeeping
    • Budgeting
    • Financing and related administrative activities
  • 32. Fund Raising
    • Publicizing and conducting fund-raising campaigns
    • Maintaining donor mailing lists
    • Conducting special fund-raising events
  • 33. Functional Reporting
  • 34. Cost Allocation
    • Indirect
    • Direct
    • Allocation
    • Cost study
    • By transaction
    • Time study
    • Space utilization
  • 35. Reporting Options
    • Investment revenues and expenses
    • Contributions whose restrictions are met in same period
    • Contributions of long-lived assets
  • 36. Cash Flow Statement-purpose
    • Ability to generate positive future cash flows
    • Ability to meet obligations
    • Reasons for differences between changes in net assets
    • Effects of cash and noncash investing and financing activities