Not for Profit Financial Reporting Paper Not for Profit Financial Reporting Paper ACC / 460 Team The not revenue driven association are known for not to gain cash for benefit but rather the requirements of the network. The not revenue driven association that the group will break down is The Habitat for Humanity. This association is focused on aiding more than 20 million individuals with the structure or improving family homes for the network. The group will assess on the chose not for benefit budget summaries fit in with Financial Accounting Standards Board, the look at the association revealing of promises and commitments to its announcing of trade exchanges, and clarifying the effect if Habitat for Humanity presents abundance monetary advantages on precluded people. The financial states for Habitat for Humanity are easily accessible on their website and conform with the Financial Accounting Standards Board (FASB) guidance in Statement NO. 117, Financial Statements of Not-for-Profit Organizations perfectly. According to the statement, it “requires that all not-for-profit organizations provide a statement of financial position, a statement of activities, and a statement of cash flows” which are all available for this particular NFP. This statement also requires that Habitat for Humanity classifies their net assets, revenues, expenses, gains and losses that are based on their donor-imposed restrictions, displays all three classes of net assets, and that they expand their statement of cash flows to include donor-restricted cash that is used for long-term purposes. Habitat for Humanity has executed all of these requirements in their financial statements by issuing a Statement of Activities that states their net assets at the end of 2018 were $230,624,227. This total is broken down into $97,459,334 of unrestricted; $130,594,965 of Temporarily Restricted; and $2,569,928 of Permanently Restricted. They also provided a Statement of Cash Flows that include certain donor-restricted cash that must be used for long-term purposes. All-in-all, Habitat for Humanity’s financial statements conform nicely with the requirements of Statement No. 117. A contribution is “a voluntary, unconditional, and nonreciprocal transfer of cash or other assets to an NFP” (Lowensohn, Reck, &Wilson, 2015). Habitat for Humanity and other voluntary health and welfare organizations are dependent on these revenues. On the other hand, an exchange transaction occurs when the other party to the transaction is presumed to receive direct tangible benefit equal with the resources provided. The Habitat for Humanity’s notes to the financial statements contains a description to explain how they record contributions. First, all revenue is recognized when the “underlying promises” are received by Habitat (Habitat, 2018). For instance, if there are donor stipulations as to the time or purpose, the gifts of cash or other assets are categorized as a temporarily restricted contr ...

1. Not for Profit Financial Reporting Paper
Not for Profit Financial Reporting Paper
ACC / 460
Team
The not revenue driven association are known for not to gain
cash for benefit but rather the requirements of the network. The
not revenue driven association that the group will break down is
The Habitat for Humanity. This association is focused on aiding
more than 20 million individuals with the structure or
improving family homes for the network. The group will assess
on the chose not for benefit budget summaries fit in with
Financial Accounting Standards Board, the look at the
association revealing of promises and commitments to its
announcing of trade exchanges, and clarifying the effect if
Habitat for Humanity presents abundance monetary advantages
on precluded people.
The financial states for Habitat for Humanity are easily
accessible on their website and conform with the Financial
Accounting Standards Board (FASB) guidance in Statement NO.

2. 117, Financial Statements of Not-for-Profit Organizations
perfectly. According to the statement, it “requires that all not-
for-profit organizations provide a statement of financial
position, a statement of activities, and a statement of cash
flows” which are all available for this particular NFP. This
statement also requires that Habitat for Humanity classifies
their net assets, revenues, expenses, gains and losses that are
based on their donor-imposed restrictions, displays all three
classes of net assets, and that they expand their statement of
cash flows to include donor-restricted cash that is used for long-
term purposes. Habitat for Humanity has executed all of these
requirements in their financial statements by issuing a
Statement of Activities that states their net assets at the end of
2018 were $230,624,227. This total is broken down into
$97,459,334 of unrestricted; $130,594,965 of Temporarily
Restricted; and $2,569,928 of Permanently Restricted. They
also provided a Statement of Cash Flows that include certain
donor-restricted cash that must be used for long-term purposes.
All-in-all, Habitat for Humanity’s financial statements conform
nicely with the requirements of Statement No. 117.
A contribution is “a voluntary, unconditional, and nonreciprocal
transfer of cash or other assets to an NFP” (Lowensohn, Reck,
&Wilson, 2015). Habitat for Humanity and other voluntary
health and welfare organizations are dependent on these
revenues. On the other hand, an exchange transaction occurs
when the other party to the transaction is presumed to receive
direct tangible benefit equal with the resources provided.
The Habitat for Humanity’s notes to the financial statements
contains a description to explain how they record contributions.
First, all revenue is recognized when the “underlying promises”
are received by Habitat (Habitat, 2018). For instance, if there
are donor stipulations as to the time or purpose, the gifts of
cash or other assets are categorized as a temporarily restricted
contribution. When the donor restriction expires, temporarily
restricted net assets are reclassified as unrestricted assets.
Contributions also take form of capital assets, materials, and

3. services. However, for Habitat for Humanity, like most NFPs,
the value of contributed time of a service is only included in the
consolidated financial statements if it requires a specialized
skill that would otherwise need to be purchased. In that case it
would be recognized as a revenue or expense.
Contributions are easily located in the financial statements, as a
category under revenue. Conversely, exchange transactions are
not specifically mentioned once. Contributions and exchange
transactions are often hard to decipher. The major difference is
“not-for-profits recognize contributions upon receipt, and
exchange transactions either at a point in time or over time
based on facts and circumstances” (Tysiac, 2017). Therefore, if
one cannot determine from the revenue recognition it is best to
consult an auditor.
For Habitat for Humanity, one can conclude that the
governmental grants are exchange transactions. “Government
grants are generally treated as exchange transactions due to the
common practice of governments purchasing goods or services
for a particular population or the general public” (Moyer, 2017).
Based on the information provided in the notes to the financial
statement which tells its readers, “Grant revenue on cost-
reimbursement grants is recognized after the program
expenditures have been incurred (Habitat)”. In other words, the
grant revenue is recognized after completing the project per
request of the government. Moreover, the government is
receiving a benefit off this grant, making it an exchange
transaction. Also, another indication is government grants are
not included in the contributions total. Overall, for Habitat for
Humanity contributions and exchange transactions are included
in the statement of activities.
Disqualified person is any person who was in a position to
exercise substantial influence over the affairs of the applicable
tax-exempt organization at any time during the lookback period.
... Family members of the disqualified person and entities
controlled by the disqualified person are also disqualified
persons "Intermediate Sanctions - Excess Benefit Transactions",

4. 2018)
An excess benefit transaction is a transaction in which an
economic benefit is provided by an applicable tax-exempt
organization, directly or indirectly, to or for the use of a
disqualified person, and the value of the economic benefit
provided by the organization exceeds the value of the
consideration received by the and the value of the economic
benefit provided by the organization exceeds the value of the
consideration received by the organization ("Intermediate
Sanctions - Excess Benefit Transactions", 2018).
According to their Return of Organization Exempt from Income
Tax Extended to May 2019. In Section 25 a. and 25 b. There
were no non-economic benefits from not-for-profit that confers
with excess economic benefits on disqualified persons. The
HABITAT FOR HUMANITY OF GREATER CINCINNATI.
("Form 990", 2017).
The budgetary revealing for not profit driven substances has
various contrasts when contrasted with announcing for the
benefit and different sorts of elements. Through dissecting a not
for benefit budget reports. The Habitat for Humanity one can
perceive how FASB direction in Statement No. 117 influences
monetary revealing. The distinction between their announcing
of commitments and trade exchanges.

5. Reference
Habitat for Humanity International. (2018, June 30).
Consolidated Financial Statements and Report of Independent
Certified Public Accountants and Single Audit Reports.
Retrieved from https://www.habitat.org/about/annual-reports-
990s
Lowensohn, S., Reck, J., & Wilson, E. (2015). Accounting for
Governmental & Nonprofit Entities. (17th ed.). Retrieved from
University of Phoenix eBook Collection.
Moyer, Danielle. (2017). Grants: Exchange Transactions vs.
Contributions. Retrieved from
https://www.wegnercpas.com/grants-exchange-transaction-vs-
contribution/
Tysiac, Ken. (2017, March 1). Get Revenue Recognition Right
at Not-for-Profits. Retrieved from
https://www.journalofaccountancy.com/issues/2017/mar/revenue
-recognition-at-not-for-profits.html
Intermediate sanctions - excess benefit transactions (2018).
Retrieved from https://www.irs.gov/charities-non-
profits/charitable-organizations/intermediate-sanctions-excess-
benefit-transactions
Form 990(2017). Retrieved from
http://file:///C:/Users/ruth/Downloads/FY18%20990%20public%
20copy.pdf
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