Term
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Definition
| authority over government-related NFPs, which follow enterprise fund accounting |
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Term
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Definition
| Authority over private NFP |
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Term
| Characteristics of a VHWO |
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Definition
-promotes general health and well-being of the public
-tends to operate mainly from grats and gifts |
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Term
| Basic Financial Statements for VHWO |
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Definition
Statement of Financial Position
Statement of Activities
Statement of Cash Flow
Statement of Functional Expenses (Exclusively) |
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Term
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Definition
Unrestricted
Temporarily Restricted
Permanently Restricted |
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Term
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Definition
| Accounting rules require contributions to be recorded when _______. Do not wait until collected. |
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Term
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Definition
| Conditional promises are recorded when the condition is ____ |
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Term
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Definition
| a class of revenues limited to gifts such as contributions |
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Term
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Definition
| a sale of a service of a NFP,which counts as revenue whenever the inflow comes into the entity. |
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Term
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Definition
| all expenses are reported in the _______ column |
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Term
| Supporting and program services |
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Definition
| Two required classes of expenses in NFPs |
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Term
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Definition
| Revenues-Expenses in a NFP |
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Term
Operating
Investing
Financing |
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Definition
| FASB's three categories of cash flow statements for NFPs |
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Term
| Operating (operating section) |
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Definition
| section of the cash flow statement for a NFP where interest expense, interest revenue, and gains and losses are classified as _____ |
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Term
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Definition
| section of the cash flow statement of an NFP where purchases or sales of fixed assets s well as purchases or sales of long term investments are. |
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Term
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Definition
| section of the cash flow statement for an NFP where the issuance of debt is recorded along with the repayments of principal only |
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Term
| Statement of Functional Expenses |
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Definition
| this shows more detail than the activities statement on how the expenses were allotted to programs and supporting services. The purpose is to show details of the entity's spending on direct program activities vs overhead, which helps donors evaluate efficiency |
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Term
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Definition
| requires contributions, including unconditional promise of support, to be recognized as contribution revenue in the period received at their FMV |
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Term
| recorded contributed services |
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Definition
| services that create or enhance a nonfinancial asset, or, require certain skills, and would have been purchased if not donated. Recorded as a credit to contribution services |
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Term
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Definition
| revenues as soon as pledged, even if the use is restricted. But, depending on the terms, may be reclassified later to unrestricted. |
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Term
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Definition
| oral promises, wills, often not legally enforceable, as the donors retain legal right to change their mind. they are not recorded until the gift materializes |
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Term
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Definition
| Presents NFP statements in a format similar to business statements. Revenues and expenses are easures on the accrual basis, but the bottomline (change in net assets) is not directly comparable to that of a business because revenues may come from donations |
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Term
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Definition
Program service revenue/total expenses
-most commonly used ratio for NFPs
- a lower ratio the better |
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Term
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Definition
| include expenses associated with performing the mission |
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Term
| Supporting services expenses |
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Definition
| include management and general; fund raising and membership development |
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Term
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Definition
| criteria to determine whether part of fundraising expense applies to program expenses |
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Term
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Definition
| FASB requires investments with readily determinable market values to be recorded at FMVs and gains and losses be recognized |
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Term
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Definition
statement pertaining to the transfers of contributions to NFPs
Either to a beneficiary or to the charity itself |
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Term
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Definition
| Mergers for NFPs. Permits two different accounting treatments for combinations by NFPs. The central issue is whether the combination is a merger or a acquisition |
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Term
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Definition
| transaction in which the governing bodies of two or more entities relinquish control of those entities to create a new NFP. This NFP must have a newly formed governing body. And commonly, there will be a new legal entity. (use the carryover method) |
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Term
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Definition
| new entity recognizes the assets and liabilities of the seperate entities and the amt and classifications reported in their financial statements. No internally developed intangible assets like goodwill are recognized. The entity resulting from the merger is a new reporting entity with no activity before the date of the merger. |
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Term
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Definition
| combinations not meeting the definition of a merger are reporting as ______. It is similar to the purchase method accounting for business combinations.Record assets and liabilities at face values |
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Term
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Definition
NFP entities that derive their revenues from business-like activities are required to measure and report ______ as an asset in a similar manner as businesses.
Entities that derive their revenues primarily from contributions are to expense the _______ at the date of acquisition |
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Term
| Reasons for NFPs to profit |
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Definition
-to replace and expand equipment and facilities
- to proide working capital
- to retire debt
- to continue programs after the foreseeable cash inflows are gone |
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Term
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Definition
| sets the standard for private NFP colleges |
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Term
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Definition
| sets the standards for public, govt-owned colleges |
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Term
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Definition
| sets the standard for investor-owned commercial colleges |
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Term
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Definition
| statement specific to public colleges and universities |
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Term
| NACUBO: National Association of College and University Business Officers |
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Definition
| provide additional guidance for both private and public colleges |
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Term
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Definition
report as special purpose govt engaged in business-type activities
they may appear as discretely presented component units of their state govt
financials closely follow enterprise funds |
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Term
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Definition
Follow FASB
finanicials closely follow those of other NFP such as the public charities of last chapter
measure events in accrual and erm focus |
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Term
| Functional expenses for colleges |
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Definition
-educational and general
-auxiliary expenses (dining etc)
-hospitals
-independent operations (r&d) |
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Term
| Differences in Public vs Private |
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Definition
Pell Grants
Reclassification of temp restricted assets
Time Restrictions
Contributed services
Statement formatting |
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Term
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Definition
| assists students from lower income families who are attending college. |
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Term
| Split interest agreements |
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Definition
| when someone chooses to benefit the college in their estate plan, but there is also another beneficiary that they must share resources with. |
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Term
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Definition
| charity receives income during the life of the trust (the life of the donor). when the donor dies the trust terminates and the rest of the assets go to the heirs |
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Term
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Definition
| the roles are reversed and someone or something receives resources until the death of the donor, when the college would receive the resources and assets of the trust |
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Term
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Definition
| an arrangement whereby a donor establishes a trust in which a portion of the trust is distributed to a NFP for a certain term, after which the remaining resources are paid too the beneficiary |
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Term
| Perpetual trust held by a third party |
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Definition
| is not exactly a split-interest agreement, but is accounted for in a similar fashion. Assume that a person establishes a permanent trust at a bank with the income going to the college in perpetuity |
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Term
| Charitable remainder trust |
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Definition
| a trust established by a donor to ensure that a specified dollar amount or a specified percentage of the trusts FMV is paid to the beneficiary, such as the surviving spouse of children. At the end of the term of the trust, the college receives the trust assets. |
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Term
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Definition
| is the same as a charitable remainder turst except that no formal trust agreement exists; normally a contract is signed. |
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Term
| Pooled (life) income fund |
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Definition
| represents a situation in which the assets of several life income agreements are pooled together. A life income fund represents a situation in which the income is paid to a donor or a beneficiary during his or her lifetime |
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