Module 22

Not-for-Profit Accounting

Accounting for Nonprofit Entities

Financial Statements of Not-for-Profit Organizations

All not-for-profit organizations must prepare at least three financial statements

Not-for-profit organizations include:

  • Hospitals
  • Colleges and universities
  • Voluntary health and welfare organizations (VHW)

Required financial statements for all types include:

  1. Statement of Financial Position
  2. Statement of Activities
  3. Statement of Cash Flows

VHWs must also prepare a Statement of Functional Expenses

Statement of Financial Position

Includes assets, liabilities, and net assets

  • Unrestricted net assets—Available for general use, including those set aside by board of trustees
  • Temporarily restricted net assets—Donated by outside party and restricted to specific purpose
  • Permanently restricted net assets—Donated by outside party and required to be invested with earnings restricted or unrestricted
NOT-FOR-PROFIT COMPANYSTATEMENT OF FINANCIAL POSITIONDECEMBER 31, 20X2
Assets: Liabilities:
Cash 100 Accounts payable 50
Marketable securities 300 Notes payable 100
Accounts receivable, net 40 Bonds payable 100
Inventory 120 Total liabilities 250
Property, plant, and equipment 80 Net assets:
Total assets 640 Unrestricted 45
Temporarily restricted 305
Permanently restricted 40
Total net assets 390
Total liabilities and net assets 640

Statement of Activities for Not-for-Profit Organizations

Similar to income statement:

  • Reports ...

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