Wiley Not-for-Profit GAAP 2020

7FUND ACCOUNTING

• Perspective and Issues
• Concepts, Rules, and Examples
  • Categories of Funds
    • Current unrestricted fund
    • Board-designated funds
    • Current restricted fund
    • Restricted endowment fund
    • Fixed asset fund
    • Other types of funds
  • Alternative Fund Groupings
    • Expendable and nonexpendable
    • Managed fund groups
  • A Typical Set of “Fund” Financial Statements
    • Interfund borrowing
  • Elimination of Funds for Reporting Purposes
• Conclusion

PERSPECTIVE AND ISSUES

Many not-for-profit organizations have used fund accounting both for internal recordkeeping and for external financial reporting purposes. Fund accounting segregates assets, liabilities, and fund balances into separate accounting entities associated with specific activities, donor-imposed restrictions, or objectives.

Generally accepted accounting principles do not require not-for-profit organizations to use fund accounting in the presentation of financial statements. Any “fund” amounts that are presented in the financial statements must still be classified in those financial statements in the appropriate net asset classification: net assets without donor restrictions and net assets with donor restrictions based on the absence or existence and type of donor-imposed restrictions. Financial statements prepared using fund accounting and not presenting these net asset classifications would not be considered to be in accordance with generally accepted accounting principles.

The not-for-profit organization financial reporting model ...