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Session 6-NPO Overview

Session 6-NPO Overview. Types Characteristics Key Pronouncements. Types. HCOs: hospitals C & Us: SCU VHWOs: Boy Scouts CNOs: Bronco Bench Foundation. Characteristics. No ownership Service/mission oriented Reliance on donations Significant restricted assets Generally tax-exempt

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Session 6-NPO Overview

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  1. Session 6-NPO Overview • Types • Characteristics • Key Pronouncements Governmental & NPO Accounting-2010

  2. Types • HCOs: hospitals • C & Us: SCU • VHWOs: Boy Scouts • CNOs: Bronco Bench Foundation Governmental & NPO Accounting-2010

  3. Characteristics • No ownership • Service/mission oriented • Reliance on donations • Significant restricted assets • Generally tax-exempt • 501(c)3 Governmental & NPO Accounting-2010

  4. NPO-Governance Risk • Volunteers’ lack of financial knowledge • Emotions may cloud logical thinking • Governance is AS IMPORTANT as fundraising • Difficulty making tough financial decisions • Lack of personal liability knowledge • NPOs are a perfect fraud target Governmental & NPO Accounting-2010

  5. Restricted Assets • Donor restrictions • Endowment restrictions • Board restrictions Governmental & NPO Accounting-2010

  6. FASB and Private NPOs • FAS 116-Contributions • FAS 117-Financial statements • FAS 93-Depreciation • FAS 136-Funds raised for others Governmental & NPO Accounting-2010

  7. Contribution--General • Unrestricted and restricted • REVENUE when received • A unconditional promise or pledge • Measured at fair value • Received does not equal collected Governmental & NPO Accounting-2010

  8. Contributions—Services and Art • Services • Enhance a non-financial asset or • Specialized skills in lieu of purchase • Valued at arms length value • Art • Capitalization is NOT required Governmental & NPO Accounting-2010

  9. Net Assets: UR, TR, PR • UR: unrestricted • TR: temporarily restricted • PR: permanently restricted • Record movement between the classifications Governmental & NPO Accounting-2010

  10. FAS 93--Depreciation • Depreciation is the same as for profit ventures Governmental & NPO Accounting-2010

  11. FAS 136—Funds Raised on Behalf of Others • Bronco Bench Foundation example • Raise $1.5 million • If $1.3 million is committed, then it is recorded as liability Governmental & NPO Accounting-2010

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