Accounting Trends and Techniques — Not-for-Profit Organizations

Illustrative disclosures for not-for-profit organizations! For over 55 years, Accounting Trends and Techniques has provided you with commentary, illustrations, and example financial statement disclosures. We took the best practices and experiences we've learned and created Accounting Trends and Techniques — Not-for-Profit Organizations to help you further understand and aid you in your financial statement preparations for not-for-profit organizations.

CHAPTER 1: Sample Statements of Financial Position

Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 117, Financial Statements of Not-for-Profit Organizations, requires the following in a statement of financial position:

• Total assets
• Total liabilities
• Net assets by class and in total
• Information about liquidity
• Reasonably homogeneous asset and liability categories

The examples in this chapter which am in a multicolumnar format show the columns labeled with either names of organizations (combining statements) , or funds, but not classes of net assets. While it is not prohibited to have the columns represent the net asset classes, this is not shown because of the FASB's statement in paragraph 94 of FASB Statement No. 117, that classification of assets and liabilities by net asset class should be permitted but not required. Many believe that, because the reporting model in Statement No. 117 is based on net assets, in most cases, specific assets and liabilities are neither unrestricted nor restricted, and that any attempt to categorize them as such results in arbitrary classifications without an objective basis. Columnar formats showing funds as the columns all show the classes of net assets separately in the Net Assets section of the statement.

Accounting literature does not specify whether certain required information should be presented on the face of the statement of financial position or in the notes to the financial statements. One example is asset valuation allowances. Some organizations include them as part of the asset caption on the balance sheet; others disclose them in a note. Allowances for unconvertible receivables are more often included in the asset caption. Accumulated depreciation is more often disclosed in a note together with details of the components of fixed assets. Other examples are information about the nature and amount of restrictions on net assets and the composition of the investment portfolio. Some organizations present this information on the face of the balance sheet, while other organizations include this information in the notes.