HOW TO USE PPC’S NONPROFIT FINANCIAL STATEMENT ...

NPT 5/12

HOW TO USE PPC'S NONPROFIT FINANCIAL STATEMENT ILLUSTRATIONS AND TRENDS

PPC's Nonprofit Financial Statement Illustrations and Trends should be used as an Accounting Trends and Techniques" for nonprofit organizations. It is organized into three primary parts: the Trends survey, the Master Finding List, and the Illustrative Financial Statements.

The Trends survey provides interesting insights into the financial statement presentation policies of nonprofit organizations. It includes results of a nonstatistical sample of the financial statements of 50 nonprofit organizations. As noted below, 76 financial statements were submitted in 2011; however some firms submitted several state ments. The objective of the Trends survey is to describe reporting alternatives that are available to organizations in a GAAP presentation1 and to track which alternatives organizations chose from among those alternatives.

The Master Finding List provides the organizational characteristics of the 22 entities whose financial statements are included in this publication. The list helps the reader locate appropriate examples. The Master Finding List describes:

The industry classification of the organization (religious, school, performing arts, foundation, etc.).

The tax exempt status of the organization [501(c)3, 501(c)7, etc.].

Each organization in the Master Finding List is given an illustration number. That number appears at the top of each page of the included illustrative financial statement. The numbers help the reader locate the desired organization within the Illustrative Financial Statements. In addition, by combining all pages with the same number, a reader can accumulate a complete financial report for the organization.

The Illustrative Financial Statements section is further divided into five sections:

Statement of financial position

Statement of activities

Statement of cash flows

Statement of functional expenses

Notes to financial statements

An index at the beginning of each section helps to locate examples of specific formats and disclosures. For example, the index to the statement of financial position section includes topics such as contributions receivable, deferred revenue, splitinterest agreements, and investments.

The financial statements illustrated in this Trends were selected from 76 financial statements submitted in 2011 by 30 accounting firms from 19 states and 6 nonprofit organizations from 6 states. The identities of the organizations and their accountants have been changed to provide the confidentiality promised to those submitting financial statements. In some cases, disclosures have been omitted due to space limitations. In other cases, information was omitted because some aspect of the financial statements may not have been in compliance with generally accepted accounting principles and the uncertainty could not be easily resolved. Although the authors have carefully edited the statements and notes, some errors may remain because the facts and circumstances underly

1 Similar alternatives are generally available when financial statements are prepared using an other comprehen sive basis of accounting (OCBOA). If those statements reflect the same or similar items as statements prepared using GAAP, disclosures similar to those required by GAAP for those items should be made. For more informa tion about preparing OCBOA financial statements, see PPC's Guide to Cash, Tax, and Other Bases of Accounting.

iv

NPT 5/12

ing specific transactions may not have been apparent. Accordingly, this Guide is not intended to be authoritative. Therefore, accountants should refer to PPC's Guide to Preparing Nonprofit Financial Statements, PPC's Guide to Nonprofit GAAP, or other Thomson Reuters publications for discussions of applying generally accepted accounting principles to various transactions.

The reports included in this Guide are for fiscal years ending June 30, 2009 to September 30, 2010, with fiscal years ending June 30, 2010, the most common. Thus, certain authoritative literature may not have been effective when the financial statements were drafted. Accordingly, the financial statements included in this Guide may not conform with the requirements in the following Standards and should be used with care for situations or transactions addressed in:

SFAS 161, Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133 (Codified in FASB ASC 815), effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.

SFAS 164, NotforProfit Entities: Mergers and AcquisitionsIncluding an amend ment of FASB Statement No. 142 (codified in FASB ASC 958), effective beginning on or after December 15, 2009.

SFAS 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162 (codified in FASB ASC 105), effective for financial statements issued for periods ending after September 15, 2009.

FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan inter pretation of FASB Statement No. 109 (Codified in FASB ASC 740). For public enti ties, this Interpretation is effective for fiscal years beginning after December 15, 2006. For nonpublic entities, it is effective for fiscal years beginning after Decem ber15, 2008.

FSP FAS 132(R)1, Employers' Disclosures about Postretirement Benefit Plan Assets," (Codified in FASB ASC 715) effective for fiscal years ending after Decem ber 15, 2009.

Accounting Standards Update (ASU) No. 200901, Generally Accepted Accounting Principles, amendments based on Statement of Financial Accounting Standards No. 168The FASB Accounting Standards CodificationTM and the Hierarchy of Gener ally Accepted Accounting Principles, effective for financial statements issued for periods ending after September 15, 2009.

ASU No. 200905, Fair Value Measurements and Disclosures (Topic 820)Measur ing Liabilities at Fair Value, effective for the first reporting period, including interim periods, beginning after issuance (August 2009).

ASU No. 200906, Income Taxes (Topic 740)Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Non public Entities, effective for financial statements issued for periods ending after September 15, 2009.

ASU No. 200912, Fair Value Measurements and Disclosures (Topic 820): Invest ments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), effective for periods ending after December 15, 2009.

ASU No. 201006, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements, generally effective for interim and annual reporting periods beginning after December 15, 2009.

ASU No. 201007, NotforProfit Entities (Topic 958)NotforProfit Entities: Mergers and Acquisitions, effective beginning on or after December 15, 2009.

v

NPT 5/12

ASU No. 201020, Receivables (Topic 310): Disclosures about the Credit of Financ ing Receivables and the Allowance for Credit Losses, effective for annual reporting periods ending on or after December 15, 2011.

ASU No. 201102, Receivables (Topic 310) A Creditor's Determination of Whether a Restucturing Is a Troubled Debt Restructuring, effective for annual periods ending on or after December 15, 2012.

Your Comments, Suggestions, and Financial Statements The authors encourage users of PPC's Nonprofit Financial Statement Illustrations and Trends to offer any comments or suggestions that they may have to improve the usefulness of future editions. Of special interest are your comments about the usefulness of the trends survey and recommendations for additional statistics or types of nonprofit organizations to be included in PPC's Nonprofit Financial Statement Illustrations and Trends. In addition, the authors encourage users to submit their organizations' financial statements for consideration for future editions of PPC's Nonprofit Financial Statement Illustrations and Trends. The authors are particularly interested in receiving statements that include unique or difficult reporting situations or that illustrate financial statement formats that utilize flexibility in their design as permitted under FASB ASC 958 (formerly SFAS No. 117, Financial Statements of NotforProfit Organizations). Please address your comments, suggestions, or financial statements to:

Tax & Accounting Business of Thomson Reuters Attn.: A&A Research Assistant, NPT P.O. Box 966 Fort Worth, TX 76101

vi

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download