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Accounting Class 5
MNA Managerial Accounting Class 5 nonprofit revenue reporting
| Question | Answer |
|---|---|
| 5 Types of Contributions | Cash, Pledges, Services, In-Kind, Other Inflows |
| Cash Contribution | Monetary donations |
| Pledge Contributions | Promises to make monetary or non-monetary donations |
| Services | Services provided to organizations |
| In-Kind Contributions | Non-monetary assets used by organizations |
| Other In-Flow Contributions | Other inflows, such as investment income |
| Reporting Agency Transactions | Organization acts as an agent or trustee for the donor |
| Reporting Exchange Transcations | An exchange transaction where both parties receive something of value |
| Define "Reporting" | How to identify, measure, and report inflows related to each category of resources |
| Define "Contribution" according to FASB | An unconditional transfer of cash or other assets to an entity or a settlement or cancellation of its liabilities in a voluntary nonreciprocal transer for another entity acting other than as an owner. Other assets include securities, land, buildings, us |
| Conditional Contributions | A contribution conditional on a future event the occurrence or non-occurrence of which releases the donor's obligation |
| Restricted Contribution | A contribution restricted for a specific purpose or time period. |
| Reporting Unconditional, Restricted, Expressed Cash Contributions | Donor expressly states a restriction. If donor-imposed restriction is met in the same time-period, the org may adopt a policy to report such contributions as unrestricted, but must disclose in financial statement notes |
| Reporting Unconditional, Restricted, Implied Cash contribution | Contributions received in response to a specific appeal, such as to build a new building/Property, plant or equipment: Board may decide whether to imply a time restriction based on useful life or treat as unrestricted |
| Reporting Conditional Cash contributions | Recognize the contribution when the donor-imposed condition is substantially met/Until then, account for as a "refundable advance." |
| Define Pledge | A written or oral agreement to contribute cash or other assets to another entity. A promise to give may be either conditional or unconditional. |
| Reporting Unconditional Pledge | Reported as receivables and contribution revenue in the period the unconditional promise is made |
| Requirements for reporting Unconditional Pledge | Sufficient verifiable evidence of pledge; increase temporarily restrict net assets, if due in future period; reported at fair value |
| More on Fair Value | Net realizable value if due within one year: The amount the org expects to collect, based on (1) past collection experience; (2) creditworthiness of parties; (3) organizations' efforts to enforce pledges; Recorded at present value if due beyond one year |
| Reporting of Pledge Disclosures | Contributions receivable pledged as collateral or otherwise limited as to use; amt of pledges due in less than one year, 1-5 years, and in more than 5 years; allowance for uncollectible pledges arising from changes in estimates |
| Reporting of Conditional Pledges | If likelihood that condition will not be met is remote: report as unconditional/otherwise, do not report |
| What to Disclose with Pledges | Total amts promised and description of conditions; total amts for each category of condition; promise made in a valid wills, known and unknown |
| When to report Services | If services created or enhanced a nonfinancial asset, such as a building or; services required specialized skills, provided by individuals w/ those skills, and would have been purchased if not contributed |
| How to report Services | Fair value |
| Disclosures for reporting Services | (Guide 5-79) Nature and extent of contributed services received by org; description of the programs or activities for which the services were used; amt of contributed services recognized during the period; NFP orgs are encouraged to report in the notes |
| When to Report In-Kind Donations | Can be used internally or sold |
| How to Report In-Kind Donations | at Fair Value |
| What are Special Issues w/ In-Kind Donations (3) | Items donated for fundraising, facilities, significance |
| Reporting Items Donated for fundraising | Report @ fair value when received and adjust based on auction price |
| Issues w/ In-Kind Facilities | Report contributions as revenue and expense in period asset used. If unconditional promise to give for a specified number of periods, then report as contributions receivable and increase in temporarily restricted net assets. |
| Significance of Reporting In-Kind Donations | Under-reporting leaves others unaware of dependence on volunteers. |
| Define Agency Transaction (Guide 5.05) Part 1 of 4 | Some NFP orgs act as agents, trustees, or intermediaries, helping donors to make a contribution to another entity or individual. |
| Define Agency Transaction (Guide 5.05) Part 2 of 4 | When acting in that capacity, those NFP orgs do not receive a contribution when they disburse the assets to the other entituty or individual. |
| Define Agency Transaction (Guide 5.05) Part 3 of 4 | Instead, they act as go-betweens, passing the assets from the donor through their org to the specified entity or individual. |
| Define Agency Transaction (Guide 5.05) Part 4 of 4 | Federated fund-raising orgs, community foundations, and institutionally related orgs are examples of NFP orgs that commonly serve as agents, trustees, or intermediaries, but any org can function in those capacities. |
| General Rules for Agency Transactions | Report an increase to assets and liabilities when asset received; and a reduction to assets and liabilities when transferred to beneficiary |
| Define Exchange Transactions | A transatciton in which each part receives something of value, as part of the organizations' central activities (revenue) or peripheral activities (gain). |
| Rules for Revenue in Exchange Transactions | Recognized based on accrual accting principles; measured by cash or receivables, with receivables valued @ net realizable value (net allowance for uncollectible revenues); increase in unrestricted net assets in a statement of activities; report gross of |
| Special Issues w/ Exchange Transactions | Token gift - not an exchange transaction; combined transaction - report as part contribution and part exchange; dues - report over the period to which the dues relate |
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MNA
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