What is an exchange transaction under NFP accounting?
An exchange transaction is when a NFP exchanges value for donations in return. For example, if a museum donates free tickets in exchange for cash donations, then that is considered an exchange transaction.
When not-for-profits recognize revenues in exchange for services provided to the resource’s provider, they will be classified as increases to net assets without donor restrictions.
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How are contributed assets or contribution of time valued by an NFP?
When a donor contributes assets or services (i.e. time), the NFP entity should record the donation at fair-market-value.
What are the key financial schedules that a not-for-profit (NFP) entity must prepare
The financial statements for not-for-profit organizations are listed separately than what you are accustomed to seeing on the financial reports for for-profit entities. The required external financial statements that non-for-profit organizations will include a statement of financial position, statement of activities, and statement of cash flows:
What information must be disclosed in the notes to the financial statements for NFP entities?
Not-for-profit organizations are required to disclose information that is relevant about the liquidity or the maturity of assets and liabilities. This will include restrictions and self-imposed limits on the use of specified items. The notes to the financial statements for not-for-profit organizations should consist of both quantitative and qualitative information: