What is included in the statement of activities?
The statement of activities is issued by a not-for-profit organization and is similar to an income statement (issued by for-profit organizations). Th statement of activities will include the following:
1) Changes in net assets – Similar to net income in the sense that it’s the summation of revenue and expenses. If revenue exceeds expenses, then net assets will increase. If expenses exceed revenue, then net assets will decrease
2) Revenues – An NFP can have a variety of revenue streams, which is basically how the NFP receives cash. Cash can come from donations/contributions, grants, memberships, etc.
3) Expenses – Represents any cash outflow the NFP incurs to run the organization.
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What are the financial reporting objectives for a NFP or government entity?
The overall objective of financial reporting of nonbusiness organizations is to provide financial statement readers with the following: 1) Information useful in making resource allocation decisions – Financial reporting by nonbusiness organizations should provide lenders and those making financial decisions based on the statements with available information in order to come to a decision as […]
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 does the cash flow statement for a not-for-profit (NFP) include?
Like reporting for private organizations, the statement of cash flows will report the statements as operating activities, investing activities, and financing activities. FASB ASC 230 provides guidance on the presentation of the statement of cash flows for nongovernmental not-for-profit organizations: