NOT FOR PROFIT ENTITIES period in which contribution is made, the
organization may report the contribution as
The concept of owner’s equity DOES NOT apply unrestricted as long as the organization follows a consistent policy
Three classes of net assets: Expenses (always) decrease unrestricted net
assets (1) Permanently restricted (2) Temporarily restricted NPE that issue GAAP-based FS must recognize (3) Unrestricted depreciation expense on long-lived assets. NPE should record depreciation even if assets are Statement of Activities and Changes in Net gifts. However, certain works of art and certain Assets historical treasures that meet the definition of -reports revenues, expenses, gains and losses, “collections” need not be capitalized or and reclassifications (between classes of net depreciated assets) NPE reports revenues and expenses at gross -focuses on organization as a whole amounts. Gains and losses from peripheral or incidental transactions may be reported at net -minimum requirements: organization-wide amounts and investment income is reported totals, changes in net assets for each class of net of related expenses assets, all expenses recognized only in the unrestricted classification. A display of a Expenses and release of temporarily restricted measure of operations in the statement of net assets activities is permitted Temporarily restricted net assets that is fulfilled Organizations can report revenues, gains, and is immediately reclassified as unrestricted. Also losses in each net asset class, but expenses are because of the following: reported only in the unrestricted net assets -Money was appropriately expended for an class expense as designated by the donor The statement of activities provides information -for an asset as designated by the donor on the change in amount and nature of net assets and reports how resources are used to -donor restriction based on time was satisfied provide various program or services: An alternative for equipment bought with the Unrestricted net assets restricted gift does exist. Time restriction can be -Not-for-profit revenues specified by the donor or assumed by the -Gains and losses on investments organization for the use of the asset *Unless their use is restricted by explicit donor Statement of Functional Expenses stipulations or by law
Temporarily restricted/permanently restricted
net assets consists of -donor-restricted contributions whose restrictions have not yet been met. If restrictions are met in the same reporting