Not-for-Profit Financial Reporting and Disclosures

This chapter covers the nongovernmental not-for-profit reporting model. FAR candidates need to separate nonprofit terminology and presentation from standard for-profit reporting so they do not carry the wrong statement logic into nonprofit questions.

In This Chapter

• Not-for-Profit Foundations introduces the nonprofit reporting environment.
• Net Assets and the Statement of Financial Position explains nonprofit balance-sheet structure.
• Statement of Activities covers performance reporting.
• Not-for-Profit Cash Flows addresses cash-flow presentation.
• Functional Expense Reporting explains nonprofit expense classification.
• Not-for-Profit Disclosures and Special Topics covers supporting details and nuances.

How to Use This Chapter

• Read this chapter when nonprofit questions are being answered with for-profit logic.
• Focus on donor restrictions, net asset classes, and functional presentation.
• Return here whenever a FAR miss turns on nonprofit statement structure or disclosure.

In this section

• Not-for-Profit Reporting Model and Governing Standards
  FAR coverage for the nonprofit reporting environment, ASC 958, stakeholder focus, and net asset concepts.
• Net Assets and the Not-for-Profit Statement of Financial Position
  FAR coverage for nonprofit net asset classes, donor restrictions, reclassifications, and statement of financial position presentation.
• Statement of Activities for Not-for-Profit Entities
  FAR coverage for nonprofit revenues, support, expenses, donor restrictions, and statement of activities presentation.
• Statement of Cash Flows for Not-for-Profit Entities
  FAR coverage for nonprofit cash flow classification, direct and indirect methods, and restricted contribution issues.
• Functional Expense Reporting for Not-for-Profit Entities
  FAR coverage for functional expense classification, matrix disclosures, and by-nature versus by-function presentation.
• Not-for-Profit Disclosures and Specialized Reporting Topics
  FAR coverage for endowments, underwater endowments, donor restrictions, split-interest agreements, and other nonprofit disclosures.