Call us 24/7: + 1(925)399 0085

Get your paper done by an expert

No matter what kind of academic paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcer. Save more time for yourself.

WhatsApp + 1(925)399 0085
$ 10
  • bibliography
  • title page
  • revisions
per page
19 k happy customers
4.7 out of 5 satisfaction rate
27 writers active

Not-For-Profit Organizations Essay

Executive Summary

Not-For-Profit organizations are fundamentally different than for-profit, private sector businesses in that they do not have shareholders, their mission statements are focused on furthering a cause rather than just increasing profitability and most Not-For-Profits earn the majority of their revenue through donor contributions. As a result, Not-For-Profit Organizations operate under different reporting requirements than for-profit businesses. In order to provide proper accounting for the numerous activities undertaken by a Not-For-Profit Organization in a given year, it is imperative that one understand the two financial accounting standards that affect Not-For-Profit organizations the most: Statements of Financial Accounting Standards (SFAS) 116 and 117 which provide guidance on donor contributions and the presentation of the financial statements.

The objective of this summary is to provide a high-level overview of the standards and the effect they have on the financial statements of a Not-For-Profit organization. The Statement of Financial Accounting Standards No. 116 establishes the standards for accounting for contributions received and contributions made to all organizations with fiscal years beginning after December 15, 1994. Contributions are defined by SFAS No. 116 as voluntary transfers in which the donor does not receive any value in return. Donor contributions may include the following resources:

Marketable securities
Property and equipment
Utilities and Supplies
Intangible assets such as intellectual property
Professional services

SFAS 116 requires that all contributions and unconditional promises to donate in the future, known as pledges, are recognized as revenues at fair value in the period in which they are received. Pledges are recognized as soon as the requirements of a pledge are met and it is no longer contingent on a future event. Additionally, contributions made and received are also recognized at as expenses upon receipt at fair value.

The Statement of Financial Accounting Standards No. 116 also requires organizations to identify those contributions that contain donor-imposed restrictions and the timeframe or requirements for meeting these donor-imposed restrictions. According to SFAS No. 116, organizations must classify contributions into one of the following categories based on the existence or absence of donor imposed stipulations:

Permanently Restricted Net Assets
Temporarily Restricted Net Assets
Unrestricted Net Assets

Those assets that are restricted by a donor imposed stipulation of time, a particular purpose or program, or the occurrence of a future event must be set aside and cannot be expended until the restriction has expired through the satisfaction of the donor stipulation.

Statement of Financial Accounting Standards (SFAS) No. 117 is also important in accounting for Not-For-Profit Organizations in that it provides standards for the presentation of the financial statements for organizations with fiscal years beginning after December 15, 1994. Overall, this standard requires that the financial statements provide the necessary information for all of the users of Not-For-Profit financial statements. The standard requires that Not-For-Profit Organizations produce the following financial statements on an annual basis: A statement of financial position (balance sheet)

A statement of activities (income statement)
A statement of cash flows

In the statement of financial position, SFAS No. 117 requires that the Not-For-Profit organization provide amounts for the total assets, liabilities, and net assets at the end of the fiscal period. Additionally, the statement of financial position must classify the organizations net assets as temporarily restricted, permanently restricted, or unrestricted based on donor imposed stipulations.

The statement of activities is required to report to the financial statement users the transactions which caused a change in net assets during the period and the statement of cash flows is must provide a reconciliation of activity between beginning and ending cash balances of the period as either operating activities, financing activities or investing activities. Additional schedules are also required by SFAS No. 117 for special organzations such a voluntary health and wellness organizations that provide unique services related to their cause.

Overall, a thorough understanding and application of Statements of Financial Standards No. 116 and 117 allows Not-For-Profit organizations to properly account for their unique activities and provide their financial statement users with relevant, understandable and comparable information in order to assess the financial position of the Not-For-Profit organization over the past fiscal year and going forward into the future.

Our guarantees

Study Acers provides students with tutoring and help them save time, and excel in their courses. Students LOVE us!No matter what kind of essay paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcers. Save more time for yourself. Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Our Homework Writing Disciplines

With a highly diverse team in almost all academic fields including: