Not-for-profit accounting question
True or False:
Question: FASB Statement NO. 117 directs that revenues and expense be reported in a statement of financial position.
Answer: Per the guidance below I would argue this statement as false. I think that revenues and expenses should be reported in the statement of activities, not the statement of financial position.
âThis Statement NO. 117 requires that all not-for-profit organizations provide a statement of financial position, a statement of activities, and a statement of cash flows. It requires reporting amounts for the organization's total assets, liabilities, and net assets in a statement of financial position; reporting the change in an organization's net assets in a statement of activities; and reporting the change in its cash and cash equivalents in a statement of cash flows.
This Statement also requires classification of an organization's net assets and its revenues, expenses, gains, and losses based on the existence or absence of donor-imposed restrictions. It requires that the amounts for each of three classes of net assetsâpermanently restricted, temporarily restricted, and unrestrictedâbe displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities.â
I have asked this question previously and received this answer as true, which I think is wrong per the guidance (amounts of change in each of those classes of net assets, which relate to revenue and expense, be displayed in a statement of activities). If you think it is true, please explain why this would be in the statement of financial position. Again I think the answer is false and should be reported in a statement of activities.
Not-for-profit accounting question
True or False:
Question: FASB Statement NO. 117 directs that revenues and expense be reported in a statement of financial position.
Answer: Per the guidance below I would argue this statement as false. I think that revenues and expenses should be reported in the statement of activities, not the statement of financial position.
âThis Statement NO. 117 requires that all not-for-profit organizations provide a statement of financial position, a statement of activities, and a statement of cash flows. It requires reporting amounts for the organization's total assets, liabilities, and net assets in a statement of financial position; reporting the change in an organization's net assets in a statement of activities; and reporting the change in its cash and cash equivalents in a statement of cash flows.
This Statement also requires classification of an organization's net assets and its revenues, expenses, gains, and losses based on the existence or absence of donor-imposed restrictions. It requires that the amounts for each of three classes of net assetsâpermanently restricted, temporarily restricted, and unrestrictedâbe displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities.â
I have asked this question previously and received this answer as true, which I think is wrong per the guidance (amounts of change in each of those classes of net assets, which relate to revenue and expense, be displayed in a statement of activities). If you think it is true, please explain why this would be in the statement of financial position. Again I think the answer is false and should be reported in a statement of activities.
