Nonprofit Accounting. 2 nd Edition. Steven M. Bragg

Transcription

1 Nonprofit Accounting 2 nd Edition Steven M. Bragg

2 Chapter 1 Overview of the Nonprofit Entity... 1 Learning Objectives... 1 Introduction... 1 Definition of a Nonprofit Entity... 1 Nonprofit Organizational Structure... 5 Chapter Summary... 5 Review Questions... 6 Review Answers... 7 Chapter 2 Basic Nonprofit Accounting Concepts... 9 Learning Objectives... 9 Introduction... 9 Double Entry Bookkeeping... 9 The Journal Entry The Accounting Equation The Chart of Accounts The Accrual Basis of Accounting The Cash Basis of Accounting The Modified Cash Basis of Accounting Converting Cash Basis to the Accrual Basis jui' Generally Accepted Accounting Principles (GAAP) Net Assets Net Assets without Donor Restrictions Net Assets with Donor Restrictions Net Assets Summary The Release from Restriction Concept Inter-Fund Receivables and Payables Board-Designated Funds Program Identification The Management and Administration Classification The Fundraising Classification Bookkeeping Concerns Case Study Chapter Summary Review Questions Review Answers Chapter 3 Nonprofit Financial Statements Learning Objectives Introduction The Statement of Financial Position The Statement of Activities The Statement of Cash Flows The Direct Method The Indirect Method How to Prepare the Statement of Cash Flows Reporting of Expenses by Nature and Function Financial Statement Disclosures Chapter Summary Review Questions Review Answers Chapter 4 Revenue Accounting Learning Objectives... 45

3 Introduction Types of Revenue Promises to Give Pass-Through Contributions Exchange Value Transfers of Assets Discounts from Revenue Sales Taxes The Allowance for Uncollectible Pledges Restricted Fund Releases Revenue Journal Entries Special Reporting Considerations Revenue Recordkeeping Revenue Disclosures Chapter Summary Review Questions Review Answers Chapter 5 Government Grants Learning Objectives Introduction Overview of Government Grants Grant Accounting Income from Government Grants Credits on Expenditures Grant Reporting Chapter Summary Review Questions Review Answers Chapter 6 Investment Accounting Learning Objectives Introduction Contributed Investments Purchased Investments Subsequent Measurement of Investments Gains and Losses on Investment The Equity Method of Accounting Investment Disclosures Chapter Summary Review Questions Review Answers Chapter 7 Inventory Accounting Learning Objectives Introduction The Periodic Inventory System The Perpetual Inventory System Inventory Costing The First in, First Out Method The Last in, First Out Method The Specific Identification Method The Lower of Cost or Market Rule Inventory Disclosures Chapter Summary Review Questions Review Answers ii

4 Chapter 8 Fixed Asset Accounting Learning Objectives Introduction Initial Recognition of Fixed Assets The Capitalization Limit Restrictions on Contributed Assets Valuation of Contributed Assets Valuation of Contributed Services Valuation of Art, Historical Treasures, and Similar Items Depreciation of Fixed Assets Depreciation Accounting Entries Accumulated Depreciation Asset Impairment Recordation of Fixed Assets Fixed Asset Disclosures Chapter Summary Review Questions Review Answers Chapter 9 Lease Accounting Learning Objectives Introduction The Nature of a Lease Lease Components (Lessee) Initial Direct Costs Lease Consideration The Lease Term Initial Measurement of Lease Payments Subsequent Measurement of Lease Payments Types of Leases Asset and Liability Recognition (Lessee) Initial Measurement Short-Term Leases Finance Leases Operating Leases Right-of-Use Asset Impairment Leasehold Improvement Amortization Subleases Maintenance Deposits Derecognition Elections Discount Rate Separation of Non-Lease Components Sale and Leaseback Transactions Lease Disclosures Lessee Disclosures Sale and Leaseback Transactions Chapter Summary Review Questions Review Answers Chapter 10 Pension Plan Accounting Learning Objectives Introduction Overview of Retirement Benefits Defined Benefit Plans Expense Attribution for Delayed Vesting iii

5 Discount Rates Settlements and Curtailments Termination Benefits Combined Pension Plans Defined Contribution Plans Presentation of Retirement Benefit Information Retirement Benefit Disclosures Defined Benefit Plan Disclosures Defined Contribution Plan Disclosures Chapter Summary Review Questions Review Answers Chapter 11 Joint Costs and Allocations Learning Objectives Introduction Costs of Activities that Include Fundraising Allocations Disclosures Chapter Summary Review Questions Review Answers Chapter 12 Accounting Changes and Error Corrections Learning Objectives Introduction Changes in Accounting Principle Changes in Accounting Estimate Changes in Reporting Entity Correction of an Error in Previously Issued Financial Statements Corrections Related to Prior Interim Periods Chapter Summary Review Questions Review Answers Chapter 13 Fair Value Learning Objectives Introduction The Fair Value Concept Fair Value Differences from Actual Prices Paid Fair Value Measurement Approaches Fair Value Option Chapter Summary Review Questions Review Answers Chapter 14 Other Accounting Topics Learning Objectives Introduction Petty Cash Interest in a Perpetual Trust Receivables Contingent Liabilities Line of Credit Disclosures Chapter Summary Review Questions Review Answers iv

6 Chapter 15 Split-Interest Agreements Learning Objectives Introduction Split-Interest Agreements Types of Split-Interest Agreements Accounting for Split-Interest Agreements Initial Measurement Ongoing Measurement Termination Classification of Net Assets Disclosures Chapter Summary Review Questions Review Answers Chapter 16 Affiliated Organizations Learning Objectives Introduction Affiliated Organizations Special Purpose Entities Noncontrolling Interests Related Parties Disclosures Revenue Sharing Consolidated Financial Statements Noncontrolling Interests Related Party Transactions Chapter Summary Review Questions Review Answers Chapter 17 Mergers & Acquisitions Learning Objectives Introduction The Nonprofit Merger The Nonprofit Acquisition Identifiable Assets and Liabilities, and Noncontrolling Interests Goodwill Calculation Contribution Received Presentation Issues Goodwill Testing Disclosures Merger Disclosures Acquisition Disclosures Chapter Summary Review Questions Review Answers Chapter 18 Nonprofit Tax Reporting Learning Objectives Introduction Overview of the Form The Form The Form 990-EZ The Form 990-N The Form 990-T The Form 1099-MISC v

7 The Form W The Form W Payroll Taxes Social Security Tax Medicare Tax Types of Tax Deposit Schedules The Form Chapter Summary Review Questions Review Answers Chapter 19 Closing the Books Learning Objectives Introduction Journal Entries The Accruals Concept Adjusting Entries Reversing Entries Common Adjusting Entries Closing Entries Prior Closing Steps: Update Reserves Core Closing Steps: Issue Customer and Donor Invoices Core Closing Steps: Reconcile the Bank Statement Core Closing Steps: Calculate Depreciation Core Closing Steps: Accounts Payable Core Closing Steps: Review Journal Entries Core Closing Steps: Reconcile Accounts Core Closing Steps: Close Subsidiary Ledgers Core Closing Steps: Create Financial Statements Core Closing Steps: Review Financial Statements Core Closing Steps: Accrue Tax Liabilities Core Closing Steps: Close the Month Core Closing Steps: Add Disclosures Core Closing Steps: Issue Financial Statements Delayed Closing Steps: Issue Invoices Delayed Closing Steps: Closing Metrics Delayed Closing Steps: Document Future Closing Changes Delayed Closing Steps: Update Closing Procedures Chapter Summary Review Questions Review Answers Chapter 20 Nonprofit Budgeting Learning Objectives Introduction The Revenue Budget The Management and Administration Budget The Fundraising Budget Program and Grant Budgets The Compensation Budget The Compensation Budget Treatment of Hourly Pay and Overtime The Benefits Budget Budget Recasting Budget Linkages Cash Forecasting The Short-Term Cash Forecast vi

8 The Medium-Term Cash Forecast Chapter Summary Review Questions Review Answers Chapter 21 Accounting Controls Learning Objectives Introduction The Proper Balance of Control Systems Control Principles Constructing a System of Controls Cash Controls Fixed Asset Controls Payables Controls Payroll Controls Chapter Summary Review Questions Review Answers Chapter 22 Nonprofit Policies Learning Objectives Introduction General Accounting Policies Cash Fixed Assets Payables Payroll Nonprofit-Specific Policies Donor Receipts Donated Assets Investments Operations Joint Ventures Lobbying and Political Campaigns Tax Filings Chapter Summary Review Questions Review Answers Chapter 23 Analysis of a Nonprofit's Financial Health Learning Objectives Introduction The Auditor s Report Horizontal Analysis Vertical Analysis Expense Proportions Analysis Fundraising Effectiveness Ratio Revenue Concentration Analysis Traffic Light Revenue Analysis Traditional Ratio Analysis Current Ratio Quick Ratio Days Sales in Accounts Receivable Days Sales in Inventory Days Payables Outstanding Free Cash Flow The Profitability Conundrum vii

9 Chapter Summary Review Questions Review Answers Glossary Index viii