When a donor makes a donation, they can mark it as restricted or unrestricted. When the donation is unrestricted, that means that the NFP entity can use the donation for really anything.
However, when a donation is restricted, the NFP has to use the donation for specific activities (i.e. acquiring PP&E, investment, etc.) The balance sheet must separate net assets that are unrestricted (i.e. no donor restrictions) and net assets with donor restrictions.
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What are the financial reporting objectives for a NFP or government entity?
The overall objective of financial reporting of nonbusiness organizations is to provide financial statement readers with the following: 1) Information useful in making resource allocation decisions – Financial reporting by nonbusiness organizations should provide lenders and those making financial decisions based on the statements with available information in order to come to a decision as...
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What does the cash flow statement for a not-for-profit (NFP) include?
Like reporting for private organizations, the statement of cash flows will report the statements as operating activities, investing activities, and financing activities. FASB ASC 230 provides guidance on the presentation of the statement of cash flows for nongovernmental not-for-profit organizations:
What are the financial reporting objectives for a NFP or government entity?
The overall objective of financial reporting of nonbusiness organizations is to provide financial statement readers with the following: 1) Information useful in making resource allocation decisions – Financial reporting by nonbusiness organizations should provide lenders and those making financial decisions based on the statements with available information in order to come to a decision as...
What does the cash flow statement for a not-for-profit (NFP) include?
Like reporting for private organizations, the statement of cash flows will report the statements as operating activities, investing activities, and financing activities. FASB ASC 230 provides guidance on the presentation of the statement of cash flows for nongovernmental not-for-profit organizations:
