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Prepared by
James Myers,
C.A.
University of
Toronto
2010 McGraw-Hill
Ryerson Limited
Chapter 12, Slide 1
2010 McGraw-Hill Ryerson
Limited
Chapter 12
Accounting for
Not-for-Profit Organizations and
Governments
Learning Objectives
1.
2.
3.
4.
5.
6.
Introduction
LO 1
Introduction
LO 1
unrestricted or restricted
LO 1
LO 5
LO 5
LO 5
LO 5
LO 5
Not-for-profit Reporting
Today
The eight Handbook sections applicable to NFPOs are
as follows:
LO 1
Not-for-profit Reporting
Today
Section 4460, Disclosure of Related Party Transactions by
Not-for-profit Organizations
Section 4470, Disclosure of Allocated Expenses by
Not-for-profit Organizations
LO 1
Not-for-profit Reporting
Today
Section 4420, Contributions Receivable:
LO 1
Contributions are defined as a non-reciprocal transfer to a notfor-profit organization of cash or other assets or a non-reciprocal
settlement or cancellation of its liabilities (4420.02)
A contribution should be recognized as an asset when the
amount to be received can be reasonably estimated and the
ultimate collection is reasonably assured. Because pledges
cannot be legally enforced, recognition should be delayed until
cash is received, unless the organization can estimate
collectibility rates based on historical results
Not-for-profit Reporting
Today
Section 4450, Reporting Controlled and Related Entities
by NFPOs
LO 1
Control over other NFPOs (for example by the ability to appoint the
majority of their directors) can be reflected either by consolidation or
by disclosure set out in paragraphs 4450.22 or 4450.26
Control over profit-oriented organizations can be reflected either by
consolidation or by accounting using the equity method with
disclosure described in paragraph 4450.32
Not-for-profit Reporting
Today
Section 4450, Reporting Controlled and Related Entities
by NFPOs (continued)
LO 1
Not-for-profit Reporting
Today
Section 4460, Disclosure of Related Party Transactions
by NFPOs
LO 1
Not-for-profit Reporting
Today
Section 4440, Collections Held by NFPOs
LO 1
Not-for-profit Reporting
Today
Section 4470, Disclosure of Allocated Expenses by
NFPOs
LO 1
Not-for-profit Reporting
Today
Sections 4400 and 4410, Financial Statement
LO 1
Financial Statements
LO 1
Financial Statements
LO 1
Financial Statements
LO 1
LO 1, 3, 4
LO 3
LO 4
LO 1
LO 1
LO 1
LO 2
LO 2
LO 2
LO 2
normal debit and credit rules are reversed, and the budgeted surplus
or deficit is also entered
LO 2
LO 2
LO 2
Close the budgetary accounts, to provide for the "set up" of next
year's budget
Close outstanding encumbrances to expenditures for the period, so
that encumbrances are charged against the budget in the year
approved (entry is reversed at the beginning of the next period)
Close actual revenue and expenditure accounts, updating the fund
balances and clearing the accounts for the following years
expenditures
LO 2
LO 2
$900,000
890,000
$ 10,000
900,000
890,000
10,000
LO 2
LO 2
950
950
950
Supplies expense
Accounts payable
954
LO 2
950
954
LO 6