|
In response to
"i am trying to write up an email to a new bookkeeper at a client, will st proof it for me?"
by
tRuMaN
|
here's a proofed version.
Posted by
b. (aka starrynit)
Jul 9 '12, 14:42
|
just some small changes, mostly tweaking to make style consistent, etc. mostly, it reads just fine.
The Financial Accounting Standards Board, in its Accounting Standards Codification (ASC) No 958 (formerly Statement of Financial Accounting Standards SFAS No. 117, Financial Statements of Not-for-Profit Organizations), requires not-for-profit organizations to report Net Assets as Unrestricted, Temporarily Restricted, or Permanently Restricted. The guidance in that standard requires that the organization reports the amount for each of the three classes of net assets � permanently restricted, temporarily restricted, and unrestricted � based on the existence or absence of donor-imposed restrictions.
Donor-imposed restriction are previously defined in other standards (Concept Statement No 6, SFAS 116, as well as other locations). The simple standard is �is the donation a gift?� and �does it contain restrictions on the use of the funds?� If it is a gift, and as such there is no contract, grant, or other agreement, then the amounts are considered a donation; and the second question determines the classification on the balance sheet.
What we are trying to determine is if the amounts shown in Temporarily Restricted Net Assets follow this guidance. If they are donations, and not contracts or grants, then it is probable that the classification is correct. But if these represent Contracts, Grants, or other non-donation sources of income, then the classification on the balance sheet needs to be changed to either Unrestricted or Refundable Advances (deferred revenue).
Our understanding is that Snickers is providing services for the City and County in exchange for these funds, such as neighborhood development, or similar. If that is true, then these funds are not a donation, and a reclassification on the balance sheet needs to be considered.
None of these changes will affect the Income statement or the revenue of Snickers, only their presentation as Unrestricted or Temporarily Restricted revenue on the income statement, and Unrestricted or Temporarily Restricted Net Assets on the balance sheet.
|