Statement of Activities
Posted by admin in Investing on Feb 2nd, 2010 | 1 comment“Statement of Activities” is the name given to a statement that reflects all of a not-for-profit organization’s financial transactions and calculations from the beginning to the end of its fiscal year which result in increases and decreases in an organization’s net assets. The statement of activities is the not-for-profit organization’s equivalent to a commercial organization’s operating statement or income statement. By its inherent design, the statement of activities presents the changes in net assets from the beginning of the fiscal year to the end of the fiscal year.
The statement of activities should report the change in each class of net assets (i.e., unrestricted, temporarily restricted, and permanently restricted) for the period shown. SFAS 117 states that information about the organization’s revenues, gains, losses, expenses, and reclassification should be reported. In addition, as per SFAS 117 and NFP Audit Guide, the statement of activities should apply the disclosure and display provisions related to extraordinary items, discontinued operations, and accounting changes, and present a subtotal for the change in each class of net assets before those items.
Elements of the Change in Net Assets
According to Statement of Financial Accounting Concepts (SFAC) 6, Elements of Financial Statements, each item presented in the statement of activities may be categorized according to one of the following components:
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Revenues—Cash inflows (or the equivalent) from delivering or producing goods, rendering services, or other activities that have occurred or will eventuate as a result of an entity’s major or central operations. The cash inflows may be actual cash receipts or expected cash receipts
Note While this definition of revenues reflects the definition of SFAS 6, it should be noted that not-for-profit organizations often receive contributions that are reported as “revenue” but are not in the form of cash. Donated materials and supplies, for example, are recorded as contribution revenue by a not-for-profit organization, although no cash is exchanged. Similarly, in many instances donated services are recorded by a not-for-profit organization as revenue (with a corresponding expense). Noncash contributions are discussed in more detail in Chapter 5.
Taken From : Wiley Not-for-Profit Accounting Field Guide 2003
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