COVID-19: What should nonprofits focus on during this time?

There is no doubt COVID-19’s impact is like nothing we have experienced from the food and toilet paper shortages to the state mandated closures of non-essential businesses and schools. There is so much uncertainty as things are continually changing day by day. Nonprofits are not immune to the impact of COVID-19. In fact, they are …

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Are you missing a related party footnote disclosure?

This disclosure is easy to overlook but it’s important for proper financial reporting.  A related party footnote disclosure is needed when transactions are recorded in the financials between the preparer and related parties.  Understanding whom and what is considered a related party will help alleviate missed opportunities in disclosing related party transactions.  Per ASC 850 …

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Raffles – Tax implications and withholdings

Holding raffles at a special event is common amongst non-profits, but did you know there are tax implications and responsibilities for the winner and nonprofit organization? Here are a few things to keep in mind as you are preparing to hold a raffle. Nonprofit organizations report raffle prizes to the recipient and IRS on Form …

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Top 10 things to know about Endowments

The accounting for and the responsibilities relating to endowments can be confusing to nonprofit organizations. Accounting staff, management, and the Finance Committee members should all have the knowledge to be able to ensure endowments are tracked correctly and that the organization is complying with UPMIFA. Here are the top 10 things you should know about …

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Who is the PCC and what do they do?

The PCC (Private Company Council) is a sub-organization created by and of the FASB. The PCC’s primary function is to evaluate current financial reporting standards set forth by GAAP and identify opportunities to streamline implementation and general reporting standards for private companies. The FASB and PCC recognize that certain standards are not as impactful for …

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Statement of Functional Expense

The statement of functional expense also referred to by some as a “SOFE”, provides the reader of the financial statement more detail of an entity’s expenses. The SOFE shows the expenses broken down by an expense’s purpose. This statement classifies expenses by its natural expense classification and also its functional expense classification. The natural expense …

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Liquidity and availability

As you are probably aware by now, Accounting Standards Update (ASU) 2016-14, Not-for-Profit Entities – Presentation of Financial Statements of Not-for-Profit Entities is in full effect as it was effective for fiscal years beginning after December 15, 2017. Many of you should have implemented this new accounting standard by now and should have already seen …

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Is it a related party transaction if no amounts were paid?

A related party transaction is required to be disclosed in the footnotes of your financial statements. Once you identify who the related parties are, then you need to disclose any transactions between the Organization and those parties. A common example is when the attorney on the board provides services to the Organization for a fee. …

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What to know about 457 plans

Taxes relating to 457 plans can be confusing for tax exempt entities. Here are some key points to know: 457b and 457f plans are deferred compensation retirement plans that are offered to a select group of higher compensated or key management employees in a tax exempt entity. Both employees and employers can make contributions to …

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