You have the passion to help and give back to others. You work so hard to get your passion into action and you know that the government offers the opportunity for organizations like yours to gain tax exemption. However, applying for tax-exempt status can be a long and complicated process and it may take months …
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 …
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 …
What exactly is the fraud triangle and a better question is how does it apply to you? One thing to know about the fraud triangle is that it is designed to help explain why internal fraud occurs. Like most triangles, it has three points that make it what it is. These three components are Opportunity, …
Related party transactions are 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. But …
Let’s be honest, data management in your organization is probably not the most important step in your nonprofit’s hierarchy of needs. And love it, or hate it, there’s a good chance your organization relies on Excel for many tasks, including data management. Here are three useful tips that may make life inside the spreadsheet a …
Many not-for-profit organizations hold special fundraising events with the intent to raise contributions to support their mission, such as galas, balls, dinners, theater parties and auctions. Donor participants purchase tickets to attend the event in exchange for goods or services provided as a benefit to the participant. The direct benefits to the donor participant are …
What is a “collection” in accounting terms? The FASB recognized that there were some conflicting definitions out there and issued a new ASU to get it straightened out. The new definition of collection is: Works of art, historical treasures or similar assets that meet all of the following criteria: (a) they are held for public …
Let’s face it, not many people like change – especially when it comes to their daily routines and their jobs. Change can cause confusion and frustration. I want to take a little time to discuss one of the changes that has affected nonprofit organizations recently. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update …
As many of you may know, the Financial Accounting Standards Board (FASB) issued a new standard ASU 2016-14, Presentation of Financial Statements. One effect this standard has is that it creates consistency on how expenses are presented in the financial statements for all nonprofit organizations. Functional expenses can be disclosed in three different ways: 1. …