AFM491 Chapter Notes - Chapter 12: Fund Accounting, Deferred Income, Equity Method

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NFPO“
Poide seies o goods to idetifiale segets of soiet, o pofits
Resoued ae get fo otiutios, o gai, o epaets
No tasfe of oeship, o sale, o edeptio
Goeed  olutees
NFP
Puli P“A hadook ith/ithout the  seies
Piate Pat  o pat 
Chage i poli etospetiel
Restitios o esoues should e leal stated i the fiaial stateets
I NFPO athig fo estited eeues he the fud ethod of aoutig is ot used,
epeses ae eogized fist ad the eeues ae athed to epeses.
A NFPO ust peset the folloig fiaial stateets:
A stateet of fiaial positio i.e. Balae sheet
A stateet of opeatios i.e. “tateet of eeues ad epeses.
Cotiutio & othe eeue iestet, sales of goods ad seies
Uestitedfo a puposes , estitedspeified  the eteal
otiuto, edoetsestited that ust e aitaied i pepetuit 
the ogaizatio, iteest eaed a e spet
Pledges aot e legal efoes, eogized util ash is eeied, uless a
estiate olletailit ates ased o past
Pledges = poise to doate assets
Beuests ot eoded util a ill has ee poated
Lage NFPO
Capitalize ad aotize apital assets
“all NFPO to-aeage e < apital assets / olletios fo NFPO
Epese he auied
Capitalize ad aotize
Capitalize ot aotized
If > theshold at soe pt, apitalize ad aotize, pospetiel appliatio of
the e poli
A stateet of hages i et assets
A stateet of ash flos
A fud asis a e used i oe o oe stateet, ut ot eessail o all
stateets
The stateet of fiaial positio ust sho:
Cuet ad o-uet lassifiatio of assets ad liailities
Edoets, estited, uestited et assets
Capital assets
 optios
Repot as a sepaate opoet of et assets
Note dislosue
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No pesetatio o dislosue
Cotol oe othe NFPO“
Cosolidatio o  dislosue
Cotol oe the FP
Cosideatio o  euit ethod ith dislosue
“etio  – Repotig Cotolled ad Related Eties  NFPOsotd
Joit otol a e efleted eithe  popotioate osolidatio o aoutig
usig the euit ethod.
“igifiat ifluee
NFPO
dislosue sie euit aoutig is ot possile i the asee
of otig shaes to deteie peetage iteest.
pofit-oieted etepise
euit ethod of aoutig.
Othe eooi iteests ae efleted  dislosue
Othe eooi iteests eist if aothe NFPO holds esoues fothe
epotig ogaizatio, o if the epotig ogaizatio is esposile fo
the othe NFPO’s dets.
“etio  – Dislosue of Alloated Epeses  NFPOs
fudaisig epeses ad geeal suppot epeses alloate to oe tha 
dislosue is euied of the alloatio aoutig poli, the atue of the
epeses, the asis o hih the alloatios hae ee ade, the aouts of
eah that hae alloated, ad the futios to hih the hae ee alloated.
Defeal ethod
Does ot ish to epot o fud aoutig asis
athes otiutio eeues ith elated epeses
Uestited otiutios ae epoted i ioe he eeied
Edoet otiutios ae ot sho o the opeatig stateet eause
the ae estited i pepetuit
Restited otiutios ae athed agaist elated epeses
Restited otiutios fo futue epeses ae defeed ad eogized i
eeue i the sae peiods as elated epeses
Restited otiutio fo auisitio of apital assets ae defeed ad
aotized to ioe o the sae asis as the assets ae depeiated; he the
elated asset is ot depeiated e.g., Lad the estited otiutio is efleted
o the stateet of hages i et assets.
“hos all atiities ude oe fiaial stateet olu
Restited fud ethod
Repots o a fud aoutig asis
“epaate f/s olu fo eah atiit
epot a geeal fud, at least oe estited fud, ad, if it has edoets o
eeies edoet otiutios, a edoet fud.
The estited fuds ill e used to eod eteall estited eeue as ell
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as a estited ioe geeated fo edoet fud iestets
The edoet fud ill sho ol otiutio eeue ad o epeses
The geeal fud eflets all uestited otiutios ad iestet ioe
iludig a uestited ioe geeated fo edoet fud iestets.
Usig the defeal ethod, the geeal fud also epots estited otiutios
ad iestet ioe fo hih o sepaate estited fud eists.
Net assets o fud alae a ilude a sepaate atego alled Net assets iested
i apital assets
epesets esoues spet o apital assets ad theefoe ot aailale fo futue
spedig
Ude the estited fud ethod, it euals the uaotized alae of all apital
assets puhased fo estited ad uestited esoues, less aelated det
Ude the defeal ethod, it euals the uaotized alae of apital assets
puhased fo uestited esoues, less a elated det
Tasfes to ad fo the et assets iested i apital assets alae o fud
fo uestited et assets o geeal fud ae sho i the stateet of
hages i fud alaes, ot as eeue ad epeses.
A NFPO is euied to eod the doatio of apital assets at fai alue. If fai alue
aot e deteied, a oial alue ill e used.
Ude the defeal ethod
CR: defeed otiutio-apital assets
aotized to futue ioe as the asset is depeiated
Cedited to et assets iested i apital assets.
if the asset is ot depeiale e.g., Lad
A NFPO has the optio of epotig o ot epotig doated ateial ad seies;
Repotig is peitted ol if fai alue a e deteied, ad if ateials ad
seies ould oall e used i the ogaizatio’s opeatios ad ould hae
ee puhased if the hae ot ee doated.
goeets do ot eist to ake pofit ut to poide seies ad eeues that ae
deied piipall fo taatio.
CPA Caada’s Puli “eto Aoutig Boad P“ABsets the stadads fo goeet
aoutig i the Puli Setor Aoutig Hadook, fist issued i 
The Puli seto Hadook applies to all goeets iCaada ad otais 
“etios o  aoutig guidelies
Reuied fie fiaial stateets:
“tateet of Fiaial Positio
“tateet of Opeatios
“tateet of Chage i Net Det
“tateet of Reeasueet Gais ad Losses
“tateet of Cash Flo
NFPO Ojeties - sho
“uffiiet esoues to poide seies
Cost of poidig seies to eeie eough ash
“teadship esposiilit
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P(cid:396)o(cid:448)ide se(cid:396)(cid:448)i(cid:272)es o(cid:396) goods to ide(cid:374)tifia(cid:271)le seg(cid:373)e(cid:374)ts of so(cid:272)iet(cid:455), (cid:374)o p(cid:396)ofits. Resou(cid:396)(cid:272)ed a(cid:396)e get f(cid:396)o(cid:373) (cid:272)o(cid:374)t(cid:396)i(cid:271)utio(cid:374)s, (cid:374)o gai(cid:374), (cid:374)o (cid:396)epa(cid:455)(cid:373)e(cid:374)ts. No t(cid:396)a(cid:374)sfe(cid:396) of o(cid:449)(cid:374)e(cid:396)ship, (cid:374)o sale, (cid:374)o (cid:396)ede(cid:373)ptio(cid:374) Pu(cid:271)li(cid:272) p a ha(cid:374)d(cid:271)ook (cid:449)ith/(cid:449)ithout the (cid:1008)(cid:1006)(cid:1004)(cid:1004) se(cid:396)ies. P(cid:396)i(cid:448)ate pa(cid:396)t (cid:1005) o(cid:396) pa(cid:396)t (cid:1007) Rest(cid:396)i(cid:272)tio(cid:374)s o(cid:374) (cid:396)esou(cid:396)(cid:272)es should (cid:271)e (cid:272)lea(cid:396)l(cid:455) stated i(cid:374) the fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)ts. I(cid:374) nfpo (cid:373)at(cid:272)hi(cid:374)g fo(cid:396) (cid:396)est(cid:396)i(cid:272)ted (cid:396)e(cid:448)e(cid:374)ues (cid:449)he(cid:374) the fu(cid:374)d (cid:373)ethod of a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g is (cid:374)ot used, e(cid:454)pe(cid:374)ses a(cid:396)e (cid:396)e(cid:272)og(cid:374)ized fi(cid:396)st a(cid:374)d the(cid:374) (cid:396)e(cid:448)e(cid:374)ues a(cid:396)e (cid:373)at(cid:272)hed to e(cid:454)pe(cid:374)ses. A nfpo (cid:373)ust p(cid:396)ese(cid:374)t the follo(cid:449)i(cid:374)g fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)ts: A state(cid:373)e(cid:374)t of fi(cid:374)a(cid:374)(cid:272)ial positio(cid:374) (cid:894)i. e. bala(cid:374)(cid:272)e sheet(cid:895) A state(cid:373)e(cid:374)t of ope(cid:396)atio(cid:374)s (cid:894)i. e. tate(cid:373)e(cid:374)t of (cid:396)e(cid:448)e(cid:374)ues a(cid:374)d e(cid:454)pe(cid:374)ses(cid:895). Co(cid:374)t(cid:396)i(cid:271)utio(cid:374) & othe(cid:396) (cid:396)e(cid:448)e(cid:374)ue (cid:894)i(cid:374)(cid:448)est(cid:373)e(cid:374)t, sales of goods a(cid:374)d se(cid:396)(cid:448)i(cid:272)es. , (cid:396)est(cid:396)i(cid:272)ted(cid:894)spe(cid:272)ified (cid:271)(cid:455) the e(cid:454)te(cid:396)(cid:374)al (cid:272)o(cid:374)t(cid:396)i(cid:271)uto(cid:396)(cid:895), e(cid:374)do(cid:449)(cid:373)e(cid:374)ts(cid:894)(cid:396)est(cid:396)i(cid:272)ted that (cid:373)ust (cid:271)e (cid:373)ai(cid:374)tai(cid:374)ed i(cid:374) pe(cid:396)petuit(cid:455) (cid:271)(cid:455) the o(cid:396)ga(cid:374)izatio(cid:374), i(cid:374)te(cid:396)est ea(cid:396)(cid:374)ed (cid:272)a(cid:374) (cid:271)e spe(cid:374)t(cid:895) Pledges (cid:272)a(cid:374)(cid:374)ot (cid:271)e legal e(cid:374)fo(cid:396)(cid:272)es, (cid:396)e(cid:272)og(cid:374)ized u(cid:374)til (cid:272)ash is (cid:396)e(cid:272)ei(cid:448)ed, u(cid:374)less (cid:272)a(cid:374) esti(cid:373)ate (cid:272)olle(cid:272)ta(cid:271)ilit(cid:455) (cid:396)ates (cid:271)ased o(cid:374) past.

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