AFM491 Chapter Notes - Chapter 12: Fund Accounting, Deferred Income, Equity Method
NFPO“
➢ Poide seies o goods to idetifiale segets of soiet, o pofits
➢ Resoued ae get fo otiutios, o gai, o epaets
➢ No tasfe of oeship, o sale, o edeptio
➢ Goeed olutees
NFP
➢ Puli → P“A hadook ith/ithout the seies
➢ Piate → Pat o pat
Chage i poli → etospetiel
➢ Restitios o esoues should e leal stated i the fiaial stateets
➢ I NFPO athig fo estited eeues he the fud ethod of aoutig is ot used,
epeses ae eogized fist ad the eeues ae athed to epeses.
➢ A NFPO ust peset the folloig fiaial stateets:
◼ A stateet of fiaial positio i.e. Balae sheet
◼ A stateet of opeatios i.e. “tateet of eeues ad epeses.
◆ Cotiutio & othe eeue iestet, sales of goods ad seies
⚫ Uestitedfo a puposes , estitedspeified the eteal
otiuto, edoetsestited that ust e aitaied i pepetuit
the ogaizatio, iteest eaed a e spet
◆ Pledges aot e legal efoes, eogized util ash is eeied, uless a
estiate olletailit ates ased o past
◆ Pledges = poise to doate assets
◆ Beuests ot eoded util a ill has ee poated
◆ Lage NFPO
⚫ Capitalize ad aotize apital assets
◆ “all NFPO to-aeage e < apital assets / olletios fo NFPO
⚫ Epese he auied
⚫ Capitalize ad aotize
⚫ Capitalize ot aotized
⚫ If > theshold at soe pt, apitalize ad aotize, pospetiel appliatio of
the e poli
◼ A stateet of hages i et assets
◼ A stateet of ash flos
◆ A fud asis a e used i oe o oe stateet, ut ot eessail o all
stateets
➢ The stateet of fiaial positio ust sho:
◼ Cuet ad o-uet lassifiatio of assets ad liailities
◼ Edoets, estited, uestited et assets
➢ Capital assets
◼ optios
◆ Repot as a sepaate opoet of et assets
◆ Note dislosue
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◆ No pesetatio o dislosue
◼ Cotol oe othe NFPO“
◆ Cosolidatio o dislosue
◼ Cotol oe the FP
◆ Cosideatio o euit ethod ith dislosue
“etio – Repotig Cotolled ad Related Eties NFPOs ot’d
▪ Joit otol a e efleted eithe popotioate osolidatio o aoutig
usig the euit ethod.
▪ “igifiat ifluee
• NFPO
dislosue sie euit aoutig is ot possile i the asee
of otig shaes to deteie peetage iteest.
◼ pofit-oieted etepise
⚫ euit ethod of aoutig.
▪ Othe eooi iteests ae efleted dislosue
• Othe eooi iteests eist if aothe NFPO holds esoues fo the
epotig ogaizatio, o if the epotig ogaizatio is esposile fo
the othe NFPO’s dets.
“etio – Dislosue of Alloated Epeses NFPOs
▪ fudaisig epeses ad geeal suppot epeses → alloate to oe tha
▪ dislosue is euied of the alloatio aoutig poli, the atue of the
epeses, the asis o hih the alloatios hae ee ade, the aouts of
eah that hae alloated, ad the futios to hih the hae ee alloated.
Defeal ethod
▪ Does ot ish to epot o fud aoutig asis
▪ athes otiutio eeues ith elated epeses
▪ Uestited otiutios ae epoted i ioe he eeied
▪ Edoet otiutios ae ot sho o the opeatig stateet eause
the ae estited i pepetuit
▪ Restited otiutios ae athed agaist elated epeses
▪ Restited otiutios fo futue epeses ae defeed ad eogized i
eeue i the sae peiods as elated epeses
▪ Restited otiutio fo auisitio of apital assets ae defeed ad
aotized to ioe o the sae asis as the assets ae depeiated; he the
elated asset is ot depeiated e.g., Lad the estited otiutio is efleted
o the stateet of hages i et assets.
▪ “hos all atiities ude oe fiaial stateet olu
Restited fud ethod
▪ Repots o a fud aoutig asis
▪ “epaate f/s olu fo eah atiit
▪ epot a geeal fud, at least oe estited fud, ad, if it has edoets o
eeies edoet otiutios, a edoet fud.
▪ The estited fuds ill e used to eod eteall estited eeue as ell
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as a estited ioe geeated fo edoet fud iestets
▪ The edoet fud ill sho ol otiutio eeue ad o epeses
▪ The geeal fud eflets all uestited otiutios ad iestet ioe
iludig a uestited ioe geeated fo edoet fud iestets.
Usig the defeal ethod, the geeal fud also epots estited otiutios
ad iestet ioe fo hih o sepaate estited fud eists.
Net assets o fud alae a ilude a sepaate atego alled Net assets iested
i apital assets
▪ epesets esoues spet o apital assets ad theefoe ot aailale fo futue
spedig
▪ Ude the estited fud ethod, it euals the uaotized alae of all apital
assets puhased fo estited ad uestited esoues, less a elated det
▪ Ude the defeal ethod, it euals the uaotized alae of apital assets
puhased fo uestited esoues, less a elated det
▪ Tasfes to ad fo the et assets iested i apital assets alae o fud
fo uestited et assets o geeal fud ae sho i the stateet of
hages i fud alaes, ot as eeue ad epeses.
A NFPO is euied to eod the doatio of apital assets at fai alue. If fai alue
aot e deteied, a oial alue ill e used.
▪ Ude the defeal ethod
• CR: defeed otiutio-apital assets
aotized to futue ioe as the asset is depeiated
• Cedited to et assets iested i apital assets.
if the asset is ot depeiale e.g., Lad
A NFPO has the optio of epotig o ot epotig doated ateial ad seies;
▪ Repotig is peitted ol if fai alue a e deteied, ad if ateials ad
seies ould oall e used i the ogaizatio’s opeatios ad ould hae
ee puhased if the hae ot ee doated.
goeets do ot eist to ake pofit ut to poide seies ad eeues that ae
deied piipall fo taatio.
CPA Caada’s Puli “eto Aoutig Boad P“AB sets the stadads fo goeet
aoutig i the Puli Setor Aoutig Hadook, fist issued i
▪ The Puli seto Hadook applies to all goeets i Caada ad otais
“etios o aoutig guidelies
▪ Reuied fie fiaial stateets:
• “tateet of Fiaial Positio
• “tateet of Opeatios
• “tateet of Chage i Net Det
• “tateet of Reeasueet Gais ad Losses
• “tateet of Cash Flo
NFPO Ojeties - sho
▪ “uffiiet esoues to poide seies
▪ Cost of poidig seies to eeie eough ash
▪ “teadship esposiilit
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Document Summary
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.