Acc548 Week 5 Reporting Requirements Memo Essay

Words: 1055
Pages: 5

Reporting Requirements Memo | Not-For-Profit and Government Accounting/ACC548



To: CPA Senior Partner
Subject: Reporting Requirements

This memo is prepared with two objectives as follows: 1. To provide analysis reporting requirement both of a small county hospital (SCH) and a private not-for-profit nursing home
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Analysis Reporting Requirement for a Private Not-for-Profit Nursing Home
The FASB is responsible for setting the reporting requirements for private, not-for-profit organizations such as the nursing home that is under consideration. Private not-for-profit organizations are commonly financed through voluntary contributions – as a result, the financial statements are intended primarily for use by its donors. Private not-for-profit organizations are required to comply with unique standards that result from the contributions by its donors as well as typical FASB standards.
Private not-for-profits use the accrual basis of accounting to report both current and long-term assets and liabilities as well as to measure revenues and expenses. FASB Statement 117 established the standardized not-for-profit financial statements - three statements are required by the FASB: Statement of Financial Position, Statement of Activities, and Statement of Cash Flows. * The Statement of Financial Position reports assets, liabilities, and net assets. Net assets are broken down into unrestricted, temporarily restricted, or permanently restricted assets. * The Statement of Activities reports revenues, expenses, gains losses and reclassifications. Separate columns are kept for each class of net assets. Contributions are recorded as revenue in the appropriate net asset class. All expenses are recorded and reported as unrestricted expenses and