[Anonymous]

Hello – For the question below, i chose “0” because i had thought that the only breakdown was donor restricted vs. non donor restricted. none of the examples I’ve seen break down current vs. non current for a non-for profit’s SOFP. can somebody clarify whether or not current vs. non current assets and liabilities are split out?

In Year 1, Gamma, a not-for-profit organization, deposited at a bank $1,000,000 given by a donor to pur­chase endowment securities. The securities were purchased January 2, Year 2. At December 31, Year 1, the bank recorded $2,000 interest on the deposit. In accordance with the bequest, this $2,000 was used to finance ongoing program expenses in March of Year 2. At December 31, Year 1, what amount of the bank balance should be included as current assets in Gamma’s statement of financial position?

Incorrect A.
$0

B.
$2,000

C.
$1,000,000

D.
$1,002,000

In this situation, the income from the endowment is available to fund current program expenses (those incurred within the year). Since the principal of the endowment is now in security investments (which are not current assets), only the income related to the investment is current, since it is intended to be expended within the coming year.

[MantisAlfredo]

Because the $2000 can be used for on-going expenses (not specifically restricted by the donor), and because unrestricted net assets can be used in the current period, the $2000 are reported as current assets. The $1,000,000 is permanently restricted, and thus non-current. Even though there isn't a specific ‘category' listed on the statement, the classification still exists.

AUD - 78
BEC - NINJA in Training
FAR - 88
REG - 81

Take care of your shoes!

[Anonymous]

I understand there is an inherent classification, but the question is about presentation on the SOFP. Just trying to clarify whether or non “current” vs. “non current” is a required classification for NFP accounting.

[MeanJoe]

The NET ASSETS are classified as either with or without donor restriction on the statement of financial position.

The assets of the NFP are broken down by current or noncurrent and further in the order of liquidity.

Liabilities are sequenced in the order of their maturity.

See here:

https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176168381847&acceptedDisclaimer=true

BEC - Passed September 2016

AUD - Passed December 2016

REG - Passed May 2017

FAR - Passed March 2018

[MeanJoe]

It may not literally say “Current” and Noncurrent” on the statement of financial position but they are still aggregated in that order.

BEC - Passed September 2016

AUD - Passed December 2016

REG - Passed May 2017

FAR - Passed March 2018

[Author]

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