Statement of Financial Accounting Standards No. 117 - FASB

Statement of Financial Accounting Standards No. 117 FAS117 Status Page FAS117 Summary Financial Statements of Not-for-Profit Organizations June 1993 Financial Accounting Standards Board of the Financial Accounting Foundation 401 MERRITT 7, P.O. BOX 5116, NORWALK, CONNECTICUT 06856-5116 Copyright © 1993 by Financial Accounting Standards Board. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the Financial Accounting Standards Board. Page 2 Statement of Financial Accounting Standards No. 117 Financial Statements of Not-for-Profit Organizations June 1993 CONTENTS Paragraph Numbers Introduction .................................................................................................................. 1–3 Standards of Financial Accounting and Reporting: Purpose of a Set of

Financial Statements ............................................................... 4–5 Scope ...................................................................................................................... 6–8 Statement of Financial Position............................................................................ 9–16 Purpose and Focus of a Statement of Financial Position ............................... 9–10 Classification of Assets and Liabilities ........................................................ 11–12 Classification of Net Assets as Donor Restricted or Unrestricted................ 13–16 Statement of Activities ....................................................................................... 17–28 Purpose and Focus of a Statement of Activities........................................... 17–18 Changes in Classes of Net Assets....................................................................... 19 Classification of Revenues, Expenses, Gains, and Losses ........................... 20–23 Information about Gross Amounts of Revenues and Expenses ................... 24–25 Information about an Organization's Service Efforts ................................... 26–28 Statement of Cash Flows.................................................................................... 29–30 Purpose of a Statement of Cash Flows............................................................... 29 Amendments to Statement 95 ............................................................................ 30 Effective Date and Transition................................................................................... 31 Appendix A: Background Information..................................................................... 32–36 Appendix B: Basis for Conclusions ....................................................................... 37–152 Appendix C: Illustrative Examples ...................................................................... 153–167 Appendix D: Glossary.................................................................................................. 168 Page 3 Copyright © 1993, Financial Accounting Standards Board Not for redistribution FAS 117: Financial Statements of Not-for-Profit Organizations FAS 117 Summary This Statement establishes standards for general-purpose external financial statements provided by a not-for-profit organization. Its objective is to enhance the relevance, understandability, and comparability of financial statements issued by those organizations. It requires that those financial statements provide certain basic information that focuses on the entity as a whole and meets the common needs of external users of those statements. This Statement requires that all not-for-profit organizations provide a statement of financial position, a statement of activities, and a statement of cash flows. It requires reporting amounts for the organization's total assets, liabilities, and net assets in a statement of financial position; reporting the change in an organization's net assets in a statement of activities; and reporting the change in its cash and cash equivalents in a statement of cash flows. This Statement also requires classification of an organization's net assets and its revenues, expenses, gains, and losses based on the existence or absence of donor-imposed restrictions. It requires that the amounts for each of three classes of net assets—permanently restricted, temporarily restricted, and unrestricted—be displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities. This Statement amends FASB Statement No. 95, Statement of Cash Flows, to extend its provisions to not-for-profit organizations and to expand its description of cash flows from financing activities to include certain donor-restricted cash that must be used for long-term purposes....

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