Nonprofit statement of activities
The nonprofit statement of activities is one of the primary nonprofit financial statements. It is basically the nonprofit income statement because nonprofit entities do not have an income statement. The purpose of the nonprofit statement of activities is to provide details about transactions of the nonprofit entity how those transactions are providing for the organizations various programs and services.
Since it is similar to an income statement it has revenues, expenses and a change in net assets. You must also break out the statement of activities into restricted and unrestricted. SFAS 117 is the primary guidance related to nonprofit financial statements. It went into effect in 1995.
Do nonprofits have a profit and loss statement?
No nonprofits do not have a nonprofit P&L. Since their mission isn’t to operate for profit, they don’t need to show a profit statement. They do need to show how they are using their revenues and expenses to achieve their mission.
Types of revenue on a nonprofit statement of activities
Fees from rendering services, donor restricted contributions, gains & losses on investments, member dues, program fees and fundraising events. Revenues should be reported on a gross basis, but investments can be reported on a net basis. Nonprofits might also receive money from the local and federal government.
Types of revenues:
Private gifts and private grants
Noncash contributions – This includes transfers of assets that aren’t cash.
Donated Materials – value of materials that have been donated to your nonprofit.
The most significant source of revenue for most nonprofits is contributions received. ASC 958 dictates how to treat contributions received.
The revenues are broken down further into temporarily restricted, permanently restricted and unrestricted.
Types of expenses on a nonprofit statement of activities
Program services, management expenses, budgeting, financial and administrative fees. Expenses should be reported as major classes of program services and supporting activities.
The other thing that FASB 117 requires of nonprofit entities is reporting of expenses by functional classification. This means that a nonprofit statement of activities should have at least two categories.
1. Program service expenses
2. Supporting expenses
Other types of services:
- Salary and Wages
- Legal Services
- Retirement Contribution
- Workers Compensation
- Disability Insurance
- Supplies and Materials
- Advertising and promotion
What is restricted revenue?
Restricted revenue for a nonprofit is revenue that is to be used to a particular purpose. Those revenues are to be set aside for particular expenses of the nonprofit. Unrestricted revenues can be used for any legal expenses that a nonprofit might have. When asking for donations or funds, nonprofits are required to ask donors if they would like their donations to be restricted or unrestricted funds.
What is temporarily restricted revenue?
Temporarily restricted profits might have a restriction on them for a given time period. Once that time period lapses or the purpose of the funds is fulfilled, those funds can be used for something else. This is no longer relevant, but it might be useful in looking at historical nonprofit statement of activities.
SFAS 116 is the FASB pronouncement that governs how contributions from donors should be unrestricted, temporarily restricted or permanently restricted. However, ASU 2016-14 simplified the restrictions into just two categories (with donor restrictions, without donor restrictions).
Nonprofit Statement Of Activities Example
Below is an example of a nonprofit statement of activities.
|Without Donor Restrictions||With Donor Restrictions||Total|
|Revenues & Other Support|
|Investment Return, Net||$200||$(4000)||$(3,800)|
|Net Assets Released From Restriction||$8,000||$(5,000)||$3,000|
|Management & General||$4,000||–||$4,000|
|Change In Net Assets||$1,450||$5,000||$6450|
|Net Assets At Beginning Of Year||$140,000||$470,000||$610,000|
|Net Assets At End Of Year||$141,450||$475,000||$616,450|
Nonprofit Statement of Activities Template Excel
An excel template for nonprofit statement of activities.
Change In Net Assets On Statement Of Activities
The purpose of the change in net assets is to articulate the net assets or equity of the statement of financial position.
Where to find nonprofit financial statements?
Where can you find nonprofit financial statements? If a nonprofit has over $100,000 in annual contributions or $250,000 in assets, they are required to file IRS Form 990. They should have a link to this on their website. However, you might not be able to easily find their financial statements. In order to get their financials, you can pay for tools like Guidestar. Alternatively, you can just ask the nonprofit itself.
ASC 958 is a new pronouncement that governs how grants and contracts are accounted for.