In: Accounting
Explain the three types of net assets used in the not-for-profit environment. Discuss the change
in the dislosure of net assets discussed in a FASB proposal.
Three types of Net Assets used in Non profit Environment | ||||||||||
Net Assets refers to the Difference betweem Total assets - total Liabilities except | ||||||||||
Equity funds. Net assets classified in Three categories in non profit environment | ||||||||||
1. Unrestricted Net Assets: these assets are used for daily operation activities . | ||||||||||
2. Temporarily restricted: When Non Profit organisation receive fund and same | ||||||||||
will be hold for spent on certain activites or in future | ||||||||||
activities these fund are blocked temporarily | ||||||||||
3. Permanently Restricted: These types of Net assets endowment funds and other | ||||||||||
same kind of funds for its perpetuity. Non Profit environment | ||||||||||
can only use the income generated from these types of funds | ||||||||||
Change in the dislosure of net assets discussed in a FASB proposal | ||||||||||
FASB classify net assets in two types of cetegory | ||||||||||
Without Restriction: these types of assets represents assets that’s are not subjects to | ||||||||||
donor restrictions | ||||||||||
With Restrictions : These are the asssts that’s are subjects to donor restrction like Endowment funds | ||||||||||
Discouser Required as FASB | ||||||||||
Following Discloser required in not environment business as follows | ||||||||||
Net Asset Classes | ||||||||||
Investment Return | ||||||||||
Expenses | ||||||||||
Liquidity and Availability of Resources | ||||||||||
Presentation of Operating Cash Flows. | ||||||||||