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5 financial statements included in nonprofit accounting Empty 5 financial statements included in nonprofit accounting

Thu Nov 24, 2022 11:42 am

Statement of financial position

• The equivalent of the traditional for-profit balance sheet
• statements of financial position show what the nonprofit owns, owes and has remaining
• Traditional balance sheets show equity on the remaining funds, but since nonprofits don't have owners, instead, the nonprofit refers to the remaining funds as net assets

Statement of activities
• Also known as the operating statement for some nonprofits,
• Nonprofit version of the for-profit income statement.
• It tracks all the organization's expenses and revenue streams over a set period of time, usually a fiscal quarter or a year.
• The bottom line, or final calculation, is the change in net assets as opposed to the net revenue shown on an income statement.

Statement of cash flows
• Tracks the cash your organization has on hand, usually from three sources—financing, operations and investing.
• These documents look very similar to the for-profit equivalent, also called a statement of cash flow or cash flow statement.
the statement in cash flow tracks
• Changes in net assets rather than profits or revenue.

Nonprofit budget
• It helps your organization allocate funds and plan for potential expenses.
• Nonprofit budgets function similarly to for-profit budgets
• They feature multiple funds reserved for different purposes, specifically restricted funds, temporarily restricted funds and unrestricted funds.

Statement of functional expense
• It tracks your nonprofit's expenses by category to help you more easily reconcile your accounts
• Maintain transparency with your stakeholders.
• Common categories for statements of functional expense include administrative expenses, program expenses and fundraising activity expenses.
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