Nonprofit Accounting Basics

Audit

Accounting for Uncertain Tax Positions: A Requirement for Nonprofit Financial Statements

FIN 48, Accounting for Uncertain Tax Positions (now codified as ASC 740-10) was made a requirement for any entity with financial statements prepared in accordance with generally accepted acc

Activities Allowed or Unallowed

The specific requirements for activities allowed or unallowed are unique to each Federal program and are found in the laws, regulations, and the provisions of contract or grant agreements pertainin

Allowable Costs/Cost Principles

These principles describe the cost accounting requirements associated with federal awards.

Audit vs Review vs Compilation

A nonprofit organization can engage a Certified Public Accountant (CPA) to prepare its financial statements.  There are three levels of financial statement services offered by CPAs: Audits, Re

Best Practice: Federal Grant Compliance Program

A "best practice" is the most effective way to achieve the desired outcome applicable to most organizations.  Our goal is to develop a compliance program for federal grants applicable to nonpr

Cash Management

When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government.

Common Disclosures

Some of the most common disclosures are:

Compliance Audits for Federal Awards

The Office of Management and Budget (OMB) issued a compliance supplement to its Circular A-133i.

Confirmations

The auditor will ask you to write confirmation letters to your banks, funders, lenders, and attorneys to confirm the amounts reflected in your records.  Confirmation letters are printed on you

Davis–Bacon Act

The Davis-Bacon Act requires that wages for "laborers and mechanics" employed by contractors (including subcontractors) of federally-funded construction in excess of $2,000 be paid in accordance wi

Eligibility

Eligibility specifies the criteria for determining the individuals, groups of individuals, or subrecipients that can participate in the program and the amounts of assistance for which they qualify.

Equipment and Real Property Management

Equipment and real property management provides standards for the use and disposition of equipment and real property purchased with federal funds.

FAS 116

What is FASB 116?

Statement of Financial Account Standards 116 (FASB116) is the primary guidance relating to the recording of contribution revenue by not-for-profit organizations (NFPs).

FAS 117

What is FASB 117?

Statement of Financial Accounting Standard 117 “Financial Statements of Not-for-Profit Organizations” (FASB117) is the primary guidance relating to the financial statement

Great New Resource for Federal Grantees

As part of its ongoing commitment to educated organizations that receive federal awards, the Governmental Audit Quality Center (GAQC), part of the American Institute of Certified Public Accountants

Interepreting an Audit

After the audit is completed, the auditor will issue the organization an audit report. The audit report is addressed to the board of directors. The report includes:
 

Introduction to OMB Circular A-133

The A-133 compliance supplementi describes 14 types of compliance requirements and related audit objectives and procedures to be considered in performing audits subject

Investments: Fair Value Disclosures

A common item on the financial statements of not-for-profit organizations (NPOs) is investments. These investments can often be the largest single line item on the financial statements.

Key Considerations for Audit/ Finance Committee Review for Form 990

With the transparency and public availability of the “new” Form 990, review of the Form 990 by audit or finance committees (and sometimes the entire governing body) has become a best practice adopt

Matching, Level of Effort, and Earmarking

Matching, level of effort, and earmarking are the:

New Financial Reporting Standards for Nonprofits

The Financial Accounting Standards Board (FASB) has issued Accounting Standard Update (ASU) 2016-14.  This ASU is intended to update, not overhaul, the current financial statement model to imp

OMB Circular A-110

What is OMB Circular A-110?

OMB Circular A-110 ("A-110") is officially named "Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals,

OMB Circular A-122

What is OMB Circular A-122?

OMB Circular A-122 ("A-122") is officially named "Cost Principles for Non-Profit Organizations".

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