The Simplified Guide to Not-for-Profit Accounting, Formation, and Reporting

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John Wiley & Sons, Apr 30, 2010 - Business & Economics - 288 pages
A complete and easy to understand guide to the fundamentals of how not-for-profit organizations are formed and run, as well as their structure and the unique accounting and reporting issues they face.

Providing you with a comprehensive understanding of how to maintain the "books" of a typical nonprofit entity and comply with numerous reporting requirements, The Simplified Guide to Not-for-Profit Accounting, Formation & Reporting equips you with everything you need to know to form a Not-For-Profit, setup an accounting system, record financial transactions and report to donors and regulatory bodies.

Topics include:

  • Step-by-step guide to forming a Not-For-Profit and applying for tax exemption
  • Becoming familiar with unique Not-For-Profit accounting rules such as classifying contributions/grants and recording restrictions, allocation of expenses to programs and supporting services and investment classification and reporting
  • Budget development, payroll processing and accounting for personnel costs
  • Shows how to prepare and understand required Not-For-Profit financial statement and their components
  • Provides you with a broad understanding of the numerous filing requirement required by donors, grantors and government regulatory agencies

Practical and comprehensive in scope, The Simplified Guide to Not-for-Profit Accounting, Formation & Reporting offers a wealth of practical information to accountants and non-accountants alike for understanding Not-For-Profit financial transactions, financial statements and the many internal and external reports they must prepare.


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This book is Fantastic! Not-For-Profit accounting can be quite complex at times but this book cuts right to the point and provides easy to understand answers to difficult questions. I would recommend it to anyone and everyone who works in a financial capacity at a Not-For-Profit organization 


Accounting Is More Than Numbers
Unique Characteristics and Types of NFPs
How Does One Start an NFP?
Exemption Applications and Other Registrations
Who Regulates NotforProfits?
Typical Reporting and Responsibility Structure
Role of the Board of Directors and Committees
Accounting for Payroll and Related Expenses
Expense Allocations FundRaising Activities and Joint Costs
Rental Expenses Related to Operating Leases
Pension and Retirement Plans
Restricted Investments
Allocation of Pooled Funds and Donor Advised Funds
SplitInterest Agreements
Accounting for Investments in ForProfit Entities

Role of Management and Staff
Role of Accounting Department
Basic TenetsPrincipals of Internal Controls Systems
NFP Accounting Rules and GAAP
Basic TenetsPrinciples Underlying Accounting
Automated Bookkeeping
Accounting Software
General Ledger and Chart of Accounts
Introduction to NFP Financial Statements
Statement of Financial Position
Statement of Activities
Statement of Cash Flows
Statement of Functional Expenses
Notes to Financial Statements
An Illustration
Cash and Receivables
Prepaid Expenses Inventory and Collections
Property and Equipment Depreciation and Other Assets
Accounts Payable and Accrued Expenses
Loans and Notes Payable
Deferred Revenue and Other Liabilities
Contingencies and Commitments
Net Assets
Contributions and Release of Restricted Funds
Contributed Goods Facilities and Services
Government Grants
Program Service Revenue and Membership Dues
FundRaising Special Events
Investment and Other Income
Employee Classification
Payroll and PayrollTax Processing and Reporting
Accounting for Interrelated NFP Entities
Budget Preparation
Budget Format
Membership Organizations Professional and Business Associations and Leagues
Civic Leagues Local Development Corporations LDCs and Business Improvement Districts BIDs
Churches includes synagogues and mosques
Social Clubs
Colleges and Universities
Other Specialized NotforProfit Entities
Regulatory Reporting Requirements
Unrelated Business Income and Reporting IRS Form 990T
History of Federal Form 990 Return of Organization Exempt from Income Tax
The New Form 990
990 Sections Part IXI and Schedules AR
Private Foundation Returns IRS Form 990PF
Obtaining Support from Individuals Foundations Government and Others
Reporting to Donors and Government Agencies
Federal Grants and Reporting
Certified Financial Audits
Local and StateAgency Audits
IRS Audits

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About the author (2010)

LAURENCE SCOT is the cofounder and comanaging partner of Skody Scot & Company, a midtown CPA firm formed in 1990 that specializes in servicing the Not-for-Profit community. Scot has taught undergraduate and graduate classes at several colleges; been lecturing and giving seminars to CPAs, bankers, NFP D&Os (directors and officers), managers, and entrepreneurs for over twenty years on a variety of subjects; and is the creator of the first in-class certificate program in Not-for-Profit accounting and governmental reporting.

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