BUCS Fund Accounting Software

NONPROFIT REQUIREMENTS
FASB STANDARDS 116, 117

The Financial Accounting Standards Board has enacted new financial accounting and reporting standards for not-for-profit organizations. These standards became effective for fiscal years beginning after December 15, 1994, except for organizations with less than $5 million in total assets and less than $1 million in annual expenses. For those organizations, the requirements became effective after fiscal years beginning after December 15, 1995. These standards do not apply to government operations.

Frey & Company has reviewed these standards. Number 116 deals with the accounting treatment for these operations. We did not see any apparent problems that would cause a difficulty for the BUCS fund accounting system. However, the requirement may require changes in some of our user's accounting methods and chart-of-accounts.

Number 117 defines financial statement requirements. Several illustrations were provided. The manual says that these were examples only.

Statement of Financial Position depicts a balance sheet statement comparing current year to the prior year. The BUCS database contains the information necessary to create such a report. The unrestricted fund balance sheet accounts are shown in-detail. Net assets for temporarily restricted and permanently restricted funds are shown as one line per group. A total for all funds is also provided.

The Statement of Activities is a full profit/loss report for the unrestricted fund. A minimum profit/loss report is provided for each of the other groups. The information contained in this report does not appear to be a problem, provided the chart-of-accounts is set up to capture the information. Several alternative formats were depicted. Format A is the easiest to use. Format B shows similar information, except it is presented in columnar format. Format C is offered in two parts, with alternates. Format C, Part 1 offers a profit/loss report on the unrestricted fund, Format C, Part 2 has two alternatives. Alternative one lists the "Restricted" funds in sequential order. Alternative two lists them in columnar order.

The above described reports will typically be produced on an annual basis and in-summary form. Some agencies might want to consider purchasing the Combining Reports Module if they will be summarizing many funds into groupings (i.e., Unrestricted, Temporarily Restricted, Permanently Restricted).

The implementation and format of these reports is a decision that must be made between the agency and its auditors. Frey & Company is a supplier of accounting software. We cannot provide financial reporting policy advice. Anyone on support and interested in setting up these reports is encouraged to contact our staff. We will be glad to discuss them with you.

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