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
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