Statements of Financial Accounting Standards (SFAS) 116 and 117 Executive Summary

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Statements of Financial Accounting Standards (SFAS) 116 and 117 Executive Summary According to the University of Phoenix (2007), Statement No. 116 addresses Accounting for Contributions Received and Contributions Made and Statement No. 117 addresses Financial Statement of Not-for-Profit Organizations. These two statements show how non-profit organizations report their contributions and how their contributions are presented on financial statements. This summary will be assessing the requirements of Statement of Financial Accounting Standards (SFAS) 116 and 117 and how it impacts the financial statements. The Statement No. 116 addresses Accounting for Contributions Received and Contributions Made, contributions consist of gifts of cash, marketable securities, property and equipment, utilities, supplies, intangible assets (such as patents and copyrights), and the services of professionals and skilled workers (University of Phoenix, 2007, p.490). These contributions have to be accounted for at fair value, unless their is a particular collection or contributed service. Statement No. 116 requires not-for-profit organizations to: -- distinguish between contributions received that increase permanently restricted net assets, temporarily restricted net assets, and unrestricted net assets -- recognition of the expiration of donor-imposed restrictions -- disclosures for collection items not capitalized and for receipts of contributed services and promises to give (FINANCIAL ACCOUNTING STANDARDS BOARD, 2008). Statement No. 117 consists of detailed information about the generally accepted accounting principles with regard to how contributions are reported on financial statements. Statement No. 117 requires not-for-profit organizations to: -- to provide a statement of financial position -- a statement of activities -- a statement of cash flows. -- amounts for
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