Like any other business, non-profit organizations have their own accountability, presenting information related to management, donors, bankers, and other stakeholders. The main difference between a non-profit organization and a for-profit is a non-profit has no owners, no investors. It is large -. You will not see the owner’s equity or profit or loss in the financial statements
This annual balance sheet is not -profit organization. The main difference between a regular balance sheet and statement of financial condition is present “net assets” instead of equity owner in the balance sheet. Since charitable organizations have no owners and no investors, lack of owner’s equity in these financial statements is understandable
formula for the balance sheet is :. Assets = Net assets
Statement of operations
Statement of operations is similar statement. Revenues are presented along with the costs, usually consist of functional areas such as program management, and fundraising. Unlike for-profit income statement, statement of operations no gain or loss; Instead it presents “the changes in net assets” .The statement of operations shows usually two lines: one line with a starting net assets and the last line by ending net assets. This presentation is unique to the non-profit sector
formula for the declaration of activities :. Revenue – Expenses = change in net assets + beginning net assets = Ending net assets
* The ending net assets in this statement to agree to the same item in the balance sheet
Statement Functional Costs
This statement is unique non-profit organization with nothing like it on a for-profit company. This statement details the cost and it is presented in a matrix format with cost descriptions lines and three functional areas columns. Many times the program is shown in more than one column, define each program separately. It is expected that most money is spent in the program area, which reflects the organization of tasks and objectives
The basic formula for a declaration functional costs :. Total Cost = Program Fees + administrative expenses + fiscal expenditure
* The ending balance statement of functional expenses should agree with costs on the statement of operations.
Statement of Cash Flows
This statement is the same as for-profit companies. It shows cash and how it was used. As in the case of the profit, the statement may be prepared by direct or indirect method. The idea is the same, but obviously includes non-profit certain information, such as grants receivable or cash from donations
formula for cash flow :. Change in Cash = Cash flow from operating activities + Cash flow from investing + Cash flow from financing activities
* The cash flow includes cash balances, which should be the same cash balance sheet.