1 Introduction 01-.27
Scope 01-.12
GAAP for NFPs 13-.19
Fund Accounting and Net Asset Classes 20-.25
Other Resources for Financial Reporting by NFPs 26-.27
2 General Auditing Considerations 01-.150
Overview 01-.02
Purpose of an Audit of Financial Statements 03-.08
Terms of Engagement 09-.11
Audit Planning Considerations 12-.59
Use of Assertions in Assessment of Risks of Material Misstatement 60-.64
Risk Assessment Procedures 65-.88
Using Risk Assessment to Design Further Audit Procedures 89-.111
Evaluation of Misstatements Identified During the Audit 112-.114
Communication With Those Charged With Governance 115-.121
Completing the Audit 122-.149
Appendix A -- Consideration of Fraud in a Financial Statement Audit 150
3 Financial Statements, the Reporting Entity, and General Financial Reporting Matters 01-.197
Introduction 01-.05
Statement of Financial Position 06-.28
Statement of Activities 29-.45
Statement of Cash Flows 46-.58
Comparative Financial Information 59-.61
Reporting of Related Entities, Including Consolidation 62-.125
Mergers and Acquisitions 126-.139
Collaborative Arrangements 140-.141
The Use of Fair Value Measures 142-.175
Financial Statement Disclosures Not Considered Elsewhere 176-.188
Auditing 189-.196
Supplement A -- Flowcharts 197
4 Cash, Cash Equivalents, and Investments 01-.110
Cash and Cash Equivalents 01-.04
Investments Discussed in This Chapter 05-.10
Initial Recognition and Measurement of Investments11-.12
Valuation of Investments Subsequent to Acquisition13-.44
Investment Income and Expenses 45-.49
Unrealized and Realized Gains and Losses 50-.53
Investments Held as an Agent 54
Investment Pools 55-.61
Endowment Funds 62-.73
Financial Statement Presentation 74-.82
Disclosures 83-.94
Auditing 95-.109
Appendix A -- Determining Fair Value of Alternative Investments 110
5 Contributions Received and Agency Transactions 01-.234
Introduction 01-.04
Distinguishing Contributions From Other Transactions 05-.57
Core Recognition and Measurement Principles for Contributions 58-.81
Additional Accounting Considerations for Certain Contributions 82-.171
Measurement Principles for Contributions Receivable 172-.204
Financial Statement Presentation 205-.207
Disclosures 208-.214
Auditing 215-.232
Appendix A -- Excerpt From AICPA Financial Reporting White Paper Measurement of Fair Value for Certain Transactions of Not-for-Profit Entities 233
Appendix B -- Technical Questions and Answers About Financially Interrelated Entities 234
6 Split-Interest Agreements and Beneficial Interests in Trusts 01-.95
Introduction 01
Types of Split-Interest Agreements 02-.03
Recognition and Measurement Principles 04-.45
Financial Statement Presentation 46-.53
Examples of Split-Interest Agreements 54-.87
Auditing 88-.93
Appendix A -- Excerpt From AICPA White Paper Measurement of Fair Value for Certain Transactions of Not-for-Profit Entities 94
Appendix B -- Journal Entries 95
7 Other Assets 01-.47
Introduction 01
Inventory 02-.11
Prepaid Expenses, Deferred Costs, and Similar Items 12-.16
Collections and Works of Art, Historical Treasures, or Similar Assets 17-.29
Goodwill 30-.32
Intangible Assets Other Than Goodwill 33-.37
Auditing 38-.47
8 Programmatic Investments 01-.71
Introduction 01-.07
Core Considerations for Accounting and Reporting 08
Loans 09-.52
Equity Instruments 53-.61
Programmatic Equity Investments That Are Consolidated 55
Programmatic Equity Investments Reported Using the Equity Method 56-.58
Guarantees 62
Concentrations of Risk 63
Presentation of Programmatic Investments 64-.69
Program-Related Investments of Private Foundations 70
Auditing 71
9 Property and Equipment 01-.47
Introduction 01-.02
Recognition and Measurement Principles 03-.32
Financial Statement Presentation 33-.38
Auditing 39-.47
10 Debt and Other Liabilities 01-.117
Introduction 01
Fair Value Measurement 02-.08
Municipal Bond Financing and Other Long-Term Debt 09-.87
Tax Liabilities 88
Deferred Revenue 89
Refunds Due to and Advances from Third Parties 90
Promises to Give 91-.95
Split-Interest Obligations 96
Amounts Held for Others under Agency Transactions 97
Revenue Sharing and Other Agreements 98
Exit or Disposal Activities 99
Guarantees 100-.101
Contingencies 102
Pension and Other Defined Benefit Postretirement Auditing 111-.115
Appendix A -- Municipal Securities Regulation 116
Appendix B -- Auditor Involvement with Municipal Securities Filings 117
11 Net Assets and Reclassifications of Net Assets 01-.58
Introduction 01-.02
Fiduciary Responsibilities to Meet Donor Restrictions 03-.08
Net Asset Classes 09-.11
Net Assets with Donor Restrictions 12-.22
Noncontrolling Interests 23-.25
Reclassifications of Net Assets 26
Expiration of Donor-Imposed Restrictions 27-.47
Disclosures 48-.54
Changing Net Asset Classifications Reported in a Prior Year 55
Auditing 56-.58
12 Revenues and Receivables from Exchange Transactions 01-.25
Introduction 01-.02
Difference between Revenues and Gains 03-.05
Recognition, Measurement, and Display of Revenue 06-.14
Receivables from Exchange Transactions 15-.17
Auditing 18-.24
Appendix A -- Implementation Guidance for FASB Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606)25
13 Expenses, Gains, and Losses 01-.142
Introduction 01
Expenses 02-.06
Expense Recognition Issues 07-.34
Gains and Losses 35-.50
Functional Reporting of Expenses 51-.132
Income Taxes 133
Auditing 134-.139
Supplement A -- Accounting for Joint Activities 139
Supplement B -- Examples of Applying the Criteria of Purpose, Audience, and Content to Determine Whether a Program or Management and General Activity Has Been Conducted 140
Supplement C -- Allocation Methods for Joint Costs 141
Supplement D -- Examples of Disclosures 142
14 Reports of Independent Auditors 01-.30
Reports on Financial Statements 01-.02
Reports on Comparative Financial Statements and Presentation of Comparative Information 03-.08
Unmodified Opinions 09
Modified Reports and Departures from Unmodified Opinions 10
Going Concern 11
Reporting on Supplementary Information 12-.14
Special Considerations 15-.16
Reporting Under Other Technical Standards 17-.21
Reporting on Prescribed Forms 22-.25
Reports Required by Government Auditing Standards, the Single Audit Act Amendments of 1996, and the Uniform Guidance26-.30
15 Tax and Regulatory Considerations 01-.74
Introduction 01-.03
Internal Revenue Service 04-.38
Income Tax Positions 39-.43
Deferred Tax Assets and Liabilities 44-.45
State and Local Regulations 46-.56
Securities Regulation 57-.60
Sarbanes Oxley and Governance Policies 61-.63
Executive Compensation 64-.67
Other Regulatory Activities 68-.70
Auditing 71-.74
16 Fund Accounting 01-.23
Introduction 01
Fund Accounting and External Financial Reporting 02-.05
Unrestricted Current (or Unrestricted Operating or General) Funds 06-.07
Restricted Current (or Restricted Operating or Specific-Purpose) Funds 08-.09
Plant (or Land, Building, and Equipment) Funds 10-.14
Loan Funds 15-.16
Endowment Funds 17-.19
Annuity and Life-Income (Split-Interest) Funds 20-.21
Agency (Or Custodian) Funds 22
Summary 23
Appendix
A FASB Accounting Standards Codification 958, Not-For-Profit Entities, Topic Hierarchy
B The New Revenue Recognition Standard: FASB ASC 606
C The New Leases Standard: FASB ASC 842
D Information Sources
E Overview of Statements on Quality Control Standards
F Schedule of Changes Made to the Text From the Previous Edition
Glossary
Index of Pronouncements and Other Technical Guidance
Subject Index
