Summary of Statement No. 117
Summary of Statement No. 117
Financial Statements of Not-for-Profit Organizations (Issued 6/93)
Summary
This Statement establishes standards for general-purpose external
financial statements provided by a not-for-profit organization. Its
objective is to enhance the relevance, understandability, and
comparability of financial statements issued by those
organizations. It requires that those financial statements provide
certain basic information that focuses on the entity as a whole and
meets the common needs of external users of those statements.
This Statement requires that all not-for-profit organizations provide a statement of financial position, a statement of activities, and a statement of cash flows. It requires reporting amounts for the organization's total assets, liabilities, and net assets in a statement of financial position; reporting the change in an organization's net assets in a statement of activities; and reporting the change in its cash and cash equivalents in a statement of cash flows.
This Statement also requires classification of an organization's net assets and its revenues, expenses, gains, and losses based on the existence or absence of donor-imposed restrictions. It requires that the amounts for each of three classes of net assets-permanently restricted, temporarily restricted, and unrestricted-be displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities.
This Statement amends FASB Statement No. 95, Statement of Cash Flows, to extend its provisions to not-for-profit organizations and to expand its description of cash flows from financing activities to include certain donor-restricted cash that must be used for long-term purposes. It also requires that voluntary health and welfare organizations provide a statement of functional expenses that reports expenses by both functional and natural classifications.
This Statement is effective for annual financial
statements issued 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 Statement is effective for fiscal years
beginning after December 15, 1995. Earlier application is
encouraged.