REGUNAYAN, MARCO PAUL C.

CBET – 01 – 602P PROF. MACRINA VIOLETA V. MUTUC

COMPARING FINANCIAL STATEMENTS OF THE GOVERNMENT,

COOPERATIVES, & OTHER NPOs

1. In a comparative matrix using either Docs or Sheets, the financial statements of the
GOVERNMENT, COOPERATIVES, & OTHER NPOs.
2. Identify the distinctions that can be seen and provide a reaction to these distinction in a
narrative after the matrix.
3. Use citations and provide or disclose references in APA format.

GOVERNMENT COOPERATIVES OTHER NPOs

Statement of Financial
Position
Statement of Financial
Performance
- -
Statement of Changes in Net
Assets/Equity
Statement of Cash Flows
Statement of Comparison of
Budget and Actual Amounts
Notes to Financial
Statements
Statement of Financial
Position
Statement of Operations
Statement of Changes in
Member’s Equity
Statement of Cash Flows
- -
Notes to Financial
Statements
Statement of Financial
Position
Statement of Activities
Statement of Functional
Expenses
-
Statement of Cash Flows
Notes to Financial
Statements

Statement of Financial Position

A government’s statement of financial position is similar to cooperatives and other non-
profit organizations’ statement of financial position. It reports the organization's assets and
liabilities in some order of when the assets will turn to cash and when the liabilities need to be
paid. The entities present current and noncurrent assets, as well as current and non-current
liabilities.
In government and cooperatives, it is represented by the following accounting equation:
Assets = Liabilities + Equity. The equity section of cooperatives’ statement of financial position
shows the amount of capital the members have invested in the cooperative through stock
purchases, allocated reserves, and per-unit retains.
The distinctions between the SFP of the three, since a nonprofit organization does not
have owners, the third section of the statement of financial position is known as net
assets (instead of owner's equity or stockholders' equity). A nonprofit's statement of financial
position is represented by the following accounting equation: Assets = Liabilities + Net Assets.
The net assets section of a nonprofit's statement of financial position requires at a minimum the
following: without donor restrictions and with donor restrictions.

Statement of Financial Performance/Statement of Operations/Statement of Activities

In government, the statement of financial performance includes line items that present the
revenue, expenses and net surplus or deficit for the period. On the other hand, the statement of
operations reports the results of all business transactions of the cooperative that occurred during
a certain time period. It shows the total revenue of the cooperative, the total expenses, and the
resulting net income (or loss). Lastly, the statement of activities reports revenue and expense
amounts according to the two classifications of net assets. It reports expenses by functional
classification such as program services and supporting services.
In preparing the statement of activities of other NPOs, it includes the reporting of
changes in net assets, unlike in government and cooperatives, they have a separate financial
statement for changes in net assets/equity.
The only difference between these reports are semantics. They are different labels given
to an entity's financial reports that lay out the entity’s key contributions to its net income. Also
referred to as a profit and loss statement at times, because it shows the entity's bottom-line
results for a given period, this report is usually a part of a group of reports prepared by
accounting.
Statement of Functional Expenses
The statement of functional expenses is described as a matrix since it reports expenses by
their function (programs, management and general, fundraising) and by the nature or type of
expense (salaries, rent). It is required only to other non-profit organizations under voluntary
health and welfare organizations.

Statement of Changes in Net Assets/Equity/Member’s Equity

The presentation of the statement of changes in net assets/equity is a key question for
any organization and should be carefully considered. The differentiation between accumulated
surplus or deficit and reserves will be made based on the nature of the underlying
transactions. The amounts included under accumulated surplus or deficit are generally derived
from operational undertakings and are expected to be used for future operational undertakings
and the amounts included under reserves are expected to reflect the true value of the
organization and the balances shown under each are generally expected to remain unchanged.

Statement of Cash Flows

The government’s statement of cash flows provides information to users of FSs a basis to
assess the ability of the entity to generate cash and cash equivalents and to determine the entity’s
utilization of funds. This also provides information on how the entity generates income
authorized to be used in their operation and its utilization.
Not all cooperatives include a statement of cash flows in their annual report. However,
this statement is gaining wider use. This is a very basic statement that shows a cooperative’s
ability to meet its immediate obligations to lenders, suppliers, and members. This is especially
important for lenders watching the cooperatives’ ability to repay their loans, and also for
cooperative personnel responsible for maintaining cooperatives’ ability to finance all their
activities. Only cash payments or receipts are included. The cash flow statement divides all cash
payments and receipts into three activities - operating, investing, and financing activities.
The statement of cash flows for a nonprofit organization is similar to that of a for-profit
business. It reports the organization's change in its cash and cash equivalents during the
accounting period. The statement of cash flows consists of three sections: net cash
from operating activities, net cash from investing activities and net cash
from financing activities.
Statement of Comparison of Budget and Actual Amounts
The presentation this report is unique only to government accounting. Government
entities shall present a comparison of the budget amounts for which it is held publicly
accountable and actual amounts either as a separate additional financial statements or as
additional budget columns in the financial statements currently presented in accordance with
IPSASs. The comparison of budget and actual amounts shall present separately for each level
of legislative sight the original and final budget amounts and the actual amounts on a
comparable basis.

Notes to Financial Statements

The notes to the financial statements are an integral part of all of the financial statements.
The Accounting Standards Update No. 2016-14 requires important additional disclosures
regarding liquidity, restrictions, etc. for creditors, donors, and others. Notes to the financial
statements disclose the detailed assumptions made by accountants when preparing these reports.
The notes are essential to fully understanding these documents. Usually, the first notes in the
series explain the “basis for accounting”, if cash or accrual rules were used to prepare the
documents, and the methods used to report amortization/depreciation expenses. The rest of the
notes explain, in greater detail, how the figures have been calculated. This gives the reader the
information needed to do deeper analysis.
REFERENCES:
Averkamp, H. (2020). Nonprofit Accounting - Financial Statements. AccountingCoach.
https://www.accountingcoach.com/nonprofit-accounting/explanation/
Business Development Bank of Canada. (2012). What are notes to the financial statements?
BDC. https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-
guides/glossary/notes-to-financial-statements
Commission on Audit. (2015). Government Accounting Manual for National Government
Agencies: Accounting Policies, Guidelines and Procedures and Illustrative Accounting
Entries (Vol. 1). Retrieved from https://www.coa.gov.ph/phocadownload/ userupload/
Issuances/Circulars/Circ2015/GAM_for_NGAs_Volume_I.pdf
International Federation of Accountants. (2006). IPSAS 24―PRESENTATION OF BUDGET
INFORMATION IN FINANCIAL STATEMENTS. IFAC.
https://www.ifac.org/system/files/publications/files/ipsas-24-presenta.pdf
Rural Business-Cooperative Service. (1998). Understanding Cooperative Bookkeeping and
Financial Statements. USDA. https://www.rd.usda.gov/sites/default/files/cir57.pdf