NON-PROFIT

ORGANIZATION
FABRERO, JIMFRED
VALDEZ, KATE VIVIEN
 NON-PROFIT
ORGANIZATION
Is one that carries out some socially desirable needs of the
community or its members and whose activities are not
directed towards making profit

Earn revenues sufficient to cover their expenses.

A major portion of these revenues are derived from charitable

donations and other fundraising activities.

Surplus revenues do not inure to the benefit of a particular

individual or group but rather retained in furtherance of the
organization’s mission. (no dividend)

Usually exempt form income tax

 01 RECOGNIZE 02 MEASUREMENT 03 DERECOGNIZE

•Meets the •Initial measurement •Asset or liability is

definition of an at cost except when a derecognized when
asset or liability relevant requires
it ceases to provide
measurement at fair
inflow or require
•Probable inflow value or other value
or outflow or outflow of
resources Subsequent resources
measurement at embodying
•Reliable amortized cost, under
economic benefits.
measurement of cost model or other
cost or other measurement model
value required by PFRS
04
PRESENTATION OF FINANCIAL STATEMENTS

General features:

•Accrual basis
•Materiality and aggregation
•Offsetting
•Frequency of reporting
•Comparative information
Consistency of presentation
THE FINANCIAL STATEMENTS OF MOST
NPOS ARE BASED ON THE FUND THEORY.
Fund theory stresses great importance on the
custody and administration of funds.
 Majority of the revenues of NPOs come from charitable
CONTRIBUTIONS
contributions or donations.

TEMPORARILY PERMANENTLY
01 UNRESTRICTED 02 03
RESTRICTED RESTRICTED

available for restricted by the donor in restricted by the

immediate use such a way that the availability
of the contribution for the
and for any
NPO’s use is dependent upon:
purpose
•The performance of a specific
task
•The happening of a future
event
•The passage of time
donor in such a way
that the organization
will never be able to
use the contribution
itself; however, the
organization may be
able to use the income
therefrom.
 CASH AND OTHER
NON-CASH ASSETS
Cash and other non-cash assets received as
contributions are recognized as revenues in the
period received and as assets, decreases of liabilities,
or expenses depending on the form of the benefits
received

Contributions are measured at fair value at the date

of contribution and are reported as either:

•Unrestricted support- revenue from unrestricted

contributions
•Restricted support- revenue from temporarily
restricted or permanently restricted contributions
 UNCONDITIONAL
PROMISES
Unconditional promise to give cash or other non-cash assets
in a future period is recognized when the unconditional
promise to give is receive from the donor.
-classified as temporarily restricted contribution because of
the time restriction

Conditional promises to give, which depend on the

occurrence of a specified future and uncertain event to bind
the promisor, are recognized only when the attached
conditions are substantially met.

A transfer of assets with a conditional promise to contribute

them shall be accounted for as a refundable advance (liability)
until the conditions have been met.
 SERVICES
Contributions of services are
recognized if the services received:

•Create or enhance nonfinancial assets;

or

•Require specialized skills, are provided

by individuals possessing those skills,
and would typically need to be
purchased if not provided by donations.
(professionals)
 An entity need not recognize contributions of works of art,
historical treasures, and similar assets if the donated
WORKS OF items are added to collections that meet all of the

ART AND following conditions:

SIMILAR Held for public exhibition, education or research in

furtherance of public service rather than financial gain
ITEMS Protected, kept unencumbered, cared for, and
preserved; and
Proceeds from sales of collection items are to be used
to acquire other items for collections.
THANK YOU