SFP

Thank you for that Ms. Ria Timog for that wonderful insights
And to continue our discussions, lets first have a quick overview about the statement of assets, liabilities
and net assets of a nonprofit associations
Again just a recap lang, we all know naman that The primary purpose of this statement is to provide
relevant information about an organization's assets, liabilities, and net assets and those informations
provided in this statement are used to help those resource providers such as donors, members, creditors,
and others to assess
(a) the organization's ability to continue to provide services and
(b) to also evaluate the organization's liquidity, financial flexibility, ability to meet obligations, and needs
for external financing

Also to emphasize about here in the SFP of an NPO is its unique account which is what
we called the fund balances or the net assets. So this account is in lieu of owner’s equity or
shareholder’s equity account since the providers of resources here does not expect to earn a
corresponding or proportionate financial return on their contributions. Or if any as in the case of PICPA,
that account is maybe primarily for conventional purposes.

SO to further elaborate these accounts, lets have the PICPA financial statements as an example.
Next slide please.
So flash on your screen it the assets section of the statement of assets, liabilities and net assets of the
PICPA incorporated, which is very similar lang sa kung anu yun nakikita naten na total assets in balance
sheet sa isang profit oriented organizations and since mga certified public accountant yun mga members
ng organizations na ito, so expect na mas clear and understandable yun mga information here as
compared with other NPOs. That is why, they classify the assets into current and noncurrent portion to
easily evaluate the liquidity and solvency and also the ability to provide services.
And as you can see, just like a typical profit organization, under current assets they have cash and cash
equivalents, receivables that is presented net of amount, sti, inventories. While in noncurrent assets, they
have also PPE, long term investments, and many other accounts.
And as you will notice in their financial statement, the cash and cash equivalents account in both 2019
and 2020 forms a large part on the total assets that is more than 30% of It, in which as per my research
about this associations, they are not just functioning as a nonprofit organizations but rather they have also
those activities that earn revenue such as the conventional purpose activities that earn fees.
Next slide. Please
So here naman is the Liabilities and fund balances section

And as you can see here, there is also similarity when it comes in the liability section of
PICPA financial statements with those profit oriented organizations wherein they also classify
the liabilities into current and non-current portion. However, one unique characteristics of their
Statement of financial position is that again they do not use capital accounts such as owner’s
equity and shareholder’s equity account because the members and other providers of resources of
this organization do not intent or expect a corresponding or proportionate financial return on their
contributions. Thus, they use this fund balances account such as general fund and special fund provide the
nonprofit organizations such as PICPA with the flexibility to allocate resources as needed, supporting
general operations, administration, new programs, or unexpected expenses.

And also as compared with other NPOs, the PICPA did not use the term Unrestricted net assets
and permanent and temporary restricted net assets but rather they use the account general and special fund
since they use fund accounting system here to record contributed resources from donors, grant
authorities, and government agencies and to easily evaluate how well the PICPA reaches its
goals in promoting, upholding and maintaining high standards in the accountancy profession.
And lastly, According to the PICPA financial statement, the general fund is the minimum fund
needed for unrestricted resources which relates to current and noncurrent assets as well as associated
liabilities. It can be used at the discretion of the governing board of the PICPA. So in other words, the
general fund here is referring to unrestricted net assets that is commonly used by other Non Profit
Organizations

and also, The organization establishes this what we called special funds, and I think this fund are
being used as a match or prize funds by the PICPA, where the aim of which is to cover costs associated
with the fund's original purpose. Meaning ito yun restricted net assets that is only attributable for specific
purposes.

Therefore, incomes derived from the amount which is invested or contributed from these funds
are accrue to the fund alone and not the income and expenditure account.

So that will be all for statement of assets, liabilioties and net assets, and to discuss the statement
of activities, here is Mr. Paul Justine Suan. So Thank you so much everyone.
 This statement of assets, liabilities, and fund balances is similar to a balance sheet that reports the
assets, liabilities, and net assets of an organization. It provides relevant information about liquidity,
financial flexibility, and the interrelationship of an organization's assets and liabilities. That information
generally is provided by aggregating assets and liabilities that possess similar characteristics into
reasonably homogeneous groups. As a non-profit organization, its capital sections are considered net
assets rather than owner's equity or stockholder's equity, as the contributors of resources do not expect a
corresponding or proportionate financial return on their contributions.

Furthermore, if the organization has any net assets that originate from outside parties, they must
be categorized as unrestricted, temporarily restricted, or permanently restricted. This distinction is
important since it discloses the use that can be made of the assets being held.

The assets and liabilities sections of the Philippine Institute of Certified Public Accountants,
which was founded as a non-stock, non-profit professional association, are similar to those of profit-
oriented associations, with current and non-current assets and liabilities. However, in contrast to profit
organizations, the PICPA statement of financial position shows fund balances rather than owner's or
shareholder's equity accounts.

General fund, special fund, revaluation surplus, and other comprehensive income (loss) are the
categories under which the fund balances are categorized. These funds provide nonprofit organizations
such as PICPA with the flexibility to allocate resources as needed, supporting general operations,
administration, new programs, or unexpected expenses.

According to the PICPA financial statement, the general fund is the minimum fund needed for
unrestricted resources which relates to current and noncurrent assets as well as associated liabilities. It
can be used at the discretion of the governing board of the PICPA. The organization also establishes
special funds, such as match or prize funds, where the aim of which is to cover costs associated with the
fund's original purpose. Thus, incomes derived from the amount which is invested from these funds
accrue to the fund alone and not the income and expenditure account.