Financial Statements: Their Elements And Scope
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From FASB “Elements of Financial Statements”

  • This Statement defines 10 interrelated elements that are directly related to measuring performance and status of an entity. (Other possible elements of financial statements are not addressed.)

Assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.
Liabilities are probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past trans- actions or events.
Equity or net assets is the residual interest in the assets of an entity that remains after deducting its liabilities. In a business enterprise, the equity is the ownership interest. In a not-for-profit organization, which has no ownership interest in the same sense as a business enterprise, net assets is divided into three classes based on the presence or absence of donor-imposed restrictions—permanently restricted, temporarily restricted, and unrestricted net assets.
Investments by owners are increases in equity of a particular business enterprise resulting from transfers to it from other entities of something valuable to obtain or increase ownership interests (or equity) in it. Assets are most commonly received as investments by owners, but that which is received may also include services or satisfaction or conversion of liabilities of the enterprise.
Distributions to owners are decreases in equity of a particular business enterprise resulting from transferring assets, rendering services, or incurring liabilities by the enterprise to owners. Distributions to owners decrease ownership interest (or equity) in an enterprise.
Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Revenues are inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity’s ongoing major or central operations.
Expenses are outflows or other using up of assets or incurrences of liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major or central operations.
Gains are increases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity except those that result from revenues or investments by owners.
Losses are decreases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity except those that result from expenses or distributions to owners.

  • The Statement defines three classes of net assets of not-for-profit organizations and the changes in those classes during a period. Each class is composed of the revenues, expenses, gains, and losses that affect that class and of reclassifications from or to other classes.

— Change in permanently restricted net assets during a period is the total of (a) contributions and other inflows during the period of assets whose use by the organization is limited by donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of the organization, (b) other asset enhancements and diminishments during the period that are subject to the same kinds of stipulations, and (c) reclassifications from (or to) other classes of net assets during the period as a consequence of donor-imposed stipulations.
— Change in temporarily restricted net assets during a period is the total of (a) contributions and other inflows during the period of assets whose use by the organization is limited by donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the organization pursuant to those stipulations, (b) other asset enhancements and diminishments during the period subject to the same kinds of stipulations, and (c) reclassifications to (or from) other classes of net assets during the period as a consequence of donor-imposed stipulations, their expiration by passage of time, or their fulfillment and removal by actions of the organization pursuant to those stipulations.
— Change in unrestricted net assets during a period is the total change in net assets during the period less change in permanently restricted net assets and change in temporarily restricted net assets for the period. It is the change during the period in the part of net assets of a not-for-profit organization that is not limited by donor-imposed stipulations. Changes in unrestricted net assets include (a) revenues and gains that change unrestricted net assets, (b) expenses and losses that change unrestricted net assets, and (c) reclassifications from (or to) other classes of net assets as a consequence of donor-imposed stipulations, their expiration by passage of time, or their fulfillment and removal by actions of the organization pursuant to those stipulations.

NOTES:

Balance Sheet = statement of financial position = statement of net assets = net worth statement } at a point in time (as of [date])

own - owe = net worth
own = owe + net worth

Also a profit & loss statement = P&L statement = income (revenue) & expenses = income (revenue) & expenditures = activities; statement of cash flows

FASB / GASB (Financial/Government) Accounting Standards Board. F = For Profit Cos/Not For Profit Cos.

FASB- statement of financial position, statement of activities, statement of cash flow
GASB- GOV WIDE - see above
GASB- Fund - Gen fund balance sheet, statement revenue and expenditures (sometimes cash flow)

Statement Category Sub-Category Type of Accounts Measurement Focus Basis of Accounting Authority
Statement of Financial Position Not For Profit - Permanent Economic Resources Accrual FASB
Statement of Activities Not For Profit - Temporary Economic Resources Accrual FASB
Cash Flow Statement Not For Profit - Both Economic Resources Accrual FASB
Statement of Net Assets Governmental Government-wide Permanent Economic Resources Accrual GASB
Statement of Activities Governmental Government-wide Temporary Economic Resources Accrual GASB
General Fund Balance Sheet Governmental Government Fund Financial Statements Permanent Current Financial Resources Modified Accrual GASB
Statement of Revenues, Expenditures and changes in Fund Balance Governmental Government Fund Financial Statements Temporary Current Financial Resources Modified Accrual GASB
Statement of Net Assets Governmental Proprietary Funds Permanent Economic Resources Accrual GASB
Statement of Revenues, Expenses, and Changes in Fund Net Assets Governmental Proprietary Funds Temporary Economic Resources Accrual GASB
Statement of Cash Flows Governmental Proprietary Funds Both Economic Resources Accrual GASB
Statement of Fiduciary Net Assets Governmental Fiduciary Funds Permanent Economic Resources Accrual GASB
Statement of Changes in Fiduciary Net Assets Governmental Fiduciary Funds Permanent Economic Resources Accrual GASB
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