Financial Reporting Review of a Not-for-Profit Organization - Greenpeace
Not-for-Profit (NFP) organizations are different from governmental entities in that they lack the authority of law to generate revenues and have greater flexibility in administering their budgets
Select one NFP organization in an area of interest to you and review their financial statements and audit report. The NFP organization selected must have their financial statements and audit report publicly available on their website.
Instructions
Write a 3–5 page paper in which you do the following:
Determine if the NFP's statements conform to the FASB guidance, explaining how the selected NFP uses the required fund categories and recommending at least two areas of potential interest to stakeholders concerning the NFP's revenue and expense status.
Analyze the selected NFP’s financial statements to determine if the statements conform to the Financial Accounting Standards Board (FASB) guidance from Not-for-Profits. (Note: You have to click “Accept” to see the guidance.)
As part of the analysis, explain how the selected NFP organization uses the required fund categories and recommend at least two areas of potential interest to stakeholders concerning the NFP’s revenue and expense status.
Explain the format utilized to prepare the Statement of Cash Flows, pointing out at least two areas of emphasis that differ from GAAP accounting format.
The financial statements of NFP organizations include a Statement of Cash Flows.
Analyze this Statement of Cash Flows in order to explain the format utilized.
Point out any unique areas of emphasis that differ from GAAP accounting format.
Compare the organization's reporting of pledges and contributions to its reporting of exchange transactions, discussing at least three of the funds used.
NFP organizations report pledges and contributions in addition to reporting exchange transactions.
Assess the fiscal condition of the selected NFP organization, interpreting financial indicators specific to NFPs and financial ratios widely accepted as being indicative of fiscal health.
Use at least three quality sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For help with research, writing, and citation, access the library or review library guides.
Produce writing that contains accurate grammar, mechanics, and spelling in accordance with SWS style.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
The specific course learning outcome associated with this assignment:
Evaluate the financial statements and fiscal condition of a not-for-profit organization relative to financial guidelines.
Financial Reporting Review of a Not-For-Profit Organization
Author
Affiliation
Course
Instructor
Due Date
Greenpeace
Conformity to FASB guidance and two areas of potential interest
Greenpeace's financial statements were audited by the firm of CliftonLarsonAllen LLP and were found to conform to the generally accepted accounting principles established by the Financial Accounting Standards Board. In addition, Greenpeace's statements conform to the FASB guidance regarding the required fund categories. However, there are two areas of potential interest to stakeholders concerning Greenpeace's revenue and expense status.
1 It is important to note that Greenpeace is a global organization with operations in many countries. As such, each country's revenue and expense status may differ. For example, Greenpeace USA may have different revenue and expense numbers than Greenpeace Germany. This could be of interest to stakeholders who are interested in the financial status of Greenpeace in a particular country.
2 It is also important to note that Greenpeace is a non-profit organization, and this means that they rely on donations from individuals, foundations, and corporations to fund its operations. As such, their revenue and expense status may interest potential donors who want to know how their donations will be used.
Greenpeace's Statement of Cash Flows points to at least two areas of emphasis that differ from the GAAP accounting format.
Greenpeace's Statement of Cash Flows is prepared using the indirect method. The main difference between the indirect and direct methods is that the direct method reports cash inflows and outflows from operating activities by using a classification of cash receipts and payments, while the indirect method adjusts net income for the changes in balance sheet accounts to arrive at cash from operating activities (Bradbury, 2011).
The main areas of emphasis that differ from the GAAP accounting format are:
1) The use of the indirect method to prepare the statement of cash flows; and
2) The focus on cash receipts and payments from operating activities.
Compare the Organization's reporting of pledges and contri...